May 2011 Issue

Cairn advises on Bern disposal Cairn Capital has advised German investor Karl Bartel  and the lender on the sale of the Wankdorf-Center in Bern, Switzerland, after a default under the loan-to-value covenant on debt secured on the retail and office asset. UBS Global Asset Management bought the six-year-old scheme for its Sima fund, Swissreal, and the […]

Société Générale’s head of European syndication has left to start a fund focused on buying secondary CMBS and investing in structured real estate debt. Hugo Headicar, director of real estate debt, syndication and sales, spent much of last year working on the White Tower deal. SocGen led a club of five lenders that provided £402.6m […]

Eurohypo has led a £320m refinancing of Saudi Arabian investor The Olayan Group’s  Knightsbridge Estate in SW1. Last June Olayan teamed up with Chelsfield Partners to pay Quinlan Private £600m in cash for the central London site. Olayan beat Korea’s National Pension Service (represented  by Rockspring) and the Qatari Investment Authority to the deal, amid rampant […]

The formation of the Commercial Real Estate Finance Council’s CMBS 2.0 Committee reflects the industry’s wish to modernise in preparation for a return of CMBS new issuance in Europe. As a first step, January’s implementation of the Capital Requirements Directive (CRD) article 122a provided much-needed regulatory clarity to the securitisation market. The CRD goes some way […]

Real Estate Capital UK commentary Central London continues to outperform the rest of the UK, with CBRE’s April index showing offices produced 0.4% capital growth and 0.5% rental growth, against 0.1% and no increase respectively for all property. Investors are focusing on big UK REITs with heavy London exposure. Great Portland, British Land, Derwent London […]

UK market overview The Jones Lang LaSalle Balanced Fund Index rose 0.34% in April, compared with 0.30% in March, writes Julian Schiller. The index has risen 1.32% since the start of the year and 4.18% in the past 12 months. Taking into account secondary market pricing, the 12-month return falls to 1.18%, suggesting that the […]

Pricing for 2011 contracts rose 30bps in April, while IPD Q1 2011 figures showed capital values still growing, albeit more slow

Sir John Beckwith’s company is raising three funds, the latest being an indirect vehicle whose liquidity should appeal to defined contribution pension fund investors, reports Jane Roberts

New investors look set to double size of recently launched IPD-tracking fund, reports Jane Roberts

Futures beat swaps for some derivatives users, writes RBS senior derivatives trader Philip Ljubic

Non-bank users dominated derivatives trades to a record extent in Q1 2011, writes Jane Roberts

Two recently unveiled funds are the first to tap a growing pensions sub-market, writes Jane Roberts FSA-approval, daily pricing, unit accumulation, high liquidity, low volatility: these are all desirable, if not essential for investors and managers of defined contribution pension schemes when they invest contributions. Such contributions are predicted to grow like topsy. Pensions consultant […]

London Business School event says it will take 10 years to clean balance sheets, writes Lauren Parr

Last week’s £175m convertible bond issue by REIT Derwent London shows that the best managements with the right assets still have a choice of finance raising options. Derwent’s issue was notable because UK property companies rarely use convertible bonds, but also for the low cost of the finance. With a 2.75% coupon, the five-year-dated, unsecured […]

More investors and fund managers are looking to use property derivatives to improve investment returns and are starting to compare its pricing regularly with their other options. The argument that derivatives can give fund managers a competitive advantage is gaining acceptance. Asset allocator converts, like UBS’s David Buckle, would even say the whole industry’s image […]

Royal Bank of Scotland has narrowed down the list of bidders for its £1.6bn UK property loanbook to Lone Star, Blackstone, Westbrook Partners and Starwood. Perella Weinberg and Morgan Stanley are believed to be among the up to 12 parties that expressed interest in the loans. Lazard is handling the sale for RBS, which now […]

Financing for big office deal and L&G swell new lending so far this year

Roger Barris’ company Peakside Capital has sold its majority stake in a Berlin residential complex, worth €24.5m. TAG Immobilien bought  the holding, which was held indirectly by the €261m Peakside Real Estate Fund I. The fund inherited the asset after a management buyout of Bank of America Merrill Lynch’s European private equity real estate business […]

Nationwide’s commercial team has provided £33.2m of debt for Europa Capital’s and M7’s Real Estate Light Industrial Property Partnership joint venture. The five-year facility, at a 59% loan-to-value ratio, is secured against LIPP’s 10 UK industrial estates and will refinance £21.5m of debt with Westdeutsche ImmobilienBank, with £12m left for acquisitions. LIPP is already under […]

German asset manager Corpus Sireo is to transfer 16,000 homes it already manages to a new Asset Management Residential business. Stefan Korthals, previously head of portfolio management for the group’s residential real estate portfolio, will lead the business, with offices in Cologne, Berlin and Leipzig. It will provide portfolio and asset management services; and  sales and […]

