Savills, the property agency-to-investment firm, will start talks this week to sell a £500 million stake in its £2.5 billion European asset management arm, The Times has learnt.

About a dozen of Britain’s largest pension fund investors and quoted property firms who have yet to build a large presence in continental Europe are considering investing in Cordea Savills, the fund management wing of Savills, according to property sources.

Potential bidders among institutional buyers are thought to include Morley, Henderson, the Prudential and HBOS. Aberdeen Asset Management is another possible bidder.

The quoted property firms Land Securities and British Land are also understood to be considering investing in Cordea Savills, which has portfolios in Italy, Germany, the Republic of Ireland, France, the Nordic countries and Britain.

Savills is understood to be looking at taking both equity and debt investment to expand its Cordea arm. It has hired British Linen bank to handle the fundraising.

Any sale would dilute Savills’ existing 60 per cent stake in Cordea and the 40 per cent held by management led by Bill Hackney, Justin O’Connor and John Partridge, the former Deutsche Bank financier with a personal 7 per cent stake.

Among big institutional firms, investment enthusiasm for continental Europe has picked up markedly over the past six months, as fears intensify that the pace of return from the UK commercial property market will slow this year after three bull years where returns averaged around 20 per cent.

Aubrey Adams, the chief executive of Savills, gave a heavy hint to investors a fortnight ago, when he delivered end-of-year figures, that a part-sale of Cordea was in the offing. Cordea’s Italian business is growing rapidly and has about €800 million (£542 million) of assets under offer.

This month Cordea agreed to buy 81 per cent of the Boccaccio fund, which comes with a portfolio of 19 retail buildings worth €306 million (£207 million) in Milan, Florence, Rome and Turin.

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