EUROPEAN REAL ESTATE INTELLIGENCE FOR US & GLOBAL INVESTORS
Volume 10, Edition 369, November 2014
PIE DIGITAL
NOvember 2014
Europe’s tectonic
base shifts east
Retail, like logistics, sees
East just as good as West
INSIDE ❱❱〉
C. Schumacher
Union Investment
Thierry Laroue-Pont
BNP Paribas RE
Harvey Coe
EY Real Estate
Michael Sales
TIAA Henderson RE
Andreas Muschter
Commerz Real
Bruce Nelson
Situs Properties
Ian Worboys
P3 Logistic Parks
Stef Blok
NL Housing Minister
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Is Europe moving east? Well, the Russians
are buying Berlin .. and other markets too!
W
elcome to November PIE DIGITAL, the third PIE online magazine featuring a selection of our unique content (that you can see
in full with a PIE Premium subscription which of course gives you
full-text clickthru to PIE Dailies)... Is Europe moving east? Of course it is!
This month, just weeks after PIE’s German Residential Property Breakfast in
Berlin featured a bus trip of housing project opportunities, PwC is organising
a similar housing bus tour – exclusively for Russian investors! Indeed, brokers
report that many Berlin apartments, particularly at the upper end, are being
snapped up by Russian and Chinese who see that Berlin will take a much
more central role in the Europe forming now in front of our eyes. The natural
synergy with CEE’s largest market Poland, as well as other CEE trading partners, is self-evident... In the none too distant future, growing middle classes
east of Gemany will balance out Europe’s historical tilt to the West.
As year end approaches, PIE, like many readers, is preparing its program for
next year. One highlight of 2015 for us will be the 10th anniversary of our
launch in April 2005. To celebrate we will publish a bumper 10th Birthday
Edition in April with a 10,000-copy special distribution. We will ask you,
the reader, to tell us how you think European real estate will change in the
next 10 years. See also our busy program of events and special editions in
this PIE DIGITAL on pXX. To take a seat at the top table or to reach the
world’s property investors with your message, contact any of the fine PIE
team on the left, or send a mail to [email protected].
This PIE DIGITAL brings you some great insights from top executives. In
these pages you will find BNP Paribas Real Estate boss Thierry Laroue-Pont
in his first interview as CEO, telling PIE his strategy for the years ahead.
Comments from Hong-Kong based Harvey Coe from EY Real Estate must
be read - in case you missed the hugely significant rule change for China’s
‘going outside’. Ian Worboys, CEO of P3 Logistic Parks, tells of a strong
expansion plans. Situs Properties’ European Head Bruce Nelson explains
how the debt side of the real estate balance sheet can and should be handled. Dutch Housing Minister Stef Blok, together with Dick van Hal,
CEO of Bouwinvest, tell us of the New World in Dutch residential - and
how foreign investors can get involved. Michael Sales and Philip McAndrews of TIAA Henderson talk about the hot European market, and Andreas Muschter, Chairman of Commerz Real, lifts the veil on his strategy
for that company now. Good reading!
Allan Saunderson, Managing Editor
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
3
contents
50
page
39
page
35
page
54
page
6 ■ The Concrete Gold Rush
Munich’s 17th Expo Real with record 36,900 entries;
US Medical pays €770m for German hospitals;
Unibail sells €850m French malls to Wereldhave
50 ■ Property Finance/Banking
Koreans draw on €280m from Helaba in Paris;
Française debt fund closes €350m allocation;
Unibail places €750m bond at record 1.375%
■ The PIE Cover Interviews
16 Thierry Laroue-Pont, BNP Paribas Real Estate
20 Harvey Coe, EY Real Estate
22 Ian Worboys, P3 Logistic Parks
24 Bruce Nelson, Situs Properties
26 Stef Blok, Dutch Housing Minister;
Dick van Hal, Bouwinvest
28 Michael Sales, Philip McAndrews,
TIAA Henderson Real Estate
30 Andreas Muschter, Commerz Real
54 ■ Deal Tracker
Madrid’s Hotel Asturias sold to Hong Kong’s Platinum;
€344m Paris hotel deal spotlights Asian interest; Unibail
to sell €300m Nice asset, €1bn more malls
32 ■ Listed Real Estate
Spain’s GIC-backed GMP registers as REIT;
German listed property free float doubles;
French REIT Patrimoine eyes €90m retail portfolio
38 ■ Property Funds
Apollo launches European distressed retail JV;
Global RE fund launches rise, volumes fall;
UK’s Cordea to place €750m for German investors
56 ■ Central & Eastern Europe
Austria’s Erste in Budapest buy from Futureal;
Central Europe property investment to top €7bn;
Moscow retail vacancy jumps as tenants review
■ Expert View
11 Christoph Schumacher, Union Investment
36 Ralph Winter, Corestate
49 Dirk Sosef, Prologis Europe
3 Editorial/Flag 4 Contents 42 Charts
45 Bulletin Board 60 People 62 Forward Thinking
46 ■ PIE Logistics Property Breakfast
High yields draw high investor numbers; E. Europe,
France in spotlight; Germany competitive;
Alongside equity, debt returns to logistics
49
page
4
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Property Investor Europe & DTZ present
Asia Capital Club
The East-West Property Knowledge Bridge
DATE: WEDNESDAY, 26 NOVEMBER 2014
|
LOCATION: LONDON CITY
The last meeting in 2014 of the Asia Capital Club launched by Property Investor Europe
and international advisor DTZ, takes place on Thursday 18 November in London. It will
start with 10-minute presentations by DTZ as well as ACC supporting partners, providing
their overview and assessments of investment prospects in pan-Europe in the short to
medium term. These are designed to assist Asian members of ACC in their judgment of
value, opportunity and risk.
Many Asian members are relatively new to pan-Europe even if they know London and the
UK better. This closed-door Asia Capital Club is designed to bring Asian capital allocators and
European real estate specialists together three times yearly in conﬁdential discussions to
exchange views and bridge the East-West knowledge gap. It will foster relationships and exchange information so that especially those Asian investors who may be new to pan-Europe
can beneﬁt from the knowledge of their European colleagues and specialists.
The 90-minute in-the-round discussion, as always, will remain conﬁdential so that sponsors
and guests can freely exchange views. PIE will sum up general conclusions in a blog but will not
cite detailed, attributable opinion.
ACC member companies in 2014 include:
AEW Europe, ASCOTT, Bank of China Global Investors, Beijing Capital Land, Beijing Construction
Engineering Group, BIggeorge’s Holding, Broadgate Estates, Canaccord Genuity, CCPIT, Chenavari,
China Daily, China International Capital Corp, China Mobile, China Telecom, China
Unicom, Corpus Sireo, DLA Piper, DTZ, Eastdil Secured, EPRA, Europa Capital, Europe
Daily, EY Real Estate, Gaw Capital, Grainger, Greenland, HSF, ICBC London, IE Singapore,
Immoﬁnanz, Invesco Real Estate, Ivanhoé Cambridge, JP Morgan Asset Management,
Mitsui Fudosan, OMFIF, Malaysia, Proﬁmex, Property Investor Europe, Realogis, Sumitomo Mitsui Banking Corp Europe, Syntrus Achmea, Taiping Insurance, TP-Link, Tristan
Capital Partners, UBS Global Asset Management, Union Investment Real Estate, Wanda
EVENT KINDLY
SPONSORED BY:
NExT PIE
EVENTS:
13 November
German
Residential
Berlin
27 November
Germany
(commercial)
London
22 Jan. 2015
Poland & CEE
London
mODerATOrS:
• Allan Saunderson, Managing Editor,
Property Investor europe
• Paul Boursican, Head of International Capital Markets, EMEA, DTZ
DATE & LOCATION:
SCHEDULE:
REGISTRATION REQUESTS:
Location: dtZ, 125 old Broad Street
london, EC2N 1ar
4.30 p.m.
5.00 p.m.
6.30 p.m.
www.pie-mag.com/events
or Email: gaby Wagner on
[email protected]
Photo: istockphoto.com
Wednesday, 26 November 2014
registration & networking
in-the-round- discussion
Networking & drinks
ENTRY FEE: PIE Premium subscribers €275. Standard entry fee €495 (plus 20% VAT)
EUROPEAN REAL ESTATE INTELLIGENCE FOR US & GLOBAL INVESTORS
the concrete gold rush
Munich’s 17th Expo Real
with record 36,900 entries
Munich real estate trade fair Expo Real closed its
17th edition last month having welcomed a record
36,900 delegates, up 2.5% over 2013. Organisers
said visitors from 74 countries (2013: 65) took part,
and international delegates accounted for most of
the rise.
Of the total of participants, 18,600 were trade
visitors (unchanged) and 18,300 represented exhibitors (2013: 17,400). The top 10 countries of visitor
origin after Germany were UK, Netherlands, Austria,
Switzerland, France, Poland, Czech Republic, US,
Russian Federation and Luxembourg. The next Expo
Real takes place from October 5 to 7, 2015. “The
positive mood in the investment and finance environment is continuing in the second half-year,” said
Messe München in a release.
Piotr Bienkowski, Chairman of BNP Paribas Real
Estate, Germany, commented: “Once again in 2014
Expo Real has lived up to its reputation as a working
fair. The appointment density was extreme, including
many meetings with ‘newcomers’ from abroad.” Ulf
Buhlemann, Head of Germany Investment at Colliers International said the international scope was
impressive. “Especially because of the presence of numerous foreign investors, Expo Real has become
more attractive compared with last year. It has again
confirmed itself as the most important meeting point
for established and ‘new’ investors alike,” organisers
quoted him saying.
Michael Sales, MD Europe for TIAA Henderson
Real Estate, said the opportunity to make new contacts was highly valuable. “Expo Real is the major
European real estate networking opportunity where
investors, service providers and tenants are in attendance. We make 30 to 40 contacts per day which normally takes us months back in London.”
Impressions from Expo 2014
Photos: Messe München International
Explaining the model, listening in on a panel discussion, enjoying the
sun, racing to the next meeting, working the stands – business as
usual at Expo Real trade fair in Munich this year.
6
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the concrete gold rush
In Germany, alongside classical residential and office property segments, the trend is towards alternative property investments, organisers noted. The
17th edition had a stronger showing from companies
involved in hotel, retail, logistics and health property.
“Over the last few years Expo Real has become one of
the most significant platforms for hospitality and hotel development in Europe,” said Nima Davoodzadeh, Vice President of Development Europe for
Wyndham Hotel Group. pie
Qatar ahead for Unicredit’s €400m Milan palace
Photo: Giovanni Dall‘Orto
The former headquarters of European bank Unicredit, Palazzo Broggi, a historic palace in the Italian city
of Milan, is on sale by manager IDea Fimit for between €350m and €450m, say local media. Around
80 investors, including sovereign funds, are in the
bid, and frontrunner Qatar wants to convert it into
an Italian Harrods store.
IDea Fimit, Italy’s largest private property manager
owned by the De Agostini publishing group, is putting the asset in Milan’s piazza Cordusio - which
dates back to the 19th century - up for sale in line
with the strategy set by CEO Emmanuel Caniggia,
the newspaper Il Sole 24 Ore reported. IDea Fimit in
October also sold its Forte Village hotel in Santa
Margherita di Pula, Sardinia, in a €180m deal.
UniCredit has moved to a new glass tower on the
northern tip of Milan’s downtown, and Palazzo Broggi may continue with office use or could be converted
into a department store. Likely to be Italy’s largest
single asset sale by value this year, the deal has attracted about 80 investors, including Blackstone and
Axa Real Estate, opportunity funds such as Cerberus
and Tristan Capital, and sovereign wealth funds including Qatar Investment Authority, Adia (Abu
Dhabi Investment Authority), GIC (Government of
Singapore Investment Corporation), and even the
sovereign wealth fund of Azerbaijan, Il Sole reported.
Il Giornale reported that Harrods is in pole position
to take the prestigious building, which belongs to the
Fondo Omicron Plus Realty fund, run by IDeaFimit.
Harrods is owned by QIA. pie
Malay KWSP buys AEW’s
€315m German office
European investment manager AEW Europe has sold
four German offices for €315m to an Asian pension
fund advised by UK-based manager Invesco, which industry insiders say is Malaysia’s Employees’ Provident
Fund KWSP, making its first office buy in Germany.
The sale has been registered and should be closed
by year end, reported German specialist property
newspaper Immobilien Zeitung. Sources said the assets include the German railway Deutsche Bahn
headquarters on Berlin’s north station, the Areva HQ
in Offenbach, a BKK centre in Hamburg and an office leased to BMW in Munich. Weighted average
lease term is 12 years, and IZ said the deal is being
done at a multiple of 17.1x rents, or about 5.85%.
Last year, KWSP (Kumpulan Wang Simpanan
Pekerja) already teamed up in a joint venture with
international logistics group Goodman to invest an
initial €500m in German logistics. In 2012 it was
also part of a three-member consortium that acquired
the Battersea power station site in London for £400m
- alongside palm oil producer Sime Darby and Malaysian property developer SP Setia. KWSP is a Malaysian government agency under the Ministry of
Finance, managing the savings and retirement planning for all Malaysian private sector workers. It held
RM597bn ($184bn) assets at end-March. pie
The Palazzo Broggi (pictured)
in Milan is on sale by manager
IDea Fimit for between €350m
and €450m.
Blackstone re-opens
Europe IV to add €1.5bn
US private equity giant Blackstone has re-opened its
fourth European property fund Blackstone Real Estate Partners Europe IV, seeking another €1.5bn to
boost its already record vehicle amid surging investor
appetite for opportunistic investments.
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
7
the concrete gold rush
Blackstone President Tony James told a conference
call on third quarter results that Blackstone will reopen its fourth fund just six months after it initially
closed it with €5.1bn in equity commitments. That
size already made it the largest-ever real estate fund
focused on European real estate, far eclipsing the
€3.2bn the New York-listed group raised in 2009.
“Given demand from our limited partners, we are
taking the unusual step of reopening and expanding
this fund by $2bn,” James said. “There’s plenty of demand from existing investors to take all of the increment. I don’t anticipate it extending the investment
period or materially changing.” Blackstone has already invested around two-thirds of the capital it
raised initially.
Blackstone has been bullish about its ability to find
investments in Europe. Group founder and CEO
Stephen Schwarzman said in a statement: “With one
of the largest pools of available dry powder capital
and the broadest alternative investment platform, we
are well positioned to capitalise on the dislocation in
asset values created by greater market volatility.” pie
USAA Realco’s deal is for a 33,955 sq.m. warehouse,
a 4,080 sq.m. office block and 19 acres of adjacent land
in Lage Weide, one of Utrecht’s main business parks.
Dutch developer Somerset Real Estate will build a new
28,557 sq.m. warehouse on the unused land.
The investment is USAA Realco’s first real estate
allocation in Europe. It opened its first European office in Amsterdam only in July, when it also unveiled
a strategic joint venture with London-based Mountpark Logistics to develop warehouse sites. “Logistics
has long been a major part of our business, and this
first Class A transaction serves not only to highlight
our dedication to securing high-quality investments,
but also demonstrates our team’s knowledge of and
relationships within the global logistics sector,” said
CEO Len O’Donnell.
USAA Realco manages some $12bn of property and
invests on behalf of US pension funds and international institutions. It is a division of USAA, a Fortune
500 financial services group, which offers auto insurance, life cover and other financial products. pie
US Medical pays €770m
USAA seals debut Euro
for German hospitals
deal with Utrecht logistics
Texas-based USAA Realco, a division of the US
armed services insurer, has bought a logistics site in
the Netherlands’s fourth city Utrecht, marking its debut property deal in Europe after the establishment
of an Amsterdam office in July. No financial details
were disclosed.
Movement in Dutch logistics: While
USAA Realco bought a logistics site in
Utrecht, Bilfinger RE took property
management of Hansteen’s HBI portfolio in the country (asset pictured).
8
In the largest foreign investment in European
healthcare property yet, US REIT Medical Properties Trust has bought 40 hospitals in Germany for
€705m from Berlin-based Median in a sale-leaseback, and three for €64m from Netherlands-based
Waterland Private Equity.
The Waterland assets are rehabilitation hospitals;
the firm is also the majority owner of Median. “This
is an important transaction because it significantly
increases our asset base to approximately $4.5bn
(€3.5bn), and builds on our recent entry into the attractive western European market,” said MPT Chairman, President and CEO Edward Aldag Jr. “As we
increase our exposure to the positive European market dynamics, we will also maintain our core investment focus on the United States.” Some 28% of its
portfolio is now in western Europe.
The three clinics from Waterland are to be leased to
operator RHM, with which it started its western European expansion in a €184m sale-leaseback last year.
The larger portfolio consists of 38 rehab and two
acute care hospitals across the country. Median Kliniken, in which Waterland has just acquired a 94.9%
stake and MPT the remaining 5.1%, has taken a 27year master lease on the assets. Based in Alabama,
MPT is the only US healthcare REIT focused on
hospitals and other facilities where patients are admitted only by doctors. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the concrete gold rush
Lasalle, Quantum pay
€161m in Paris La Defense
LaSalle Investment Management and Swiss-based
Quantum Global Real Estate have announced the
acquisition of Tour Blanche in the La Défense business district on the western rim of Paris for €161m.
Vendor was New York-based Perella Weinberg Real
Estate.
The acquisition is one of the largest ever in Europe
for LIM, the investment arm of the Chicago-based
LaSalle group, and is also the fourth on behalf of
Plaza Global Real Estate Partners – the joint venture
of the two US based private-equity investors. The
Plaza partnership, established in 2012, is a joint-venture with a total investment capacity of $1bn to invest in large real estate assets targeting high-quality,
long-term investments in excess of $100m in mature
real estate markets. This venture has so far secured
deals in London, New York and in Munich.
The 27-storey Tour Blanche building comprises
25,783 sq.m. of Grade A office accommodation and
is fully-let to ERDF, a subsidiary of the national electricity provider EDF, on a new nine-year lease following a comprehensive €41m refurbishment completed
in March 2014. The pre-leasing to ERDF in 2013 for
its headquarters operation, almost one year before
delivery and the first pre-leasing of an entire building
in La Défense since 2008, demonstrates the high
quality and central location of the building, the firms
said in a release. pie
GRESB-GBCI merger raises green monopoly fears
The merger between two green building benchmarkers, Amsterdam-based GRESB and US-based GBCI,
is set to create a powerful platform to certify sustainability properties. But a top German executive warns it
risks creating a kind of green rating agency monopoly.
The Holland-based Global Real Estate Sustainability Benchmark collects sustainability data for the
global real estate industry, and the US Green
Building Certification
Institute is the nonprofit organisation issuing the LEED certificates. GRESB’s global
benchmark covers over
800 REITs, private equity funds, joint ventures and directly-held
pension fund portfolios, representing $8.9tr
in AUM.
“Joining forces with
GBCI enables us to deliver on the demands of
both the property industry as well as the financial markets,” said
GRESB CEO Nils
Kok. “Together, we will
be able to execute our
roadmap towards investment grade data at a
higher speed. This move
is a logical next step in
providing comprehensive sustainability information to the real estate
sector.”
Added Rick Fedrizzi,
CEO of GBCI: “Since
2000, GBCI has evaluated and certified more than 10bn sq.ft. of green
building space around the globe, and that number is
increasing. We are excited about the possibilities
from combining our network, knowledge and skills
with GRESB.”
However, some specialists fear the move could create a certification monopoly. “What is at stake is, in
essence, who is going to say if a fund or company is
sustainable or not,” Olivier Elamine, CEO of German alstria Office REIT told PIE. The new entity
can influence bond ratings. “This is potentially a
GRESB CEO Nils Kok says joining forces with GBCI will enable
the new body to deliver on
demands of the property industry as well as the financial
markets.
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property investor europe l Edition 310
339 l July/August
324
March 20142013
November
2013
l www.pie-mag.com
l l www.pie-mag.com
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9
the concrete gold rush
multi-billion industry, bigger than green building itself,” he said. He is also concerned the rating power
will end up as a commercial undertaking. “Initially
this initiative was non-profit, backed by some large
investors and companies like alstria which accepted
to submit information. Our hope was that GRESB
would structure and share this information to allow
existing rating agencies to use it.” Instead, it kept all
data confidential and used the backing of early adopters to build a dominant market position. “As a result, the risk is high that GRESB ends up building a
monopoly, while at the same time moving out of
non-profit into a fully-fledged commercial entity…
It would be like having only Standard & Poors rating
everyone as a non-profit organisation, and then turning into a commercial company and being acquired
by an investment bank.” pie
vember 2010 when it bought out the heirs of Ernest
Cognacq and Marie-Louise Jay, who founded the
store in 1870. LVMH is planning a luxury hotel offering 80 rooms and suites for the art deco Samaritaine building, to become part of its Cheval Blanc
chain. Three adjacent buildings will be converted
into 20,000 sq.m. of offices, 26,000 sq.m. of shops,
7,000 sq.m. of low rent apartments.
