March 2011 Issue

I came away from MIPIM this year with mixed feelings. There was a lot of positive sentiment, but also an underlying negativity. On the positive side: the world is awash with equity, plenty of people are talking about providing mezzanine finance and I received very positive feedback from banking clients on the debt side. But there […]

REC global commentary Europe headed the league of global property securities markets in February, returning 4.2%. The UK was the leading market, with a 6.6% return, but France and Germany both registered 4%-plus. On a 12-month basis, the US leads, returning 37.7% and also outperforming the broader equities market over 12 months. The rebound by […]

Real Estate Capital UK commentary After a flat start to the year, UK REIT share prices have bounced up 7% since mid-February, making the UK market the best-performing globally in February, with a 6.6% total return. Investors’ enthusiasm for the sector is thought to stem from a belief that commercial property will provide a hedge […]

UK market overview Last month the Jones Lang LaSalle Balanced Fund Index experienced its strongest rate of growth since the middle of last year, rising 0.45%, compared to 0.22% in January, writes Julian Schiller. The index has risen 1.0% in the past three months and 6.26% for the preceding 12 months. Taking into account secondary […]

Figures showing a slight rise in returns and weak but positive capital growth have stimulated 2011 and 2012 contract pricing   CBRE-GFI market commentary The 2010 IPD Annual All Property Index, released at the end of February, revealed 15.1% total returns for the year, writes Sam Whitham – 15bps lower than the 2010 contract price […]

Flat capital growth is the name of the game for the next two years. Respondents to the latest Colliers CRE/Real Estate Capital Pricing Survey still expected negative capital growth this year, but were slightly more optimistic than in the previous survey, in November. For 2012, investors predicted a 0.9% rise in capital values, compared to […]

As well as raising a third fund for its Glenn Arrow series, pan-European property fund manager Aerium is starting a venture to fill a gap in the housing development market, writes Lauren Parr

The bank’s future is uncertain, but its head of real estate says it will “come back into the market” this year and can play a part in helping create a sustainable financial system.  Jane Roberts reports Pbb Deutsche Pfandbriefbank, the good part of Germany’s nationalised Hypo Real Estate, has been telling property clients and other […]

Insurers unable to make property decisions due to lack of detail on EU rules, writes Alex Catalano

Insurance giant forms logistics joint venture in plan to boost property assets, writes Jane Roberts This month, German insurer Allianz Real Estate took a step towards its goal of boosting its indirect property holdings by €5bn in the next three to four years when it committed an initial €400m of equity to a logistics joint […]

Winning bid for Barclays’ ‘non-core’ unit boosts Capita’s loan servicing push, reports Lauren Parr

Funds targeting debt or other niche areas had an edge in tough first quarter, reports Jane Roberts Capital raising for UK-based fund managers remained as difficult as ever in the first quarter of this year. “It is still bloody tough out there,” says David Rendall, European CEO of Cushman & Wakefield Investors. This month CWI […]

Two news stories of significance to the property derivatives market broke this month. One was that broker ICAP is pulling out of trading property derivatives after a near six-year struggle to make money; the other, that LaSalle Investment Management is set up to start trading. These announcements were in no way co-ordinated, but there is some […]

Michelin Pension Plan and two other corporate pension schemes have committed £117m to Legal & General Property’s Limited Price Inflation Income Property Fund. LGP launched the open-ended fund for defined benefit pension schemes last year. The latest investments take total commitments to nearly £180m, from eight investors. The fund matches pension fund liabilities by investing […]

Investors are still targeting more than £40bn of equity at central London real estate, according to Jones Lang LaSalle. The agent said at MIPIM this month that this represents more than 80% of an estimated £52bn of capital chasing UK property. Chris Brett, director and head of JLL’s London-based international desk, predicted that this year […]

Russian investors back London fund, as US vehicle prepares for launch Wainbridge Capital is to hold a second closing for its Wainbridge Global Opportunities London (WGOL) fund in April. The group, which was set up last year by former Cambridge Place Investment Management property director Rob Rackind, hopes to follow up with a final closing […]

Amundi Real Estate will launch a fund to target the Paris office market in the next three months, backed by €300m-€350m of mainly German and Dutch institutional money. With leverage, the fund will have a total investment volume of €600m. ING Real Estate Finance has provided some of the debt for group funds in the past. […]

Bayern LB is targeting £500m of new business in the UK this year, on a par with the volume of lending it provided in 2010. This will amount to an increase overall, because new lending was matched by repayments last year. Its two biggest 2010 deals, closed at the end of the year, were a […]

Company has deployed well over half of £188m equity raised since 2009 Development Securities has invested £110m of the £188m of equity it raised during 2009 and 2010. Including debt, the quoted property company has made £233m of acquisitions since the first equity raising in July 2009. The company buys secondary assets that it believes can […]

UniCredit has earmarked up to €6bn for financing real estate deals this year – a 10-20% higher allocation than last year. But the UK is not one of its core markets as loans cannot go into its pfandbrief programme and the bank is not allocating balance-sheet capacity here. The German bank plans to invest more […]

