The proportion of the asset deals increased.

Real estate transactions are either executed in the form of an asset deal (ie acquiring the real estate) or in the form of a share deal (ie acquiring the special purpose vehicle (SPV) holding the property). Each has its own advantages and disadvantages and different tax treatments.
A share deal is generally easier to execute as only the share in the SPV needs to be transferred, external financing already in place may also be retained provided that the bank is happy to continue lending to the new owner. The drawback is that the SPV is inherently acquired with all historic liabilities. These can, however, be mitigated to some extent with thorough due diligence, warranties and indemnities given by the sellers.
An asset deal is a bit more complicated to execute than a share deal. Although lease agreements are automatically transferred to the new owner of the property by the force of law, tenant securities, architect and contractor warranties, supply agreements and other contracts of interest have to be transferred to the new owner, in many cases requiring the approval of a third party not involved in the transaction. On the other hand, in an asset deal the property is acquired clear of any historic liabilities.

Deal type

In 2020 the proportion of asset deals rose to 74%. The high ratio of asset deals is partially explained by the fact that domestic real estate funds and private equity funds, which executed the majority of the transactions in 2020, have a very beneficial tax treatment if the deal is structured as an asset deal, as the real estate transfer tax is set at 2% (in contrast with the generally applicable 4%) and the funds are exempt from corporate income tax and local business tax.

Portfolio deals

The proportion of portfolio transactions stood at 11%, which came off the back of a steady decline over the past five years.

Download the full reports


The information contained in this Report is provided for informational purposes only, and should not be construed as legal advice on any matter. The transmission and receipt of information contained in this Report does not constitute or create a lawyer-client relationship between us and any recipient. You should not send us any confidential information in response to this Report and such responses will not create a lawyer-client relationship, and whatever you disclose to us will not be privileged or confidential unless we have agreed to act as your legal counsel and you have executed a written engagement agreement with DLA Piper. This Report may not reflect the most current legal developments. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this Report to the fullest extent permitted by law. Do not act or refrain from acting upon the information presented in this Report without first seeking professional legal counsel.