The group won a building permit in December
2012, but two conservation associations filed complaints, sparking a prolonged legal battle that is still
not over. pie
€460m Paris Samaritaine
refurbishment restarts
Austrian listed property firm S IMMO is planning to
shift activities in Berlin residential to focus on developing owner-occupier apartments, plus privatisations,
instead of acquiring existing stock which has become
too expensive, CEO Ernst Vejdovszky tells PIE.
“We started buying relatively big housing portfolios in Germany in 2005/06, with a focus on Berlin,”
Vejdovszky told PIE in an interview. Owning around
5,000 units at the moment, it now wants to focus on
developing new apartments. “We have over 100 assets and plots in Berlin which have further development potential,” said Vejdovszky.
German residential share is currently 20% of S
IMMO’s €1.7bn portfolio, and it does not plan to
expand this. “We would not buy an existing portfolio
today as pricing is too high for us now,” Vejdovszky
told PIE. “We want to raise potential in our own
stock and also buy commercial buildings which have
the potential to be turned into residential use.” S
IMMO’s book value per share is at €7.87, still well
above the share price of around €6 over the past three
months. But Vejdovszky said the listed sector is better supported now. “We have the disadvantage to be
listed on the Vienna stock exchange, which is a bit at
the fringe, and we are among the smaller firms.” Austrian property overall is also still struggling with a loss
of reputation from scandals in prior years.
S IMMO also put in a bid for the 16.4% stake in
Austrian peer CA Immo, sold by Unicredit/Bank
Austria and ultimately bought to Russian-controlled
O1 Group for €295m. Commenting on the decision
to bid, Vejdovszky said that CA is a solid, professionally-run business and active in many of the same
fields as S IMMO. His firm saw potential for co-operation and synergies. S IMMO was able to bid for
the stake due to backing from its two major shareholders Vienna Insurance and Erste Group. pie
A Paris court has ruled that French luxury goods conglomerate LVMH can resume work on its €460m
conversion of the Paris La Samaritaine department
store into a mixed-use complex including a prestige
hotel. Work was stopped after a court ruling in May.
The store, which sits on the right bank of the River
Seine, close to the Louvre museum and Notre Dame
cathedral, has been closed since 2005 when it failed
to meet safety standards. LVMH acquired a majority
stake for €230m in 2001 and took full control in NoAustrians active in Berlin housing: S Immo is planning more privatisations, while
Buwog, the German spin-off of peer Immofinanz, just celebrated topping-out in the
Westendpark project (visualisation pictured).
10
Austria’s S IMMO switches
to Berlin privatisations
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Expert view
German secondary cities
can help avoid yield trap
by Dr. Christoph Schumacher, Managing Director,
Union Investment Institutional Property, Hamburg
Y
ield compression continues in Germany’s major cities.
the largest single group – are even more
About a year ago, prime yields on office averaged 4.82%
conservative. Just 8% express an interest in
but by the end of second quarter 2014 they had
secondary cities. Additionally, there is also
dropped more than 20bp to 4.61%. The most expensive location
less competition from foreign investors.
is Munich at 4.45%, with Hamburg second with 4.55%, followed
International players seeking to enter the
by Berlin at 4.65%. Prices nonetheless seem very high from an
German office market initially focus on pri-
investor’s perspective, particularly when one considers that re-
mary cities with their transparent markets.
turns are eroded by factors such as transfer tax. Against this back-
Secondary cities only appear on their radar
drop, it comes as little surprise that institutions are shifting atten-
at a later stage, if at all. Low vacancy rates
tion to secondary cities where, thanks to Germany’s federal
in many B cities offer a further incentive to invest, often signifi-
structure, many offer positive economic and demographic pa-
cantly below those in A cities. According to DG HYP, vacancy is
rameters. Prime yields on offices in Karlsruhe are now around
just 2.1% in Karlsruhe, 4.5% in Darmstadt, 4.6% in Mannheim
6%, according to Wüest & Partner, with Potsdam and Münster
and 4.4% in Hanover. The figures for the major cities are much
delivering 6.5%. Others offer even better prospects: 7% in Erfurt,
higher: 12.6% in Frankfurt, 11.5% in Düsseldorf, while Berlin,
7.5% in Lübeck and as high as 8% in Heilbronn and Krefeld. Hav-
Munich and Hamburg range between 7%-8%. On the flip side,
ing said that, the old adage that higher returns mean higher risks
investors in B cities face a number of challenges. Market trans-
applies here as well. Better-yielding secondary cities typically in-
parency is significantly lower - plus it is also difficult for large
volve greater demographic or economic risks.
investors to find the lot sizes they need, with many under pres-
Christoph Schumacher: “It
comes as no surprise that institutions are shifting attention to
secondary cities where… many
offer positive economic and
demographic parameters.”
sure to favour properties worth €100m or more. In secondary
Large differences between secondary cities
cities, most office properties are worth €15m-€25m.
The first task therefore is to identify the right secondary cities.
Investors need to analyse a range of parameters, including
Office property liquidity significantly lower
property metrics, such as total office stock, development
The risk of not being able to dispose of a property in secondary
pipeline, rent trends and vacancies, and net absorption. But
German cities during some market phases is also greater than for
investors must also consider the wider outlook. How is office
the main centres. According to Aengevelt Research, properties
employment likely to change? What are the demographic
worth around €6.9bn changed hands in Berlin in 2012, and in
and economic prospects? Those with the right conditions of-
Munich for €3.8bn - compared to Dresden at only €440m. An-
fer a number of advantages over primary cities - and the yield
other potential risk is the economic focus of some mid-sized cit-
differential is obviously important, with returns 120-140bp
ies, which often lack a balanced mix so that if a key sector or ten-
higher, and lower volatility. While prices and rents rise less
ant gets into difficulties it can have a significant impact. Examples
sharply in boom times, slumps are also correspondingly less
include cities with a strong bias towards the automotive industry
severe when trouble hits. This is particularly evident when
such as Ingolstadt, or the chemical industry like Ludwigshafen.
comparing Essen with nearby Düsseldorf. According to DG
Another example is former German capital Bonn, which had to
HYP, prime rents in Düsseldorf plummeted 6% during the cri-
contend with losing its status. Bonn office has actually coped
sis year 2009, rallying just three years later by more than 6%.
very well, contrary to all expectations. Overall, there are good
In Essen, by contrast, prime rents remained unchanged be-
arguments for and against B cities. The decision will ultimately
tween 2008 and 2012 before edging up in 2013.
depend on the risk-return preference of the investor. Secondary
cities carry certain risks but in the long term it can be just as risky
Many investors still shun secondary cities
to acquire in major cities at inflated prices. Exposure to B cities in
The greater stability of Germany’s secondary markets is sup-
the current market is one way of boosting the overall portfolio
ported by two factors: less speculative development during
yield. But the prerequisite is painstaking research to identify the
booms and less competition for attractive properties since
right city and the right property within it. cs
many investors decline to look outside primary cities. A recent
survey revealed that around 70% intend to stay focused on ma-
The author can be reached at
jor cities and only 20% consider diversifying. Insurers – by far
[email protected]
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
11
the concrete gold rush
Norway Pension pays
Unibail sells €850m French
€176m for Munich offices malls to Wereldhave
12
Franco-Dutch REIT Unibail-Rodamco has agreed to
sell six French shopping centres to Dutch listed
Wereldhave for €850m for a net initial yield of 5.5%
as it continues to refocus its €33.6bn portfolio on large
malls. The deal is Wereldhave’s largest-ever acquisition.
Wereldhave will finance the acquisition, which
represents an average value of €4,200 per sq.m., with
a €550m rights issue, €150m of available cash and
existing debt facilities. The rights issue will enable the
company to maintain its conservative balance sheet
policy with a loan-to-value ratio of 35%-40%. The
issue will be launched as soon as possible after approval by an EGM on 28 November and the deal is
expected to close by year-end, the Dutch firm said.
Unibail said in February that it was aiming to sell
€1.5bn-€2bn of non-core shopping centres over the
next five years to focus on larger malls. “This transaction, part of the disposal program of retail assets
announced in February this year, will allow the
group to continue to sharpen its focus on large regional shopping centres,” said CEO Christophe
Cuvillier. Unibail has already sold malls for €931m
to Carrefour real estate firm Carmila, and is close to
agreeing the sale of its Nice Etoile mall to Allianz
Real Estate for just under €300m, according to Le
Figaro newspaper. It also reported, prior the announcement of the Wereldhave deal, that the group
has mandated Goldman Sachs to find buyers for
€1bn of French centres.
Wereldhave is focusing on growth after restructuring and risk reduction and says the size of the French
portfolio offers the opportunity to immediately reach
critical mass. “This deal is spot on for us,” said CEO
Dirk Anbeek. pie
American Realty REIT
buys German tower
American Realty Capital Global Trust, a non-traded
US REIT, has bought the office tower headquarters
of German energy giant RWE in Essen in a sale-leaseback. The asset is its third since starting buying in
Germany this year. The price was not disclosed.
ARC bought the office tower and four adjacent
buildings, RWE said in a statement. The firm will
remain a tenant in the assets. “RWE is bound to Essen as a location and has therefore leased the buildings back long-term from ARC,” said Board Member
Uwe Tigges. “Together with ARC we are currently
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Photo: RWE
American Realty Capital
Global Trust has bought
the office tower headquarters (pictured) of German
energy giant RWE in Essen
in a sale-leaseback.
Norges Bank Investment Management, manager of
the world’s largest sovereign vehicle, Norway’s Pension
Fund Global, has bought a majority stake in two Munich offices for €176m from local manager AM Alpha.
NBIM’s purchase of two offices in the Lenbach
Gärten quarter for €176m includes €75m third-party debt, said AM Alpha in a statement. The 29,000
sq.m. assets were developed in 2007 and are primarily leased to consultant McKinsey and publisher
Condé Nast. The remaining minority stake, the size
of which was not disclosed, went to a co-investment
vehicle advised and managed by AM Alpha, which
plans to acquire further stakes in German real estate.
“We had overwhelming interest when we started
the bidding process for Lenbach Gärten, from both
international and domestic investors, and we are glad
to have chosen a top financial institution like
Norges Bank Investment
Management as an investor for our prime properties,” said MD Siegmut
Boehm. “We will continue to leverage on our
network and local market knowledge across Europe and major gateway
cities in Asia, to unlock
value for our investors.”
AM Alpha in 2009
bought the two offices
plus a hotel from Austrian listed Immofinanz
for €200m. The firm invests in commercial
property in Europe and
Asia on behalf of family
offices, private investors
and foundations, and
has transacted €510m in
Europe so far this year.
It has sold €390m in
Dublin, Munich and
Berlin and acquired for
€120m in Amsterdam
and Munich. In AsiaPacific, the company
manages a portfolio of
over $1.1bn, with assets
in Tokyo, Shanghai and
Sydney. pie
the concrete gold rush
redeveloping the office floors in the tower to conform
to our demands for a modern work place.”
ARC earlier this year acquired the HQ of German
engineering firm Kolbenschmidt Pierburg in the city
of Neuss, near Düsseldorf, from Hamburg’s Captiva
Capital Management. The deal was part of an exclusive Europe advisory mandate of UK private group
Moor Park to build a portfolio of sale-leaseback
transactions in the UK, Germany and France. pie
NL’s Hague seeks €150m
annual private investment
The Dutch city of The Hague is seeking around
€150m annually in private investment to help develop student and traditional housing in one of the
most stable and high-quality cities in Europe, says its
Deputy Mayor for Development Boudewijn Revis.
Speaking at the Expo Real trade fair this week, he
told PIE that The Hague - one of Holland’s four
‘Randstad’ cities also including Amsterdam, Rotterdam and Utrecht - is extremely stable and has a clear
urban strategy, being the international city of peace
and justice. It is the United Nations’ second centre in
the world after its New York headquarters, hosting
the International Court of Justice and other international institutions. The Hague also accommodates
many students attending two expanding nearby universities, Delft and Leiden.
“When you look at The Hague it’s a city right in the
middle of the Randstad, and the only one of the four
with a seafront beach which is important for people
who want a high quality of life,” Revis said. “Aside
from this we have lots of developments, leading to
very fast growth in population.” City statistics show
5,000 to 6,000 people yearly move into the urban district which has a population now of some 540,000
sparking a huge need for traditional housing alongside more student accommodation. One way to
achieve both, he says, is to convert publicly-owned
properties - and many are available for refurbishment.
“We need investors to come to The Hague and transform government properties into student accommodation,” he told PIE. “But there is also a requirement for
traditional housing. We have local investors who allocate €50m to €60m yearly, but we need €200m each
and every year to build 500 to 2000 student housing
units.” The city already hosts a high proportion of expatriates working in the UN and other international institutions, which means it offers plenty of international
schools and high-quality health care facilities. Hague
authorities are ready to support inward investment and
provide a one-stop partner, Revis said. pie
La Défense aims
to end stop-go
construction - Parant
The Hague – where Evans Randall negotiated a 20,600 sq.m.
lease to CB&I in the Haagse
Poort office (pictured) – is seeking around €150m annually in
private investment to help
develop student and traditional housing.
EPADESA, the management body of the Paris La
Défense Seine Arche urban district on the city’s western
rim, aims to stagger new tower construction to avoid
stop-go fluctuations, says CEO Hugues Parant. A surge
in the new supply after 2007 led to high vacancies.
“In future we want to avoid the supply shocks and
the stop-and-go trends that La Défense has seen with
the 2007 renewal plan,” Parant told French specialist
portal Business Immo. The renewal plan called for
300,000 sq.m. of additional space in completely new
buildings and 150,000 sq.m. of new space resulting
from demolition-reconstruction projects by 20152016, and these targets are likely to be exceeded.
EPADESA now wants to focus on encouraging owners to renovate existing towers and on attracting a
wider range of companies as tenants.
Demand for office space in the district has picked
up, with take-up reaching 180,000 sq.m. in JanuarySeptember and likely to be well over 200,000 sq.m.
for the full year - above its 10-year average, said Parant. The decline in annual economic rents to around
€400 per sq.m. has made La Défense more attractive
and the vacancy rate is likely to drop back below
10% by 2016 from around 13% now, he said.
French-Dutch REIT Unibail-Rodamco has just confirmed the letting of 18 floors in its newly delivered
Majunga tower to AXA Investment Managers.
A sales agreement for Russian developer Hermitage’s €3bn mixed-use twin-towers project is now
ready to be signed, and this will then clear the way for
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
13
the concrete gold rush
the €250m of preparatory work necessary for the construction, said Parant. “Hermitage Plaza is useful for
La Défense - it offers a response to our need to make
the different parts of the district more multi-functional.” La Défense needs to follow the example of London’s Canary Wharf by developing more housing, retail and other facilities. EPADESA is also carrying out
feasibility studies on a cable car transport system that
would initially run between the adjacent Neuilly Paris
suburb and La Défense’s Grande Arche, eventually
extending to the planned Arena 92 stadium. pie
Italy cancels 10yr-old
EIRE trade fair from 2015
Italian real estate specialists attending Expo Real
2014 in Munich say the cancellation of the Milan
EIRE trade fair in 2015 by its organiser the Ge.fi
group will leave a presentational gap at a time of fast
rising interest by foreign capital in the Italian market.
Antonio Intiglietta,
founder and chairman of Ge.Fi (Gestione Fiere) announced last month
that the event, which
this year had its 10th
edition, will not continue. “The amount
of people willing to
play a leading role is
not, at present, a ‘critical mass’ sufficient
for the realisation of
the event,” he said.
The crisis in the industry brought many
difficulties in organising the event, which
in recent years has
made significant losses. “After long reflection, I find it hard to
identify a true community in the industry, which wants to
represent the facts beyond personal intentions, and play a real
part in the transformation of the counAntonio Intiglietta, founder and chairman of Ge.Fi,
try, generating crediannounced that the EIRE event in Milan will not continue
bility and authority.”
14
Italian managers and brokers at Expo Real in Munich expressed regret that the event will not take
place, but acknowledged that attendance at EIRE
had dropped back in line with the general property
downturn. pie
US-based Alvarez buys
German manager Captiva
US restructuring firm Alvarez & Marsal has acquired
German asset manager Captiva, based in Hamburg,
and says the takeover gives it a €700m platform to
expand in Germany and across Europe. No financial
details were disclosed.
Captiva, founded in 2001 in Hamburg by the
French Natixis banking group, will be renamed A&M
Captiva and continue to be run by current MD Stephan Fritsch. The deal gives Alvarez & Marsal, best
known for its insolvency work on collapsed US bank
Lehman Brothers, a full real estate advisory, asset management and services business in Germany.
Robin Priest, leader of A&M Real Estate Advisory
Services in Europe, said A&M Captiva’s experience
and credibility in asset management, combined with
A&M’s multi-national platform will create strong opportunities. Captiva focuses on buying and improving
properties across all asset classes, and has invested or
committed more than €1.7bn of equity to date. pie
Valad Europe confirms
Blackstone to sell stake
UK-based asset manager Valad Europe, which has
significant real estate holdings on the continent, confirmed reports that is identifying investors to acquire
the shareholding from current majority investor
Blackstone.
“Blackstone is happy with its investment but feels
now is the time to move aside for a long-term investor,” a firm spokesman said in a statement to PIE.
The business now manages over €5bn in investments
serving diverse global investment and capital partners. “It is getting on with managing its 20 funds and
mandates, across the 13 European countries in which
it invests, and has a current investment capacity to be
deployed of €1.3bn,” he said. “It is unlikely that a
new partner will be selected until the New Year.”
UBS has been appointed advisor.
Blackstone took Valad Europe private following its
acquisition of the Australian-listed Valad Property
Group in April 2011. The size of the Blackstone ma-
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the concrete gold rush
jority holding, owned by the New York-based private
equity manager through its Blackstone Real Estate
Partners VI global real estate fund, has not been revealed but the closed-ended fund matures in two
years’ time.Valad’s corporate history dates back to the
1960s, as Teesland, which listed in 2002. Two years
later, it acquired the iOG Group and was acquired by
in January 2007 for around £200m. The Australian
parent pulled back from Europe however during the
global financial crisis. Valad Europe is headed now by
Australian-born Chairman Martyn McCarthy. pie
L.A.’s Karlin in first Euro
deal, in Portugal/Spain
Los Angeles-based Karlin Real Estate has bought a
portfolio of retail properties in Portugal and Spain
from Dutch group Redevco, sealing its first deal on
mainland Europe since entering the UK last year. No
price details were given.
The portfolio includes a four-storey building in
central Porto, Portugal’s second city, fully let to fashion group C&A and French books and music retailer
FNAC. The other five assets are based in mainland
Spain and the Canary Islands and let to affiliates of
supermarkets group Dinosol. Karlin Real Estate
managing director Matthew Schwab said the acquisition of the Portuguese property on one of Porto’s best
shipping streets is an excellent example of the type
the group wants to buy in Europe. “It fits perfectly
into our plan to purchase well-located properties
leased to strong credit-worthy tenants,” he said.
Karlin Real Estate is the property investment vehicle for billionaire surgeon and medical device inventor Gary Karlin Michelson. Since it was set up
in 2009, the real estate business has acquired and
financed close to $1bn of deals, initially in the US
and now increasingly in Europe. The group entered
Europe last year with the purchase of an office block
in the British city of Peterborough for £16m. To
date, it has assembled a portfolio of European assets
worth about €215m and covering 200,000 sq.m.
Karlin plans to invest up to $750m in Europe in
both debt and equity, mirroring the scale of its activities in the US.
The deal also signals a trimming of Redevco’s exposure to assets on Europe’s periphery. The private
retail real estate firm is backed by the family behind
clothing chain C&A and owns some 450 properties
worth €6.5bn in 11 countries. Redevco has 8.8% of
its total assets in Italy, Portugal and Spain, compared
with 18.8% in Germany and 26.7% in Belgium/
Luxembourg. pie
French Proudreed targets
€3bn, eyes listed firms
Redevco sold a portfolio of
retail assets in Portugal and
Spain to Karlin Real Estate –
and refurbished and expanded
the C&A store in north German
Oldenburg (visualisation pictured).
French private real estate group Proudreed is now
aiming to grow its portfolio to €3bn while also rebalancing away from logistics. Its main focus is on development projects but it also open to acquisitions,
including acquiring a listed property company.
“Our aim is to have €3bn of assets by 2020-2025
and to build a portfolio that is as diversified as possible because that is what will generate the most durable long-term returns from our operations,” Chairman Christophe Le Corre told French specialist
portal Business Immo. Proudreed’s portfolio has
been stable at around €2bn over the past three years,
with declines in property values and €150m of asset
sales offset by acquisitions and development projects.
Earlier this year Le Corre said the firm wanted to
grow the portfolio to €2.7bn-€2.8bn by 2020 but it
is now setting its sights higher. To rebalance, Proudreed will cut the logistics portion from 34% to
20% and significantly increase the share of industrial
premises, which is currently at 30%. Office is expected to remain at 20% and retail at 15%.
