Capital offering activity by European real estate companies plummeted in the three months to June 30, 2022, dropping nearly 90% year over year and 67.7% from the prior quarter, an S&P Global Market Intelligence analysis showed.

European real estate companies raised €1.02 billion through capital offerings in April, a figure which declined to €815.9 million in May and €184.8 million in June.

Interest rate hikes pushed down both public and private real estate markets, Deutsche Bank AG Research Division analyst Thomas Rothaeusler said in written comments to S&P Global Market Intelligence.

"Expensive financing and equity make issuance unattractive," Rothaeusler said.

Belgium-based Warehouses De Pauw raised the most capital in the recent quarter, selling €500 million of green unsecured notes due 2032, and completing a private placement of common stock worth €18.8 million.

Supermarket Income REIT PLC, a U.K.-based shopping center REIT, ranked second after completing a common stock offering worth €364.4 million.

The newly completed offerings bring the year-to-date total to €8.27 billion, down roughly 75% from the €32.93 billion raised in the first six months of 2021.

Real estate companies based in Germany raised the most capital year-to-date, at €1.65 billion, followed closely by France and Belgium at €1.62 billion and €1.61 billion, respectively.

Germany-based, multifamily-focused LEG Immobilien SE raised the most capital year-to-date at €1.5 billion, which it accumulated through a three-tranche debt offering completed Jan. 17.

Industrial-focused VGP NV, based in Belgium followed, selling €1 billion worth of green bonds also on Jan. 17.

Low liquidity weighed on investment markets, bid-ask spreads are wide, and new, reliable pricing points are not expected until at least the autumn, at which point capital raising activity might recover, Rothaeusler said.