2021 was the strongest year for global M&A since data collection began in 1980 and private equity deals have more than doubled, according to Refinitiv.

Private equity players are sitting on record amounts of capital – even during the initial COVID-19 lockdown, their fundraising was still fairly healthy. Additionally, pension funds, insurance companies and other funds have a hefty stockpile of dry powder on hand, which they need to deploy. When businesses have lots of capital available, financing conditions are friendly, interest rates and prices in some areas of the market are low, these factors sum up to a perfect real estate investment opportunity.

In 2021, market players took notice and went on a buying spree. The sectors most favored last year were logistics, technology - especially data centers, residential and healthcare – all of which seem to offer good post-pandemic opportunities.

“Deal making fell off a cliff in the second quarter of 2020, as buyers, including private equity firms, pressed the pause button, uncertain of what the COVID-19 pandemic might bring. But private equity investment in the real estate sector skyrocketed last year with multiple mega deals already completed and more yet to come,” Evan Z. Lazar, Co-Chair, Global Real Estate at Dentons told PropertyEU, following the recent release of its Ranking of Law Firms, which has placed the Firm at one of top 5 law firms. The ranking features law firms that advised on the top 25 largest real estate transactions of 2021, over 20 of which exceeded €1 billion threshold.

Dentons’ high ranking position is a result of the Firm’s advisory on three major deals completed and announced in 2021:

• The Firm assisted KKR and Global Infrastructure Partners in the US$15 billion acquisition of data center owner CyrusOne, which was the largest M&A deal in the history of the data center sector. 
• The Firm also acted for GIC on the acquisition of a portfolio of sites across EMEA upon which hyperscale data centers will be developed, as part of a larger global portfolio. The transaction was part of GIC’s US$3.9 billion joint venture with Equinix, the world’s digital infrastructure company, to develop and operate 17 xScale™ data centers across EMEA and South and Central America. 
• In the residential sector, Dentons assisted Vonovia on the sale of a portfolio of 4,250 Berlin apartments and commercial units, as part of a larger package of 14,750 apartments and 450 commercial units, sold together with Deutsche Wohnen, to the municipal housing companies berlinovo, degewo and HOWOGE. 

So what’s to come in 2022? There is still a high level of capital available and the positive real estate market conditions remain, so we can expect a healthy transaction volume to continue into this year.