Le Corre said Proudreed is in a position to spend
€100m-€200m a year. It is open to taking part in the
consolidation of the listed real estate sector and is
considering opportunities to buy REITs/SIICs with a
free float of €50m-€200m. “We are in a position to
seize opportunities because of funds allocated by our
shareholders, three families who are ready to reinvest
in France,” he said. But development will be the
spearhead. Proudreed secured close to €600m of refinancing from HSBC at end-2013 and this summer
gained €400m of new financing from pbb Deutsche
Pfandbriefbank and Helaba and a French banking
pool led by Société Générale and AXA. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
15
the pie cover interviews
Property investment surge different to
2006 boom - BNPP RE’s Laroue-Pont
Thierry Laroue-Pont was named CEO of international property advisor BNP Paribas Real
Estate in June, succeeding Philippe Zivkovic. In an exclusive first interview as CEO, he
tells PIE of new strategies to meet current and future opportunities and challenges.
Thierry Laroue-Pont: “We’ve
got €7bn of assets under
management and we would
like to increase that activity
because it’s one which is
highly synergetic with the
other business lines.”
PIE: What is your assessment of the market in Europe as we
near the end of 2014?
Laroue-Pont: I think
2014 is going to be
extremely dynamic
compared with last
year. Over the first
nine months we have
had double digit
growth, because we
have achieved a 23%
increase in total investment. In the UK,
we should achieve
€71bn versus €65bn.
Germany has had
growth of 21% so
that
we
should
achieve €37.5bn after €31bn last year.
And even France, despite the ‘French
bashing’ we had to go
through, has been
quite successful because we will achieve
€23-€24bn, an increase of 24%. This is
significant because
the first three countries represent 80% of the total
investment volume in Europe. If you go to the Tier
2 countries, Spain has been quite successful, increasing 58% to €5.7bn.
PIE: Which camp are you in between those who
say it is like 2006 and we’re overpriced or and it
could turn out badly, and others who say this is
completely different because of more institutions
and more equity?
Laroue-Pont: There are many differences compared
with 2006. Firstly, it’s an equity-driven investment
policy versus a leverage investment policy. The sec-
16
ond difference is the level of education of the investors, because mostly we are dealing with domestic
investors who still represent 60%-65% of investment in France, UK and Germany. The third thing
is that there are extremely educated overseas investors, because if you go to the big investors coming
from Asia or Middle East most of them are sovereign funds, and they put money into core or core
plus product, so the speculative approach is really
not so important.
There is diversification because of the yield pressure
on prime CBD products so it’s true that we have
got some more aggressive investment policies towards Tier 2 countries, such as Spain, Italy to a certain extent or eastern European countries. There is
more appetite for the regions, for instance, if you
go to the UK, and there’s an appetite for diversification in the range of products, because it’s not
only led by offices but retail has been pretty successful followed by logistics investment, and residential and hotels.
PIE: A lot of Asian money is coming into our marketplace boosting prices. Despite this, would you
say that France, UK and Germany are becoming
overpriced?
Laroue-Pont: I don’t think they are overpriced because if you go to France, for instance, you have
prime CBD yields of 4.2%-5%; if you go to Germany it’s between 4.5% and 5.2%. So I would not
say that it’s overpriced, I would say that it’s giving
rise to a diversification in asset allocation for some
investors, for example in UK regional markets. If
you go to France for instance, we have yield compression between 4% and 4.5%, which gives more
room for speculative development.
PIE: You of course came into the CEO job back in
June. And in July you announced some internal
changes. Can you outline these and the thinking
behind them?
Laroue-Pont: We are a European and UK company, so we have made sure that our governance principles include all the countries. We now have
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the pie cover interviews
brought into the management committee the CEO
of UK, CEO of Germany and France, and the
CEOs of Tier 2 countries. We made sure that all
the business line heads belong to the management
committee.
We are also sticking to the ambitious development
plan presented to the BNP Paribas group in 2012 by
Philippe Zivkovic and the management board. This
means a reinforcement of our presence in the UK
and in investment management, and going from
€630m of net banking income to €800m by 2017
and increasing profit from €150m to €200m. So it
means being more aggressive in property development in the UK and in some top cities in Germany,
and identifying new sites within the Ile de France
region of the French capital.
Concerning advisory, clearly we have the number
one position in France and Germany and we want to
go into the top five in the UK quickly. We have expanded our geographical presence in the Netherlands and Poland through the acquisition of two
advisory teams, and we have also launched platforms
supported by corporate and investment banking,
and wealth management in Asia, based in Hong
Kong, and in Middle East based in Dubai.
In property management, I think we have now
reached critical size both in France, Germany and
Italy. And we have made significant investment specifically in the eastern European countries.
And the last footprint we want to develop is the investment management team. We are ranked eighth
in investment management; we’ve got €18bn of assets under management and we would like to increase that activity because it’s one which is highly
synergetic with the other business lines.
PIE: Of the business lines you outlined, is there any
particular main market focus for the team now?
Laroue-Pont: We try to be a global player and not to
be a one-stop shop. It is in our DNA to be a longterm provider of all real estate services for our clients.
Basically now our focus is on improving some business lines in some countries rather than expanding
our geographical coverage, because we think we have
a very extensive geographical coverage following the
acquisitions we made in Poland and eastern Europe.
PIE: But BNP Paribas Real Estate wasn’t ever really
a global real estate force, it was mainly European
based. Is this changing?
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l www.pie-mag.com
17
the pie cover interviews
PIE: How important are Poland and Central Europe in your thinking?
Laroue-Pont: We have 140 professionals providing
roughly all the business lines except for property development because we are active in property management, letting, investment, retail agency services
and we cover all the range of products - office, industrial, retail and hotels. We have made a decision to
reinforce our presence in eastern Europe and specifically in Poland.
Thierry Laroue-Pont: “Middleeast investors are considering
diversifying geographically
and they are very active in
Germany.”
18
Laroue-Pont: What is changing is that because of the
amount of overseas money coming in, we made the
decision to structure our approach towards these
newcomers. We used the tremendous leverage of the
historic and long-term presence of BNP Paribas
within these countries to set up the platforms. We
have more than 2,000 people in Asia and 2,500 in
Middle East and these guys have long-term historical
relationships with the family offices, the ultra high
net worth individuals and the sovereign wealth funds
So we have created a specific team dedicated to these
key investors called the International Investment
Group (IIG) and we have got more than 20 people
working in that team and making sure that they create the connection between overseas money sent by
our Middle East and Asian colleagues and access to
the official sales instructions we have here in the UK
and Europe for off-market investment opportunities.
From the beginning of the year we have achieved or
we have on-going negotiations representing close to
€2.5bn in terms of investment. For example, we
have announced the sale of the Risanamento portfolio in France for a Saudi Arabian investor for €1.2bn.
We are just about to sign transactions of €500m in
Frankfurt with an Asian investor and a further
€500m in the UK with another Asian investor. All of
these deals are coming from the platforms and from
either the wealth management or CIB teams in Asia
and the Middle East.
PIE: You’ve created a new team to focus on logistics. Did you feel that that was a little bit weaker
than it should be?
Laroue-Pont: We have had an approach which was
mainly based on national investment and letting
markets, which is fine because we have excellent
market shares, but due to the size of the logistics investment market in Europe, which is 10% of total
European investment, we decided to have a European logistics competence platform based in London because we realised that the sourcing of portfolio transactions mainly comes from the UK, so we
are trying to set up that team by the end of this year.
And we carried out the same approach for retail services.
PIE: Are Middle East investors getting more enthusiastic about investing in Europe, or is it stable and
steady?
Laroue-Pont: No, I think we will see double digit
growth in the next five years for many reasons. First
of all, they are very educated about the UK markets
and they want to consider any type of product in
London - offices, retail, residential and hotels. They
appreciate that the yield compression for these products and the level of competition in the UK is high,
and now they are considering diversifying geographically and they are very active in Germany. We have
two or three big transactions over €200m in Germany, and it’s the same in Paris. They want to have
mega transactions over €150m.
PIE: What about US opportunistic investors?
Laroue-Pont: It’s huge, we have people dedicated to
the US and Canadian funds. Once again it’s 10% of
total European investment, it’s up 39% at the end of
the third quarter versus the same period last year.
They have a more opportunistic approach. For instance, they’ve started invest massively in Spain.
They started to invest massively in La Défense a year
and a half ago. They are extremely sophisticated investors, and they use the cycles and invest at exactly
the right times, when the cycle is just about to improve again. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
NGOUR
I
UD S T
L
C U
IN G B
IN Property Investor Europe proudly presents the latest in its expert seminar series:
S
OU
H
German Residential Property Breakfast
Does German rental housing still offer value? Is Berlin the best regional market?
DATE: THURSDAY, 13 NOVEMBER 2014
|
LOCATION: BERLIN
SPEAKERS:
NIKOLAI DEUS-VON HOmEYER
Managing Partner, NaS invest, Berlin
SPEAKER
NAS Invest is a real estate investment ﬁrm specialising in complex property strategies such as project development, re-positioning, asset turn-around and portfolio optimisation. Mr. Dëus-von Homeyer, a co-founder
of the ﬁrm, has over 12 years’ experience in the property industry, having previously worked as head of corporate development at Corestate Capital and in the Frankfurt oﬃce of Cerberus Capital Management where
he dealt with property acquisitions, optimisation and exit strategies.
mARCUS EILERS
Head of german asset Management, round Hill Capital, Berlin
SPEAKER
London-based Round Hill Capital is a private equity group founded in 2002 to acquire stable, cash-ﬂowing
real estate across Europe, and to date the ﬁrm has invested over $6bn. Prior to joining, Hr. Eilers co-founded
boutique consultancy Rheingold, with clients including GSW, Pirelli RE, Nicolas Berggruen, and Vitus, following a position at Germany’s second largest listed residential ﬁrm GAGFAH, responsible for portfolio acquisitions and ﬁnancing, corporate restructuring and outsourcing.
ANDREW m. GROOm
SPEAKER
Head of Valuation & transaction advisory, Jones lang laSalle, frankfurt, germany
Global real estate services group JLL employs over 48,000 staﬀ in 70 nations, and in Germany is now the largest realtor. Mr. Groom, who heads a 70-person valuation/due diligence team, led development of the VICTOR
prime oﬃce indicator and is also responsible for key clients, business acquisition, portfolio strategy and risk
assessment. With over 20 years’ experience, he has been based in Germany since 1992 and previously worked
with other major realtors in Europe.
mICHAEL SCHLEICH
Managing director, Corestate Capital advisors, frankfurt
SPEAKER
Corestate Capital Advisors is a real estate advisory ﬁrm and part of the Swiss Corestate group, a specialist private equity real estate investor. With over 22 years’ experience in the sector, Hr. Schleich previously acted as VP
of GREAT, in charge of the execution of due diligence processes and exit strategies for residential portfolios. He
was also founder and MD of Real Estate Concept, an advisory ﬁrm for privatisation, asset and facility management. He graduated as a real estate economist from EBS and is a FRICS.
PETER SCHORLING
Partner, Head of Corporate/M&a germany, olswang, Berlin
SPEAKER
Olswang is an international law ﬁrm focused on the real estate, infrastructure, technology and media sectors. Dr. Schorling is a partner and heads the Corporate/M&A Group in Germany. He specialises in advising
on M&A transactions as well as on joint ventures and corporate reorganisations. His main area of expertise
lies within the real estate sector, covering all asset classes, inter alia, residential, oﬃces, retail, hotel and logistics
CORNELIA YZER
Senator, Berlin government
SPEAKER
Ms. Yzer will welcome the panel and audience to Berlin. She has been Senator for Economics, Technology and
Research of the Berlin Government since 2012. She previously worked as parliamentary state secretary to the
Federal Minister in the same department and as state secretary for the Federal Minster for Women and Youth.
Between 1997-2012, she served a stint as director general of the German Association of Research-based
Pharmaceutical Companies vfa. She studied law and economics in Münster and Bochum.
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EUROPEAN REAL ESTATE INTELLIGENCE FOR US & GLOBAL INVESTORS
the pie cover interviews
Chinese investors eye pan-Europe
as Beijing loosens investment rules
Rising numbers of Chinese developers and investors are eyeing property deals and joint
ventures across Europe, buoyed by China’s go-global policy and simplified approval
procedures for outbound investments, says EY Real Estate’s China advisory head.
W
“
e notice a lot of investors are visiting
Paris and Frankfurt, Portugal and Spain
to look for investment opportunities as
well as partners,” Harvey Coe, Real Estate Advisory
Leader - Greater China for Ernst & Young Transactions, told PIE. “We have been asked by several large
and medium-sized developers to advise on where to
invest in Paris, because Paris is a very well-known city
to Chinese and there may be some angle for developers to market properties back home.” Individuals and
institutions are not just looking for single deals but
want joint ventures to build investment programs.
That wave of property developers and investors, including insurance groups, family offices and banks, are
now benefiting from changes to rules governing outbound investments that will make them more competitive and speedier in executing transactions. Those
changes, under the Revised Measures for Foreign Investment Management, from 6 October allow firms to
invest over $100m in an overseas transaction without
prior approval - although they must still register deals.
The main regulating body is the Chinese Ministry of
Commerce, but in April the National Development
and Reform Commission, also eased its criteria for
groups planning to invest under $1bn overseas. “Recent
studies conclude that about 92% of offshore investment projects have been assisted by the simplified procedures, which cut waiting time and
increase transparency,” Coe said. Now only
investments in sensitive industries or countries will require approval while the timeframe
for registering straight-forward overseas investments has been cut to three working days.
“Prior to this policy change, in certain markets
such as New York and London, it’s been difficult for Chinese institutional investors to compete in ‘on market’ processes as the timeframe
required for internal and external approvals often
exceeded the timeline for these sales processes.”
Harvey Coe: “ With the regulatory hurdles
gradually retreating, Chinese firms will be
able to compete on a level playing field,
and outbound activity is bound to continue its upward trajectory.”
20
More state-owned enterprises and private equity
funds are participating in overseas M&A than ever before and are seeking deals in industries from food production to automotive. Chinese outbound investments
across hit $108bn in 2013, exceeding the $100bn-mark
for the first time, and 22.8% higher than 2012. The
only region where they fell last year was Europe, down
15.4%. But more M&A activity is expected after the
MOF’s revised measures and the People’s Bank of China’s in September green light for direct renminbi- euro
trading - allowing deals to be paid in euro.
“Under China’s ‘going out’ policy, Chinese firms are
being encouraged to invest overseas to render them
more globally competitive, to boost the country’s economic development and to slow the increase of China’s
foreign exchange reserves,” Coe added. “With the regulatory hurdles gradually retreating, Chinese firms will be
able to compete on a level playing field, and outbound
activity is bound to continue its upward trajectory.”
In the last 18 months China’s leading developers
Dalian Wanda and Greenland, plus insurers such as
Ping An, alongside Taiwan-based China Life have invested in Europe. Realtor JLL expects the loosening
to further accelerate outbound capital, in particular
into Britain, Australia and US. Coe said that for large
Chinese groups, raising their status on the world
stage is as important as financial or macro-economic
considerations. “They want to build a brand for
themselves but to be international they have to go
overseas,” Coe said. “We have seen the big names go
overseas to purchase trophy assets at really premium
prices. This has put them on the map immediately.”
That has meant planting a flag in London first, but
some are ready to spread their wings. “The UK is really
getting expensive across the board. There are investors
and developers back home who are thinking of moving
away from the UK to concentrate on other gateway
cities in continental Europe,” Coe said. “Now we are
really seeing the second wave of developers coming out
of China. They are lesser known to the western community but are quite substantial in size domestically…
Instead of investing in a £200m or £300m deal, they
will very likely partner up with local players to have a
better grip of what the local market is about.” pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Property Investor Europe
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EUROPEAN REAL ESTATE INTELLIGENCE FOR US & GLOBAL INVESTORS
the pie cover interviews
No sign of slowdown in expansion for P3
Logistic Parks, backed by new owners
Prague-based P3 Logistic Parks has more than doubled in size across Europe over the last
year, and the pace of expansion shows no sign of easing up after its takeover by two large
private equity groups - and its change of name from Point Park Properties.
S
Ian Worboys:
“We’ve seen demand across the
whole of Europe
increase and our
rents and occupancy rates have
been rising.”
22
ince takeover in October 2013 by Texas-based
private equity giant TPG and Ivanhoé Cambridge, the acquisitive real estate arm of Quebec public pension fund CDPQ, the renamed P3 has
been adding assets fast - with CEO Ian Worboys
given the green light to compete with the rapidlymultiplying Big Money
managers seeking European logistics. Worboys
admits the speed has
been so great that the
59 warehouses shown
on the website comprise
only half of the actual
current total. He has
led the company since
the beginning, and into
its pan-European expansion since being
sold by the original
backer, Bahrain’s Arcapita bank.
“The next deal we’re
doing adds another 30
to 40 units,” Worboys
told PIE at Expo last
month. Confidentiality
agreements prevented
him giving details but
he added: “By the end
of the year we’ll have
250 tenants, so our
portfolio today is at 117
warehouses
offering
about 2.4m sq.m. of
space… and the deal
we’re going to announce
will take it to 2.8m!” In
value, Worboys is careful; P3 remains privately
owned and the value of
holdings is not published. But he said that
at Expo 2013, P3
owned around €750m in assets. In the interim it has
spent about €1bn.
But even if P3 has doubled in size in a year, there
is no high pressure from its owners to grow. “There’s
no specific target and with our shareholders TPG and
Ivanoé Cambridge we’ve always agreed that we’ll look
at good opportunities if and when we can get the returns we want and it makes sense geographically. And
for the 11 countries we’re in, we’ll do the deal and
that’s what we’ve done. The shareholders have been as
good as their word; they’ve backed management and
we’ve grown the company hugely.”
One aspect of activities now is a concerted move
into other markets - even if its Prague base has given
it a competitive advantage in Czech and nearby markets which are rising fast. “We keep a balanced portfolio so we have bought just about everything in the
Czech Republic and we really need to work hard to
build western European holdings,” Worboys said.
“But these days Slovakia, Czech Republic and Poland
are considered as good as western Europe. The centre
of Europe has moved… This year our game plan was
to grow in our core markets of Czech and Poland, so
we’ve done that – tick. The second was to grow our
Italian portfolio, and there we spent nearly €120m so
we’ve done that – tick. We haven’t grown as fast in
Spain as we would like to. But apart from that, in the
main markets we’re still doing a lot to build-to-suits,
and that’s been very successful. And now we have a
land bank with planning for 780,000 sq.m. of warehouses.”
Does Worboys see prices rising too fast and entry
yields, therefore, getting down to levels where acquisition is becoming less interesting? “There are certain
locations where this might be true; they’re getting
much sharper in core Germany, core UK. But in
other countries we believe as a group that there is
still opportunity.” P3 as yet has not acquired in Britain but is keeping a watching brief, and has opened
a UK office. France, however, is more tricky. “I think
France is an opportunity even if to me France is one
of the most difficult economies in Europe. They
have a weak government; they have a society where
more than 60% of the population works for the gov-
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the pie cover interviews
ernment; they have a 35-hour week, and they insist
on keeping it that way!.. So we see France as a challenge - but we also see it as an opportunity because
yields haven’t moved nearly as much as in Germany
and England.”
While eastern Europe still offers high warehouse
yields to investors this is changing fast, Worboys said.
“They’re coming in quite a lot and there are two
things driving it: firstly, manufacturing has very
much moved east, especially towards Romania… I
think if the Germans knew how much of their Mercedes is made in Romania they’d be quite shocked.
And, in fact, for most cars the airbags are probably
made in Romania. That happens because of low labour costs and government grants, so the opportunity for warehousing - because you still need to move
the goods, once you’ve manufactured them, into a
warehouse and then back either by train or by lorry
- is very high. Romania’s shortcoming is they don’t
have the huge motorway network, but that is changing too. They’ve just opened up 85km on one of the
main highways. The first to open was to the port but
it also happens to go to the beaches where all the
politicians go like Mamaia and Constanta!”
The drive of Big Capital into logistics is certainly
being caused by the surge in online retail, Worboys
agrees, but it is not the only motivation.”E-commerce is a growingly important piece but actually it’s
a very small proportion – under 5% of our portfolio
looked at from the tenant side. We don’t have any
large Amazons even if we have a lot of other retailers.” One of these is a very similar internet sales portal company called Mall.CZ, which is the Czech
equivalent, and it has a similar tenant in Romania.
“And we also have situations where people are doing
bits of retailing from within the warehouse. They’ll
just take one bay of a large warehouse for their postal
packing centre, and then they give the parcels to
DHL.”
One recent change for P3 has been a move toward
building more DHL and TNT parcel hubs. It has
constructed one in Slovakia, one in Czech Republic,
and even one in Saudi Arabia. But all in all, he told
PIE, lettings have been very lively across the portfolio. “We’ve seen demand across the whole of Europe
increase and our rents and occupancy rates have been
rising. We’re up to 100% in several countries. In Slovakia we are at 98%, Germany is 99% and Holland
is in the top 90’s.”
