June 2012 Issue

We’re all familiar with CBRE’s estimate that around €960bn of European commercial real estate debt is outstanding. Around half is due for repayment before 2014, requiring new capital sources to refinance or repay a wall of maturing debt – just as banks lower or eliminate their commercial real estate debt exposure. The huge capital demands […]

UK market overview Last month the Jones Lang LaSalle Balanced Fund Index continued a downward trend that began in February, losing 0.17%, writes Ashley Marks. The index has risen just 0.73% over the past 12 months and is down 0.38% when secondary market pricing is considered, on account of sharp rises in balanced fund pricing […]

Private wealth backs fund of funds targeting emerging non-European markets, writes Jane Roberts

Savills’ William Newsom predicts new market entrants will drive increase in liquidity for property

Dishner and Denton lead private equity firm’s push into European senior debt, writes Lauren Parr

Having bought Protego as a stepping stone into European property two years ago, Cornerstone believes the time is right to start lending in a now debt-starved market, reports Alex Catalano

Insurers are entering the gap left by banks, with senior debt funds set to follow, writes Jane Roberts

At a recent round table event hosted by Lloyds Banking Group and Real Estate Capital, representatives of leading borrowers and lenders addressed the changing shape of the property lending landscape. Banks’ struggle to restructure balance sheets, new regulatory pressures and the rise of new debt providers were among the topics discussed.

Fears that regulation may scare insurers off CMBS are aired at ABS event, reports Jane Roberts

Private equity players eye assets of 11 open-ended funds facing liquidation, reports Lauren Parr

Solvency II is turning out to be bad news for structured credit. The high level of capital that insurers, and now probably pension funds too, will have to hold against AAA bonds will cause an exodus of investors from these assets. That was the feeling this month at the year’s biggest securitisation conference. One delegate at […]

DekaBank has completed the financing of Thames Court with a £61.875m, five-year loan. The all-in cost of finance was 3.75% for Korean investor Public Officials Benefit Association, which bought the grade A office building in the City of London from Apollo Real Estate for £165m. The leverage on the deal is just under 40% and in […]

Aviva Commercial Finance has provided £104m of senior debt for the building and operation of two headquarters for West Yorkshire Police Authority. The 24-year term loan, made by the insurer’s Public Private Finance team, is the third large loan made by Aviva’s commercial lending business this year. Last month Aviva provided £100m of senior debt […]

Working party favours less responsibility for note trustees if deals sour

Legal & General’s £676m UK Property Unit Trust is adding to its holdings by forward funding two Waitrose supermarket developments. The daily-traded fund has taken in £50.3m of cash in the first five months of this year. Fund manager Matt Jarvis said the widening development finance gap meant that forward funding deals were “a growing […]

Aberdeen Asset Management’s Nordic team is taking on a new Danish client and renewing a Swedish mandate. The fund manager was picked by Danish charity Aage V Jensen to manage €170m of Danish assets, while SB Trygg Liv has extended a mandate to improve performance of its €2bn Swedish property portfolio. SEB appointed Aberdeen in […]

Orchard Street Investment Management has won the mandate to manage £300m of the BBC pension fund’s £1.1bn real estate portfolio. This element, which is part of the fund’s UK holdings, was previously managed by CBRE. The fund is believed to have made the switch because its long-term manager, CBRE’s Edward Luker, whom it regards highly, […]

Two Asian investors are lining up to go into AEW UK’s Core Property Fund. The investors are going through the due diligence process, said Richard Tanner, AEW UK’s managing director. The value-investing-style fund took in its first money last October, from a corporate pension fund client of The Townsend Group. Asset management director Rachel McIsaac […]

The balance sheet of the UK’s largest business park fund has been restructured and the fund extended for a further five years. As part of the restructuring, PRUPIM, one of four investors in Arlington Business Parks Partnership, has sold its interest for £48m to two of the others, believed to be Goodman and Legal & […]

Invista board picks Townsend-funded Palmer Capital bid over Internos’s

Coffee goes cold on DB                                                                                             Clarke Coffee has left Deutsche Bank, where he was most recently co-head of origination, alongside Steve Williamson in the London-based European real estate finance team. Coffee will be joining a hedge fund in September. The bank’s real estate finance business has been headed by Gad Casby since Cyril Courbage left […]

