December 2012 Issue

As Europe’s commercial real estate debt market enters its sixth year of credit crunch disruption, it is increasingly clear that traditional bank lending cannot meet demand for new finance. However, three significant bond deals this year moved real estate financing into the high-yield spectrum that we believe is part of the outlook for 2013. The […]

UK market overview The Jones Lang LaSalle Balanced Fund Index fell by a further 0.88% in November,  a 12-month return of -2.93%, which falls to -5.96% including secondary market pricing, writes Ashley Marks. This relatively sharp fall can be attributed to redemption queues becoming a serious issue for some open-ended funds, with a small group […]

Basel lll raises cost and complexity for banks providing interest rate derivatives, reports Alex Catalano

Switch from swaps to exchange trading may stem property derivatives’ decline, writes Jane Roberts

Investors have largely stuck with property this year, reports Jane Roberts, convinced by its ability to deliver reasonable returns – even against a backdrop of double dip UK recession, eurozone economic turmoil and banks’ struggle to claw their way back from the global financial crisis

Other PUTs expected to follow M&G fund’s switch to tax-transparent vehicle, writes Jane Roberts

Bank’s non-core real estate team believes German market is ripe for disposals, writes Lauren Parr

From this month, investors in the open-ended UBS Triton fund who want to take out their money may have to wait up to two years. A queue of them wanting to redeem prompted a liquidity crisis that has led the fund to change its redemption policy so that the manager may defer redemption of units […]

New entrants have yet to fill gap left by banks not lending, while big refinancing problem remains

Land Securities plans to expand  its leisure property holdings by acquiring a 42% stake in the X-Leisure fund. The REIT signed agreements to buy Capital and Regional’s 11.9% stake and AREA Property Partnership’s 30.1% of the £580.6m fund for £109.6m. It also plans to buy the fund’s management company for £1m. The price represents 34p […]

Investors will be able to trade ‘on exchange’ property derivatives based on IPD sub-sectors early next year. Deutsche Börse-owned derivatives exchange Eurex is targeting next February to list standardised futures contracts based on IPD’s indexes for City offices, West End and Mid Town offices, shopping centres, retail warehouses and South East industrial property. “We are […]

NAMA is believed to be in the final stages of selling an €85m junior loan backed by Treasury Holdings’ €300m Irish retail and office portfolio. Ireland’s National Asset Management Agency appointed a large panel of advisers last January to sell loans, but this  is the first deal that is close to coming off. The 16 […]

Founders of property debt arm leave as mezzanine raising proves tough

Brookland Partners has hired Gareck Wilson as a director and Amar Majithia, as its business continues to expand. Wilson was formerly in the commercial real estate group of Deutsche Bank, while Majithia worked in Ernst & Young’s real estate corporate finance team. Brookland, which is advising NAMA on its interest in a large Irish portfolio […]

Royal Bank of Scotland is said to be preparing €300m of German property for sale. The bank is exiting its German assets one by one, but a team  in the non-core group is also assembling portfolios of small German properties for sale. Its exposure there includes multi-family apartments and the bulk are office buildings  in […]

Further big sales ahead in 2013 as Lloyds prepares two more portfolios

Fidelity International is fundraising again for its UK and pan-European funds. The UK-based team, led by Neil Cable, is targeting €200m of new capital for its €125m  Eurozone Select Real Estate Fund, which was launched  last year and is almost fully invested. Fidelity also hopes to raise  up to £200m more for its four- year-old, […]

Third EPISO vehicle is first in series to be managed exclusively by Tristan

Alpha Plus and UNITE closed retail bond offers this month, raising capital at the top end of, or above, their target ranges. UNITE raised £90m at the closing of its 7.5-year, unsecured bond, which pays 6.125%, after going to the market on 21  November seeking between £50m and £75m. Delancey-managed Alpha Plus raised £48.5m at […]

Property’s longest-standing and largest equity fund has merged its two share classes into a single offering. Shareholders in TR Property Investment Trust, formerly run by Chris Turner and now by Marcus Phayre-Mudge, agreed last week to convert the Sigma shares into ordinary shares and to merge the underlying portfolios. The Sigma share class was launched […]

Volumes of secondary trades in UK and European unlisted funds continued to rise in 2012 according to screen-based trading platform PropertyMatch. “The story is in the trend line,” said Paul Robinson, director of CBRE Real Estate Finance, which runs the platform with broker GFI. Robinson expected volumes to be £700m by the end of the […]

DekaBank and Helaba have lent £66m to finance Oxford Properties’ £115m purchase of St Martins Court. The five-year senior loan was jointly underwritten, each bank taking an equal share. The 106,218 sq ft office block at 10 Paternoster Row is let to CBRE for the next 10 years and the loan-to-value ratio reflects “the quality of […]

London and Paris deals help bank notch up better-than-expected total

Catalyst Capital has structured a €155m acquisition of 30 retail assets for its European Property Fund in partnership with a US investor. Catalyst’s opportunity fund invested €33m of equity in the transaction and brought in a US investor, which put in about €25m of equity. The rest of the deal, including costs and equity for capital […]

AXA Spain is making a small investment, of €10m, in Spain’s ‘bad bank’, SAREB. It is likely to inject 20% in equity and 80% in subordinated debt. The French insurer’s Spanish entity believes it is important for the Spanish financial system to start consolidating and go back to normal business as soon as possible. It […]

Newlon Housing Trust has raised £100m of senior secured debt through a private placement with US and UK institutions. The 15 and 20-year notes have an average interest rate  of 4.31% – the second lowest coupon achieved by a housing association in the capital markets this year. Newlon, which owns 7,300 properties mainly in north […]

European debt fund’s whole loans strategy proves attractive to investors

Investors in balanced UK property fund accept longer redemption deferral period, following manager’s departure and loss of value in £765m vehicle

The Property Derivatives Industry Group is redoubling its efforts to make it possible for banks to use property derivatives to hedge their own real estate risk. The special interest group of the Investment Property Forum is in talks with the Bank of England. PDIG’s chairman, Paul Ogden, founder of fund manager inProp Capital, said that […]