Operators Selling Property Assets in Europe Are Changing Who Invests in Real Estate – and How

Written by:

Rudi Davis

Date:

04 May 2026

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Across Europe, operators in sectors ranging from retail and logistics to senior housing and student accommodation are selling the properties they occupy and leasing them back. The trend is drawing new types of investors into real estate, creating hybrid deal structures that combine property ownership with operational risk in ways the industry is still learning to manage.

According to Antoine Mercier, Partner at White & Case LLP, this move toward asset-light operations is doing more than creating buying opportunities. It is forcing investors, lenders, and legal teams to rethink what real estate investment involves — who the counterparties are, what risks matter, and how deals are financed.

The Asset-Light Operator and the Pure Real Estate Investor

The basic dynamic is straightforward: operators running clinics, warehouses, hotels, or care homes find that holding real estate ties up capital and limits flexibility. By selling properties to investors and leasing them back, operators free up funds for their core business while maintaining day-to-day control of the facilities.

For real estate investors, the appeal is a stable, long-term income stream backed by a lease from an established operator. Mercier points to a deal he advised on involving Realty Income’s acquisition of approximately 90 large-format retail properties from Decathlon across five European countries. The operator shed the real estate burden; the investor acquired a predictable cash flow.

“The operators don’t want to keep the assets on their balance sheet, because it costs a lot, so they would naturally like to outsource,” Mercier says.

Two Investors, One Asset

These deals have grown more complex as two distinct investor types now frequently occupy the same asset structure. One holds the real estate and collects rent. Another invests in the operational platform — the business generating the revenue that ultimately funds the rent. These investors have different return expectations, different risk tolerances, and different financing needs.

This arrangement creates structural tension. Traditional real estate lenders want security over physical assets. Investors backing the operational platform may prefer corporate finance structures that sit higher in the capital stack, without granting mortgages over individual properties. Reconciling these financing approaches within a single deal requires cross-disciplinary structuring that remains relatively rare in the market.

“You’ve got a cohabitation between more traditional real estate finance and other strategies to develop the operations,” Mercier says.

The consequences for deal teams are significant. Real estate investors who once focused exclusively on lease terms, asset values, and property fundamentals now need to assess the viability of the underlying operating business. A clinic operator, a student housing manager, or a self-storage platform each brings distinct operational risks that directly affect the security of rental income. If the operator fails, the lease income disappears — regardless of the underlying asset value.

A Broader Investor Base

The overlap between property and operational investment is also pulling new categories of investors into asset classes that were previously the domain of specialist real estate funds. Sectors like senior housing, student accommodation, and hospitality are now attracting capital from investors drawn primarily to the operational growth potential rather than the real estate itself.

“Now the real estate investors look at everything — business, real estate, operated assets — and they have a much broader diversity of sources of funding,” Mercier says.

This wider investor base is likely to intensify competition for high-quality operated assets, particularly those with strong operators and long lease terms. It also raises valuation questions: when a property’s value depends in part on the operator’s business performance, standard real estate appraisal methods may not fully capture the associated risk.

Where These Deals Are Headed

Mercier’s practice at White & Case spans both pure real estate acquisitions and the M&A structuring required to manage operational platforms, joint ventures, and multi-party capital structures. One example of how these disciplines converge is a preferred equity deal involving Elsan, a major French operator of clinics and retirement homes, which required the simultaneous management of real estate security, corporate governance, and operational continuity.

As more European operators pursue asset-light strategies and more capital seeks exposure to operated real estate, hybrid structures like these are becoming more common. Several forces are accelerating the trend: rising capital costs make property ownership more burdensome for operators, while investors searching for yield are willing to look beyond traditional property plays. At the same time, sectors such as healthcare and education are expanding across Europe, generating a steady pipeline of operator-owned assets that could be sold and leased back.

The challenge for the industry lies in building the analytical frameworks, legal structures, and investor relationships needed to manage assets that function simultaneously as property and as business. Investors entering these deals without understanding both sides of the equation — the real estate fundamentals and the operational risks — risk mispricing what they are actually buying. Those who develop fluency in both disciplines stand to benefit as the market matures and deal volume grows.

About the Expert: Antoine Mercier is a Partner at White & Case LLP, where he advises on complex real estate and M&A transactions across Europe, with a focus on operated assets, sale-leaseback structures, and hybrid capital arrangements.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.