Grainger has won a mandate to run a new distressed residential property platform for Lloyds – the first agreement of its type in the UK. The deal was secured by Grainger’s asset and property management team, led by Alex Greaves and Anish Thobhani, who will head the Grainger Residential Asset Management Platform. Grainger is thought […]

A Lloyds Banking Group pension fund is one of the three cornerstone investors in the Pan-European Urban Retail Fund (PURetail), launched last month by Lloyds subsidiary Scottish Widows Investment Partnerships with €100m. Robert Matthews, head of international property at SWIP, said the other two investors in the retail vehicle are a multi manager and a […]

Europe faces the biggest property debt funding gap globally, at $118bn over the next three years, according to DTZ. It also lacks the most available equity, proportionate to the shortfall.  The UK is up against the biggest challenge, with a gap of $42bn; followed by Spain at $28bn; and Ireland at $12bn. On the other hand, banks […]

Bank provides finance to help buyer take office development off its hands Benson Elliot has forward purchased a prime Barcelona office investment with stapled finance from Banco Sabadell. Antic Cami de Valencia is a 20,000m2, three-building complex with a projected €80m end value and will be developed by Banco Sabadell’s real estate arm, Solvia. Benson Elliot […]

Topland has refined its strategy for investing in mezzanine debt by teaming up with Dragonfly Property Finance and house builder Westcity to lend on prime central London housing. The move follows Topland’s plan last year to invest up to £200m in a mezzanine fund and reflects the fact that the greatest appetite for mezzanine debt […]

Valente takes JP Morgan role Joe Valente has left Allianz  Real Estate to join JP Morgan Asset Management as head of research and strategy for the European real estate team. He will report to Peter Reilly, head of European real estate. Valente moved from his post as global head of research at DTZ to join […]

HSBC is the third lead  underwriting bank for Westfield at the Australian company’s Stratford City regional mall in east London, alongside Credit Agricole CIB and Eurohypo. It is thought that HSBC and one of the other two banks already have the go-ahead to underwrite up to £175m each for Westfield. The banks are expected to […]

MSREF VI is finally handing back the keys on a German office portfolio worth around €900m. The Morgan Stanley fund has agreed to sell its equity stake to a special-purpose vehicle set up to buy the properties, which form the security of the €940m Mozart loan, the largest part of the Talisman-7 CMBS. The deal […]

Cushman & Wakefield Investors has withdrawn from advising segregated indirect property mandates. CWI is the second fund manager to close down its segregated multi-manager recent decision to quit this market. Both had relatively small businesses: CWI had five mandates, with total assets under management of around £90m; Henderson had nine, totalling £195.5m. A mandate to […]

Most investors in CMBS will be repaid from Aviva Tower sale proceeds

Investors in the debt backing five City offices will get their money back following the £190m sale of Leadenhall Triangle, EC3. The buildings went into administration with Pricewater-houseCoopers in November 2010 after the two borrowers failed to repay £173m of debt secured against them last April. They were two private investor groups, one from the […]

M&G rakes in further €35m as 13 mezzanine funds get set to raise capital

Deutsche Pfandbriefbank has part financed one of France’s first distressed bank sales. It lent almost €88m for Catalyst Capital to buy Front de Parc in northern Paris out of the recently unwound Barclays Juno Eclipse 2007-2 securitisation. The loan includes a refinancing tranche, two capital expenditure tranches and a VAT line. Catalyst also injected equity to […]

LGP funds pull in £575m Legal & General Property took in £575m of net new capital in Q1 2011 – more than a quarter of Legal & General Investment Management’s £2bn net inflows. UK head of balanced funds Mike Barrie said the UK Property Unit Trust had grown from £470m at the start of the […]

The amount of commercial real estate debt in the UK financial system shrunk by 9.4% in 2010,  De Montfort University’s annual survey has found – the first drop in the survey’s 14-year history. The 66 lending teams reported balance-sheet debt secured by UK commercial property fell 9.4% in 2010, to £206.9bn. This may indicate that […]

Derivatives exchange EUREX, which launched futures based on the IPD UK All-Property index two years ago, is planning to add sector trading shortly. Contracts on the UK retail, office and industrial sectors will be introduced first. EUREX director Stuart Heath said: “We have the ability to go into sectors and initiated that process at the […]

PDIG chairman says greater derivatives use may aid banks and market

Five regional real estate teams formed to work alongside large loans unit

Deutsche Bank’s securitisation of Chiswick Park has been officially launched this week. A one-week roadshow will begin on 23 May, with the bank lined up to talk to investors like L&G, M&G, AXA, Aviva and Henderson. The £302.2m floating-rate CMBS, named DECO 2011-E5 and rated by Standard & Poor’s and Canadian rating agent DBRS, features […]

Bank seeks to cut exposure to low-margin social housing debt and is l ikely to take a hit on any disposals, despite renewed interest in sector