July/August 2011 Issue

Generally, there is an encouraging convergence of opinion among originators, servicers and investors on what should be done to help the CMBS market  to recover. But debt-driven property investors, who held the reins in the past few years, have not voiced their opinions lately. Perhaps they are just grateful when any debt finance is made […]

REC global commentary Global real estate securities headed south  in June, posting total returns of -2.1% and underperforming equities generally. The  UK was the only leading market to show a positive return, at a modest 0.34%. The UK now leads on a 12-month basis, with 35.1% total returns, ahead of Canada (33.9%) and the US (33.3%). […]

     Real Estate Capital UK commentary UK REITs continued to drift sideways in June and early July, as did the wider stockmarket. Some smaller companies raised capital towards the end  of the period. Food and value retail specialist NewRiver Retail announced a £40m placing at 252p a share to help fund its £68m purchase of four […]

Derivatives pricing implies a positive capital return for 2011, but fears of a eurozone debt crisis have hit post 2011 pricing

UK market overview The Jones Lang LaSalle Balanced Fund Index increased by 0.15% in June, compared with a 0.51% rise in May, writes Julian Schiller. The index has now increased by only 1.98% since the start of the year and 3.51% over the past 12 months. When taking into account secondary market pricing, the 12-month […]

The Duke of Westminster’s property group is expanding its real estate funds business under a new boss after a three-year hiatus, with Japan and Europe fund launches planned, writes Jane Roberts   After swinging from a £236m loss to a £395m profit last year, Grosvenor is in expansion mode once more and so is its £3.8bn […]

Debt funds or those with a specialist twist have won over reluctant investors, reports Jane Roberts It has been another very tough quarter for capital raising for UK and European fund managers. In the April to June period, seven funds either got to first closings, or, in the case of three open-ended vehicles, launched with […]

CBRE will be dominant property fund manager globally after $940m takeover, writes Jane Roberts ING Real Estate Investment Management retains its top spot as the world’s largest property investment manager, but barring an unexpected left-field deal, the name at the top next year will be CBRE Global Investors. CB Richard Ellis’s $940m, game-changing acquisition of […]

RBS chooses Blackstone as most aligned to its aims for future of debt fund, reports Lauren Parr

Borrowers will struggle to refinance debt behind multi-family housing CMBS, writes Lauren Parr German multi-family housing may be a resilient asset class, but it is carrying a massive load of debt that needs to be refinanced just two years from now. Some €12.5bn of this debt is securitised in CMBS and Barclays Capital estimates that […]

Nori Gerardo Lietz, Partners Group’s real estate strategist who is bowing out of the private equity real estate group, wrote a research piece two years ago that is still worth reading. In I Will Survive she described how a very painful market correction, exacerbated by gearing, was causing a breakdown in trust between investors and […]

Blackstone has asked for a loan extension from July until 19 September 2011 for €45.7m of debt secured by a portfolio of German assets let to Deutsche Bank, underlying the MARLIN (EMC II) CMBS transaction. This will allow it time to sell or refinance the remaining assets to fully repay the loan. In return for […]

M&G Investments has raised a further €168m for its mezzanine debt fund at its third and final closing, bringing its total equity to €343m. Placement agent First Avenue Partners helped rally investors for the fund, which at the end of March collected €35m of equity from two European pension funds at its second closing. A […]

UK property companies continue to be active in the US private placement market. British Land is planning to raise about $480m by placing  a series of bonds in the US. It is rumoured that at least one of the landed estates that recently raised capital this way – Howard de Walden, Cadogan and Grosvenor – […]

Eurohypo is to provide up to £86m of debt for Max Property Group’s and Newmarket Property Holdings’ £156.3m purchase of St Katharine Docks, at a loan-to-value ratio of 55%. The 60/40 joint venture has agreed to buy the asset, net of acquisition costs, from AREA Property Partners and F&C REIT Asset Management. Max Property Group will […]

Schroder Property Managers hopes to reach a final closing for the Columbus UK Real Estate Fund by the end of next month. The value-added fund, run by Joe Froud at Columbus Capital Management, has spent 80% of its initial £85m of equity after agreeing to buy a £50m portfolio with two joint-venture partners. Schroders’ property […]

Schroders raises only a third of £200m equity it sought for London fund Schroders has raised just over one third of the new equity it had hoped to attract for its flagship central London fund. The fund manager had a mandate early last year from investors in the West End of London Property Unit Trust […]

