October 2012 Issue


    Month: October
    Year: 2012

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    Viewpoint: Negative LIBOR will have fatal floor for borrowers

    Over the summer the reliability of LIBOR has been brought into question and led to the Financial Services Authority launching an investigation into the benchmark rate: the Wheatley Review. One of the big questions that needs to be answered is how LIBOR should be set when there simply isn’t an interbank lending market. To put […]

    Indirect investment market: Jones Lang LaSalle market commentary

    UK market overview Reflecting the trend for the year, the Jones Lang LaSalle Balanced Fund Index continued to fall in September, by 0.23%, to -1.41% over 12 months, writes Ashley Marks. This falls further to -2.74% when secondary market pricing is considered, reflecting both a fall in property values and the resulting negative sentiment in […]

    Capital into UK property: Overseas investors remained strong competitors during Olympics

    According to The Property Archive, Q3 UK investment volumes were relatively stable at £8.51bn, slightly down on Q2, but well up on the £7.16bn at the same time last year. Overseas investors continued to have the largest share of investment, nearly half, spending £4.03bn. Total UK property investment for 2012 to date is £25.34bn, up […]

    New homes are where the debut Hearthstone fund is

    New residential specialist believes defensive qualities of housing sector and demand from small retail investors will help its FSA-authorised OEIC fund grow in value to £1bn, reports Jane Roberts

    Three property pioneers join the retail bonds revolution

    PHP, CLS and Workspace tap new funding source for mid-sized property firms, writes Jane Roberts

    Property giants convert to an alternative bonds debt source

    Three firms have raised debt via unusual route of convertible bond issues, writes Doug Morr

    Property company finance & treasury: Cheap debt and new capital are light at end of the tunnel

    Bond issues and new capital sources are helping property firms to refinance, writes Alex Catalan

    Consolidation sparks fear of conflict in loan servicing field

    Servicers may face conflict of interest if their parent firms are also loan buyers, writes Lauren Parr

    Slow-burning FLORE goes off to help re-ignite CMBS sector

    After setbacks, biggest Continental public CMBS since 2007 finally launches, reports Lauren Parr

    Comment: Property companies would rather bank on new sources of finance

    The London Stock Exchange’s UK retail bond market has been doing pretty well since its launch in 2010. It suits private investors looking for reasonable yields in a low-interest rate, low-growth/high-inflation environment, as they can buy in small amounts and trade cheaply, and investors in the market have given debut issues by property companies a […]

    Wells Fargo helps back Brookfield’s City tower buy

    Canada’s Brookfield Office Properties has financed the acquisition of 99 Bishopsgate in the City, with senior debt from US bank Wells Fargo, Aareal Bank and Santander. Brookfield acquired the 26- floor tower from Hammerson last month as part of a London office portfolio bought for £518m. The club is lending £130m, which is thought to […]

    Overseas appetites drive big London deals past 2011 total

    Overseas buyers chase trophy central London assets worth £100m-plus

    Servicer pushes Treveria into secondary retail sell-off

    Demand for repayment of CMBS loans may force sale of whole portfolio

    Cerberus to snap up distressed German assets

    Another distressed portfolio of secondary German retail property is being sold, by Wells Fargo. Cerberus is carrying out due diligence to buy Project Phoenix, nine properties in west German towns and cities totalling almost 1m sq ft, for less than the latest €70m valuation. The vacancy rate in the portfolio is about 20%. The US private equity firm […]

    CBRE Loan Servicing head Lloyd quits for rival start-up

    CBRE Loan Servicing has lost its head, Paul Lloyd, to a loan servicing start-up company. Lloyd is joining a new European commercial real estate loan servicing business backed by US private equity firm Greenfield Partners, in partnership with Raith Capital Partners. Two of the partners at London-based Mount Street Capital, Ravi Joseph and Bill Sexton, […]

    Non-banks tipped for 25% share of property lending

    A quarter of real estate financing will come from non-bank sources in five years’ time,  AEW Europe predicts. The investment manager, which has just launched its Senior European Loans Fund with €240m of initial equity, said new lenders such as insurers and debt funds will provide €33bn of senior debt out of an estimated €130bn […]

    Wagner joins growing BlackRock real estate lending arm

    BlackRock is beefing up its European real estate debt group with the appointment of former Barclays Capital director Christoph Wagner. Wagner used to work in the Barclays CMBS team with Christian Janssen, first in origination and underwriting, and latterly restructuring. BlackRock wants to increase its investment in senior and mezzanine debt, which it started in […]

    Aviva platforms team up to work on senior debt launch

    New core-strategy fund would invest both third-party and in-house capital

    AXA REIM aims to increase debt investment to €7bn

    AXA Real Estate Investment Managers expects to raise a further €2bn by the end of  this year, to increase its real estate senior debt investing programme to €7bn. The commercial real estate finance team, led by Isabelle Scemama, has already had commitments of €1.4bn and raised its 2012 investment target from €2bn to €2.4bn. In […]

    St Modwen to follow retail bonds trend

    St Modwen Properties became the fourth property company to turn to the retail bond market to raise debt capital this month. St Modwen and advisers Investec Bank and Numis Securities aim to raise £50m-£100m and have priced the seven-year, unsecured bond at 6.25%. Mid-cap property companies have been attracted to the new market by the […]

    Logistics specialist P3 set for first property IPO since 2010

    Prague-based firm seeks£250m to help fund Arcapita portfolio purchase

    BlackRock recruits CIO for new Euro securities strategy

    One of Thames River Capital’s star fund managers is leaving to set up a European real estate securities business for giant US money manager BlackRock. BlackRock has recruited James Wilkinson as European chief investment officer for the firm’s recently established global real estate securities business. He will start in January. The division is headed in […]