Are logistics prices now getting too hot around Europe now because of the mass of big players? “Yes,
there’s a lot more money there,” Worboys said. “Although we’re all after warehouses we all have slightly
different angles on the countries we’re going to. We
lock horns but I think that’s good for the market. It’s
driving prices up but there comes a point where you
can’t afford to pay more unless you can see an angle
into the future. And for us, we’re very strong in development and we’re also very strong in asset management; that’s our angle.” pie
the pie cover interviews
Growing debt investment in Europe widens
requirement, momentum for advisor Situs
Growing investment by many different players into European debt, with banks and
non-banks buying both performing and distressed assets, is widening the requirement
and building momentum for US-based advisor Situs, says its European head Bruce Nelson.
Bruce Nelson: “ Greece is a
smaller market but interestingly enough there’s some
interesting granular opportunities there.”
24
F
ounded in 1985 in Houston, Texas, Situs is a
global provider of commercial real estate and
loan advisory services. It is owned since 2011
by Helios AMC, a New York-based special servicer
controlled by Lewis Ranieri, a legendary figure on
Wall Street, considered the ‘father’ of the securitised
mortgage market from his 1980s role as vice-chairman of Salomon Brothers. Situs, which says it provides the most comprehensive third-party business
solutions platform in the CRE finance industry, entered Europe in 2004. It has been active in Germany
since it bought the service GSSG in 2009 from US
group LNR. Three years later in September 2012, Situs acquired Deutsche Bank’s CMBS loan servicing
platform DECO, transferring 83 securitised loans
with an outstanding balance of over €6bn. Now, in
Europe it operates from offices in London, Frankfurt,
Dublin and Copenhagen.
“In a nutshell, we like to say that your back office
is our front office,” US-born Nelson told PIE in an
interview at Expo Real last month. The profusion of
banks and non-banks now originating lending to
European real estate or simply investing in secondary debt because they see an opportunity - without
any intention or skill to manage or service the investment - means fast-expanding requirements for
all the services that Situs can offer. Situs has underwritten about €40bn of commercial real estate, new
loan originations or NPL trades in Europe, Nelson
says. “We’ve been involved in probably 65%/70%
of NPL trades in one form or fashion. Today we’re
servicing or asset administering about €25bn
throughout Europe; that’s about 40% Germany and
40% UK and the balance spread through the Netherlands and other countries. And that doesn’t include the €2bn in the Nordics! … In all, we’ve taken
on 17 new clients this year.”
A member of the Situs group executive committee,
Nelson, prior to joining, headed Houston-based
Ranger Realty that was a contractor to the Resolution Trust Corporation that unwound a mountain
distressed loans arising from the US savings & loans
crisis. Now, he sees that with many different investors
coming into European debt, Situs has to transform
itself fast from a special servicer into a much wider
financial services ‘back office’ processor. “What we’re
morphing into is the outsourcing and business process provider to the financial industry, so that’s both
banks and non-banks. We want to be the company
they go to when they have resource needs - and those
can be processes like fund servicing, they can be more
analytical in terms of their underwriting, and as part
of the NPL advisory business they may want to do.”
Situs is also expanding its offerings into residential
mortgage due diligence. “The same clients that are
buying or providing commercial loans are also buying large portfolios of residential mortgage loans, and
that’s going to be on-going business and a natural
outgrowth for us because it’s the same clients and the
same basic concept,” Nelson says. “Lastly, what banks
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Photo: shutterstock.com
the pie cover interviews
are going to need specifically now that the paradigm
has changed, is to have a new look at how they really
operate their business. Just like any of us, you’re constantly having to evolve and change how you do business compared to the way you did 20 years ago.”
For banks, Nelson says, times are a lot tighter
than before the global financial crisis. “Nowadays,
they’re having to rework every aspect of their operations. Things they might not have considered previously are now going to have to be on the table to be
considered. And clearly when you look just at trends
globally, outsourcing is a bona-fide and viable option for anybody. In particular, we think the reason
it works for financial institutions is that they have
to deal with fixed costs, while their business volumes are variable… And so by nature you’re inefficient if you cannot match your costs to the variable
nature in your production.”
Situs has recently been hiring top executives including Chip Good and Fernando Salazar to
strengthen its experience base in the wider European
debt market. “We are a customer-centred business;
we are a consulting business, an advisory business - so
our ultimate goal is to sit down with our clients to
understand their needs and then fill those needs,”
Nelson says. Most recently, the firm took over a portfolio for HSH Nordbank and the staff from the platform to help wind it down - a model that mirrors its
operations in the US. “We have four standard platforms in the US for different banks where we have
dedicated people helping do a variety of different
functions that the bank needs - so this is a natural
progression for us, extrapolating it here in Europe
because the need is there. We’re expanding our product line because our client base, the same client base,
can use Situs in different tasks. For instance shipping
loans; it’s another asset class, but in terms of the servicing and the basic processes it’s the same.”
Among priorities going forward in Europe now are
southern markets - Spain and Italy. “We’re currently
overseeing a large number of assets in Spain,” he told
PIE. “We all know how much money is flooding into
Europe, and certainly looking at Spain. But what you
don’t have is an independent third-party service provider; you have all of the guys - that we know so well
- who are going out and buying servicing platforms
and buying assets, but you don’t really have a professional firm – and certainly not a global firm – that
can provide these type of services.” He adds: “Spain
needs more liquidity. These NPLs and even perform-
ing loans are going to change hands and they’ll get
refinanced… But the problem is that those with
global experience has pulled back; nobody has any
strong existing platforms in Spain other than domestic banks.”
In Italy, where local specialists estimate distressed
loans still on bank books at around €180bn and still
rising, Nelson says Situs is in the process of finding
the right corporate solution. “Spain was a natural,
and then you have to work at Greece and you have to
look at Italy. Greece is going to be smaller market but
interestingly enough there’s some interesting granular opportunities there. Italy’s a market that people
have to take some time to really think about... The
recent changes in the tax laws regarding REITS is
certainly going to have an impact on the level of interest from specialists like us.” Already, Situs is servicing an Italian NPL portfolio of around €500m face
value, he notes. “We don’t have boots on the ground
.. but Italy’s definitely on our horizon and we will
have a more direct presence there soon.”
For the near future, Situs will continue to expand
where it sees a requirement, and where the client
needs help. “We will be looking at how we can provide more resources to our prospective clients again
in the commercial real estate arena, the residential
arena, as well as elsewhere,” Nelson says. “Our message right now really - and our theme for 2015 - is
‘momentum’… From our standpoint, we’re moving
with the market to be able to take these actions, to be
able to service our clients… And it’s a certainly a winwin for everybody.” pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Spain (Zaragoza in the north
pictured) was a natural choice
for Situs, says Nelson.
25
the pie cover interviews
Foreign investors welcome in Holland’s
rapidly liberalising housing – minister
B
lok told PIE in an interview at Expo Real last
month: “Traditionally, the Netherlands had
a very large subsidised social housing sector,
with about one in three Dutch people living in social
housing with regulated rents.” The large majority of
the remainder, about 60% of stock, comprises owner-occupied homes. “So fewer than 10% of Dutchmen are living in free rental houses, which makes us
a peculiar country! The situation has developed because the dominance of social housing hasn’t
changed; and that’s happened because of the state
rental guarantee.”
Stef Blok: “You can buy
social housing of good
quality, and you are allowed to transfer to the
free sector once the tenant leaves so that’s also an
investment strategy.”
26
Now, spurred by the need to cut public spending,
his right-of-centre People’s Party for Freedom and
Democracy government, in power since 2010, is cutting back on subsidised social housing where rents
are strictly controlled. “My policy for the last two
years has been to bring social housing associations
back to their core business – social housing for people with lower incomes - while creating an attractive
environment for investing in the free housing sector,”
Blok said. “This I have done by legislation that allows
for rent increases, really restricting social housing
corporations to clearly providing social homes.” A
second string of policy has been to regulate the mortgage market where lenders have offered loans as high
as 120% of value as well as interest-only mortgages
without amortisation, resulting in a housing bubble.
New mortgage restrictions came into effect in January 2013, initially having a shock effect of depressing values, Blok said. “But house prices are now moving up again. The number of transactions had
increased enormously so the market is very much
getting back on track. But this is important. The fact
is that people at the start of their housing career now
normally have to rent for a couple of years to save
money to be able to buy, and that creates a deferred
amount for housing, especially a free rental sector…
With this combination of measures we’ve created a
large amount of free-market rental homes and we
fully expect demand to rise in years to come.”
Total Dutch housing currently comprises a social
housing sector of 30%, a liberalised rental sector of
roughly 10%, with the remainder owner-occupied.
Unlike in its big southern neighbour Germany, the
Dutch government headed by Prime Minister Mark
Rutte is making no attempt to restrict rents at levels
in excess of €700 per month. Amsterdam has now
also added laws to encourage more of the rent-controlled ‘social’ sector back into the free market - including allowing social housing associations to sell to
investors, including to foreigners. Blok told PIE:
“Social housing associations are not obliged to sell
but we introduced a tax levy that has had two effects:
to force them to increase their rents, especially for
people with higher incomes - and creating a pressure
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Photo: ANP
Housing Minister Stef Blok says foreign investors are welcome to participate in the
liberalisation of Dutch housing, acquiring social housing to move stock out of the
controlled sector. Bouwinvest CEO Dick van Hal says the opportunity is large.
the pie cover interviews
to move into the free housing sector and pay the taxman also! It means they need liquidity, so a number
are considering selling at least part of their stock.
They’re not obliged to do so, but we have given them
strong incentives.”
Van Hal, Chief Executive of Bouwinvest, added
that the regulatory moves have started to re-establish
some balance in Dutch residential. “There was no
level playing field in the rental housing market because social housing was built originally as free rental
stock but was stuck in a price level below €500 a
month due to the controls,” he told PIE, speaking
alongside the minister. The opportunity for domestic
and foreign investors is clear, he said.
One of the most recent examples of foreign acquisition - and the biggest to date - was July’s €578m investment by German listed firm Patrizia of 5,500
housing units from Dutch housing association Vestia.
One of some 400 housing associations in The Netherlands, Vestia in the global crisis lost billions in financial derivatives and has been seeking to recoup losses
since. Patrizia made the acquisition via its co-investment vehicle WohnModul I without identifying coinvestors. But other acquirors in Dutch residential
have included UK-based Round Hill Capital, giant
Swiss bank Credit Suisse together with investors from
Qatar, and Asian institutions - some of whom were
also involved the Patrizia deal, van Hal said.
Housing Minister Blok added that he sees no political problem with foreign investment into Dutch
housing. “On the contrary, they are very welcome,
because as a minister it’s very important that investors choose the Netherlands, thereby increasing the
housing stock .. So why I should I shy away from
foreign investment..? I think the main interest for
foreign investors will be in the free rental sector.
That’s where the Dutch housing market has the greatest need .. and with the 30% social housing stock
there’s no need for an increase.”
Blok added that social housing can be taken fairly
into the free housing sector over time. “Literally you
can buy social housing of good quality, and you are
allowed to transfer to the free sector once the tenant
leaves so that’s also an investment strategy,” he said.
But Amsterdam is allowing the transformation of social housing associations to take place at its own
speed. “I don’t have a policy that says you should
shrink. I’m not the owner, the social housing corporations are independent owners. It’s not for me to tell
them what should happen but
as said, there are strong incentives for them to get back to
their core business in the social
housing sector and sell part of
their stock.”
But van Hal noted that even
if there is huge capital in the
market eyeing Netherlands residential - and now no regulatory
constraints for foreign investors
- a deep knowledge of the market is needed to be successful.
“So if foreign investors come I
advise them to have a local platform here, to understand the
different markets because in The
Netherlands regional differences
are very big. We have shrinking
regions and we have growing regions; although we’re a small
country, you have to be aware of
the local things and local conditions.”
Bouwinvest already welcomes foreign investors
into its Dutch Residential Fund which has grown
since launch to total assets of around €2.7bn, encompassing some 15,000 housing units. “We are growing
by 2,000 units a year at the moment in the rental
area,” van Hal told PIE. “We are working together
with other partners in Amsterdam .. teaming up with
developers and with the cities who are present here.”
The fund offers investors a yield of 4%, with a longterm return of 6%, and Bouwinvest intends to build
this to around €3.2bn over a three-year horizon.
He noted though that different markets in Europe
have their own cycle, and Dutch housing is now in
recovery from a slide of 20% in the last five years.
“It’s interesting that residential markets in Europe are
local markets. The German market, the Dutch market, the Swiss market, the Swedish market - they all
have their own cycle. So the German market already
had a down cycle and moved up, and the Dutch market had a down cycle, is now bottoming out and is
moving up… There’s low correlation between the resi
markets in Europe so it’s very interesting to have a
European residential fund because then you can diversify your risk.” Bouwinvest is also invested via local managers elsewhere in Europe, also in Germany,
and in North America. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Dick van Hal: “The Dutch
housing market had a down
cycle, is now bottoming out
and moving up.”
27
the pie cover interviews
TIAA Henderson RE expands, but weight
of capital makes European values tricky
Boosted by April’s merger of TIAA CREF and Henderson Global property arms, UK-based
TIAA Henderson Real Estate is carefully broadening into more assets and markets in
Europe. The weight of capital makes valuations tricky, say its top executives.
S
peaking at Expo Real in Munich last month,
European head Michael Sales and US head
Phil McAndrews told PIE that both group parents have given the green light for expansion. Sales
told PIE: “We tied up in April and for the last six
months we’ve been going full speed ahead with trying
to match the aspirations of both parents as to why we
did this joint venture - which on the TIAA side was to
get a better footprint throughout Europe and the rest
of the world, and for Henderson is to have access to
co-investment capital and align ourselves with our clients - as well as investing money for the significant
general account.”
Michael Sales: “ We’ve just written our
first loan for the TIAA General Account …
and we’re looking at doing more.”
28
In former days, Henderson Global did not have the
depth of capital available for seeding vehicles before
full launch, but has now seeded a debt fund using this
new capital source. “This allows you to go out and
potentially warehouse loans so that when we’re marketing the fund we have instant products we can put
in front of people that illustrate or deliver the returns
we’re saying they’re going to achieve by investing in
the product. So that’s a good example of one of the
merits of doing this transaction. The other big changes are the types of transactions we’re trying to do on
behalf of the GA (general account) and other clients,
taking us into bigger assets.”
TH RE has a global presence with offices across
Asia and Europe, and manages some $23bn of real
estate across about 50 funds and mandates. Its alliance with TIAA-CREF in North America increases its
global AUM to around $71bn. TIAA-CREF holds
60% of the company and Henderson Global Investors 40%. During Expo, the group announced - using
this additional buying power - an investment of
A$425m to take a 75% share in a shopping centre in
Australia. It is also looking at assets for the general
account, and other clients for bigger tickets of €200m
and over - “In line with the sort of strategies for most
of these funds which buying dominant assets in core
European cities particularly,” Sales noted.
The main focus of its fund family and its current asset
search remains the Henderson specialities retail and office. “In terms of the big winner for us since the JV has
been, strangely enough, in the UK on the retail side. The
Henderson UK Property Unit Trust has now gone
through the £2.2bn barrier; we’ve taken in £800m of net
equity inflows over the course of this year. And the great
thing about that is we’ve managed to invest and invest it
well. So we’ve done £1.2bn in 25 transactions in the last
14 months… The team has been incredibly active.”
One area that TH RE is now firing up is debt investment, last year hiring Christian Janssen away from
Renshaw Bay. “We’ve just written our first loan for the
TIAA General Account which was a retail park in
northern England, and we’re looking at doing more,”
Sales said. It is equity raising for a new debt fund, and
has several loans it is looking to invest in.
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the pie cover interviews
From the US viewpoint, McAndrews said interest
in European real estate remains high. “As you see
globally there’s strong capital pressure to deploy into
alternate asset classes and the US is no different than
anywhere else. European markets are an interesting
opportunity so from TIAA’s vantage point, the opportunity to invest in the Henderson platform really
did two things: TIAA-CREF has over $600bn of assets under management, and when Mike talks about
the TIAA General Account, that side of the business
alone at TIAA is around $226bn... We run our own
assets and third-party assets and doing the joint venture and acquiring the Henderson Real Estate division brought us greater assets under management...
and it also, most importantly, gave the TIAA investors that are part of the college and university systems
deeper penetration from the real estate standpoint
into European and Asian markets.”
TIAA-CREF has had an office in London for over
15 years, and over $3bn invested across pan-Europe at
the time of the merger. But McAndrews said: “Now
with this platform we have the opportunity - through
the nine offices in Europe and four in Asia - to gain
much deeper on-the-ground penetration.” TIAA
overall it will make over $5bn of acquisitions in real
estate this year, and of that around $1.5bn internationally. Its mortgage portfolio is about $14bn in size.
“We like Europe because there’s opportunities here
to globally deploy into key gateway markets, to penetrate deeper and more meaningful in for example the
UK markets not only in just London. We’ve been active for example up in Scotland as well…but obviously
we’ve got better access to cities like Paris and the German markets and Milan in Europe now.” The group
also wants to seek more in eastern Europe, exploring
the the Polish market in particular - and is also looking
closely at Scandinavia. “So there are places that we’re
going to take the TIAA investment capital as an investor and deploy deeper into European markets than we
have ever in the past,” McAndrews said.
Are these directions and market selections being
driven by stateside institutions, or is this coming
from within TIAA-Henderson? “It’s coming from
within TIAA because this is our capital we’re talking
about, and it’s coming from TIAA-Henderson who
are identifying areas of opportunity, areas where we
can find really compelling risk-adjusted return pricing,” McAndrews said. “When we are going after investments it’s not just always chasing yield, it’s about
is the pricing appropriate to the risk we’re taking and that can be both property level risk, meaning the
assets; it can also be risk relative to the geo-political
nature of the country and the transparency of the
country? So all of those things when you filter them
through, do we feel that the yield parameters in terms
of capital and] discount rates are appropriately priced
for the opportunity?”
Now, drawing on the combined team in London
TIAA has, in effect, added around 250 people to the
program across nine markets. “You’re going to looking at an incomparable position to find compelling
investment opportunities off market, well-priced
deals, and you’ll see us closing by the end of this year
some large transactions that are pretty dynamic and
interesting.” One market both executives are looking
at closely is Spain, but McAndrews said the ‘bargain’
that was there has been eroded in the last year or so.
“The problem is that the weight of capital
drives yields down and it’s not underpinned
by fundamentals. That’s our issue because
we’re a real estate investor wanting to
deliver a real estate return.” – Michael Sales
Pricing though is getting difficult, Sales told PIE,
with the weight of capital making value assessments
more tricky. “That’s a problem for people like us that sheer weight of capital. Because if you add that
onto the fact that most insurance companies and
pension funds are under allocated to real estate in
Europe, and some of them are trying to increase as
fast as possible and it’s huge numbers… The problem we’ve got is that that weight of capital drives
yields down and it’s not being driven by fundamentals in most cases, not to where things are getting to
now. And that’s our issue because essentially we’re a
real estate investor wanting to deliver a real estate
return. And when the yields get driven down by that
type of money, it makes it very hard for us to justify… So, for example, where we’ve had developments
in central London and we’ve exited, someone is paying us up front for the rental value three years in
advance.” pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
29
the pie cover interviews
German Commerz Real eyes US,
Asia-Pacific as flagship fund globalises
Commerz Real, the asset management arm of Germany’s Commerzbank, will continue
to develop its open-end property fund hausInvest for domestic savers and is expanding its asset base from Europe into the US and Asia-Pacific, says CEO Andreas Muschter.
Andreas Muschter was named
CEO in January 2013 after starting as CFO in December 2009.
30
I
n a wide-ranging interview Muschter told PIE that
the Commerz Real remit has not significantly
changed despite the banking group’s decision to
exit real estate finance and wind down commercial
lender Eurohypo, now renamed Frankfurter Hypothekenbank. Much of the uncertainty in the aftermath of the global crisis was actually caused by changes in capital regulations. “When the board decided in
July 2012 to run down Eurohypo that was the same
month when the decision was taken that Commerz
Real would be the centre of competence for tangible
assets within Commerzbank group,” Muschter said.
The group is convinced that offering quality assets to
the nationwide private saver base continues to be a key
retail business. “Our assets are different and do not
correlate with capital market segments. They need
good asset management, reliable after-sales service,
and therefore Commerzbank decided to keep that inhouse, which serves the whole Commerzbank group
and is positioned in the retail banking division. “We
still have strong earnings generated from the retail
business so that was why the decision was taken to remain 100% part of the retail segment.” This is reflect-
ed in the unit’s governance: its supervisory board head
is Martin Zielke, group board member with responsibility for private clients.
