Blog #3: The Blossoming New Era of Secondaries — and What It Means for Real Estate in Europe

29/5/25

A quiet revolution is underway in the private equity secondary market—and its ripple effects are finally reaching European real estate. After years of dislocation and caution, the market is now waking up to a new wave of opportunity. Dry Capital sees this not just as a trend, but as a transformation—and one we intend to help shape.

Liquidity, Optionality, and a Reset in Mindset

In 2024, global secondary transaction volumes hit record highs. LP-led secondaries surged to $87 billion, with 40% of sellers being first-timers, signaling broader adoption. GP-led secondaries, meanwhile, grew by 44%, with single-asset continuation vehicles gaining ground. Pricing has also recovered, with average LP transaction pricing climbing to 89% of NAV, up from 85% the year prior.

For years, GPs, such as real estate owners, were hesitant to embrace secondaries beyond distressed situations. Now, we’re seeing a decisive shift. Continuation vehicles are no longer taboo; they’re strategic.

Investment managers are using them to unlock value, provide liquidity, and retain exposure to trophy assets.

Real Estate: Europe's Next Frontier for Secondaries

What does this mean for real estate—particularly here in Europe?

After several years of capital freeze and macroeconomic headwinds, real estate sponsors are finally returning to the table. Many European GPs are sitting on exceptional assets with strong fundamentals but mismatched capital structures. As debt costs have risen and exit markets remain cloudy, the secondary market offers a lifeline—and a launchpad.

Dry Capital is exploring recapitalization strategies, preferred equity structures, and continuation vehicles with motivated players. These aren’t fire sales. These are smart plays to bring in new capital, align incentives, and extend runway for value creation.

And it’s not just anecdotal.

According to Commonfund, a staggering $216 billion in dry powder is now sitting on the sidelines in secondary funds globally. The question isn’t if this capital will move—it’s where and when.

Our View: Opportunity Through Recapitalization

At Dry Capital, we see this as a pivotal moment for real estate secondaries in Europe. The historic friction points—valuation gaps, GP stigma, platform fragmentation—are easing. The institutional appetite is there. The structures are evolving.

Final Thoughts: Shoots of Recovery, Roots of Innovation

The global secondaries boom is creating fertile ground, and Europe’s real estate sector is finally seeing green shoots emerge. As capital reawakens, the winners will be those who move with agility, transparency, and a creative mindset.

Dry Capital stands ready to support this shift—with clarity, conviction, and capital.