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Laxman Pai, Opalesque Asia: The private equity real estate (PERE) deals have been fairly consistent in terms of both the number and total value, each quarter for the past three years until now.
But, as per a study by Preqin, in the first quarter of 2020, with economic markets roiled by the outbreak of COVID-19 and amid increasing competition for assets, deal activity fell below the recent quarterly average.
In total, 1,797 PERE deals were completed globally for a total value of $73bn. This compares with 2,417 deals for a combined value of $101bn in Q1 2019, Preqin said in its Quarterly Update on Real Estate.
The slowdown in activity has been observed in all property sectors. Compared with Q1 2019, the total number of PERE deals declined across each property type in Q1 2020, with office and residential properties registering a 28% and 22% decline respectively.
Deal activity has also taken a hit in every regional market. North American real estate recorded 1,242 completed deals in Q1 2020.
Although we expect this figure to rise as more data becomes available, this marks the lowest number of deals for the region in any quarter in recent years.
Similarly, back in Q1 2019, a total of 41 PERE deals were completed in Asia, but there were only 12 in Q1 2020.
Data from across the world suggests that deal-makers may be holding back until the full scale and economic impact of the coronavirus can be accurately assessed. ...................... To view our full article Click here
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