April 2012 Issue

At a time of weak equity markets and ultra-low interest rates, high investor demand for dividend yield can be met by income flows from European listed property companies – particularly REITs. A key feature of real estate investments is their ability, if managed and structured correctly, to generate stable income returns. Since 1999, European property companies’ […]

UK market overview In February the Jones Lang LaSalle Balanced Fund Index fell for the first time since July 2009, a trend that continued in March, when the index fell -0.23%, writes Ashley Marks. In previous months the index was flat or showed a slight increase in performance. The index has risen 1.88% in the […]

This year has opened with a quieter first quarter in the UK and elsewhere for property investment. JLL reported subdued global volumes of $75bn, 23% down on Q1 2011. According to The Property Archive, Q1 2012 UK investment volumes were £7.53bn, 12.4% lower than the £8.6bn in Q1 2011 and 28.4% below the £10.52bn in […]

Fresh from winning the work-out of Uni-Invest’s assets, US private equity giant TPG is warming to European real estate and may be set to launch its first dedicated property fund, reports Lucy Scott

Government backs resi REITs rather than commercial property debt vehicles, writes Doug Morrison

Relaxation of conversion charge will allow variety of firms to become REITs, reports Alex Catalan

High swap breakage costs are preventing work-out of some legacy loans, writes Alex Catalano

Third European fund rounds off investments by backing new offices venture, writes Jane Robert

ECB rescue has only postponed deleveraging, delegates at CREFC event say. Jane Roberts reports

REITs are a tale of two continents. In the US, they are a 134-strong, $200bn public equity market business, plus a $70bn private one. In Europe, it’s been a struggle for REITs to establish themselves. The US REIT sector is a 50-year veteran of several boom-and-bust cycles, but Europe’s  fledgling one was delivered five years […]

CBRE’s unlisted fund trading platform notched up €270m of deals in Q1 PropertyMatch, CBRE’s trading platform for secondary units in unlisted funds, has made more than €1bn of trades. The milestone was reached after an exceptionally big volume was traded in the first quarter of this year, including two much larger-than-average-size trades of around £50m […]

Secondaries specialist Madison International Realty has bought a 57% stake in Frankfurt office tower Trianon from Morgan Stanley’s German open-ended P2 value fund, which is liquidating. P2 paid 620m euros for the stake at the top of the market. The remainder is owned by Morgan Stanley’s Eurozone Office fund. The US private equity fund did […]

Valad Europe this month extended a facility to refinance its €1.1bn joint venture with Lloyds Banking Group. The refinancing extends the three-year facility put in place in July 2009 to December 2016. Under the original restructuring, Valad wrote down the equity on assets secured against loans originally made by Bank of Scotland, after multiple loan-to- […]

US private equity firm lines up second deal for former Lehman’s loans Lone Star is on track to complete the acquisition of a second tranche of loans from Germany’s Bundesbank by the end of this month. The US private equity fund is buying €960m of notes from Excalibur, the former Lehman Brothers collateralised debt obligation, […]

Goldman Sachs is attempting to syndicate a £210m whole loan  it made to Blackstone for the acquisition of Devonshire Square in the City of London. The US bank lent all the debt for Blackstone’s £325m-£330m purchase of the 13-building estate in E1. The blended margin on the five-year term finance is thought to be around […]

AIM-listed commercial fund manager First Property Group has started talks with investors about launching a new fund. In a year-end trading statement, the company, which manages £366m of assets, said its UK fund had invested £96m of its £106m capital. The new fund will be called Fprop Sterling Income Fund. The group also runs the […]

Orchard Street Investment Management and GIC Real Estate are launching a second fund to buy assets to improve through active management. Special Situations Fund II will take on debt with up to 65% loan-to-value levels and have firepower of at least £200m. The first fund, set up in 2008, bought £130m-worth of property and runs […]

Joint venture with Investire Immobiliare will launch pan-European fund

Hunter Property Fund Management is funding a Czech retail scheme with €9.2m of equity. The Edinburgh-based manager’s Prague team arranged the funding for big box retailer OBI, which is taking a store in Frydek Mistek on a 15-year lease. “The forward commitment structure allows the developer to attain development finance by having a contracted exit; […]

