September 2011 Issue

If you can keep your head when all about you are losing theirs, you have misunderstood the severity of the situation. That’s the joke doing the rounds on the trading floors of London, New York and Hong Kong. Markets have been wildly volatile, US sovereign debt downgraded and new rumours about struggling eurozone members abound. […]

REC global commentary An apocalyptic August and first two weeks of September for equities markets saw property shares fall 11.4% globally from the mid-July peak, giving up all this year’s gains. Global total returns collapsed in August to -6.6%. Australia was the only leading market to show a positive return, 1.7%, outperforming local equities markets as […]

Real Estate Capital UK commentary UK REITs were mauled during August’s stock market volatility. Their share prices, which had steadily outperformed equities for the first half of the year, fell in line with the market generally. In terms of total returns, in August, UK REITs returned -9.9% against the FTSE 100’s -6.5%. Economic confidence has […]

Maturing CMBS loan volumes will leap in 2012, when €14.4bn by balance will need to be refinanced: £5bn in sterling and almost €8.5bn in euro. As at the end of July, delinquent loans equated to 11.67% of the outstanding euro loan balance and 6.73% for sterling loans. A breakdown of loans in special servicing (by […]

Pricing for 2012 contracts plummeted from 4% in late July to 1.5% this month, reflecting the gloomier economic outlook

UK market overview The Jones Lang LaSalle Balanced Fund Index rose 0.29% and 0.22% respectively in July and August, compared to 0.15% in June 2011, writes Julian Schiller. The index is up 2.50% since the start of the year and 3.20% over the past 12 months. Taking into account secondary market pricing, the 12-month return […]

Banks’ reluctance to fund residential developments has created an opening for private equity firm Beaubridge, which has funded four London projects and is looking for more. Jane Roberts reports

Property director Malcolm Naish is quietly confident about UK property’s prospects, and winning £2.3bn of mandates from Invista this year has positioned SWIP for growth. Jane Roberts reports

Private bank uses strength of HSBC brand to secure exclusive deals for clubs of wealthy clients

Morgan Capital bought 8-10 Hanover Street for one of its clients, an overseas private investor. The price paid wasn’t disclosed, but it was marketed at £25m. Occupier demand for West End space is still buoyant and buying opportunities are scarce; this investment was hotly contested. The property is a development proposition; it has consent for 25,000 […]

Drapers Gardens, a newly built City office building bought last year for £240m by Evans Randall, has some 10 ultra wealthy private investors co-investing in the deal. Set up in 1993, Evans Randall structures real estate finance and invests directly. Some wealthy private investors or their representatives come to Evans Randall directly, while others come via […]

Wealth manager Stanhope Capital looks after some $7.5bn of its clients’ investments. The manager was originally set up as a family office by a group of rich European families, but its clients are now a mix of other family groups, charities, institutions, and ultra high net worth investors; the minimum entry level is £10m. Stanhope’s […]

Citi Private Bank links co-investing property players with private investors, writes Alex Catalano

Wealthy private investors favour prime property for its security of income, reports Alex Catalano

Australian and US players beat European ones in Sustainability Benchmark, reports Jane Roberts

INREV study finds investors suspect managers’ motives for fund extensions, reports Jane Roberts

Economic turbulence in equities markets also threatens property’s recovery, reports Lauren Parr

At a dinner this month I sat next to a fund manager whose expertise is UK property and he remarked that his next priority was to talk to his research colleagues about Japan. You may have already guessed what came next. He said he’d been thinking that it would be useful to find out what […]

Legal & General’s new commercial property lending business is looking at several potential transactions. The team is headed by Ashley Goldblatt and includes Steve Boyle and Graham Rouse, who joined in the summer from Aviva Commercial Property Finance. At his first press briefing in the role since moving from the fixed income division, Goldblatt said […]

German lender teams up to refinance mall and offices in French capital

A ninth UK pension fund has invested in the UK Ground Lease Fund managed by Pramerica Real Estate Investors. Together with extra capital from existing investors, the fund had taken in a further £98.3m by last month since Pramerica gained the mandate from UBS last year, taking equity committed since the fund’s launch in 2007 […]

Three of Capmark’s former European property finance team have joined hedge fund Chenavari over the summer. Andrew Haines, Sam Mellor and Duncan Elley will source real estate deals for Chenavari’s ABS Toro Fund. It is their third move since leaving Capmark: they worked on a potential mezzanine fund at Evans Randall before moving to boutique […]

Three UK CMBS loans above £150m are due to mature in the next six weeks, the largest of which is the Devonshire Square Estate loan in October, with an expected securitised balloon amount of £285.5m. Rockpoint, owner of the mainly-let City office complex, is topping up the income so that it will cover interest payments. […]

Standard & Poor’s finds German deals make up large slice of those not repaid at 2011 maturity

