European M&A bounces back, with record levels of activity and a return to standard seller and buyer positions.

CMS is pleased to an­nounce new heads for four of its in­ter­na­tion­al ex­pert­ise groups.All CMS law­yers work in cross-bor­der groups across more than 40 coun­tries world­wide that are struc­tured ac­cord­ing to...

Real es­tate in­vest­ment mar­kets re­main stable whilst buy­ers con­tin­ue to catch up in con­trac­tu­al risk al­loc­a­tion Lo­gist­ics as­sets more pop­u­lar than ever­De­mand from in­ter­na­tion­al in­vestors reaches re­cord high ac­count­ing for 55% of deals, with most in­ter­na­tion­al in­vestors still be­ing from with­in Europe­In­creased de­sire for se­cur­ity on the part of sellers con­tin­ued to be a fea­ture in 2021: share of trans­ac­tions in which the buy­er­'s pay­ment ob­lig­a­tions are se­cured reaches an­oth­er re­cord high­Buy­er-friendly trend in con­trac­tu­al risk al­loc­a­tion con­tin­ues as seller-friendly pro­vi­sions on lim­it­a­tion of li­ab­il­ity con­tin­ue to de­clineThe European real es­tate in­vest­ment mar­ket ap­pears to have largely re­covered from the con­sequences of the COV­ID-19 pan­dem­ic in 2021. Com­pared to the pan­dem­ic-stricken pre­vi­ous year, total in­vest­ment in­creased by around 15% to ap­prox­im­ately EUR 270 bil­lion, mark­ing a re­turn to the pre-crisis level.Lo­gist­ics as­sets per­formed par­tic­u­larly well last year, hav­ing be­come the fo­cus of in­vestors’ at­ten­tion due to their stable in­come flows and the on­go­ing growth of on­line shop­ping. De­mand from in­ter­na­tion­al in­vestors was also up again in 2021, with in­tra-European trans­ac­tions be­ing the rule. 2021 also brought a new re­cord high in the num­ber of trans­ac­tions in which the buy­er­'s pay­ment ob­lig­a­tions were se­cured. With re­gard to con­tract design, the buy­er-friendly trend con­tin­ued, as re­flec­ted es­pe­cially by a de­crease in de min­imis and bas­ket clauses as well as caps. Lo­gist­ics as­sets more pop­u­lar than ever Of­fice prop­er­ties were a pop­u­lar as­set class in 2021 des­pite all the un­cer­tainty sur­round­ing the COV­ID-19 pan­dem­ic, al­though some mar­ket share was lost to lo­gist­ics and res­id­en­tial. The slight down­ward trend in of­fice trans­ac­tions handled by CMS seen in pre­vi­ous years non­ethe­less con­tin­ued, with their share de­clin­ing from 30% in 2020 to 19%. The reas­on for the de­clin­ing pro­por­tion of trans­ac­tions in the of­fice seg­ment is likely to be two-fold, com­bin­ing the lack of avail­able core prop­er­ties and the cur­rent un­cer­tainty around the im­pact of hy­brid ways of work­ing on de­mand for of­fice space.The res­id­en­tial and lo­gist­ics as­set classes on the oth­er hand were es­pe­cially pop­u­lar in 2021, each with a mar­ket share of 23%, com­pared to 22% and 19% re­spect­ively in 2020. One of the key factors for this trend was the stable in­come gen­er­ated by res­id­en­tial and lo­gist­ics prop­er­ties, which is par­tic­u­larly at­tract­ive to in­vestors. Lo­gist­ics as­sets ad­di­tion­ally be­nefited from the on­go­ing growth of on­line shop­ping, which was boos­ted re­cently by the COV­ID-19 pan­dem­ic and the re­lated clos­ure of re­tail shops, lead­ing to an in­creased need for de­liv­ery and dis­tri­bu­tion centres. High de­mand from in­ter­na­tion­al, mostly in­tra-European, in­vestors In­ter­na­tion­al in­vestors were more act­ive again last year: they ac­coun­ted for 55% of deals in 2021, com­pared to 43% in 2020. In 2020, in­ter­na­tion­al in­vestors had a dif­fi­cult time, not least due to the im­pact of the COV­ID-19 pan­dem­ic. The as­so­ci­ated travel re­stric­tions meant that many in­ter­na­tion­al in­vestors from oth­er con­tin­ents were forced to post­pone their planned trans­ac­tions. The prop­erty mar­ket seems to have re­covered from these ef­fects last year, with a new re­cord 55% of trans­ac­tions in­volving for­eign in­vestors. However, these for­eign in­vestors were mostly from with­in Europe; the num­ber of in­ter­con­tin­ent­al trans­ac­tions re­mained be­low pre-pan­dem­ic levels in 2021. Sellers seek se­cur­ity An in­creased de­sire for se­cur­ity on the part of sellers con­tin­ued to be a fea­ture in 2021. The share of trans­ac­tions in which steps were taken to en­sure that the buy­er met its fin­an­cial ob­lig­a­tions rose fur­ther in 2021. Sellers were gran­ted se­cur­ity in more than two thirds of cases (70%). This trend is con­sist­ent with 2020, when an in­creased de­sire for se­cur­ity on the part of sellers was already ap­par­ent. In con­trast, se­cur­ity was agreed in less than 50% of all trans­ac­tions in the peri­od from 2015 to 2018. The cur­rent high level is due in part to an in­creased de­sire for se­cur­ity on the part of sellers as a res­ult of the COV­ID-19 pan­dem­ic; they were of­ten un­cer­tain about the buy­er’s solvency go­ing for­ward. Buy­ers con­tin­ue to catch up in con­trac­tu­al risk al­loc­a­tion Buy­ers were able to catch up fur­ther in terms of con­trac­tu­al risk al­loc­a­tion. The pro­por­tion of trans­ac­tions with seller-friendly de min­imis clauses and bas­ket clauses (i.e. clauses that provide for a threshold or min­im­um lim­it for guar­an­tee claims by the buy­er) stag­nated or de­clined some­what com­pared with the pre­ced­ing years. In the pre­vi­ous year, after a no­tice­able de­cline, agree­ments aimed at lim­it­ing li­ab­il­ity were made in 44% (de min­imis clauses) and 41% (bas­ket clauses) of cases. The share of deals with a bas­ket clause fell fur­ther to 32% in 2021. As in 2020, a de min­imis clause was in­cluded in 44% of the trans­ac­tions ana­lysed. A sim­il­ar trend was seen in con­trac­tu­ally-agreed li­ab­il­ity caps. Whilst the pro­por­tion of trans­ac­tions with a cap was well over 60% in some cases in the years up to 2018, the per­cent­age of agree­ments with a con­trac­tu­ally-agreed max­im­um li­ab­il­ity fell slightly from 56% in 2020 to 50%.