Germany’s second largest private bank, Commerzbank benefits from nationwide distribution that only
Deutsche Bank, savings bank manager Deka and the
cooperative system’s Union Investment can offer. A
fully-owned subsidiary, Commerz Real manages
around €32bn in assets. Its fund spectrum includes
open-ended real estate fund hausInvest - the flagship
retail vehicle - institutional products, and equity investments in real estate, aircraft, regenerative energy,
and ships. It also offers equipment leasing concepts
with financing for real estate, big-ticket equipment,
and infrastructure. Muschter was named CEO in January 2013 after starting as CFO in December 2009. A
lawyer by training, he also led the team that supervised
the takeover of Dresdner Bank in 2007.
The flagship open-end property fund hausInvest
now manages €10.7bn, of which equity capital totals
around €9.5bn. It has investments in 17 countries
and total lettable space of 2.4m sq.m. leased to 2,500
tenants and with occupancy at 90.4%. The three biggest market exposures are France (23%), UK (21%)
and Germany (18%). “We also have assets in Sweden,
Finland, Luxembourg, the Netherlands, Poland, the
Czech Republic, Spain, Portugal, Italy and Turkey - so
basically that’s the euro part,” Muschter says. “We’ve
just sold two assets in Japan; we have assets in Singapore, and we are currently looking at Australia.” The
fund only last month re-entered the US for the first
time since 2007, committing to a $110m investment
in a retail project in Miami, Florida. “Our strategy is
Europe and certain growth areas, and we’ve just set up
a subsidiary in Hong Kong so Asia-Pacific is one of
these,” he says. While currency hedging is an issue,
legal frameworks and tax issues in Asia-Pacific are
quite favourable.
Closer to home, one of Commerz Real’s major investments, the giant Westfield mall in London, reflects
a gradual shift toward retail from office in the asset
mix. “We are mainly invested in office – we have more
than 50% office buildings, and about 30% retail. We
have some logistics, and some hotel assets, with just a
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
the pie cover interviews
tiny bit of residential. In the future, we’ll shift from
office to retail gradually but I think we have proven
our retail expertise over the last 20 years and we have
very successful centres and have made a lot of money
with them… Westfield in London is my favourite asset
in the fund and we’re currently working with the
group on an expansion of the centre and so are investing more money.”
One asset that may not fit over the longer term is
French REIT/SIIC Cegéréal, a vehicle floated out of a
Paris portfolio in 2007 when the group, and many
others in the industry, expected to be able to place asset
packages in listed REIT vehicles to benefit from efficient tax structures. “Back then we had the idea of a
German REIT, a French REIT and so on but the German REIT never made it to the stock exchange”,
Muschter says. “The French managed to do that and
the firm is quite stable, but strategically I don’t think it
is absolutely necessary for us to have a REIT in the
fund... On the other hand, it is performing and it
doesn’t hurt. We have tax issues there; it’s hard to terminate the structure within a 10-year period so you do
have to wait until you work with that... We currently
have three assets, and I think everyone can live with
this structure and so I don’t think we will see changes
within the near future there.”He adds: “hausInvest is
from my perspective one of the best products you can
generally find in the market – not only compared to an
open-ended but compared to many other products in
the market. It has existed for 42 years and has always
generated a positive income for investors, always above
the inflation rate - and that’s through all the cycle,
through all the crisis.” Commerz Real plans to grow
the fund by about 5% annually, which means net inflows of about €500m. “Of course we can take up to
€700m maybe, but we can’t invest more money because we are focused on finding high-quality low-risk
assets. On top of that holding liquidity is very expensive right now; the more liquidity you have, the poorer
the performance of your fund.”
While stable growth with retail savers will always be
the key part of the business model, the open fund’s
institutional investor share could increase up to 10%
over time, Muschter says, rejecting criticism of new
and tougher regulation. “The new regulations lead to
very stable funding and your planning of your funding. If an institutional investor hands us €100m now,
he has to keep it for at least 24 months in the fund and
he has to hand in a termination notice 12 months
ahead - so you really have the time to organise this.”
While he concedes that the new rules, introduced by
the German government only last year in response to
runs on open funds amid the financial crisis that
sparked the closing of many, it also means large institutions will be wary of committing capital.
But hausInvest is suitable for smaller pension funds
and other kinds of managed domestic institutional
capital, he says. “These institutions get new funds every year, pension plans every year, they need to reconsider where to invest their money. Some of them were
forced out of the product because of the 12-month
termination notice - and that’s why they all go in Special Funds. But I think that is quite amazing because in
practice it’s a lot harder to get out of a Special Fund
then it is to get out of hausInvest. Yes, you have a termination period but after 12 months you will definitely receive your money back because we plan our
liquidity and we always have enough in place to be
able to pay back this €100m for example. With a Special Fund, if you hand in a termination you will never
get your money back in six months because they usually don’t have any liquidity, maybe 1% or 2% only,
and the rest has to be generated by selling off buildings.” Commerz Real has a track record of some 180
closed-ended funds, which manage roughly €9bn
more of assets. In addition, asset structuring activities
has another €9bn under management in different SPV
structures. The leasing segment does just under €1bn
of new business annually. pie
Andreas Muschter: “Our strategy is
Europe and certain growth areas, and
we’ve just set up a subsidiary in Hong
Kong so Asia-Pacific is one of these.”
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
31
listed real estate
Spain’s GIC-backed GMP
registers as REIT/SOCIMI
Spanish group GMP, controlled by the Montoro
family property dynasty and now backed by Singapore’s sovereign wealth fund GIC, has registered as
the latest in the nation’s expanding list of REIT/SOCIMIs, planning a stock market listing soon.
GIC’s equity injection of €200m for a 30% stake
in September has provided the resources to establish
GMP, owner of the iconic black skyscraper let to the
BBVA banking group on the prestigious Paseo de la
Castellana street in downtown Madrid, as a key investor in offices and business parks in the Spanish
capital and in Barcelona, local media say.
Its new Stategic Plan aims at acquiring office buildings, divestment of non-core assets and refurbishment
of part of its stock. In July, GMP sealed a deal to buy
the old headquarters of Altadis on Eloy Gonzalo street
in Madrid, and has recently started renovation works.
GMP also owns prime office properties in Madrid at
Luchana 23, Ortega y Gasset 20, Hermosilla 3 – headquarters of the Garrigues legal group - and Genoa 27.
GMP last year earned €98m in revenues, posting
EBITDA of €68m and
Befimmo CEO Benoît de Blieck described
net profit of €5m. Its
the new Belgian REIT legal status as an
loan to value is 52% and
important development.
has a portfolio occupancy rate of 93%, with
over half rental contracts
expiring after 2017. The
group was founded in
the late 1979 under the
leadership of Francisco
Montoro Muñoz, who
still heads the group.
The family has five
board members.
SOCIMIs have two
years after initial registration before going
public, and a listing on
the junior Spanish
bourse requires a minimum free float that
would allow the Montoro family to retain
control. However GMP
(now renamed as GMP
Sociedad de Inversiones
Inmobiliarias Socimi)
said it hopes to take the
step as soon as possible.
Chris Morrish, GIC
32
Real Estate’s London-based Head of Europe, said the
investment in Gmp demonstrates GIC’s belief in
Spain’s office sector and its confidence in the quality
of the Gmp portfolio and management. Gmp CEO
Francisco Montoro said his firm is pleased to have a
strategic partnership with a truly global, experienced
and reputable long-term investor such as GIC, and
the two firms’ objectives of disciplined capital deployment to add value are aligned. “The funds will be used
to foster growth through new investments, refurbishment and development projects,” he said. Adolfo
Ramirez-Escudero, Head of Spain for realtor CBRE,
who advised Gmp, called the transaction, “a very remarkable and strategic deal.” The transaction was also
advised by JP Morgan, Garrigues (Gmp), and Clifford Chance (GIC). pie
Belgian RE firms adopt
new B-REIT status
Major Belgian listed real estate firms – Cofinimmo,
Befimmo and Montea - have adopted a new REIT
legal status that enables them to continue operations
without becoming subject to the EU’s alternative investment funds management (AIFMD) directive.
Belgian property firms previously had the status of
Sicafis (Société d’Investissement à Capital Fixe en Immobilier), which for legal reasons were due to be
brought under the AIFM regime. The Belgian government thus earlier this year introduced a new BREIT status offering similar benefits to Sicafis but
recognising firms having a commercial rather than an
investment purpose. Belgian firms say the change will
maintain a level playing field with the rest of Europe.
The change required the approval of 80% of shareholders at an EGM, and most major operators have
now secured this. “Cofinimmo is pleased to benefit
from this new regime which will allow it to pursue its
operational activities as a real estate company efficiently, working in the interest of all its stakeholders,”
it said in a statement. Befimmo CEO Benoît De
Blieck described the move as an important development. “As a public B-REIT, Befimmo will continue
to pursue its operational activities as a REIT within a
legal framework that corresponds to the reality of
business,” he said. A handful of Befimmo shareholders took up an exit option to sell. Befimmo will thus
benefit from B-REIT status immediately after buying
in these shares, which is planned for 13 November.
Montea’s adoption of the new status (SIR/GVV - Société Immobilière Réglementée or Gereglementeerde
Vastgoedvennootschap) won unanimous approval of
shareholders at an EGM on 30 September. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
listed real estate
Spanish REIT keeps
Luxembourg listing
Luxembourg-listed real estate firm Saint Croix Holding Immobilier, active in Spanish property, has
moved its fiscal and administrative domicile to Spain
to take on REIT/SOCIMI status while retaining its
original Luxembourg listing.
The firm has also changed its name to Saint Croix
Holding Immobilier, SOCIMI, S.A – as a Spanish
REIT/SOCIMI (Sociedad Anónima Cotizada de Inversión Inmobiliaria) will therefore be regulated by
Spanish fiscal authorities. Its business consists mainly
of holding equity interests in Spanish REITs or listed
firms, and direct assets such as hotels in the Spanish
province of Huelva and office properties in Madrid.
The firm is controlled by the Colomer family, who
also own Spanish developer Pryconsa. In 2013 it
merged its two fully-owned SOCIMI subsidiaries
with its unit CIBRA (Compañía Ibérica de Bienes
Raíces), also absorbing another holding CIRU
(Compañía Ibérica de Rentas Urbanas).
Founded in December 2011, Saint Croix had a
portfolio of €261m in real estate assets at end-2013,
with 53% of revenues coming from hotels, 12%
from offices and 34% from retail. pie
Photo: Immofinanz
French Gecina raises forecast; contests Rivero moves
French REIT/SIIC Gecina has raised its 2014 earnings forecast due to an improvement in its financial
structure. Separately, the group also announced legal
action over guarantees made by former CEO Joaquin
Rivero in Spain.
Gecina now expects a rise in recurrent net income
this year. “The full year is expected to show growth
for 2014, compared with the previous stable forecast,
thanks in particular to the positive impacts during
the fourth quarter of work carried out since the start
of the year to optimise the financial structure,” the
group said in a third quarter earnings statement.
Gecina in July issued a €500m seven-year bond
with a 1.75% coupon and 92bp spread over midswaps, its lowest ever coupon and spread, and has
adjusted its hedging portfolio. Moody’s and Standard & Poor’s have both upgraded their ratings in recent weeks.
Recurrent net income declined 1.5% to €244.2m
in the first nine months, but like-for-like rents were
up 1.1% at €440.3m. Average occupancy rose to
96.4% from 95.2% a year earlier, and on the office
portfolio is well above the average for the Paris region. Gecina is on course to meet its full year targets
for €600m of disposals and €300m of investments goals cut in mid-year due to rising prices in Paris office. It has booked €583m of disposals, mainly its
75% stake in the Beaugrenelle shopping centre.
Gecina also said it has received a €63m claim from
Spanish bank Abanca in relation to guarantees allegedly provided by former CEO Joaquin Rivero in
2008 and 2009. The company said it was unaware of
these commitments and considers they were made in
breach of its corporate interests and relevant rules and
procedures, and therefore fraudulent. It is to launch
proceedings. Rivero quit as Gecina CEO in November 2009 after shareholder complaints, resigning as
chairman three months later. Transactions carried out
under his leadership have since been the subject of
investigations by French legal authorities. pie
Immofinanz has divested its
logistics holdings to concentrate on its core portfolio, such
as the Equator office in Warsaw
(pictured) where it recently
signed on the Polish General
Inspectorate of Road Transportation for over 7,000 sq.m.
Immofinanz exits Swiss
logistics with €95m sale
Austrian listed Immofinanz has divested its last logistics holdings in Switzerland, selling three assets to a
fund managed by Credit Suisse for €95m, and says it
will now concentrate activities on Germany.
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
33
listed real estate
Immofinanz sold two assets in Bülach, north of
Zurich, and one in Derendingen near Berne with
140,000 sq.m. GLA, at a price of CHF115m, exceeding book value. “This step completes our exit
from the secondary market Switzerland,” said CEO
Eduard Zehetner. “We were also able to benefit from
the high CHF exchange rate on this transaction.”
Proceeds will be used to develop logistics projects
in Germany. “We want to further expand the position of our subsidiary Deutsche Lagerhaus as a key
logistics player,” Zehetner said. Immofinanz plans to
sell €500m-€600m of assets annually in a strategic
divestment program. The original plan to sell €2.5bn
assets within five years was exceeded after only four
years, with the transactions resulting in a doubledigit margin over the book value.
Founded in 1990, the company holds 470 retail, office and logistics investment properties valued at
€6.9bn across Austria, Germany, the Czech Republic,
Slovakia, Hungary, Romania, Poland and Russia. pie
German listed property
free float doubles – ZIA
The investable free float of the 16 largest German
listed property companies rose by 115% to €21.8bn
in the year to August, says German Property Association ZIA. The sector has grown overall and will continue to do so, albeit at a somewhat slower pace.
Newly-listed TLG – which recently
bought the pictured office in Berlin has added a sizeable chunk to the
German listed sector, noted ZIA.
“One of the most striking finds of our new study ..
was that free float more than doubled on last June,”
said Peter Barkow, MD of Barkow Consulting and coauthor of the study, which covered 80% of the German listed property index DIMAX. Market cap overall has risen to over €30bn from €22.2bn in June 2013
while assets under management rose 13% to €7.9bn.
The listed sector is still dominated by residential
companies, responsible for 78% of AUM, Barkow
told a press briefing in Frankfurt Thursday. “Last year,
total German market cap was 60% of Dutch-French
REIT Unibail-Rodamco. Now the German listed sector is bigger than the company.” It is now the third
largest in Europe after UK and the Netherlands.
Rüdiger Mrotzek, MD of Duisburg-based Hamborner REIT, said growth should continue, and pointed
to east German property firm TLG’s IPO. “This would
mean a sizable addition to the commercial segment,
which is where main growth of the listed sector now has
to come from,” he said. Further growth hinges on developments in the commercial sector and new IPOs. “It
will continue, as interest from foreign investors is very
high and should be a catalyst for more listings. There are
enough portfolios that would sustain this.”
Barkow noted that new investors into listed real estate have lower yield targets and a long-term outlook entering the sector alongside large financial institutions
such as Lone Star for TLG or Fortress for Deutsche
Annington whose return expectations are much higher.
“German investors are still underrepresented, only taking 10% of total,” he added. US investors hold 39%,
UK and Norwegian ones 18% each. pie
New CEO named at
French REIT Tour Eiffel
In the aftermath of the takeover of French REIT/SIIC
Société de la Tour Eiffel by mutual insurer SMABTP,
a newly-elected board Thursday appointed former
Silic MD Philippe Lemoine as new CEO to succeed
Renaud Haberkorn, who is leaving the company.
In a release, STE said the new board has registered
the resignation of Mark Inch as chairman, and CEO
Haberkorn among others. SMABTP now holds
89.88% of outstanding equity, and in relation to the
change in governance linked to the successful tender
offer, the board has appointed five new members as
well as SMABTP representatives.
Lemoine is was most recently MD of French REIT
Silic between 2010 and 2013 and Chairman of Socomie between 2004 and 2013. The board thanked
Inch and resigning members, “for their involvement
in the company’s development and their commit-
34
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
listed real estate
ment during the company’s last months’ transition
phase, as well as Renaud Haberkorn for his action
and professionalism .. having in particular enabled its
repositioning in the office real estate market.”
SMABTP (Société mutuelle d’assurance du bâtiment et des travaux publics) is a mutual group serving employees of the French construction and public works sector. It improved its offer for STE in
June to €58 a share, valuing STE at €363m, following a counter offer by former main shareholder
Chuc Hoang. Hoang later withdrew from the bidding. pie
Photo: Overmann/S Immo
French REIT Patrimoine
eyes €90m retail portfolio
French retail SIIC/REIT Patrimoine & Commerce
has started talks to acquire a €90m package of retail
parks in western France from the Trimax group in a
deal aimed to help the firm towards its €1bn portfolio target by 2016.
The retail park portfolio totals 65,185 sq.m. with
45 tenants generating annual income of €6.3m,
with a purchase price likely to be around €37m,
P&C said. Some 70% of the payment will be made
in cash and 30% in new Patrimoine & Commerce
shares. The deal will not have any significant impact
on P&C’s loan-to-value ratio, which stood at 46.2%
at mid-year.
The acquisition will mark a further step in P&C’s
expansion towards its target €1bn portfolio by
2016. The firm was set up in 2009 aiming at a
€500m portfolio by 2015 but achieved this three
years early by taking control of smaller peer Foncière Sepric in December 2012. The portfolio was
valued at €494m at end-June, with NAV of €23.1
per share compared with a stock price around €22.
Most of its 318,000 sq.m. assets are in low cost suburban parks.
Insurer Crédit Agricole Assurances recently took
a 20% stake in P&C by subscribing to a €47m capital increase. P&C said the Trimax deal and the entry of Crédit Agricole Assurances will mark the
completion of its launch phase, which has seen assets grow fourfold, its NAV multiplied by five and
its market capitalisation by six. “Over the past five
years we have demonstrated that there is real demand from retailers for quality properties on the
outskirts of medium-sized towns, offering a combination of footfall and retail space, at a cost that is
compatible with the transformation of the economy
and competition from online retailing,” said founder and MD Eric Duval. pie
French Inea to boost
focus on regional offices
French REIT/SIIC Foncière Inea is aiming to boost
profitability by increasing its focus on regional offices, reducing vacancies and cutting financial charges.
The firm is also planning to overhaul its governance
structure, says Chairman Philippe Rosio.
“To pursue our strategy as a high-yield real estate
investor focused on regional offices, we can use a
number of operational levers and benefit from the
support of our strong core shareholder group,” Rosio told French specialist portal Business Immo.
Inea is working to reduce its 14% vacancy rate
through asset management measures, while the sale
of parcel delivery warehouses and other small assets
will enable it to strengthen the focus on offices. The
maturing of some of the firm’s long-term loans between now and end-2015 will also allow it to take
advantage of the current low interest rate environment to cut financial costs.
Inea is also proposing a new governance structure
involving a single board built around the core shareholder group, and has called an EGM for 18 November to approve this change. Institutional investors
including insurers Malakoff Médéric, Macif and Assurances du Crédit Mutuel, and lenders Crédit Foncier de France and Crédit Agricole Brie-Picardie control 39% of the capital, with 17% held by family
investment funds and 29% by the firm’s managers.
Foncière Inea was set up in 2005 by its three current managers - Rosio, MD Arline Gaujal-Kempler
and Supervisory Board Chairman Alain Juliard - and
in 2006 set a €500m portfolio target. It is now close
to reaching this, with €475m of assets made up of
131 new or recently-built offices or industrial premises in 24 cities. pie
S Immo receives BREEAM ‘Excellent’ for Vienna hotel
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Austrian listed S
Immo received a
BREEAM sustainability certification
with ‘Excellent’
rating for its Hotel
Zwei in Vienna. The
four-star hotel with
251 rooms has
been in the firm’s
portfolio since
2010.
35
Expert view
Ralph Winter: “ With its
club deals, CORESTATE
has achieved an average
equity yield rate of 29%
p.a., and a return on the
invested equity of 1.7
times.”
Club Deals are More Effective
than Real Estate Funds
Interview with Ralph Winter, founder of CORESTATE Capital
W
hat is CORESTATE’s business model
that emerged since its formation in 2006?
In the years since CORESTATE was
formed, we have continued to develop our capacity to
identify and develop potential markets early on. Our
investors see us primarily as co-investors whose sole
objective is to realise returns and capital gains as quickly as possible. Combining our investments with a proactive asset management and a deliberate exit strategy
enabled us to deliver a constant performance of aboveaverage returns for our investors throughout the years.
Who are your investors and what kind of investment vehicles do you offer?
Our investors include institutional investors, family offices, and high-net-worth individuals. CORESTATE
always acts as co-investor, committing an equity interest of up to 50%. We only offer club deals to a se36
lected circle of investors. We start by identifying and
selecting potential investment situations, and then
present these to investors case by case. This guarantees
a high level of transparency. As a result, our investors
focus on real assets – unlike with blind pool investments, where you only get a rough idea about the nature of your commitment.