Deutsche Pfandbriefbank has provided Pradera’s open-ended retail fund with a €16.7m, five-year loan to buy two Polish shopping centres. It has also lent €7.6m on a temporary basis for VAT facilities related to the deal. “When VAT gets repaid [to Pradera], we get repaid,” said Harin Thaker, Deutsche Pfandbriefbank’s head of international real estate finance. The […]

Santander has slightly raised its target for new lending in 2011 to £1.2bn-£1.5bn. Last year the bank was one of the UK’s top lenders, writing £1bn-£1.2bn of loans. It will lend up to about £65m on its own. The bank has closed around six deals since November. Its latest is providing senior debt and a […]

Bank vows to lend at same rate as last year but to cut total asset volumes

INREV launched a fund style classification guide at MIPIM this month, to mixed reviews. The guide sorts funds into core, value-added and opportunity categories and will be used for all new funds in INREV’s quarterly index. Previously, fund managers “self-declared” the style of their products. INREV said its approach was based on the notion that […]

Field test shows insurers have capital to meet new reserve requirements European insurers have enough capital to meet new solvency rules, according to the European Insurance and Occupational Pensions Authority, which last week published the results of Quantitative Impact Study 5. QIS5 is a field test of the Solvency II rules that European insurers will […]

Private equity firm GI Partners has bought a €214m performing loan book backed by housing in the Netherlands. The deal follows Apollo’s purchase of a portfolio of distressed residential loans from Merrill Lynch last year. GI Partners injected most of the equity via a joint venture with Dutch asset manager Principal Company. Natixis structured a […]

Begor to head GE’s property arm GE Capital has appointed Mark Begor as head of its commercial real estate division. He comes from the group’s US consumer retail finance business and will replace Ron Pressman as president and chief executive of GE Capital Real Estate. Bate moves to Mayfair Investment manager Mayfair Capital has appointed […]

Resolution Property has still to spend half of the €808m equity raised for its Resolution Real Estate Fund III in late 2007. It announced at MIPIM that the rest of the €400m cash from the eight-year, closed-ended fund would be allocated to potentially stalled developments. Resolution says that with 60% gearing it could unlock up to €1bn […]

German group favours home market first, as other insurers look to lend

The Situs Companies’ European boss has left the group after six years to set up Castor Capital, an adviser to buyers and sellers of direct property and real estate debt in the UK and Germany. It will also help to refinance existing portfolios using debt capital market instruments. Nicolaus Harnack helped build Situs’s European business, […]

AREA Property Partners has sold a 35%, non-controlling stake in the private equity real estate business to nabInvest, the direct asset management group of National Australia Bank. The deal gives AREA balance-sheet strength to raise more funds and pursue acquisitions. It will also bring more international coverage, given that NAB’s institutional distribution capabilities are based […]

Jones Lang LaSalle’s latest 2011 lending survey says greater liquidity in the UK lending market has failed to materialise. City investment director Andrew Hawkins said: “A year ago we predicted greater liquidity than we are now experiencing and the outlook is challenging.” The survey’s findings were: Refinancing will continue to account for 50% of banks’  […]

Mark Graham has resigned from his post as UBS’s head of securitised products for the Europe, Middle East and Africa debt capital markets team. He joined the Swiss bank last May from Deutsche Bank. Graham’s appointment  was seen as a sign that UBS anticipated a revival in the securitisation sector in Europe. Three months later it […]

Duet Private Equity raised only half its £100m target in this month’s initial public offering for Duet Real Estate Finance. The new £50m company, which listed on the main stock exchange on 14 March, is a feeder fund to Duet’s European Real Estate Debt Fund. It is the only UK-listed company focused on investing in […]

Portfolio being sold to private equity firm shrinks from €400m to €150m Royal Bank of Scotland is selling a smaller portfolio of Spanish loans to Perella Weinberg than it originally came to the market with. Perella Weinberg has agreed to buy a batch of loans with a face value of €150m. It was thought that […]

Grosvenor Fund Management is thought to have gained commitments from two Dutch pension funds for a pan-European shopping centre vehicle. The core-plus fund is one of five that Grosvenor’s fund management division hopes to launch this year. GFM is reported to have agreed terms to buy six shopping centres from Unibail-Rodamco, four in Sweden and two […]

An option for Deutsche Bank’s potential securitisation of Chiswick Park could be to parcel it up as part of a US CMBS deal. Deutsche Bank has agreed to provide a £300m loan for Blackstone’s purchase of the West London business park. The bank is exploring options to split up and sell on the debt, although […]

Court ruling protects borrowers during debt restructuring of Paris tower

Goldman Sachs’ Whitehall is understood to have injected substantial new equity into a refinancing of its £101.3m Queens Moat Houses loan through one of its funds. Clydesdale Bank stepped in to provide senior debt at a loan- to-value ratio of around 30% of the portfolio’s £230m value. The debt, which was originally provided by Goldman […]

Eurohypo and Credit Agricole are among at least three banks in talks to raise a likely £700m-plus of debt against developer’s flagship UK scheme