In­ter­ested in the latest trends and rel­ev­ant is­sues on dis­pute res­ol­u­tion and ar­bit­ra­tion in Africa?CMS ex­perts will dis­cuss the latest trends in dis­pute res­ol­u­tion and ar­bit­ra­tion in the re­gion, es­pe­cially...

Real es­tate in­vest­ment mar­kets re­main stable whilst buy­ers con­tin­ue to catch up in con­trac­tu­al risk al­loc­a­tion Lo­gist­ics as­sets more pop­u­lar than ever De­mand from in­ter­na­tion­al in­vestors reaches re­cord...

Com­pan­ies in sev­er­al sec­tors are cur­rently faced with sig­ni­fic­ant in­creases in the price of raw ma­ter­i­als (in­clud­ing gas and pet­rol), or even short­ages in or tem­por­ary in­ter­rup­tions to sup­plies. These...

As a busi­ness, your most val­ued as­sets can be the things you can’t touch or see. In­tan­gible as­sets such as pat­ents, for­mu­las, soft­ware, designs and data are now driv­ing cor­por­ate per­form­ance. And in...

The glob­al pan­dem­ic has ris­en a grow­ing aware­ness of the risks of ad­verse ef­fects of drugs and vac­cines. This un­ex­pec­ted event has put health­care pro­fes­sion­als in a situ­ation whereby the stand­ard pro­to­cols...

Mia Kala­jdžić of Bardek, Lisac, Mušec, Skoko (in co-op­er­a­tion with CMS Reich-Rohr­wig Hainz) and Den­nis Fromm of CMS Ger­many dis­cuss how law firms can de­liv­er on their en­vir­on­ment­al, so­cial and gov­ernance tar­gets.En­vir­on­ment­al, so­cial and gov­ernance (ESG) is a phrase that has been thrown around with­in the leg­al in­dustry for quite some time now. However, many law firms have re­cently be­gun to real­ise that the oc­ca­sion­al pro bono or char­it­able ac­tion here and there in sup­port of sus­tain­ab­il­ity com­mit­ments does not lead to suc­cess­ful ESG ad­op­tion with­in their firms. As a res­ult, there is still huge po­ten­tial for im­prove­ment in the leg­al mar­ket.The di­men­sions of sus­tain­able busi­ness are widely un­der­es­tim­ated and pro­fes­sion­al sus­tain­ab­il­ity stand­ards are of­ten not ad­hered to. This leads to in­tens­i­fied gre­en­wash­ing, blue­wash­ing or pink­wash­ing, rather than an act­ive con­tri­bu­tion to­wards a more sus­tain­able world.Against this back­drop, there are six im­port­ant areas to con­sider when ad­dress­ing ESG per­form­ance with­in law firms: Car­bon foot­print The term ESG im­plies quite clearly that there are more than just en­vir­on­ment­al is­sues linked to sus­tain­ab­il­ity. Fur­ther­more, the term in­dic­ates that en­vir­on­ment­al, so­cial and gov­ernance is­sues are con­nec­ted. Law firms are ser­vice pro­viders. There­fore, law­yers are faced with a range of sus­tain­ab­il­ity is­sues that are spe­cif­ic to the pro­vi­sion of leg­al ser­vices. These dif­fer from is­sues that an air­line might face, for in­stance, or those that af­fect a loc­al en­ergy pro­vider, where car­bon foot­print is very much the main con­cern in terms of sus­tain­ab­il­ity im­pact. As a gen­er­al rule, cor­por­ate sus­tain­ab­il­ity is about re­du­cing a law firm’s neg­at­ive im­pact and in­creas­ing its pos­it­ive im­pact in sev­er­al areas. To identi­fy these areas, a ma­ter­i­al­ity ana­lys­is will need to be car­ried out for the firm (see box “Ma­ter­i­al­ity ana­lys­is”). While the find­ings of a ma­ter­i­al­ity ana­lys­is are in­di­vidu­al, there are in­dustry spe­cif­ics. For law firms, one of these spe­cif­ics is that the “S” and the “G” in ESG are more sig­ni­fic­ant than the “E”, as a law firm’s en­vir­on­ment­al im­pact is re­l­at­ively low. There­fore, a law firm’s ESG ap­proach should in­clude a lot more than just its car­bon foot­print.