What are the advantages that set club deals apart
from real estate funds?
It has been our experience that investors appreciate
the high degree of transparency these transactions offer more than anything else. They get a tailored product with a clearly defined investment target and an
up-to-date business plan. Parameters such as volumes, time of investment, and time of the equity
drawdown are clearly scheduled and fixed. There is
also no need to maintain the earmarked equity over
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Expert view
indefinite periods of time, because the assets are directly committed in the club deal. In addition, an
incentive-driven asset management team ensures delivery of a value-add performance throughout the
lifetime of a given deal.
So club deals are also more flexibly structured than
other investment vehicles?
They certainly are, for it is important to adapt a given
investment to the latest market conditions. Not being tied to rigid fund terms lets you choose the optimal time to exit. Ticket sizes should also be structured individually so as to let investors freely choose
their investment weightings and their risk diversification. Investors can thus spread their assets across several club deals and lower their exposure.
Fund investments, by contrast, are exposed to high
risks due to poor timing that may be dictated by the
fund’s life. This will seriously diminish returns, especially in volatile markets – and these are markets we
will have to get used to. Unfortunately, fund providers tend to focus primarily on one thing – collecting
asset management fees for long periods of time. This
is hardly the right approach to achieve good returns.
What is your track record in the club deal segment?
With its club deals, CORESTATE has achieved an
average equity yield rate of 29% per annum, and a
return on the invested equity of 1.7 times. The average investment period has been less than 36 months.
These are very high earnings. How did you achieve
them?
We focus on undervalued real estate opportunities.
This may involve any of the various sectors, since we
have the advantage of a broad-based expertise across
all asset classes. Our active asset and property management enables us to enhance the profitability of
portfolios, and this will automatically translate into
capital growth, which we then proceed to realise. For
instance, we started very early on to acquire residential property portfolios in dire need of professional
management well beyond Germany’s ‘Big Seven’ cities, and stabilised them by properly managing them.
After repositioning such assets, we resell them to investors who are looking for stable portfolios, and
whose structure targets lower returns on their equity.
Could you give us an example for asset management
measures?
In 2010, for instance, we acquired a residential property portfolio including around 2,250 units in Berlin
and the greater metro area from a distressed seller with
a liquidity shortfall. The portfolio was characterised by
a high maintenance backlog, and therefore had considerable potential in terms of refurbishment investment and rental upside. So we used this as a basis to
develop an asset-led business plan that included maintenance measures and a leasing strategy. We were able
to generate a positive rental growth of nearly 10%, and
to reduce the vacancy rate. We then split the portfolio
and sold it in several separate transactions.
Why are not more companies offering club deals?
For one thing, it is certainly hard to realise transactions worth over €500m in the club deal sector. It
depends mainly on your ability to coordinate investors and sellers quickly. The smaller asset managers
are simply too focused on current income, seeking to
cover their fixed costs. Ultimately, the only way to
successfully implement club deals is by being able to
join up with your investors to pool substantial
amounts of equity for joint investment. The 1% or
2% that some of the fund models offer are rather
modest, to say the least, and offer no kind of security
during
turbulent times. pie
CORESTATE
Capital
CORESTATE Capital – Overview
CORESTATE Capital – Overview
CORESTATE
Capital
is an independent
firm
and
acts
CORESTATE Capital
is an independent
firm and acts as a real
estate
investor
as
Locations
investment and asset manager.
aswella asreal
estate investor as well as investment and
Key Facts
asset
manager.
Foundation
2006
Headquarters
Zug, Switzerland
Locations
Key
Facts
20 offices in five countries, 15 offices of its property
management subsidiary
Employees
200
Real Estate Transactions
EUR 3 bn since foundation
London
Luxembourg
Frankfurt
Zug
Institutional Investors, Family Offices, UHNWI,
Investors
Foundation2006
CORESTATE Capital
Headquarters
www.corestate-capital.ch
Zug, Switzerland
Singapore
Locations20 offices in five countries,
15 offices of property management subsidiary
RE transactions
€3bn since foundation
InvestorsInstitutionals, family offices, HNWI, CORESTATE Capital
www.corestate-capital.ch
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
37
property funds
Korean insurers Hanwha und Kyobo Life headed the
buying consortium in September for an office complex in Paris from German manager KanAm, which
achieved a 5% mark-up on a €740m global package
that also included assets in Washington D.C. and
Canada’s Montreal.
The global portfolio was sold from KanAm grundinvest fund which, like many other German openend vehicles, is in liquidation, and faces a deadline
for wind-up of 2016. KanAm said the package comprised core real estate in top locations, with longterm tenants including the US Department of Justice, Sanofi-Aventis, and Bell Canada. Altogether the
capital portfolio includes more than 125,000 sq.m.
of leaseable space.
The buyer was Korean IGIS Asset Management for
its IGIS Global Private Placement Real Estate Fund
No. 37-1, for the account of a Korean consortium led
by Hanwha und Kyobo Life. The transaction takes
the share of liquidated real estate of KanAm grundinvest to over 58%. pie
Apollo launches European distressed retail JV
US private equity group Apollo Global Management
has launched an investment joint venture named Alteri Investors, aimed at financing opportunities in
Kennedy Wilson is eyeing opportunities in Spain (Gerona in
the North pictured) and Italy.
38
performing, stressed and distressed retail in Europe.
Initial focus will be on UK and Germany.
The venture is structured as a JV between Apollo
Credit’s funds and Alteri Advisors, led by Gavin
George, former CEO of GA Europe, part of the
Great American Group. The venture will access assets
through debt or equity in deals of £10m to £50m with funding available for larger deals. Apollo said it
will seek to lend to retailers directly, providing flexible asset-based financing in a senior or second-lien
capacity. Alteri Investors will also provide consulting
to retailers and key stakeholders in stressed or distressed situations, assisting with store closures, stock
sales or managing a restructuring.
“Retail is experiencing a transformation which we
believe will create opportunities,” George said in a
release. “With the financial resources and capabilities
of Apollo Credit and the deep retail restructuring expertise of Alteri, we are well placed to partner with
retailers in the UK, Germany and beyond to restore
their businesses to health.” Robert Ruberton, head of
European credit at Apollo Global added that the
group is delighted to have a partner with sector-specific skills and origination capabilities. Apollo Credit
manages some $106bn, while Apollo Global Management’s overall assets total $167bn in private equity, credit and real estate funds. pie
Kennedy Wilson raises
£352m, eyes Spain, Italy
Kennedy Wilson’s listed European real estate affiliate
has raised £351.5m through the issuance of new
shares in a public offering to help it fund new deals
and expand, also with an eye to opportunities in
Spain and Italy.
Kennedy Wilson Europe Real Estate, the US firm’s
listed European vehicle, said it had secured the capital via the placing and open offer of almost 35m
shares. The group unveiled the plans at the start of
the month as it looked replenish equity reserves for
new investments. “This successful offering represents
a further milestone for the company,” said Mary
Ricks, President and CEO of Kennedy Wilson Europe.” We now look forward to capitalising on market conditions and our extensive pipeline of opportunities to invest the proceeds .. transaction as part of
our strategy to deliver strong capital returns and sustainable earnings for our shareholders.”
The new issuance comes just seven months after
Kennedy Wilson Europe raised €1.25bn of equity for
deals via an IPO of the European division in London. The firm rapidly deployed the capital into a suc-
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Photo: shutterstock.com
KanAm sales to Hanwha,
Kyobo at 5% markup
property funds
cession of investments, mainly in the UK and Ireland, including the £296m Fordgate Jupiter portfolio,
which stemmed from a busted CMBS structure and
had 21 properties including offices and car showrooms. Ricks recently said the firm expects Italian
and Spanish bank de-leveraging to yield more deals
over the coming 12-18 months.
The latest funds raised supplements debt capital of
over £400m secured in the last two months to bolster
the balance sheet. Kennedy Wilson Europe set up a
£225m revolving credit facility in September with a
group of investment banks, and raised £184m against
assets in the Jupiter portfolio from Royal Bank of
Scotland just a few weeks later. The group is targeting
annualised returns of around 15% and counts prominent US asset managers and hedge funds such as
Fidelity and Moore Capital among its cornerstone
investors. Dealing in the new shares starts on October 23, following admission to the London Stock
Exchange. pie
Global RE fund launches
rise, volumes fall – Swisslake
The number of global property fund launches rose
13% in the first three 2014 quarters to 221 vehicles,
while target equity fell by 1.1% to $109.6bn, says
Zug-based independent investment advisor and research group Swisslake.
The dynamics in first and second quarter have thus
slowed, depressing average fund volumes in the year
to September to €496m from €568m a year before,
said Swisslake in a release. Placement picked up however, with 95 funds placed with an equity volume of
$61.8bn , up from 83 and $49.4bn. North American
funds continued to drive growth, where 104 vehicles
with $49.8bn equity accounted for 45.5% of global
total, followed by Europe with 64 funds and $26.1bn
(23.9%). Global funds took 18.2%, returning to a
level above their long-term average of 15%. Asian
funds took 10.3%.
The share of specialised vehicles fell to 46% from
55.4%, with debt funds taking the largest part at
29.4%, down from 20.8%. Swisslake notes a saturation in the segment. While the number of debt funds
rose by two to 37, target equity volume fell significantly to $22.8bn from $32.6bn, and average fund
size to $616m from $930m. Residential funds took
second place with a 9% share, comprised of 31 vehicles with $9.9bn, followed by office and retail funds
with a 4.5% share each. Based in Pfäffikon near Zurich and founded in 2004, Swisslake draws on a database of 3,980 funds and 1,560 fund managers. pie
German open funds seen
selling another €14bn
Discounts on an expected €14bn of European property sales by liquidating German open-ended funds
will narrow in coming years after hitting a record
21% in the first half of 2014, according to new research from advisory firm DTZ.
Sales by German open-ended funds accelerated to
€2bn in 1H14, with discounts to book value widening to an average of 21%, DTZ said in its biannual
report on the liquidation process. As a result of the
increase in assets being sold, the discount has grown
from 15% in 2013. Disposals were made at a 2%
premium to book value in 2012. DTZ said €14bn of
European assets remain to be sold over the next three
years, with most activity coming in 2016 and 2017.
Around one-third of the properties are located in
Germany, 18% in France and 17% in Benelux. DTZ
expects discounts to decline to between zero and
20% as international and domestic capital targeting
European property deals increases.
“We expect to see German open-ended funds continue to demonstrate some pro-activity in their selling process .. especially given the 11% increase in
1H14 in capital targeting Europe. Based on these
trends, we expect discounts to decrease from their
current level for upcoming sales in 2016-17,” said
DTZ’s global head of research Hans Vrensen. German SEB Asset Management, a unit of the Swedish
banking group, recently started to liquidate its
€1.2bn open-ended SEB ImmoPortfolio Target Return Fund due to redemption requests from around
half of investors following changes in legislation.
DTZ says German open-ended funds hold €82bn of
property assets around the world, with 18 different
funds in liquidation. pie
German ECE opens mall in Stuttgart Milaneo
Hamburg-based mall specialist ECE has opened the Milaneo mall in Stuttgart’s new Europaviertel urban quarter, six months ahead of schedule. The 43,000 sq.m. mall offers 200 shops, 90
of which new to Stuttgart, the firm said in a release. The Europaviertel will house a hotel, apartments and offices, constructed by Bayerische Hausbau. Total investment volume is €550m.
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
39
property funds
German ECE raises €500m
for second mall fund
The Zielone Arkady mall
(entrance pictured) in Poland’s Bydgoszcz, which is
being constructed for €150m,
will be the fist asset in ECE’s
second European Prime
Shopping Centre Fund.
Hamburg-based mall giant ECE has raised €500m in
fresh equity from investors in the first closing for its
second European Prime Shopping Centre Fund,
which has a target equity of €750m for a full fund
investment volume of €2bn.
Investors are the Otto family, which owns ECE,
the firm’s employees, and institutional investors including pension and sovereign wealth funds, said
ECE in a statement. The
fund will focus on investments in European
malls with value-add potential. One asset has
been secured for the seed
portfolio: the Zielone
Arkady in Poland’s Bydgoszcz, which is being
constructed for €150m
by ECE and scheduled
to open in autumn next
year, when it will also be
transferred to the fund.
Final closing is planned
next year; the investment phase will extend
into 2018.
“We are still seeing excellent investment opportunities in our target
countries Germany, Austria, Poland, the Czech Republic, Scandinavia, Italy, Spain and Turkey, into
centres that offer value growth potential through refurbishment, expansion or tenant optimisation,” said
Ruediger Cornehl, MD of ECE Real Estate Partners,
in a release. pie
UK’s Cordea to place €750m
for German investors
London-based property investment manager Cordea
Savills aims to place €750m in German investor equity
commitments in 2014, and plans €300m more acquisitions for this client group across Europe before year end.
The group, the arms-length asset manager of the
UK’s listed Savills, has collected €510m in equity in
Germany in 2014 to date. “With an acquisition volume of over €440m this year, we have proved our
good market access through a broad network on numerous European markets, also in off-market trans40
actions,” said German MD Thomas Gütle in a release. An investment in five assets in Copenhagen for
over €150m in one example.
Head of Portfolio Management Germany Gerhard
Lehner said the focus will remain already acquired assets,
inner city retail and office as well as retail warehouses.
“We especially looking in central locations in European
growth regions and centres of Europe,” he said. Only last
month, the firm bought two German office assets - in
Stuttgart and Essen - for over €120m following new equity raised from German insurers in a Special Fund.
Cordea Savills has offices in London, Milan, Munich, Düsseldorf, Hamburg, Stockholm, Luxembourg, Paris and Hong Kong, Tokyo and Singapore.
It has €6.4bn AUM. pie
TIAA Henderson raises
€100m for core German retail
UK-based manager TIAA Henderson Real Estate has
raised €100m for core retail investments in Germany
and hopes to invest the capital by the end of the year
following its first deal in the southern town of Bruchsal, near Stuttgart.
TIAA Henderson said the capital marked the first
close of its Core German Retail Fund and will be deployed into deals for specialist retail parks, hybrid malls
and inner city shopping centres. The $25.5bn investment manager expects to hold a second closing for the
fund during 1Q15 and hopes to have some €400m to
invest, including moderate leverage at a loan-to-value
ratio of 40-45%. The fund has a ten-year lifespan and
will target a 5.5% distribution yield to investors.
Unveiling the fund, TIAA Henderson said it has
made a forward commitment to a 11,000 sq.m. retail
project in Bruchsal, some 60km northwest of Stuttgart. The scheme is located beside the main train station in the town centre, and when completed in summer 2015 will be anchored by supermarket group
REWE. The firm has other investments in the pipeline for the new fund, which should permit the initial
€100m of investor equity to be invested by the end of
the year. As well as the prospect of a regular income,
the fund should offer investors capital appreciation
over time, said Thilo Wagner, fund manager and director of investment Germany. “The Core German
Retail Fund seeks assets in established, dominant locations across German metropolitan areas and medium-sized towns. Target properties have a gross rental
area of at least 7,500 sq.m. Asset management will
play an important role in the process in order to optimise both the term of lease agreements and the tenant mix,” he added. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Property Investor Europe proudly presents the latest in its expert seminar series:
Germany Property Breakfast
With prices back at 2007 levels, where is the value in Germany for 2015 & beyond?
DATE: THURSDAY, 27 NOVEMBER 2014
|
LOCATION: LONDON CITY
SPEAKERS:
JAmES BAUER
SPEAKER
SPONSOR:
Managing director, rEag germany, frankfurt, Member of the advisory Board, rEag
The Real Estate Advisory Group is an international real estate service provider in investment advisory, technical services, environmental, research, hospitality, NPLs, and valuation. Mr. Bauer was formerly a director at
Calliston Development, and before that worked in the ﬁeld of real estate extensively in the US. A native of
Chicago, he was educated in the US and Germany, and gained international working experience prior to
REAG where he is responsible for Germany and central and western Europe.
NIC FOx
Partner, Head of Middle Europe, Europa Capital, london
SPEAKER
Owned by the US Rockefeller group, a unit of Japan’s Mitsubishi, Europa is one of the most experienced real
estate managers in pan-Europe. Mr. Fox joined in 2007 and heads acquisitions and asset management in Germany, France, Austria and Switzerland. He was previously director at UK-based Westbrook, and partner at Healey & Baker, now part of Cushman & Wakeﬁeld, for which he managed the Düsseldorf oﬃce from 1991 to 1996.
Early posts included UK real estate agency and investment brokerage. He is a Chartered Surveyor.
ANDREW m. GROOm
SPEAKER
Head of Valuation & transaction advisory, Jones lang laSalle, frankfurt, germany
Global real estate services group JLL employs over 48,000 staﬀ in 70 nations, and in Germany is now the largest realtor. Mr. Groom, who heads a 70-person valuation/due diligence team, led development of the VICTOR
prime oﬃce indicator and is also responsible for key clients, business acquisition, portfolio strategy and risk
assessment. With over 20 years’ experience, he has been based in Germany since 1992 and previously worked
with other major realtors in Europe.
THOmAS HOELLER
SPEAKER
Executive director Product development, Corestate Capital, Zug
Founded in 2006, Corestate Capital is a specialist private equity real estate investor. With over 30 years’ experience in international real estate, Hr. Hoeller is responsible for product development and capital raising. He was
a board member at TMW and, after the takeover by Prudential Financial in 2003, he acted as MD, CIO and head
of business development for Pramerica. Prior to that, he headed Metro America, a subsidiary of Canadian Metro
International, and built up the international RE desk for Bourdais in Paris.
CHRISTOPH SCHUmACHER
SPEAKER
Managing director, Union investment institutional Property, Hamburg
Union Investment Institutional Property, part of cooperative bank fund manager Union Investment, focuses
on business with institutional clients, managing €3.2bn in one institutional RE and seven Special Funds. Dr.
Schumacher is responsible for the institutional client management division, fund structuring and outsourcing controlling. He previously worked as head of indirect investments and MD for Generali in Cologne, Luxembourg and Paris. He was also personal advisor and head of oﬃce for the Berlin minister of ﬁnance.
UPCOmING:
13 November
German
Residential
Berlin
18 November
Asia
Capital Club
London
22 January
Poland & CEE
London
29 January
Italy Property
Opportunities
11 February
Germany
London
DATE & LOCATION:
SCHEDULE:
REGISTRATION OPEN ON
Location: dla Piper, 3 Noble St,
City of london, EC2V 7EE
8.00 a.m. Networking & Snacks
8.30 a.m. Panel discussion
10.00 a.m. Coffee/Networking
www.pie-mag.com/events
or Email: gaby Wagner on
[email protected]
Thursday, 27 November
ENTRY FEE: PIE PREMIUM subscribers enter free to all PIE Breakfasts. Non-subscribers: Early Bird £62.50*.
Normal price £80*. *Prices plus 20% UK Vat if applicable. Early bird rate closes 27 october 2014.
