Practice Briefing: Mergers and Acquisitions in real estate asset management (Part 1) – strategic motivations, valuation and transaction structuring

Purpose This paper explores Mergers and Acquisitions (M&A) in the real estate asset management sector, with a focus on the strategic motivations driving transactions, valuation methods specific to the sector and key considerations in transaction structuring. By integrating buyer and seller perspectives, it examines the factors influencing M&A success, including financial and strategic alignment, valuation challenges and structuring models. The subsequent paper (Part 2) will relate to the execution phase, covering inter alia due diligence, negotiation and post-merger integration. Design/methodology/approach This paper adopts an expert opinion-based approach, leveraging insights from two seasoned professionals: a managing director with over 20 years of investment banking experience in the asset management sector at a leading global advisory firm and a real estate professional with 25 years of experience, who co-founded a real estate investment and asset management boutique later acquired by a publicly listed global investment firm. Findings The paper identifies critical success factors for M&A in real estate asset management, synthesizing expert insights into strategic motivations, valuation techniques and transaction structuring that align buyer and seller interests. While these elements form the foundation for a successful transaction, practical execution – including due diligence, negotiations and integration – will be explored in Part 2. Practical implications By addressing the complexities of M&A in real estate asset management, this paper serves as a guide for stakeholders navigating M&A in the sector, equipping them with the knowledge required for informed decision-making. Originality/value This paper contributes to both academic research and industry practice by offering a structured approach to M&A in real estate asset management. By separating strategic and valuation considerations from the execution phase, it provides a framework for understanding the drivers for M&A, setting the stage for a subsequent discussion on the implementation of M&A processes in Part 2.