Peakside Capital is expanding into Poland via the acquisition of Allied Irish Banks’ local fund management subsidiary. The boutique European private equity firm, established 18 months ago by Roger Barris and other real estate colleagues from Bank of America Merrill Lynch’s principal investments division, signed an agreement this month to buy the business, plus AIB’s […]

Claxon moves to Cordea Savills John Claxon has left BNP Paribas REIM to join Cordea Savills, where he will help to expand the European fund manager’s segregated mandates business. Claxon is a director of investment and will report to George Tindley, Cordea Savills’ head of UK investment. BNP Paribas recently lost one of its longest-standing […]

Grosvenor has moved into the UK industrial market via an indirect investment in John Sims’ Industrial Ownership. Sims is relaunching his I.O. Asset Management business, which he sold in 2007, by setting up a fund called I.O. Investment with capital from Grosvenor for a £35m investment programme. Sims’ and partner Angus Scott Brown’s business model […]

Private bank and wealth manager LJ Capital has provided up to £500m of capital to set up a private equity fund manager with former London & Regional deal-finder Jason Kow. The company, Queensgate Investments, has launched a fund backed by five LJ Investment Group family office clients, who have allocated £100m of discretionary capital and […]

New firm will co-run £300m European Real Estate Debt Fund with Duet

Italian and Spanish investors seek international safe havens for capital

Deutsche Postbank is financing the acquisition by sharia-compliant Gatehouse Bank of a West Midlands office block let to BT. Invista Foundation Property Trust, now managed by Schroders, sold the newly-completed, 75,000 sq ft building on the edge of West Bromwich for £19.5m, at a 5.8% initial yield. The lease runs for another 14 years; IFPT […]

Royal Bank of Scotland and Santander have refinanced Primary Health Properties’ banking facilities. The banks have lent £175m, comprising a £125m term loan and a £50m revolving facility. Both banks were already lenders to PHP but an existing bilateral loan with Allied Irish Banks has been restructured. Key covenants of the four- year facility are […]

TPG is considering raising its first pure property fund. The US private equity firm, which manages $50bn in assets globally, last week won a large European property deal with Patron Capital, and is increasing its focus on Europe. It is hunting for similarly complex deals to the distressed Dutch Uni-Invest portfolio, which the pair landed […]

CMBS investors and advisers have closely watched the conduct of the Uni-Invest restructuring and its outcome. Peter Hansell, head of property at Cairn Capital, said: “We were very pleased with the very high level of engagement of the noteholders across the entire capital structure.” As expected, the class B, C and D noteholders all voted […]

Class B, C, and D noteholders are wiped out as class As swing vote for Patron/TPG proposal

A stream of US investment advisers want to set up or expand in London in anticipation of more distressed European real estate opportunities. They include Boston-based hedge fund Baupost, which submitted a bid for the Excalibur loans acquired by Lone Star and has a joint venture with Helical Bar. Others targeting expansion include Centerbridge Partners, […]

Senior Santander real estate finance director joins biggest landesban

Royal Bank of Scotland is expected to announce that it has appointed Jones Lang LaSalle to advise on its Ulster Bank non-performing property loan portfolio. RBS had invited JLL to pitch for the instruction along with CBRE, DTZ and Savills. The Irish book is one of the bank’s most pressing problems. In February, RBS said […]

Laxfield Capital is set to be appointed originating partner to US giant Mass Mutual, the latest big insurer to enter Europe’s property lending markets

Capital raising has been quiet in the first few months of 2012. There is no single strong theme as there was in 2011, when a relatively high amount of equity was raised for mezzanine debt. The capital that has been raised so far this year is very focused and not much is for core strategies. […]

Two bodies have published documents aimed at helping real estate lenders. The Loan Market Association’s real estate finance agreement was published on 16 April, while the Commercial Real Estate Finance Council Europe published a tax guide for lenders and a lending principles paper. The LMA represents lenders in the syndicated loan market and its 200-page […]