JLL’s latest Corporate Capital Markets report indicates that corporate real estate disposals in EMEA reached €15.7 billion in 2024, showing signs of stabilisation despite continuing market challenges.
While this represents a 10% decrease from 2023, it marks a significant slowdown in the pace of contraction compared to the previous year, which saw a 36% fall.
Traditional sectors showed signs of recovery, aligning with the gradual improvement seen in the broader commercial real estate market throughout the year as well as an increase in corporate M&A, so often a catalyst for sale and leasebacks.
The industrial sector, where Private Equity sponsors are the most active, remained the largest contributor to corporate asset sales, growing 4% to reach €5.8 billion in asset sales. Office disposals, the second-largest sector, totalled €3.8 billion (+3%), while retail disposals retained third place with €3.3 billion (+ 8%) of sales.
Outlook for 2025
JLL anticipates several key trends for 2025:
- Automotive sector surge: JLL expect a significant increase in sale and leasebacks of automotive production and distribution facilities throughout 2025. This trend will likely involve both original equipment manufacturers (OEMs) and their component supply chains. The primary driver is the pressure from zero-emission vehicle (ZEV) mandates imposed by national and regional legislators. Manufacturers are struggling to maintain margins while balancing consumer demands and government regulations, all while facing competition from lower cost Chinese products. The introduction of tariffs by the current US administration could further destabilise the European automotive industry, pushing more companies to utilise real estate assets to raise capital.
- Continued strength in grocery and convenience retail: The grocery and convenience retail sector are expected to remain a key component of the sale and leaseback market. Recent transactions, such as the Morrisons ground lease deal and Casino’s sale to Tikehau Capital, highlight the ongoing interest from both private equity and institutional investors in this space.
- The “Japan effect”: Private equity capital was particularly active in acquiring Japanese corporates in 2024, partly due to Japanese accounting and asset-owning customs. This trend reflects a growing global attention towards the value held in corporate real estate portfolios and the benefits of releasing free cash. As bond market volatility subsides and pricing levels continue to settle, we expect this focus to increasingly shift towards European corporates, potentially driving more disposal activity in the region.
- Industrial and logistics sector resilience: While the industrial sector saw modest growth of 4% in 2024, it remains the largest contributor to transaction volumes, led by PE sponsored businesses. JLL anticipate this sector will continue to be robust, particularly in logistics and production assets in line with increasing levels of M&A activity. The ongoing evolution of supply chains and e-commerce is likely to sustain interest in these properties.
- Gradual office sector recovery: Despite underperforming in recent years, the office sector showed signs of improvement in 2024 with a 3% increase in disposal activity. As companies continue to reassess their office space needs in the post-pandemic era, we may see more corporate-owned office properties coming to market, potentially offering opportunities for investors seeking prime locations or value-add prospects.
- Emerging opportunities in alternatives and healthcare: While corporate data centre transactions declined in 2024, the social infrastructure sector maintained healthy levels of investment particularly in schools and healthcare facilities. As investors increasingly look towards operational real estate, we are likely to see continued interest in healthcare assets and other alternative property types that offer stable, long-term income streams.
Nick Compton, Director, Head of Corporate Capital Markets, EMEA JLL, said: “Despite the overall decline in corporate disposal volumes in 2024, we’re seeing encouraging signs of growth in both traditional sectors like office, retail, and industrial as well as specialised markets. This underscores the strategic value of corporate real estate assets for businesses and the capital that can be released through sale and leasebacks, especially in challenging economic conditions. As we move through 2025, we anticipate increased activity in key areas such as the automotive sector, grocery retail, and potential spillover effects from Japanese corporate activity. While hurdles remain, the gradual recovery in established sectors coupled with emerging opportunities point to a cautiously positive outlook for sale and leaseback volumes in EMEA.”
Photo by Harrison Moore on Unsplash
