March 2010 Issue

There are clear advantages to buying a business like WestImmo. The bank has been busy writing profitable new loans – €6.2bn across all markets in 2009 – and is among a club of German lenders becoming steadily more competitive for new business, which are said to be squeezing UK margins below 200 basis points to […]

Investors blame managers’ behaviour as much as the downtun for their losses, writes Lauren Parr

The European Union’s original draft directive on alternative investment fund managers (AIFM) did not tackle fund managers’ pay. But the latest version, due to come into effect in 2012, includes measures that would heavily regulate the way fund managers are remunerated. It says that: Pay policy must promote “sound and effective risk management and not […]

Although net asset value is being touted as a fairer basis for management fees than gross asset value, it too can be problematic – especially during a market slump. Peter Hughes, a partner in the investment funds team at law firm Salans’ London office, points to the case of the general partner of one private […]

Investors’ views about the property market in 2010 continue to improve, following more compression in yields, especially secondary ones. Respondents to the latest Colliers CRE/Real Estate Capital survey have upgraded total return forecasts, expecting less severe rent falls and positive capital growth. But they are less optimistic about 2011, predicting that capital growth will turn […]

DG Hyp’s full name, Deutsche Genossenschaft Hypotheken, means German co-operative mortgage bank. But it has been running down its residential mortgages book since 2005/2006 and shifting to commercial mortgage lending. “The residential business was no longer commercially viable in the long run as we were becoming a competitor to our owners,” says Steffen Günther, head […]

Four retail property veterans plan to raise £100m of equity for a new UK shopping centre fund. Centenary Investments, Ashcroft Estates and Henry Boot hope to raise the money by the summer for the CAB Shopping Centre Fund. Curlew Capital, a new company set up by Valad’s Paul Oliver, is advising on the fund raising […]

UK market overview The Jones Lang LaSalle Balanced Fund Index showed a 1.07% monthly increase in February, reflecting a 1.8% increase over the past 12 months – the first positive 12-month figure for some time, writes Julian Schiller. Taking into account secondary market pricing, the index has moved closer to par, at -6.39% for the […]

In future, investors are only likely to accept certain fees if managers work harder to earn them

Having reinvented itself as a commercial property lender, the German bank hit the UK just as others were retreating, helping it to almost double its loan book last year. Jane Roberts reports

It is now largely agreed that levels of global real estate investment will be higher this year and prices will firm up, at least for prime stock. The latest Cushman & Wakefield forecast points to a 30% leap in global trading to $478bn (€362bn) – not far off 2005 levels – and this could be bettered […]

The IPD UK Annual Index showed a 3.5% property return for 2009, but post-2010 pricing reflects fears that recovery will falter CBRE-GFI market commentary The pricing of future property risk has been remarkably stable in recent months, with the derivatives market expecting income return to be the main form of growth in the coming years, […]

REC global commentary Global property shares rebounded in February, as total returns rose 2.8%. They also outperformed global stock markets; the MSCI AC World Index registered only 1.5%. The Americas performed best, at 5.9%. Europe bucked the rising trend and was the only region to end in negative territory, with returns of -0.5%. Of the […]

Real Estate Capital UK commentary UK property stocks rose 1% in February, compared with a wider stock market uplift of 2.8%; UK REITs share prices rose 0.8%. Capital values rose by 1.3% on IPD’s monthly index for February, while rents fell -0.1%. All-property prime initial yields fell 12bps to 6.8%. Liberty’s demerger into a new REIT […]

Private equity players and German rival vie for profitable real estate lender, writes Lauren Parr

Restructuring of German retail CMBS is first to extend maturity of notes, reports Jane Roberts

It is not the 1990s again, but bank sales and restructurings are gathering pace. This month, Hansteen’s Ian Watson and Morgan Jones have pulled off their own “German Industrious” by clinching the old GPT Halverton portfolio in Germany. Just as Nick Leslau pounced on the distressed UK Industrious deal, in which many parties lost their […]

Last summer, when 60, 70 or even 80 fund managers said they planned to launch UK funds, there was widespread scepticism. Now, at the end of Q1 2010, the target date for most of them to close, only a handful have done so. Brockton Capital’s £400m raising for a second opportunity fund is a stand-out […]

IPD has signed a second, multi-country contract to benchmark funds, this time with AEW Europe. IPD will benchmark all 23 of AEW’s core and value-added funds, worth a total €8.9bn The four-year contract follows IPD’s global deal to benchmark all of ING REIM’s funds. IPD managing director Laurent Ternisien said: “This allows a whole management […]