Lloyds Banking Group has made more big reductions to its UK real estate exposure in the past two months by quietly selling CMBS and RMBS senior- tranche bonds with a par value of over £1bn, sources said. The bank is pursuing every avenue to cut its property book, including portfolio loan sales. “It completed the […]

AgFe has secured two mandates involving debt worth more than £550m. It will manage a private auction of the German Bundes-bank’s €238.78m Portfolio Green CMBS, while London & Regional has appointed it to advise on options for a £362m loan that matures in October. The structured finance adviser is selling Portfolio Green as a whole […]

AXA set to buy French and German performing loans at 15% discount

US investor/manager Kennedy Wilson and its client Fairfax Financial bought a Dublin residential investment this month. Kennedy Wilson, which has also topped the bids for Lloyds’ Project Prince portfolio of Irish loans, paid €40m in cash for Dublin’s Alliance Building. The price equates to a 6.3% net income yield on the 210 apartments, said Fergus […]

Swap rates have fallen following the Bank of England’s 14 June announcement that it would activate a special liquidity scheme for UK banks. The new Extended Collateral Term Repo Facility (ECTR) is intended to boost lending and is similar to the recent LTRO scheme put in place by the European Central Bank. JC Rathbone Associates […]

Hedge fund Chenavari Investment Managers is one of the latest firms planning to raise lower-return money to lend on senior debt. The credit investor plans to tap a separate investor base to the hedge fund business and offer debt on good-quality secondary property, making long-term loans on an 8-10% return basis from next year. It […]

APB set for rebranding The Association of Property Bankers is likely to change its name soon, to reflect the restructuring going on in the UK lending market. A growing proportion of the APB’s 400-strong membership do not work for banks but for other organisations now lending on property, such as insurance companies. Goodbody joins City […]

Cordea Savills has raised £25m from a global private bank in the first closing for its Prime London Residential Development Fund. The sum is far less than the £250m target the fund initially announced last October. However, the company said it was planning another closing in August with an Asian private bank. The fund intends to […]

After a year’s fund-raising Brookfield Asset Management has taken in $2.1bn at the first closing of its global opportunistic fund, Brookfield Strategic Real Estate Partners. About half the capital is from Brookfield itself, which is investing via Brookfield Property Partners, the real estate arm the company will float later this year. The remaining capital is from […]

Bank has yet to decide whether to hold bonds i n securitised loan or sell them in public market

Renshaw Bay has continued to assemble a real estate team under former JPMorgan banker Jon Rickert, recruiting Martin Farinola from Goldman Sachs. Farinola, who worked at the bank’s ABS trading desk, will set up a mortgage trading and syndications business at Renshaw. The asset management company, which was set up by Rickert and JPMorgan’s former […]

US insurer’s recruits include Barry Worth, formerly with Nationwide – one of many traditional lenders stepping back as new entrants gain strength

Deutsche Pfandbriefbank and Unicredit Bank Austria have provided a €148m senior loan for Aviva Investors to refinance a 12-asset central and eastern European property portfolio. Aviva’s Central European Property Fund owns six offices in Warsaw, Katowice and Prague;  four logistics assets; and two retail properties, all of which are well-leased, mainly to international tenants. The […]

Mandate to run MEREIT trust fits Schroders’ Continental growth plans

US private equity firm has made “big bet” on revival for Irish market

A £350m, five-year loan facility from Lloyds, MetLife and RBS  has provided the final slug of refinancing for the loan backing retail warehouse fund Hercules Unit Trust’s CMBS. “We were very pleased to work with three major lenders,” said Lucinda Bell, finance director of HUT’s adviser, British Land. “We have raised £850m over a relatively […]

US lifts ban on funds advertising offerings to professional investors New US legislation has lifted the restrictions on private funds marketing themselves to professional and institutional investors. The change will help boutique fund managers to reach a wider US investor base. “If we or anybody else wants to market a European fund in the US, […]