ASR REIM has launched a Dutch retail fund and hired CB Richard Ellis to help raise €300m of equity by the end of the year. The manager, a subsidiary of Dutch insurance group ASR, and CBRE will target Dutch institutions and international investors; ASR will remain the cornerstone investor. The closed-ended, mutual fund, with an […]

The loan on prime London property Devonshire House is at risk of payment default unless rental income improves, Fitch Ratings has warned. The loan on the building, owned by US investors Witkoff Group and Madison International, is part of the Windermere XI CMBS. Lease expiries and vacant space mean that the net rental income is […]

Income formed more than a third of total pooled property fund returns in Q1 2011, AREF reports

Nori Gerardo Lietz is leaving private equity firm Partners Group. Gerardo Lietz, a partner at the Swiss-based fund manager since 2007, was a key contributor to its real estate strategy. Two years ago, in a paper called I will survive, she lambasted some private equity real estate fund general partners and outlined what needed to […]

Hermes is to invest in US property for the first time, on behalf of the British Telecom Pension Scheme. Hermes REIM has launched a US fund with two partners: local private company Hampshire Real Estate, which will source assets; and UOB Global Capital, a subsidiary of Singapore’s United Overseas Bank, which will market the fund […]

Deutsche Pfandbriefbank has lent £174m for three clients’ UK and Swedish acquisitions. In the UK, it lent £94.25m to refinance the European Property Investors Special Opportunities fund’s acquisition of the Sapphire retail portfolio, comprising malls in Burnley, Cardiff and Harlow. They were bought for £145m cash in March by the fund’s managers, AEW Europe and […]

Internos seizes IERET mandate, while Orchard Street will run SJP funds

IM Properties has secured £150m of debt in two separate facilities from Handelsbanken and Clydesdale Bank Corporate & Structured Finance. Handelsbanken’s five-year, £95m loan replaces debt that expired in June, while the £55m from Clydesdale replaces a £43m Bank of Ireland loan that was due to mature. The debt is backed by two office, retail and […]

UK investment deal volumes fell to £5.8bn in Q2 2011 from £8.5bn in Q1. According to The Property Archive data, the most active investors remained funds, which acquired over £2.2bn of mainly offices, plus retail and hotels. Overseas buyers, led by Far Eastern investors, spent £1bn  in central London. Jones Lang LaSalle’s Q2 deal figures […]

Manager taps new capital source to back second emerging markets fund

MSREI moves Poulpiquet to Asia Olivier de Poulpiquet, Morgan Stanley Real Estate Investing’s co-chief executive, will move from Europe to Asia following the bank’s decision to become a net buyer in the region again. Brian Niles will take on the role of European head. Heideby hunts for Resolution Mads Heideby has joined Resolution Property to […]

YONIQ seeds German fund Corestate Capital-owned German student housing developer YONIQ has sold four projects worth €63m into a new closed-end fund launched by MPC Münchmeyer Petersen Capital. MPC will market the fund to investors in the third quarter  of this year, while YONIQ will develop and manage assets for a series of student housing […]

Germany’s Bundesbank may sell the bonds it owns in the debt tied to Paris’s Coeur Défense office complex. According to one debt adviser, the Bundesbank owns “a large chunk” of the bonds in Lehman Brothers’ €1.6bn Windermere XII CMBS, through which the asset was funded – a portion of those in every tranche of the […]

Bank to follow up sale of Project Isobel stake with French loans disposal

Four private equity consortiums are competing to buy Anglo Irish Bank’s $9.65bn US loan portfolio. The debt has been split into eight tranches, the largest being $2.26bn of distressed office and industrial loans. Blackstone is working with Deutsche Bank to make a bid by the 9 August deadline, while Westbrook Partners has teamed up with KKR. Centerbridge Capital […]

The EU Commission has approved the €150bn state aid given to Hypo Real Estate during the financial crisis. The clearance given on 18 July means the Commission has also endorsed the new business model for the bank. This involves shrinking its balance sheet and focusing on real estate finance and public investment finance, carried out through […]

Canadian pension fund puts up £190m for London offices joint venture

German bank closes £450m of lending to three UK assets in a single day, paving the way for autumn follow-up to landmark Chiswick Park CMBS