The £1.9bn SWIP Property Unit Trust could buy £100m of property derivatives after unit holders voted by a 98% majority to change the open-ended fund’s investment parameters. Malcolm Naish, head of Scottish Widows Investment Partnership, said: “We will probably buy a series of staggered terms and maturities. “Even if we limited ourselves to [a derivatives […]

Pan-European fund widens investor base as Invesco plans new US fund and second hotels fund

Savills has bought in a 40% stake in its European property fund management arm from the management, after failing to find a buyer. Savills will pay £13.6m-£15.4m over two years for the stake in Cordea Savills LLP. The business manages £2.5bn of assets mainly in co-mingled, specialist funds. It made a £2.9m profit in 2009, […]

Venture from former Pillar Property men floats on main London market

Norway targets indirect property Norway’s government pension fund has published longawaited guidelines allowing the £300bn fund to invest 5% of its equity in real estate. The fund is switching the cash out of fixed income investments. It is thought that the fund’s manager, Norges Bank Investment Management, will put all £15bn into unlisted property funds […]

US REIT Anthracite Capital, a specialist in real estate debt, has filed for liquidation in the US after defaulting on its own debt. Managed by BlackRock, Anthracite invests in CMBS, commercial real estate loans and REIT securities, at the riskier, high-yield end of the market, buying mostly B-notes and subordinate CMBS. Anthracite also funds itself […]

The US has taken an important step towards setting up a system of government-regulated covered bonds similar to those that exist in the UK, Germany and other European countries. Republican Scott Garrett has put the US Covered Bonds Act 2010 before Congress. Crucially, the legislation would allow commercial mortgages and CMBS to be used as […]

A proposal to extend the loan underlying the £750m securitisation of holiday company Centre Parcs looks likely to be approved next month. About 75% of CENTP-2007-1 Class A bond holders have said that they will vote for a two-year loan extension to October 2013. In return, the borrower, Blackstone Group, has offered an incentives package […]

Fitch Ratings predicts that only 1% of 73 CMBS loans due to mature this year will be fully repaid

CMSA Europe, the chief lobbying group for Europe’s commercial securitisation market, is widening its remit to include more participants in commercial property finance. With no sustained return to primary CMBS issuance since the market shut down in August 2007, global CMSA membership has been shrinking. The US-based Commercial Mortgage Securities Association’s European arm is still […]

Cushman & Wakefield’s first attempt to build up a global investment management business in Asia has ended in failure. The firm has closed down its Cushman & Wakefield Capital Asia operation, which was based in Hong Kong, three and a half years after hiring Helen Wong to lead it. Wong, who had previously worked at […]

Buyer agrees to take on liability of previous loan on German properties

Columbus Capital Management, the separately run, opportunity fund division of Schroders’ property business, has raised £80m at the first closing of its third fund. The new fund has a lower target return than previous funds, at 15%. Ten UK institutional investors have subscribed to the fund. Like other sponsors, Columbus hopes to attract more equity […]

AIM-listed group plans residential launch after refinancing resi portfolio

Henderson Global Investors hopes to have a first closing soon for its Central London Office Fund II, after receiving commitments from three investors. It is thought that £100m of equity has been promised by UK, Nordic and North American institutional investors. The seven-year, absolute-return, closed-ended fund, managed by Clive Castle and Nick Deacon, is modelled […]

BNP Paribas plans to raise two new property funds and has recruited Chris Carter Keall, formerly head of UK funds at Valad Property Group. BNP Paribas Real Estate’s investment management business has launched a pan-European real estate fund called Next Estate, which will focus on green office buildings. The company also plans to launch a […]

Dutch property lender SNS Property Finance is retrenching to its home market and selling its non-Dutch loanbook, a mixture of performing and non-performing loans. A €2.4bn European portfolio is up for sale, mainly comprising loans in Germany, France and Spain. Cairn Capital is thought to be advising SNS Property Finance. Dutch loans account for 73% […]

Parent company and third-party clients back AXA REIM’s plans to step up debt market activities

German bank set to place £50m of debt secured on Manchester block

Chris Bates, a senior director within the European real estate finance division at Royal Bank of Scotland, has been appointed to lead the business from which his former boss, Mike McNamara, recently stepped down. Bates’ job title is now head of real estate in RBS’s global banking and markets division. A new business plan is […]

Four investors back institutional UK fund offering geared and ungeared returns, while managers will co-invest to ensure alignment of interests