Andreas Quint will become head of Jones Lang LaSalle’s EMEA corporate finance division next January. Quint joined JLL in 2009 from Catella as chief executive officer for Germany. He has previously worked for accountancy firms Arthur Anderson and Ernst & Young. Frank Pörschke, chairman of the management board at Eurohypo until last month, will replace him […]

Non-Sterling Fund’s property allocation may be raised via indirect buys

The first property derivatives sector switch took place on the Eurex exchange this month. The two parties swapped all-industrial and all-offices returns. Jon Masters of bgc, the deal’s broker, said the trade was 15 lots of Calender 2012 contracts per side, making £1.5m in total. “We traded at level prices, of 2%: one counterparty sold […]

Cobb and Dobson rise at Aviva Aviva Commercial Finance has promoted Neil Dobson and Simeon Cobb to business managers, reporting to Adrian Poole. The move follows Steve Boyle’s and Graham Rouse’s departure to Legal & General’s new commercial property lending business. Wintle goes continental for GFM Giles Wintle has left GIC Real Estate to become […]

John Carrafiell’s GreenOak Real Estate is close to acquiring a piece of distressed US debt with an eye to taking control of the underlying asset, following a $150m first closing for its debut US fund earlier this year. GreenOak US is targeting 15- 20% returns by buying office, retail and hotel properties, as well as […]

Fund may cut its holding in business park operator by half in long term

Refinancings worth more than £1.3bn have taken place in the past eight weeks. One of the largest was Duet Private Equity’s and Deutsche Bank’s £375m debt package for the Mint hotel portfolio, recently acquired by Blackstone. Deutsche Bank provided around £300m of senior debt on a five-year term at more than 300bps over Libor and […]

British Land and Schroders are to repay half of the £500m debt outstanding in the REC Retail Parks securitisation, secured against assets in Hercules Unit Trust. HUT has signed a £350m, five-year loan, entirely underwritten by Aareal Bank. A £250m term loan will be used to repay half of the debt that expires in a […]

Real estate mezzanine, bridging finance and buy-to-let specialists Dragonfly Property Finance and Maslow Capital have merged. Dragonfly has acquired Maslow’s book of around 12 mezzanine loans, which was owned by a fund backed by its four partners and a group of wealthy private investors. But mezzanine and development loans will still be made under the […]

Howard de Walden estate also returns to US market with £147m issue

Mayfair Capital Investment Management’s higher risk capital growth fund has made a 25% return in 12 months on its first project. Mayfair Capital’s £12m MC Property Growth Fund 2 and partner Beaubridge made a £5m preferred equity investment in Liberty Properties’ luxury residential development, 2 Hyde Park Square, W2. The developer decided to exercise its […]

Lloyds appoints Royal adviser Lloyds Banking Group has hired JP Morgan Cazenove to sell a £1bn portfolio of distressed UK property loans, dubbed Project Royal. It will be a straightfor-ward disposal of loans backed by regional office, retail and industrial assets, rather than the sale of a stake in a fund, like RBS’s Project Isobel […]

Barclays Capital is trying to offload the debt it provided against a Dublin office asset called La Touche House, which is now worth less than the value of the loan.  While the bank does not own the asset, the loan is in breach of its loan-to-value covenant. “The asset isn’t in receivership but is so deeply underwater […]

Cyril Courbage is leaving Deutsche Bank, where he is European head of real estate. A source working on a deal with the bank said the real estate team were surprised by his resignation after 10 years. One of Courbage’s team, Heath Forusz, has also left. Forusz led the sale of bonds in the bank’s recent […]

Manager wins capital for CASA V as well as Austrian and German funds Henderson Global Investors has raised $105m for a follow-on US multi-family housing fund. The manager has also won  more capital for two German and Austrian property funds launched this summer. But it has put back the September closing date for its second Central London […]

Prime CMBS recovery expected as AAA bonds offer investors ‘safe haven’ Worsening global economic news has caused secondary European CMBS spreads to widen, presenting a buying opportunity at the prime end  of the market. This means returns are much more attractive now than they were before the summer. “We have seen hardly any weakness in the prime […]

Confidence in the US CMBS market has deteriorated as a result of a rating debacle. Citigroup and Goldman Sachs, as well as Freddie Mac, were forced to cancel their CMBS deals worth a combined $2.7bn after Standard & Poor’s pulled its preliminary ratings on the transactions – used to sell the bonds to investors. S&P […]

Latest commitments to Longbow’s and Duet’s debt vehicles take total contribution to mezzanine funds by institutions this year to over £1bn Duet Private Equity and Longbow Real Estate Capital have raised a further £300m for their mezzanine debt funds. Duet raised £125m for the European Real Estate Debt fund, almost £100m from institutions, plus £26m via […]