April 2011 Issue

Real Estate Capital UK commentary The UK Budget was surprisingly favourable to REITs. The government is to consult on abolishing the conversion charge for entry to the regime; introducing a ‘diverse ownership’ rule for institutional investors, to allow REITs backed by seed investors whose interests would dilute over time; and the disaggregation of stamp duty on residential […]

The UK real estate industry is moving back to the future. In five to 10 years’ time, insurance firms will be significant debt providers; banks will play a smaller role in financing real estate; there will be more funding via the capital markets – CMBS, bonds, debentures; and indirect equity investment via unlisted funds is […]

UK market overview The Jones Lang LaSalle Balanced Fund Index rose 0.30% in March, compared  with a 0.45% rise in February, writes Julian Schiller. The index has risen 0.97% since the start of the year and 4.67% over the past 12 months. Taking into account secondary market pricing, the 12-month return falls to a more […]

The IPD all-property return for March was the strongest so far this year, yet pricing for 2011 contracts fell back to 5% CBRE-GFI market commentary Pricing for IPD derivatives contracts fell in the past month,  contradicting the strong all-property total returns figure for  March, writes Sam Whitham. March was 2011’s strongest month so far, with […]

Investment volumes were down in Q1 2011 to £8bn from £13.2bn* in Q4 2010, but were still higher than Q1, Q2 and Q3 2010. Over 60% of buyers were UK institutions and overseas investors. The Irish and Germans continued to be big sellers, as were private property companies. Initial yields trailed upwards as investors began […]

The Austrian bank’s year-old real estate lending arm, a senior lender in a number of club deals, is taking on more staff with a target of writing €800m of new loans this year, reports Lauren Parr

Fund manager aims to improve mainstream returns by cutting energy use, reports Jane Roberts.

Interest in sustainable investing in property is picking up, despite a lack of empirical evidence in Europe so far that sustainable buildings have higher capital values or rents than resource-guzzling alternatives. “This topic is getting a lot of traction with investors,” says Jean-Francois Le Teno, AXA Real Estate’s head of sustainability. “We would have been […]

Owners and tenants back initiatives to monitor and cut carbon emissions, reports Jane Roberts

Draft derivatives rules may still be a blow to property, despite EU concessions, writes Jane Roberts

FSA urges banks to scrutinise property loanbooks when setting capital reserves, writes Lauren Parr

Capital reserve rules will further squeeze banks’ lending ability and raise costs, writes Lauren Parr

Research for INREV shows draft insurance rules over-estimate property risk, writes Alex Catalano The Solvency II proposal that insurers should set aside capital to cover a 25% fall in the value of their real estate investments is much too high and should be lowered to 15%, according to European unlisted real estate funds body INREV. […]

Inflation rise to twice Bank of England target rate puts it back on the agenda. Alex Catalano reports.

The committee just set up to look at ways to improve CMBS in the future is very welcome. Chairman Nassar Hussain deserves the thanks of many for agreeing to take on a great deal of extra work and, some might say, a poisoned chalice. To get results, Hussain will have to try to balance the […]

You’ll be familiar with INREV, EPRA, the BPF and the IPF, the APB and the CREFC. Possibly you’re getting to know the PBF? But be prepared for some more alphabet soup: this year has seen the launch of the GRA, the ISA and (wait for it) the GRESBF. The latter organisations have more than a […]

The net balance of lenders reporting a rise in availability of credit for commercial property in the latest Bank of England Credit Conditions Survey was -13.7%. The figure was a surprise and is worse than had been expected at the time of the previous survey, when it was 2.1%. It contradicts the Property Banking Forum’s […]

First Lending Intentions Survey reports debt availability up 50% on 2010

HSBC and Santander have made a £120m loan to Grainger, secured on a £285m portfolio of eight London residential blocks. The loan, at a 4.28% average cost, replaces a previous £188m Royal Bank of Scotland/Lloyds loan, giving those banks an exit and introducing two new bank relationships for Grainger. The quoted residential firm has also […]

The Independent Commission on Banking’s (ICB) interim report, published in April, avoided a complete separation of retail and investment banking. Under its recommendations, banks will still be able to transfer capital and liquidity from their UK retail banking activities to their investment banking business, but the ICB is considering forms of ring-fencing for retail operations. […]

The M&G Secured Property Income Fund has bought a Tesco superstore in Cardiff in an off-market deal, taking its assets above £800m. Advised by Prupim, the fund paid £67m for the store in Culverhouse Cross in a 25-year sale-and-leaseback deal with annual RPI-linked rent reviews. The fund was launched three and a half years ago […]

Legal & General Investment Management expects to finalise a strategy by early summer for lending to the property sector. The proposal is being drawn up by the fixed income division rather than the property group of the top-four UK insurance company. The strategy is being led by fixed-income product director Ashley Goldblatt, who has been […]

