Real Estate

Q1 2023 saw a total of 28 deals for Real Estate, which reflects an 11% fall in deal activity from the previous quarter. Key deals include: 

• The merger of Capital & Countries Properties and Shaftesbury to form Shaftesbury Capital with a deal size of £3,500m.
• Dexters London’s acquisition of Marsh & Parsons via it’s financial sponsors Oakley Capital through a leverage buy-out for £29m

Deal activity within this sector has been driven by the marked change in social and economic patterns following the pandemic, creating clear 'winners' and 'losers' in the real estate sector. Whilst demand for A-grade office space remains extremely high, for secondary office, retail or commercial space demand has dipped significantly. As a result, real estate investors have sought to combine to balance their exposure across underperforming property types and to reduce operating costs. 

Restructuring activity for Real Estate remains high. As noted above, activity has been largely affected through shifts in demand for property space, with a significant reduction in demand for Grade B office space as commercial real estate patterns align with the new post-pandemic trend of hybrid working. Increased interest rates is also likely to impact more stressed market participants upon refinancing.