Wednesday, October 21, 2009

Business Times: UK property M&A activity surges in Q3

October 20, 2009
UK property M&A activity surges in Q3

(LONDON) M&A activity in the UK property sector surged in the quarter to Sept 30, with reported deal values more than five times those seen in the third quarter of 2008, financial services adviser Grant Thornton UK LLP said.

Grant Thornton's Property M&A Tracker, which tracks UK non-residential, real estate, real estate management and development deals, reported £4.1 billion (S$9.2 billion) of transactions last quarter, the highest quarterly figure seen this year by some £2.2 billion.

The Tracker saw the number of deals rise by 67 per cent to 30 last quarter compared with 18 deals seen in Q2.

Average deal values have also risen, up to around £135 million from around £37 million in Q3 2008.

'Although the results this quarter were strengthened by big ticket M&A activity, recent easing of the availability of credit coupled with lower interest rates may have spurred-on buyers back into the property deals market,' said Clare Hartnell, head of property and construction at Grant Thornton.

Despite a hike in buyer appetite for deals, Ms Hartnell said many companies are stalling on sales in the hope of achieving stronger valuations when the recovery in the economy and underlying property markets gain momentum.

'This is having a knock on effect on the availability of M&A opportunities meaning those that do exist, are more likely to get snapped up,' Ms Hartnell said.

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Martin Koh/ Sherry Tang
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