    Colony loses debt strategist Awtani

    US private equity firm Colony Capital has parted company with its head of European debt strategies, Dilip Awtani. The London-based managing director was responsible for loan purchases and originations, as well as structured product investments, in Europe. He joined the firm from GE Capital in 2009. The deal he is remembered for was Colony’s acquisition […]

    Europa pulls in €150m for opportunity fund’s first closing

    One of the many pan-European opportunity fund managers on the road raising capital has held a first closing. Europa Capital has had about €150m of commitments for Europa Fund IV. The Los Angeles County Employees Retirement Association is a cornerstone investor, taking €50m. Europa’s parent, the Rockefeller Group, is also likely to invest. Europa’s latest […]

    ‘Missing’ investors urged to back L&R’s CMBS extension

    London & Regional has not  been granted the three-month extension it sought for the LoRDS securitisation of five UK office properties, as only 70% of class A noteholders are accounted for, when the consent of 75% is required. London & Regional and its advisers AgFe and Reed Smith have urged the 30% of ‘missing’ noteholders to […]

    Emmett gives mezzanine specialist Longbow a shot

    Graham Emmett has joined mezzanine lender ICG-Longbow Real Estate Capital as a partner. Emmett left Ireland’s National Asset Management Agency, (NAMA) where he had been head of lending and corporate finance, last January. Longbow, headed by Kevin Cooper and Martin Wheeler, is one of the most active investors in UK mezzanine property debt and raised […]

    Henderson buys in Vienna after closing Austrian vehicle

    Henderson has completed equity raising for its second core Austrian fund and invested 35% of the capital. The joint venture Warburg-Henderson KAG beat its €175m target by €5m. The diversified fund focuses on retail but will buy offices in Vienna. It targets a 7% total return and has bought high-street retail, a retail warehouse in […]

    Standard Life fund takes in £280m

    Another UK inflation-hedging property fund has reported strong capital inflows this year. Standard Life said its open-ended Long Lease Property Fund has taken in £280m and now has more than £1bn of assets under management. The fund, managed by Richard Marshall, has delivered an average 7.5% annual return since its launch nine years ago. It […]

    AEW takes club approach for new opportunity fund

    The tough fund-raising environment for blind pool private equity funds has led AEW Europe to look for a club deal to launch its AEW Europe Partners vehicle. The manager recruited Russell Jewell last year to head its private equity arm and aims to replicate the US opportunistic AEW Partners series in Europe. It is marketing […]

    CBRE multi manager teams up with CIC for deal in Japan

    CBRE GMM invests in logistics portfolio alongside Chinese wealth fund

    People

    Couturier heads Hudson Europe Philippe Couturier joined Hudson Advisors this month as president for Europe, replacing Ron Coggle, who has left. Couturier spent 16 years at Goldman Sachs’ servicing and debt business Archon Group. Hudson manages and services investments by Lone Star funds. Mercury rises for Gaffney Domhnall Gaffney,  previously with Lloyds Capital Markets, has […]

    Raynor ready for move to Oxford

    British Land’s Mike Raynor will join Oxford Properties in January to work on its central London development projects. As director of development, he will report to development and asset management managing director Richard Pilkington. Raynor will oversee The Leadenhall Building, Oxford’s joint EC3 project with British Land, and the London Wall Place development site, which it […]

    GIC favourite for hotels mezz deal

    GIC is being tipped as the likely provider of up to £150m of mezzanine finance for a large hotels portfolio. The owners of 61 UK Holiday Inns have mandated Deutsche Bank to refinance the portfolio ahead of a maturity next May. LBREP, GIC Real Estate and Realstar hope to close the refinancing this year. The […]

    Private wealth backs record – sized fund from Blackstone

    Private clients provide up to 15% of $13.3bn for biggest ever property fund

    Younger joins London debt team as GE Capital expands property lending arm

    GE Capital Real Estate UK, led by managing director Ilaria del Beato, has expanded its team of lending specialists to support its re-entrance into UK property lending. James Spencer-Jones has been promoted to head of debt, new business, and has recruited Jamie Younger as a senior originator in the London-based team. Younger was previously at […]

    FLORE’s success adds to CMBS revival

    All bonds in the €754m Florentia securitisation, this year’s third public CMBS deal, have been sold, in a boost for the recovering primary-issuance market. JPMorgan bought around 75% of the FLORE 2012-1 notes at weighted average pricing of 300 basis points over three-month Euribor. The remaining bonds placed in the market were oversubscribed and buyers […]

    LaSalle mezz vehicle makes Continental debut in Cannes

    Investment manager helps finance retail specialist’s boutiques purchase LaSalle Investment Management has made its first European mezzanine investment outside the UK. LaSalle, which invests in mezzanine for its Special Situations Fund and separate account clients, provided a mezzanine loan for Thor Equities’ purchase of a 25,000 sq ft retail block on Cannes’ Croisette in the […]

    Low bids prompt Allied Irish to axe Project Pivot loan sale

    Bank scraps sale of £383m bad loan portfolio at last minute, as round-two bids fail to meet expectations, and will now sell a reduced loans package

    Recent property lending deals

    After the completion and funding of many deals worked on in Q2 2012 during July and August, the past few weeks have been quieter. Lenders say August was subdued, particularly in the UK. One London-based originator who We had a quiet patch during the Olympics and silence ” • 99 Bishopsgate was the biggest single […]
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