Europe’s non-performing loans market exceeded forecasts last year as 2018 became the most active year on record, with €113.8bn of distressed real estate loans sold.
The total was an 11.3% rise on the €102bn of closed deals in 2017, according to Evercore’s European Distressed Real Estate Market report.
Evercore had predicted that 2018 would be an active year but would fall below the 2017 total. However, an active fourth quarter that saw €27.6bn of transactions – nearly three-quarters of which completed in December as banks tried to meet end-of-year targets – pushed the total to a record high.
The year was characterised by large transactions, with 27 completed “mega-deals” – deals with a face value of more than €1bn. There were just eight deals of that size in 2017.
As in 2017, southern Europe accounted for the vast majority (77%) of the total closed volume. Spain was the most active country, disposing of €40.1bn of real estate-related NPLs, which was a 21% fall on the peak recorded in 2017.
The outlier in the trend was Ireland, closing €15.3bn of loans in 2018 – nearly six times as much as in the year before. Although activity has largely shifted from Ireland and the UK, given the two countries’ early moves in the NPL market, several large portfolios still remain.
LISTEN: Evercore managing director Federico Montero on bad loans – and how to fix them
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @karltomusk or @estatesgazette
