Drooms: complexity adds to transaction times for RE deals
Transaction times for real estate deals are getting longer, with the UK the worst affected with an average 499 days to complete, delegates heard yesterday at the Real Estate Trends in 2025 webinar, organised by Drooms.
“On our platform we see the data and the time it takes to get to closure and there is no doubt that market transactions used to be a lot quicker,” said Alexandre Grellier, CEO, Drooms. “There is more complexity now and more requests for documentation.”
The data volume needed for transactions has increased by 20% in one year from 3 gigabytes to 3.6 gigabytes, according to Drooms data. This is partly due to EU Taxonomy and the increased requirements for ESG compliance.
“ESG due diligence has now become standard, and more documents need to be submitted and reviewed, which takes time,” said Christiane Conrads, partner, global real estate sustainability leader, PwC. “Institutional investors demand the highest standards. Even Japanese pension funds investing in Saudi Arabia insist on compliance with EU regulations.”
Due diligence takes longer in a challenging market like the current one, but it is not all due to ESG compliance.
“A lot of time is lost on the financing side,” said Timo Tschammler, founder and executive partner, Twain Towers. “Once it was quicker to arrange mezzanine or find additional capital, now it is much harder. There was a hope that pure equity buyers would save the market, but it has not materialised.”
Another factor that slows down transactions is the wide gap between sellers’ and buyers’ expectations. The UK is the quickest market in Europe to adapt to price corrections, as it is not constrained by valuation regimes, yet it has recorded the slowest average time to complete a deal.
“The top reason for delays is lack of an agreement on price, the second financing issues,” said Tschammler. “You need a willing seller and a willing buyer to conclude a deal, and the bid/ask gap is too wide.”
Nearly half (42%) of real estate companies see regulatory hurdles as the biggest obstacle to concluding cross border deals, according to Drooms. More rules need to be observed and more documents need to be submitted.
However, technology can come to the rescue. “Complexity will become less and less of an issue because technology is changing the way due diligence is done,” said Grellier. “In future the process will be easier, quicker and more transparent.”
Technology companies already have, and will develop even more, tools to analyse and simplify the transaction process. Artificial intelligence, in particular, is a real game changer, he said, and brings “tremendous results.”