EUROPEAN REAL ESTATE INTELLIGENCE FOR US & GLOBAL INVESTORS
charts / tables
EPRA/NAREIT Europe Index – Stock Performance
Prices at 22 October 2014
Float Float Float Total
Total Total
Local Mkt Cap Global
Europe
Rtn (%)
Rtn (%)
Rtn (%)
Index Constituents
Sector
Price
EUR (m) Wght (%) Wght (%)
- 3 Yrs - 1 Yr
mth
Total Rtn (%)
YTD
CA Immobilien AnlageDiversified
15.21
1,217.23 0.13
0.87
20.44
45.43
-3.34
21.16
BUWOG - Bauen und WohnenResidential
15.68
735.63 0.08
0.52
Conwert ImmobilienDiversified
9.06
554.95 0.06
0.39
0.78
5.28
-4.52
-1.82
Austria Total
2,507.80 0.27
1.78
Cofinimmo *Diversified 89.98
1,555.61 0.171.117.25 10.84-4.206.94
Befimmo *Office
60.00
981.95 0.10
0.70
6.51
23.74
-2.42
20.52
Warehouses De Pauw *Industrial
56.13
631.29 0.07
0.45
19.03
14.64
-1.96
12.68
AedificaDiversified 52.03
481.87 0.050.348.27
2.02-0.690.97
Wereldhave Belgium *Retail
95.65
187.05 0.02
0.13
18.48
17.02
-2.41
20.22
Leasinvest Real Estate *Diversified
85.16
168.23 0.02
0.12
17.67
27.18
-0.13
21.82
Intervest Offices *Office
21.81
148.26 0.02
0.11
11.20
27.89
-6.76
19.82
Belgium Total
4,154.26 0.44
2.95
SpondaDiversified 3.63
873.43 0.09 0.6213.65
-0.26 -8.7911.40
Citycon OYJRetail
2.50
652.66 0.070.469.64
7.59
-10.714.65
TechnopolisOffice
3.70351.79 0.04 0.25 14.29
-16.00-12.32-14.94
Finland Total
1,877.88 0.20
1.33
Gecina *Diversified
103.00
3,526.85 0.38
2.51
19.28
8.98
-4.19
7.28
Klepierre *Retail
33.13
3,231.71 0.35
2.30
21.15
8.19
-8.62
2.94
Fonciere Des Regions *Diversified
71.28
2,400.57 0.26
1.71
16.88
23.11
-7.43
20.29
IcadeDiversified 63.67
2,248.41 0.241.608.52
-0.25
-10.03-0.49
Mercialys *Retail
17.01
703.98 0.08
0.50
9.23
20.39
-9.76
16.92
ANF-Immobilier S.A. *Diversified
23.00
154.12 0.02
0.11
2.96
11.09
-5.31
7.75
Affine *Diversified 14.27
82.21 0.010.066.49
5.71-2.938.82
France Total
12,347.841.328.78
Deutsche WohnenResidential 16.82
4,812.73 0.51 3.4220.72
31.43 -2.0723.84
GagfahResidential 14.54
3,138.87 0.34 2.2347.09
50.79 -2.4535.84
LEG Immobilien AGResidential
54.87
2,649.74 0.28
1.89
Deutsche AnningtonResidential
22.98
1,786.18 0.19
1.28
20.95
0.57
27.67
Deutsche EuroshopRetail
34.26
1,570.95 0.17
1.12
14.48
10.85
-4.91
11.58
TAG ImmobilienResidential 8.97
1,156.37 0.120.82
17.46
1.602.096.15
Alstria Office *Office
9.75
661.36 0.07
0.47
8.33
11.55
-4.18
12.00
Hamborner REIT AG *Diversified
8.12
355.41 0.04
0.26
12.56
17.95
-0.04
16.07
DIC AssetDiversified
6.44
220.72 0.02
0.16
10.87
-10.83
-5.93
1.45
DO Deutsche Office AGOffice
3.03
183.92 0.02
0.14
-12.14
-7.95
-3.81
-1.70
Germany Total
16,536.26 1.77
11.79
Eurobank Properties *Diversified
9.40
364.54 0.04
0.26
44.17
55.15
1.73
42.67
Greece Total
364.54 0.04
0.26
Beni Stabili *Office
0.54
502.76 0.05
0.36
16.81
27.08
-9.20
19.17
IGD *Retail
0.60
180.01 0.020.130.36 13.96
-27.573.75
Italy Total
682.77 0.07
0.49
Unibail-Rodamco *Retail
193.35 18,799.34 2.01
13.36
16.66
7.55
-5.41
5.91
Corio *Retail
37.20
2,549.25 0.27
1.81
8.88
23.50
-9.01
20.74
Eurocommercial Props *Retail
35.38
1,467.98 0.16
1.04
12.68
24.60
-5.38
14.65
Wereldhave *Retail
63.96
1,386.63 0.15
0.99
12.40
25.44
-8.69
17.65
Vastned Retail *Retail
35.60
677.61 0.07
0.48
7.00
20.65
-3.88
15.07
Nieuwe Steen Inv *Diversified
3.96
515.48 0.06
0.37
-19.65
-19.92
-8.55
-9.13
Netherlands Total
25,396.3 2.71
18.05
Norwegian Property ASAOffice
9.74
606.74 0.06
0.43
8.77
22.52
-1.62
33.98
Norway Total
606.74 0.06
0.43
Merlin Properties Socimi SADiversified
10.05
1,192.70
0.13 0.85
0.56
Inmobiliaria Colonial S.A.Office
0.56
876.71
0.09 0.62
-3.95
Spain Total
2,069.41 0.22
1.47
CastellumDiversified 109.00
1943.15 0.21 1.3812.75
23.57 -4.3913.14
FabegeOffice
89.80
1291.56 0.14 0.9223.62
30.70 -2.2920.83
Wallenstam ABDiversified
109.30
1145.58
0.12 0.92
21.50
25.63
-4.87
13.68
Hufvudstaden ADiversified
91.20
1099.17
0.12 0.78
14.07
14.85
-1.78
9.05
Fastighets AB Balder B *Diversified
91.75
879.57
0.09 0.63
54.25
74.76
-5.17
39.02
Wihlborgs FastigheterDiversified
123.00
883.73
0.09 0.63
15.66
23.24
-4.65
10.41
KungsledenDiversified 43.60
862.600.09 0.612.79 10.05-2.089.29
Hemfosa Fastigheter ABDiversified
113.00
487.57
0.05 0.35
2.03
Klovern ABDiversified
34.10
277.80
0.03 0.20
20.06
27.14
-5.80
24.91
Dios Fastigheter ABDiversified
53.25
250.76
0.03 0.18
-4.91
Sweden Total
8,592.94
0.92 6.21
Source: European Public Real Estate Association. NAREIT. and Financial Times group. * -3 Years Total Returns are annualised.
42
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
charts / tables
Most active sources of cross-border
RE investment 2004-1H14
Rank
Country
$bn
1
Germany
151
2
USA
133
3
United Kingdom
100
4
Middle East
99
5
Singapore
56
6
Ireland
54
7
Canada
53
8
Australia
42
9
Hong Kong
30
10
The Netherlands
28
Germany tops foreign
property investor nations
Over the past 10 years, German investors have put more capital into
international real estate, namely €119bn, than any other nationality,
says realtor JLL. US investors follow in second place with €105bn and
British with €79bn. One of the reasons for taking the lead is that German groups continued investment outside the domestic market, while
other investors reigned in cross-border activities in the wake of the
global financial crisis.
German investors target over 40 countries worldwide, with 82% outbound investment allocated to mature markets in western Europe and
North America. Most capital went into the UK, followed by France and
the US. Some 80% of capital flow targets core office product, 13% retail.
“Despite being challenged by Norwegian, Chinese and Canadian investors, with their established presence in many global property markets
we anticipate German investors will maintain their international investment focus,” said JLL’s Matt Richards.
Source: JLL
EPRA/NAREIT Europe Index – Stock Performance
Prices at 22 October 2014
Float Float Float Local Mkt Cap Global
Europe
Index Constituents
Sector
Price
EUR (m) Wght (%) Wght (%)
Total
Rtn (%)
- 3 Yrs Total Rtn (%)
- 1 Yr
Total
Rtn (%)
mth
Total Rtn (%)
YTD
Swiss Prime SiteDiversified 72.00
3,286.060.352.341.52
8.08-1.779.49
PSP Swiss PropertyOffice
82.00
2,705.030.291.921.43
8.60-1.20
12.91
AllrealOffice
127.20
1,008.240.110.72-1.18
5.571.037.45
MobimoDiversified 185.20
951.92 0.10 0.67-5.03
-2.06-2.27-0.48
Switzerland Total
7,951.250.855.65
Land Securities *Diversified 10.86
10,826.991.167.70
22.14 21.551.10
15.14
British Land *Diversified
7.20
9,223.82
0.99
6.56
18.88
29.26
-1.51
17.61
Hammerson *Retail
5.91
5,868.93 0.63 4.1719.50
21.78 -2.8021.53
INTU PropertiesRetail
3.33
3,872.610.412.755.30
9.27-2.66
11.59
SEGRO *Industrial
3.59
3,376.13 0.36 2.4022.55
20.82 -2.9512.14
Derwent London *Office
28.73
3,364.360.362.39
27.54 23.033.40
16.82
Capital & Counties PropertiesRetail
3.29
3,018.37
0.32
2.15
25.70
-1.38
-1.54
0.35
Great Portland Estates *Diversified
6.51
2,835.21
0.30
2.02
25.76
22.32
-0.91
9.50
Shaftesbury *Diversified 6.91
2,431.320.261.73
15.68 19.190.80
12.16
Unite GroupDiversified 4.17
1,063.560.110.76
37.59
7.87-4.755.36
Grainger PlcResidential 1.85
964.170.100.69
30.33
7.27
-10.79-8.79
LondonMetric PropertyDiversified 1.39
1,043.670.110.74
10.33 21.67-1.073.04
Hansteen HoldingsIndustrial 1.04
896.690.100.64
17.83
9.930.68-1.37
Big Yellow Group *
Self Storage
5.35
871.25
0.09
0.62
33.81
25.32
1.52
13.68
St Modwen PropertiesDiversified
3.56
795.16
0.08
0.57
46.48
18.59
-4.20
-1.84
Workspace Group *Office
6.30
840.780.090.60
45.29 41.001.37
21.24
F&C Commercial PropDiversified
1.25
792.61
0.08
0.56
16.63
21.65
-1.10
14.85
Safestore Holdings
Self Storage
2.14
510.74
0.05
0.36
31.32
64.22
-0.35
36.68
Redefine InternationalDiversified 51.50
555.200.060.39-0.58
-13.81
Quintain EstatesDiversified 0.82
508.450.050.36
27.03
-2.96-7.34
-13.23
Primary Health Prop. * Health Care 3.41
457.970.050.337.96 10.490.742.67
Helical BarDiversified 3.32
417.520.040.30
21.57 14.31-1.413.30
UK Commercial Property TrustDiversified 0.83
428.200.050.308.83 16.621.84
11.89
Medicx Fund
Health Care 0.84
359.670.040.264.20
4.37-2.34-0.60
Picton PropertyDiversified 0.62
343.69 0.04 0.2417.83
26.34 -0.8014.29
Development SecuritiesRetail
1.88
296.560.030.212.16
-1.91-8.54
-28.38
Invista Foundation PropDiversified 0.57
340.600.040.24
23.30 27.917.04
17.72
Daejan HoldingsDiversified 49.07
304.090.030.22
28.51 27.862.219.59
F&C UK Real Estate InvestmentDiversified
0.89
258.91
0.03
0.18
12.20
23.84
2.87
10.48
Standard Life Inv PropDiversified
0.76
202.94
0.02
0.14
16.81
17.65
-1.30
13.51
United Kingdom Total
57,070.18
6.10
40.57
Azrieli GroupDiversified126.50
957.520.100.70
14.11 15.119.05
11.62
Israel Total
957.520.100.70
Source: European Public Real Estate Association. NAREIT. and Financial Times group. * -3 Years Total Returns are annualised.
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
43
charts / tables
European outlets underestimated asset class
European outlet malls are considered a niche investment class – which is
often associated with risk – but is in fact underpinned by very sound
drivers of performance, and should continue to enjoy structural growth
globally, says UK-based manager TIAA Henderson Real Estate.
“Designer outlets have been one of the most widely misunderstood, but
strongest performing, real estate sectors in Europe over the past decade
and, relatively speaking, they thrived during the global economic downturn,” said Global Co-Head of Research Alice Breheny. “Strong demand
from international retailers means the occupier base is broadening and
covenant quality is improving. Likewise, the investor base is deepening.”
Outlets are a specialist branch of the retail market and relatively immature, both as a shopping concept as well as an investment opportunity,
TH Real Estate found in its latest Think report. This is however changing
as retailing is becoming more international and demand for luxury
goods grows in line with emerging middle-classes.
Source: TIAA Henderson
3/4-Stars
1/2-Stars
5-Stars
Source: Colliers International
Source: Colliers International
First half investment into Dutch commercial property rose by 146.7%
on 1H13 to €3.1bn, says realtor Savills. It expects a strong year, but says
volumes may be subdued by a lack of good-quality assets. While retail
dominated the first quarter, focus shifted to office in the second, reaching a record €1.1bn in investment volume, Savills found in a new report.
Some 40% went ahead in Amsterdam’s South Axis. Retail totalled
€950m in first half, up from €630m in 1H13. A lack of good quality stock
will probably limit future volume, however. In the industrial sector,
speculative projects have started, indicating strong confidence in the
asset class and investment volumes are up to €850m from €300m.
“Investor demand has been increasing substantially in the Dutch market over the past five quarters and is expected to remain high,” said
Clive Pritchard, investment director Netherlands. “It is mainly the lack of
good quality product, as we have seen in the retail investment market,
which may hold the investment volumes back.”
€m
Dutch 1H property investment
up 147% to €3.1bn
Source: Savills
44
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
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This year’s edition of Reed
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REXPO, Zagreb
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More information:
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PIE German R
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Property Brea
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Posing the ques
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The third ACC organised
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Registration request to:
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More info
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27 November, Thursday
PIE Germany Property
Breakfast, London
Posing the question: Is German
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where are good value alternatives?
PIE
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More information:
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45
Logistics property breakfast
Logistics demand spreads across
Europe as institutions flood in
PIE’s Logistics Property Breakfast in London assembled five experts to discuss the theme: Given the surge of big capital chasing European logistics
now, is value fading or will yields fall further? Held at the offices of law firm DLA Piper, PIE welcomed Philip Dunne, President, Prologis Europe, based
in Amsterdam; Umut Ertan, Managing Director of Realogis, headquartered in Munich and Zug; Michael Hughes, London-based CEO of Verdion; Franck
Poizat, Deputy Director Industrial & Logistics Investment for BNP Paribas Real Estate, based in Paris; and Logan Smith, Chief Investment Officer for P3
Logistics Parks, based in Prague.
High yields draw high
investor numbers
High yields in European logistics will continue to
drive North American and Asian capital into warehouse deals over the next 18 months even as new investor numbers reach eye-watering levels, PIE Breakfast panelists said.
Low interest rates and, by extension, low yields in
government fixed income securities are making property assets appealing to investors and have been shining a new light on higher-yielding sectors of the asset
class, such as logistics and light industrials. “As long
as government money remains so cheap, the spread
between what you can get in that and in industrial
property makes it probably the most attractive asset
class right now. And I think that will remain the case
for the next 12 to 18 months,” said Dunne, who
heads up Prologis’ business with 14.5m sq.m. of assets in Europe. While the amount of capital inflow is
high and evokes memories of the buying frenzy be46
fore the crash, buyers are more disciplined now and
use little if any leverage on deals, he added.
Smith said interest in warehouse real estate has
soared. “From the start of 2013, we have seen 20 to
25 separate investment managers or investment
funds going after this asset class – either new managers with an equity partner, or existing fund with a
new equity partner. It feels like 2007, but it’s not,” he
said. Formerly known as Point Park Properties, P3
itself was bought by US private equity firm TPG and
Caisse de dépôt et placement du Québec investment
arm Ivanhoé Cambridge last October, and has more
than doubled its portfolio since to around €1.8bn.
Poizat said that what started as a sector appealing
mainly to opportunistic investors, most notably large
US private equity groups, has evolved into one that
draws institutions seeking less risky value-add or
core-plus assets. “Nowadays we are seeing a lot of
newcomers from many new places; the US for sure,
(but) there are Australian funds, Asian funds, investors from China and South Korea,” he said. He highlighted a potential deal in Germany, on which an
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Logistics property breakfast
Asian institution is conducting due diligence on its
first direct acquisition in the sector. Even more notable is the fact that the group has no indirect exposure
to warehouses in Europe whatsoever so far.
That appetite and competition is inevitably having
an impact on prices and yields as buyers attempt to
snap up assets they see as undervalued relative to
other real estate sectors, Hughes said. “We should be
honest with ourselves and say that the weight of the
money is indeed chasing down yields and seeking to
capture that value – so it’s illusory in a sense,” he said.
While logistics is, “reassuringly simple to manage and
its returns are stable”, investors need to find situations where they can create real value through new
developments, for example, or properties tailored to
certain long-term tenants.
Though prime yields of 6.25% in a core market like
Germany are some 125bp lower than Czech Republic
or Poland, and 300-350bp below Hungary and Romania, they can compress further, panelists agreed.
Ertan said seven times more capital is chasing investments than there is stock to satisfy demand- and overseas investors’ yield expectations are significantly different to domestic institutions. “At the moment you
have to pay a little more in Germany but if you see it
through the Asian glasses they get a lot more. They
pay 3% to 4% (in Asia) for in prime logistics, so if
they can come to Germany and pay 6% or 6.25%
they are happy to pay that,” he added. pie
E. Europe, France in spotlight; German competitive
The rapid compression of yields in what used to be an
unfashionable sector is having a direct impact on US
or domestic investor groups who arrived in the sector
in 2012 and 2013, the PIE Breakfast heard.
“If you look at the German market that has been
very good to us over the last few years, it is now
fiercely competitive,” said Hughes, whose group Verdion has an exclusive mandate to build a portfolio of
£1bn for Healthcare of Ontario Pension Plan, the
€36bn Toronto-based pension fund. In addition to
the competition, he is finding occupiers extremely
resistant to rent increases, making it even more difficult to unlock value in the country.
Some favour going east to markets like the Czech
Republic, Poland or Slovakia. “The macro situation is
probably stronger in central/eastern Europe than it is
in western Europe at the moment,” Smith said. P3
has invested about €750bn in the CEE region over
the past three months alone. However, Smith warned
against chasing yield, and recommended investors
keep a close eye on the cost of building a new warehouse on a site. “I am more or less obsessed with replacement costs. If it’s a good asset in a good location, and you are buying it at a sensible basis in
relation to replacement cost, then there is only so
wrong you can go,” he said.
Poizat agreed that industry is moving eastwards
and cited a 5% fall in Germany’s manufacturing
numbers as a signal that companies are moving operations to nearby countries with lower labour costs.
“Yes. We have to consider that manufacturing is
moving to eastern parts. But it is not competition, it’s
complementary,” Poizat said.
Dunne sees more opportunities in Prologis’s largest European market France. But secondary cities
are outperforming the capital Paris, where logistics
demand is sluggish amid a weak consumer outlook
and a stagnating economy. Lyon and Marseille are
turning around, Lille is robust and Le Havre is
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Verdion’s Michael Hughes (top
left) told the Breakfast his link
up with a Canadian pension
fund has given more investment scope. BNP Paribas Real
Estate’s Frank Poizat (top right)
said logistics in Europe is now
appealing to core investors,
and not just opportunity funds.
Umut Ertan of Realogis (above)
said seven times more capital is
chasing investments than there
is stock.
47
Logistics property breakfast
emerging as a strong European port where Prologis
may build a new warehouse next year, he said.
“Generally for the right product, France is a real investment opportunity if you are looking for value
relative to Germany,” he said. Prologis considered
investing in Russia at the start of the year, but the
political situation means no investors have the
country on their radars at the moment.
With competition so fierce for ready-made portfolios in core markets like Germany, Ertan said investors should either build platforms from scratch
with deals for individual assets, or switch into
neighbouring sectors sharing similar dynamics.
“There are a lot of opportunistic investors who want
double-digit rates of return. We say change your
perspective a bit and think about light industrial
technology parks in Germany,” Ertan said. Such assets can yield 9-10%, much higher than logistics,
but form part of the country’s industrial backbone
and supply chain, he added. pie
Philip Dunne (top), head of
Prologis in Europe, told the PIE
Breakfast that while the
amount of capital inflow is high
and evokes memories of the
crash, buyers are more disciplined now. Logan Smith CIO of
P3 Logistic Parks (above centre), warned the Breakfast
against chasing yield and recommended investors keep a
close eye on replacement costs.
The event gave networkers
(above) plenty to discuss.
48
XXL sites, cross-docks,
e-commerce reshape
tenant needs
Not only is demand soaring among investors for logistics assets but the rise of e-commerce is also having a
huge impact on the amount and type of space tenants
need - and some markets are struggling to keep up.
“More and more tenants are looking for XXL sites,
but we are suffering from a lack of development of
such sites in France,” Poizat told the Breakfast. The
properties tenants want are larger than 40,000 sq.m.
and are usually far from cities to limit costs. Dunne
said that to be suitable, those large warehouses need
to be as uniform as possible. “Flexibility is king. If
you have a perfectly generic building in a core global
market where there is always going to be logistics
trade, that building is going to be let all day long.”
Increasing roof height, truck court space and increasing the number of dock doors, makes those buildings
as adaptable and re-lettable as possible, he added.
At the same time, tenants are also looking smaller
sites of up to 6,000 sq.m. – commonly referred to as
cross-docks – from which to deliver parcels direct to
consumers at their homes or offices. Because those
sites need to be located close to cities, the land costs
are high. However, that presents other opportunities.
“This land is really so valuable compared to other logistics properties, so in 10-15 years it probably becomes residential – the long term perspective for this
asset class is completely different,” Ertan said. Smith
agreed: “It’s like buying a parking lot but being paid
rent for it. It creates lots of interesting possibilities
over the longer term.”
And as a result of the rapidly changing customer
shopping habits and tenant demand, those smaller
facilities are becoming more appealing to more investors. “Consumers tastes are so maverick, and
business will be at the mercy of the tastes. As investors we have to remember to be adaptable and flexible,” Hughes said. “Are we willing to invest in
cross-docks? Yes we are.” pie
Alongside equity, debt
returns to logistics
As equity has flooded into logistics property in Europe so has debt financing as banks increasingly accept that the asset class is now an institutional quality
investment, the PIE Breakfast panel hear.
