Market Radar Europe: Southern Europe’s largest ever real estate fund, and landmark GBP 9.9bn acquisition of Schroders

GBP 9.9 Billion Schroders Acquisition

In a move that signals the end of an era for the City of London, the historic asset manager Schroders has agreed to a GBP 9.9 billion takeover by US-based giant Nuveen.

Founded during the Napoleonic Wars, Schroders has long been a stalwart of the UK’s financial landscape and a vocal champion for the London stock market. However, a decade of pressure from low-cost passive investing and a shifting tide toward private markets led the board - and the founding family - to accept a 612p-a-share offer.

This union aims to blend Schroders’ storied stock-picking heritage with Nuveen’s massive USD 1.4tn footprint in fixed income and alternatives, creating a global powerhouse with significantly deeper pockets.

While the deal marks the exit of a FTSE 100 icon from the London exchange, leadership insists the Schroders brand will survive and London will remain the combined group's primary operational hub. CEO Richard Oldfield, who previously dismissed rumours of a sale, framed the merger as a "huge opportunity" to scale at a pace independence simply couldn't match.

Despite the 29% share price surge following the announcement, some analysts argue the takeover came too soon, suggesting the price tag might undervalue the momentum Oldfield had recently built. Nevertheless, if shareholders greenlight the deal, one of British finance’s oldest names will begin its next chapter under the wing of a Chicago-based titan.

Sustainable Financing in European Real Estate

Sustainable financing in the European real estate sector has entered a phase of rigorous pragmatism in early 2026. Capital is no longer just chasing "dark green" trophies but is targeting the decarbonisation of the continent's aging building stock.

This shift is being bolstered by the SFDR 2.0 rollout, which has officially introduced the Article 7 "Transition" category, allowing real estate funds to invest in brown assets provided they have a credible, data-driven plan to green them. This new regulatory gold standard is unlocking the massive liquidity needed for deep retrofits.

Meanwhile, the European Green Bond Standard (EuGBS) has hit a major milestone, with over EUR 22 billion in bonds issued under the label since late 2024.

To use this label, 85% of the proceeds must now be strictly aligned with the EU Taxonomy. Though the label seeks to reduce greenwashing, it is reportedly making it harder for smaller developers to access this specific pool of capital due to rigorous reporting requirements.

Deutsche Bank made a landmark move this week, as it became the first global systemic bank to price a bond under the EuGBS, raising EUR 500 million specifically to refinance its taxonomy-aligned residential real estate portfolio.

With banks tightening lending criteria due to rising operationalisation costs - fuelled by the EU’s Omnibus I package and the Corporate Sustainability Due Diligence Directive (CSDDD) - third-party capital is stepping in to fill the gap.

This credit-first era is rewarding those who can prove climate resilience; properties in flood or heat-risk zones are now seeing immediate brown discounts in their financing terms as insurers and lenders integrate real-time climate modelling into their underwriting.

Capital Moves South

While much of Northern Europe is focusing on stabilising after years of volatility, countries like Spain, Italy, Portugal, and Greece are emerging as the preferred destinations for both institutional real estate investors and second-home buyers.

Spain has solidified its position as the top destination for real estate investment in Europe this year, supported by Azora’s announcement this week of closing the largest ever real estate fund in Southern Europe, raising nearly EUR 1 billion in the third close for Southern Europe Opportunities III.

Greece is also being highlighted as the best-value market in the Mediterranean for private buyers in 2026. While prime areas in Madrid, Lisbon, and Milan are reaching or exceeding EUR 4,000 per square metre, high-end regions in Greece (such as Crete or parts of Athens) still offer entry points between EUR 1,500 and EUR 2,500 per square metre.

Short-term rental yields in popular islands remain strong, often exceeding 5.5%, supported by a tourism sector that is expected to welcome over 35 million visitors this year.

Meanwhile, Portugal saw commercial real estate investments grow by 17% in late 2025, reaching around EUR 2.85 billion. Following recent reforms to streamline permitting, the focus for 2026 is on Purpose-Built Student Accommodation (PBSA) and living sectors to address the domestic housing crisis.

And, finally, Italy remains a favourite for institutional core assets, as its logistics sector is forecasted to deliver above-average capital growth in 2026.

Self-Storage Surge

After a period of stalled deals, the UK and European self-storage markets are gearing up for a comeback in 2026. Savills predicts a surge in investment as delayed transactions finally cross the finish line, fuelled by a "build-it-if-you-can't-buy-it" mentality among well capitalised operators targeting supply-starved urban hubs.

This rebound isn't just about more space, it’s a high-tech evolution, with industry leaders leveraging data-driven expansion and automated operating models to sharpen margins.

Backed by eager lenders and tightening debt terms, the sector is shedding its recent sluggishness to emerge as a resilient and innovative frontier in real estate.

Notable recent transactions in the sector include QuadReal’s acquisition of a 26-asset UK portfolio from the Padlock Euro Storage Fund I for approximately GBP 270 million, while in Germany, Blackstone provided a EUR 100 million loan to Lagerbox to support its acquisition and development-led expansion across the country.
 

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Look out for a new edition of the GRI Institute's Market Radar Europe next week!