The crisis has naturally led to an evolution in investment and sales strategies by institutional investors, major accounts, and family offices. This is not surprising, as the real estate industry is inherently cyclical and constantly evolving, requiring stakeholders to regularly reinvent themselves to adapt to new financial conditions, investor expectations, and seller constraints. Interestingly, in recent quarters, unit-by-unit sales, also known as piecemeal sales, have regained notable interest among institutional investors, surpassing the traditional bulk sale solution. This trend has been observed by the IKORY group, which supports institutional investors and family offices in valuing their real estate assets and developing their divestment strategies. Thus, today, their clients prefer to divide their real estate portfolios into several independent units, sold separately, a strategy that allows them greater flexibility and increased profitability while diluting risk.

A response to the new dynamics of the real estate investment market:
The rise in interest rates since early 2022 has complicated credit access for some players in the real estate market, whether in residential or office sectors. Institutional investor transactions have slowed down, as the sector crisis has disrupted the balance of power and the dynamics at the negotiating table. Indeed, institutional owners who wanted to continue their bulk sale strategy have faced the demands of investors who, to offset the new market conditions, require higher yields. This situation has led to a decrease in the prices of bulk assets.

As a result, unit-by-unit sales are experiencing a resurgence among both institutional sellers looking for a favorable alternative for their divestment strategies and investors who can continue to enhance their portfolios by acquiring real estate at more accessible prices, as they are bought individually

The crisis does not seem likely to end soon, especially with the uncertainty surrounding the legislative outcomes and the implementation of the first economic or housing-related measures. IKORY anticipates that unit-by-unit sales will continue to develop for at least the next 12 months. This strategy indeed appears to be a pragmatic response to current challenges, allowing for the revitalization of a real estate market in search of innovative solutions.

A flexible and profitable solution for distributed risk
For institutional investors and major property owners, unit-by-unit sales offer several significant advantages, particularly during more cautious periods like the one we have been experiencing for the past few quarters.

“For an institutional owner, selling their buildings unit by unit with condominium creation has therefore regained interest as it is more financially attractive compared to bulk divestment,” observes Gianni VIGEZZI, Director of IKORY PROPERTIES, a subsidiary of the IKORY group dedicated specifically to managing these retail sales. “Building owners can thus maximize the value of their assets by subdividing their properties.”