Finance boutique helps property company land non-bank-market debt

Global fund raising for property funds has stalled to its slowest rate for eight years according to Preqin’s latest quarterly data. The firm’s Q1 2011 figures found that 17 funds raised $5.8bn at final closings, down from $6.5bn in Q4 2010 and far lower than the typical $30bn quarterly figures for 2006-08. Preqin logged four […]

Legal & General Property’s UK Property Income Fund has taken in a further £100m from investors in France, Finland, Switzerland and Japan. The new money takes the fund’s net asset value to more than £250m and its gross asset value to £400m. The fund, managed by Charlie Walker, buys large assets: it recently bought Fremlin […]

LaSalle junior debt fund lands £150m and AXA fund an additional €180m

Scottish Widows Investment Partnership and Cushman & Wakefield Investors have raised €100m for their pan-European urban retail fund. Three European institutional investors have invested in the PURetail Fund, which will gear up to invest €200m. The fund will buy UK, French, German and Swedish city-centre shops in lot sizes up to €40m and seek 10-12% […]

Citigroup’s EMC and Eurohypo’s Opera CMBS loan conduits are the best performing in Europe, while ABN Amro’s Talisman, followed by Lehman Brothers’ Windermere, are the worst, according to Fitch Ratings. Fitch said EMC and Opera had the highest proportion of fully performing loans, both at 82%. EMC also had the highest level of repayments (62.6%), […]

MEPC has continued to make in-roads into its £470m of securitised debt that was arranged by Eurohypo and matures in July 2012. The property company, which is owned by the BT and Royal Mail pension funds, this week prepaid £74.5m of the loan securitised via the Opera Finance (MEPC) CMBS. This follows a £102.5m first- […]

HIP buys units in Standard Life and Unite funds on secondary market Henderson Global Investors’ European fund of funds has made its first UK investments. The open-ended Henderson Indirect Property Fund (HIP) bought around €27m of units in Standard Life’s UK Shopping Centre Trust and the Unite UK Student Accommodation Fund on the secondary market. […]

Committee of market participants will explore ways to restructure CMBS

INREV reshuffles board INREV has made three board appointments to beef up its response to regulatory and global standardisation pressures. They are: Christian Delaire, CEO of AEW Europe; Matthew Ryall, head of indirect investment at Allianz Real Estate; and Neil Harris, head of European asset management at GIC Real Estate. Stepping down are Chris Morrish […]

The €222m of proceeds from the German multi-family housing GSW loan in Goldman Sachs’ Fleet Street 3 CMBS has become the centre of a court battle among note holders. The most senior class A1 note holders want a fully sequential pay down, which would mean they receive all the money. But note holders lower down […]

Crédit Agricole CIB and Handelsbanken have provided a £60m loan to refinance the Beaumont Leys Shopping Centre in Leicester, owned by a British Land and Tesco joint venture. The five-year debt facility was used to repay an existing bank loan on maturity and return funds to the partners. Crédit Agricole acted as facility agent and […]

Crédit Agricole CIB and Handelsbanken have provided  a £60m loan to refinance the Beaumont Leys Shopping Centre in Leicester, owned by a British Land and Tesco joint venture. The five-year debt facility was used to repay an existing bank loan on maturity and return funds to the partners. Crédit Agricole acted as facility agent and […]

Credit adviser proposes extending loan on €1bn German housing CMBS AgFe has been mandated on a potential restructuring of the loan underlying €1bn German multi-family housing CMBS  Immeo Residential Finance No 2 (Immeo 2). Credit adviser AgFe, where Natalie Howard is head of real estate, is working for the borrower, Immeo Wohnen. It has put […]

Brookland Partners has hired Griff Winkler from Hatfield Philips to spearhead the principal side of its business. As a director, he will focus on investment and business opportunities, working with capital providers and other joint venture partners. His appointment marks the start of Brookland’s initiative to launch a debt vehicle that will provide senior whole loans, super-stretched […]

HSH Nordbank is believed to have begun talking to London office staff about redundancies. The German bank is quitting international lending to focus on its core German business. As part of this process the London team recently appointed advisers and receivers on several London sites it lent on, including Aldgate Place, E1 and Triton Court. […]

Helaba, Crédit Foncier de France and Aareal have provided €138m for the first refinancing of securitised debt in France since the crisis began. Benson Elliot Capital Management and joint-venture partner Générale Continentale Investissements used the five-year loan to pay off debt in Morgan Stanley’s ELoC 28 CMBS. Originally lent by the bank in February 2007, […]

UK property firm uses private US placement as alternative to bank debt

Ten firms line up to buy Australian property firm’s European investment manager after shareholders reject management’s £52m buyout offer