European real estate capital offerings down 54.4% YOY in 2023

Capital markets activity by publicly traded European real estate companies dropped by more than half in 2023 as interest rates continued to ramp up throughout the year.

In aggregate, publicly traded European real estate companies raised €8.80 billion through capital offerings in 2023, down 54.4% from the €19.28 billion raised in 2022, according to S&P Global Market Intelligence data.

Debt offerings account for the majority

The majority of the capital raised came through debt offerings, at €5.39 billion, while common equity offerings accounted for €3.40 billion and the remaining €14.0 million came through a preferred equity offering.

By country, real estate companies headquartered in Sweden raised an aggregate €2.66 billion in 2023, the largest of any European country.

France-headquartered real estate companies followed, raising an aggregate €2.36 billion, while the UK rounded out the top three with €1.15 billion raised.

Largest issuers in 2023

Paris-headquartered retail real estate investment trust Unibail-Rodamco-Westfield SE raised the most capital in the year, collecting €1.75 billion through two debt offerings. The two offerings include a €750 million green bond placement Dec. 11 with a 7-year maturity and a 4.125% fixed coupon rate, as well as €995 million of perpetual bonds that will start at a fixed rate of 7.25% but will then have its rate reset in 2033 and 2048.

Gothenburg, Sweden-based Castellum AB (publ) ranked second, collecting approximately €877.8 million through a common stock subscription rights offering in May, along with approximately €158 million through two green bond offerings.

Another Paris-headquartered REIT, Covivio, rounded out the top three largest issuers in 2023 with its €500 million green bond offering, maturing in June 2032.

Other large debt issuances during the year included Gothenburg, Sweden-based Fastighets AB Balder's €480 million senior unsecured convertible bonds due 2028, along with London-headquartered Land Securities Group PLC's approximately €456.7 million green bond due 2032.

On the common stock issuance side, Brussels-headquartered Aedifica NV/SA raised approximately €380.4 million through a public equity offering in June, while Hamburg, Germany-based Deutsche EuroShop AG raised €315.6 million through a subscription rights offering in January.