“There is debt available in a way that I don’t think
any of us would have expected a few years ago - on
pretty good terms,” Smith said. Many of the lenders
are German-based, and their numbers have swelled
rapidly since the downturn, Ertan added. “Four
years ago, we had just three or four banks in Germany, now we have 10 to 15,” he said. That competition is allowing buyers to compare terms, and
forcing lenders to keep improving their rates. “The
terms over the last 24 months have just got better
and better,” Hughes added.
The availability is allowing some to add more debt
than their business plans initially forecast. “We are
seeing private equity guys using a lot of leverage and
that is driving pricing for sure, driving the ability to
price. Those that got in early in the cycle probably
have deeper pockets than even they thought they
would have,” Dunne said. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
Expert view
E-commerce is growing driver
of logistics real estate demand
By Dirk Sosef, Director, Research & Strategy, Prologis Europe
T
he global shift towards e-commerce is changing how
customers use logistics facilities are
the retail and logistics industries operate. This trend
unique, it mostly affects how these
affects all aspects of retail, including the strategic lo-
customers use their space rather
cation of fulfilment centres and their overall real estate foot-
than requiring new facilities. How-
print. Global B2C e-commerce sales are growing 20%
ever, there are a few features that
annually and are expected to exceed half a trillion euros this
attract e-commerce customers. The
year. This growth is an important new driver of demand for
first is a superior location, because
logistics real estate, as traditional methods of delivering
proximity to customer bases and la-
goods to stores transitions to fulfilment centres, which are de-
bour pools are important. The sec-
signed to send products directly to customers.
ond is access for employees. E-fulfil-
Our recent research into how e-commerce is changing re-
ment
centres
have
a
higher
tailers’ requirements for logistics real estate and how distribu-
employee count compared to tradi-
tion centres are adapting reveals that e-commerce accounts
tional warehouses. And lastly, high-
for a sizeable and growing share of demand. E-commerce ac-
er ceiling heights - larger require-
counts for more than 10% of all new leasing around the world,
ments
up from just 5% less than three years ago. And we are still
flooring. These needs are available
early in the cycle. Not only is e-commerce growing rapidly,
in most modern logistics facilities
they are also a very intensive user of logistics facilities. Our
and are consistent with non-e-com-
industry research indicates that each €1bn of turnover re-
merce requirements.
often
install
mezzanine
quires about 125,000 sq.m. of fulfilment space, three times
Philip Dunne, President of Prolo-
the amount needed by a retailer with traditional distribution
gis Europe, sees logistics in Europe
requirement. This increased intensity arises due to a few dif-
in general lagging other world re-
ferences for e-commerce, including greater product variety,
gions, creating opportunities as the
higher inventory levels, individual outbound shipping and its
market returns to an expansionary phase. Strengthened de-
reverse logistics.
mand across Europe is supported by a gradual macroeco-
E-commerce markets, however, vary significantly. General-
nomic recovery and structural drivers. He believes the huge
ly, Europe can be divided into three regions. The UK is the
interest by investors is compressing cap rates fast. Logistics
most mature market with higher levels of e-commerce share
yields are well above their prior peak and their spread to
of retail sales and the strongest presence of online food retail-
benchmark government bond yields is elevated, even after
ers. Western Europe has mature markets with elevated levels
accounting for expected interest rate increases once bond
of market share, albeit lower than the UK, and a lower pres-
rates normalise. Additionally, yields for logistics are elevated
ence of online food. The European periphery has small mar-
relative to other sectors, including office and retail, suggest-
kets, but their growth is sizeable and is catching up rapidly
ing a potential for outsized capital market tailwinds relative to
thanks to improving internet connections and broadening
other sectors. But of course the stronger investment competi-
usage of credit cards. The logistics market enjoys strong
tion has led to very competitive bidding situations.
growth in all three regions, but, on an absolute level, demand
In all, the e-commerce market continues to grow and ex-
is strongest in mature markets such as the UK, Germany, the
pand. It’s a young market and supply chains continue to
Benelux and France. However, demand is picking up in central
change. We expect e-commerce will continue to create sig-
and eastern Europe and in southern Europe.
nificant new demand for logistics real estate. While there may
Diversity also exists among online retailers. Large-scale re-
continue to be fluidity in the types and sizes of requirements,
tailers with sales of more than €5bn account for 22% of online
the ongoing consolidation of retail needs into logistics facili-
sales; mid-size retailers with €500m to €5bn in sales account
ties is a structural driver of demand for our industry. We ex-
for 41% of online sales; and smaller-scale retailers with sales
pect more established retailers to unbundle their distribution
of €25m to €500m account for 37%. This diversity among re-
and fulfilment models, creating more dedicated e-commerce
tailer size gives rise to a variety of distribution requirements,
requirements. ds
Dirk Sosef: “The e-commerce
market continues to grow
and expand. It’s a young
market and supply chains
continue to change.”
so that e-commerce translates to demand for a wide range of
logistics facilities. While the ways in which our e-commerce
The author can be reached at [email protected].
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
49
property finance / banking
in 2009 and now sees France as one of its key markets, but board member Jürgen Fenk said earlier this
year that it takes a more selective approach to financing in France than in its home market. pie
Aareal, pbb lead
€515m re-finance for
Beacon Paris tower
IVG has secured €1.5bn in
long-term financing with
Deutsche Bank. One of its
assets is the BoLa office in
Frankfurt (pictured).
Koreans draw on €280m
from Helaba in Paris
A group of Korean institutional investors has bought
a prime office complex in Paris from Frankfurt-based
KanAm, financed by a €280m debt package from
German landesbank Helaba.
The purchase was made by Korea’s IGIS Asset Management on behalf of the investor group. The asset is
the head office of healthcare group Sanofi and is located in the heart of the Paris CBD at 54 rue La Boëtie.
Fully renovated in 2011, the Haussman style property
comprises two buildings with 20,000 sq.m. of office
space. Sanofi rents the complex on a long-term lease.
Korean investors have shown a growing interest in
European real estate recently. The Korea Teachers’
Credit Union is part of an Asian consortium that has
just bought Exchange Tower in London’s Docklands,
and Korean institutions last year purchased Frankfurt’s Gallileo Tower. UK-based manager Rockspring
has also made a series of investments on behalf of the
National Pension Service of Korea, the fourth largest
pension plan in the world.
The €280m financing package for the Sanofi acquisition consists of a €183m senior loan and a €97m
mezzanine facility provided by Helaba, acting as arranger, lender and agent. The mezzanine facility is
entirely syndicated to a Korean debt fund. Helaba
had more than €33bn of outstanding real estate loans
and commitments at end-June and ranks among the
leading originators in real estate lending in Germany,
Europe and the US, with new business of more than
€4bn in the first half. It set up a full branch in Paris
50
A consortium led by German lenders Aareal Bank
and pbb Deutsche Pfandbriefbank have provided a
€515m refinancing for Boston-based investment
firm Beacon Capital’s Tour First office asset in the
Paris business district of La Défense.
AEW Europe’s Senior European Loan Fund 1, UK
asset manager M&G Investments and another banking
partner also participated in the facility. At 231m Tour
First is the tallest office building in France. It underwent
a €300m refurbishment between 2008 and 2011, with
the height of the tower raised from 155m previously,
and 83% of the total lettable area is now leased to international companies including EY and Euler Hermes.
Beacon said in 2012 that it planned to keep the tower in
its portfolio for between one and three years.
Aareal MD Martin Vest said the refinancing deal
allows the bank to pursue the growth of its portfolio
in France. “This transaction is a further proof of our
strong commitment to France being one of our core
markets in Europe,” he said. Norbert Müller, head of
real estate finance continental Europe west at pbb,
said France is also important for the Munich-based
property financier. “The transaction demonstrates
the strong appetite of pbb Deutsche Pfandbriefbank
to underwrite significant loan amounts in order to
support our clients in France, a core market for pbb,”
he said. The structure of the new financing is complex, but pbb knows the asset well and has known
Beacon for many years, he said. pie
German IVG refinances
€1.5bn with Deutsche Bank
German property group IVG, which came out of insolvency last month, has confirmed reports that it has
secured €1.5bn in long-term financing with Deutsche
Bank - almost fully completing the restructuring of
its loan facilities and equity.
A series of IVG loan facilities and individual liabilities to banks have been converted into two new loan
agreements with Deutsche, IVG said. “The company
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
property finance / banking
has strong capital resources following the successful
conclusion of the refinancing,” said new IVG CEO
Ralf Jung. “This is a solid foundation from which to
play a leading role in the market for office property in
Germany once again.” PIE sources in summer reported the probable Deutsche Bank financing.
One of Germany’s largest portfolio managers for
offices, IVG owns €3.5bn in real estate, and manages
another €11bn in its institutional funds unit. It said
it now plans to focus on actively managing the portfolio through acquisitions and disposals, and on optimising and running its properties on a “needs-driven basis”. Under IVG’s financial restructuring, which
included a debt-to-equity swap, the firm received
fresh equity of around €1.8bn and debt was reduced
by €2.2bn.
Deutsche is planning a €750m CMBS of one of
the IVG loans to be issued before year end, reported
British specialist portal Debtwire. Industry sources
said the €1.5bn IVG loans were priced at a premium
of 200bp above the 3-month Euribor. In the new financing, IVG was advised by Freshfields Bruckhaus
Deringer and Rothschild. pie
Photo: shutterstock.com
pbb, SCOR back Apsys in
Metz at €105m
German lender pbb Deutsche Pfandbriefbank and
French reinsurer SCOR have provided a €105m development finance facility to French operator Apsys
for a shopping centre in Metz, France. The deal is
supported by a mezzanine facility structured by
Quarters Capital.
Pbb said it originally provided the full €105m before syndicating €30m to SCOR in a financing
closed in September. The 3-1/2 year facility finances
development of a 37,600 sq.m. centre 65% pre-let to
tenants including Primark. It is part of a scheme to
develop eight further buildings and over 80,000 sq.
m. of mixed use space, including residential, office
and retail. Metz is close to the borders of Germany,
Belgium and Luxembourg.
pbb’s Norbert Müller said the deal was one of the
more complex in the last few years and extends the
bank’s commitments to selected development finance
and exposure in French regional cities. SCOR Global
Investments’ Gilles Castiel added: “This transaction
underlines our capacity to invest for our funds in
large and sophisticated projects.”
Apsys, an integrated shopping centre operator in
France and Poland founded in 1996 by Maurice
Bansay, attracted some controversy earlier this year
when it bought the massive Beaugrenelle mall in
Paris - which it operated - from French REIT Gecina
in a last-minute move with French partners and an
80% LTV loan from Natixis. Major investors had
been bidding for the trophy asset, and Germany’s
Union Investment,. partnering China’s Gingko Tree
sovereign fund, were on the point of winning the bid
at around €700m. SCOR is a top-five global reinsurer with premium income crossing the €10bn
threshold in 2013, and total assets over €30bn.
Quarters Capital was founded in 2013 by Olivier
Vellay. pie
pbb and SCOR have provided a
€105m development finance
facility to Apsys for a shopping
centre in Metz (view of the city
pictured).
Française debt fund
closes €350m allocation
French fund manager La Française REM’S real estate
debt fund has completed its investment phase at
€350m after participating in financing Kai Yuan’s
€345m purchase of the Paris Marriott Hotel ChampsElysées. It will now develop more real estate debt financing tools.
La Française REM launched the fund in February
2013 in response to banks’ withdrawal from real estate lending, planning to finance new deals and take
over existing loans, with a focus on prime office and
retail in France. More than 50% of underlying assets
are offices or Ile-de-France properties but the fund
has also financed hotels, logistics platforms and car
parks - asset classes that have been less subject to margin compression than office.
And while the fund was set up to bridge the gap
left by the decline in banking financing, La Française
REM does not see it as being in competition with the
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
51
property finance / banking
banking sector. “The fund has taken part in financing
operations alongside most of the main market players, which shows that so called alternative financing
and the traditional banking model are very compatible,” the group said in a release. La Française REM is
part of La Française AM, which has €45bn of AUM
across all asset classes, and is controlled by regional
bank Crédit Mutuel Nord Europe. La Française
REM had €9.7bn of AUM at end-2013. pie
Atrium raises €400m in
3.625% bond, credits
Listed East European retail investor Atrium, an affiliate of the Gazit Globe shopping centre group, has
issued a €350m unsecured eight-year eurobond paying 3.625% in an offer that it said was oversubscribed. It also signed two five-year revolving credit
lines for €50m.
Atrium European Real Estate, registered in Jersey and
listed in Vienna and Amsterdam, its operating headquarters, said it placed the bond - with an issue price of
99.788% - with a broad range of institutional debt investors across Europe. In addition, Atrium signed two
five-year revolving credit lines for a total of €50m.
CEO Rachel Lavine said the over-subscription allowed books to be closed within a couple of hours.
“Our second unsecured eurobond together with the
new revolving credit lines we have agreed, further affirm the success we have achieved so far in delivering
our strategy,” she said in a release.
“This issuance and the new revolving facilities provide us with greater financial flexibility to build on
the momentum achieved with our
recent acquisition and at the same
time extend the average maturity
of our debt portfolio at attractive
costs.”
Proceeds of the issue will
strengthen liquidity and be used
for acquisitions, refinancing of existing debt, investment and general corporate purposes. Atrium
owns a €2.5bn portfolio of 153
mainly food-anchored retail properties and shopping centres which
produced €203.5m of rental inAtrium CEO Rachel Lacome in 2013 from 1.3m sq.m. of
vine said the over-subgross lettable area. These properscription of the firm’s
new €400m bond alties are predominantly in Poland,
lowed books to be closed
Czech Republic, Slovakia and
within a couple of hours.
Russia. pie
52
Chenavari buys €400m
NPLs, from Spain’s Bankia
UK distressed debt-focused hedge fund Chenavari
has paid €79m for the Project Sky portfolio of Spanish NPLs from nationalised lender Bankia, say local
media. PIE sources broadly supported the report but
not the discount - saying the deal comprised NPLs
and bank-owned real estate with nominal value of
€335m €65m respectively.
The Expansion newspaper earlier reported that
the credit package formed part of a Bankia portfolio
which was not transferred to Spain’s ‘bad bank’
Sareb. More talks are ongoing with other investors
on other projects under constraints of strict confidentiality. But one informed source said: “Overall,
the discount is greater than 80%.” The sale comprises the first secured portfolio disposal done by
Bankia. Spanish firm Finsolutia will be retained as
servicer and as co-investor though one of its managed funds.
The great majority of the loans is non-performing,
with real estate collateral, apart from being fully provisioned by the bank, the newspaper reported. The
bank, led by Chairman Jose Ignacio Goirigolzarri,
said in early October that the operation allowed it to
cut defaulting loan volume by €320m. The follows
Bankia’s transferral of the non-core Project Amazona
to Starwood and Sankaty in which €800m of NPLs
was sold for half of face value. pie
Unibail places €750m
bond at record 1.375%
Giant French-Dutch REIT Unibail-Rodamco has
placed a €750m 7yr bond and launched a tender offer for five issues as part of a move to extend the
maturity of its debt. The new bond was three times
oversubscribed despite a record low 1.375% coupon
for the group.
The €750m bond subscription book reached
over €2bn in less than two hours, the company
said. It matures in October 2022 and carries a
fixed coupon of 1.375%, a record low for the
group. Unibail has also launched a tender to buy
back five bonds maturing in April 2016, September 2016, December 2017, August 2018 and
March 2019. The tender offer is expected to close
on 14 October. “With these transactions the group
aims to extend the average maturity of its debt as
part of the proactive management of its balance
sheet,” Unibail said. pie
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deal tracker
❚ Madrid's Hotel Asturias sold to
Hong Kong's Platinum
❚ alstria REIT sells in Hamburg,
buys in Düsseldorf
UK and Hong Kong investment group Platinum Estates, led by the textile mag-
alstria office REIT has sold an office in Hamburg for €42m, and reallocat-
nate Harry Mohinani has acquired - together with partner in Spain Juan Luis
ed the funds into two assets in Düsseldorf which it says have stronger
Segalerva - the Plaza Hotel Asturias Madrid. No price details have been re-
growth potential due to higher vacancies. Vendor details were not re-
leased. The operation includes two buildings that occupied the property, lo-
leased. alstria sold in Hamburg’s Barmbek district, fully let to the City of
cated at 9 and 11 Carrera de San Jerónimo in the centre of the Spanish capital.
Hamburg with a new 10-year lease and generating total annual rent of
Platinum Estates, part of the Roshni Mohinani group chaired by the wife of
€2.5m. The €42m will be reinvested in two buildings in Düsseldorf which
founder Harry Mohinani, plans to rehabilitate both properties to turn them
generate €2.2m annually but offer higher growth potential, alstria said in
into luxury residences. In February Platinum and Segalerva purchased the for-
a release. n pie
mer HQ of Telefonica in Barcelona. n pie
❚ German ECE to redevelop
Bielefeld mall for €120m
❚ Cerberus, Orion pay €225m
for Spanish resort
Hamburg-based mall giant ECE plans to redevelop the City-Passage shopping
Spain's NH hotel group has come to an agreement with Cerberus and Orion
centre in Bielefeld, between Düsseldorf and Hanover, for €120m. The asset has
on sale for €225m of a 96.997% stake in Sotogrande, a residential complex lo-
been part of the firm’s European Prime Shopping Centre Fund since 2011. The
cated on the Spanish coast near Cadiz. NH informed the Spanish stock market
asset, built in 1977, is to be converted to house 100 shops with 26,000 sq.m.
commission CNMV that the deal excludes assets owned by Sotogrande in
GLA. “Having successfully taken over the management of the property, we
Mexico, Dominican Republic and Italy but includes land in Spain destined for
now focus on converting the gallery into a state-of-the-art shopping world,”
development and two golf courses, as well as two 4-Star hotels which will be
commented CEO Alexander Otto. n pie
managed by NH. Daily newspaper Cinco Dias reported the sale means €178m
in net proceeds for NH. n pie
❚ Samsung said buyer of €170m
Stuttgart office
❚ German Union buys historic
Century Stuttgart
German developer FOM Real Estate has is reported to have sold the Stuttgart
HQ of French engineering conglomerate Thales for a multiple of 17x rents,
German cooperative manager Union Investment Real Estate has bought the
around €170m, to South Korean conglomerate Samsung. Specialist newslet-
historic Century mixed-use building in Stuttgart from local developer Bülow
ter Immobilienbrief Stuttgart reported that FOM initially wanted to achieve
for an undisclosed sum - part of an estimated €150m redevelopment that in-
18x with the sale. The 58,000 sq.m. headquarters in Ditzingen near Stuttgart
cluded the adjacent Bülow Carré office. The Century building includes 3,300
consists of four buildings with space for 1,800 employees, and was devel-
sq.m. office and 1,500 sq.m. retail space as well as a 2,900 sq.m. cinema, said
oped for around €145m. Thales moved in May this year, taking out a 20-year
Union. It is fully leased to 11 tenants, including Berenberg Bank, Italian restau-
lease. n pie
rant chain Tialini and brewery Schönbuch-Bräu. The asset will become part of
the UniImmo: Deutschland open-ended property fund. n pie
ECE plans to redevelop the City-Passage shopping
centre in Bielefeld (model pictured) for €120m.
❚ High Gain plans €100m Mall
of Berlin expansion
German developer High Gain House has bought two buildings adjacent to the
giant Mall of Berlin – which it opened only last month with London-based
Arab Investments, the Affara family office – and plans €100m refurbishments
to create Germany’s largest shopping centre. HGHI bought the assets on Leipzig Square in Berlin’s central Mitte district from German pension fund Höchster Pensionskasse. No price details were disclosed. The already existing
80,000 sq.m., with over 270 retail and gastronomy units, were developed for
€800m and opened in September. The project also includes 30,000 sq.m. residential space and a hotel. n pie
54
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
deal tracker
❚ €344m Paris hotel deal
spotlights Asian interest
Hong Kong-listed Kai Yuan Holdings has completed its €344.5m landmark ac-
Messeturm office tower
in Frankfurt – bought
by Blackstone from
GLL Real Estate
Partners and
KanAm.
quisition of the Paris Marriott Hotel Champs-Elysées, highlighting the growing
interest of Asian investors in trophy assets in the French capital. Kai Yuan said
in June it would seek to boost occupancy rates at the 5-Star hotel by promoting it to Chinese tourists. The deal includes the €226m purchase of the hotel
building from French real estate company MCE PropCo and the €118.5m acquisition of operating and holding companies from Luxembourg-based Tamweelview European. n pie
❚ French ANF, CA insurer buy
Lyon portfolio
French REIT/SIIC ANF, insurance group Crédit Agricole Assurances and local
developer DCB are buying a 40,000 sq.m. portfolio of three office assets in the
❚ Blackstone paying €250m
for Frankfurt Fair tower
southern city of Lyon from pan-European group Aerium. The deal inaugurates
US fund manager Blackstone has confirmed that it is buying the Messeturm
a new partnership between ANF and CAA. ANF has initially acquired the
office tower in Frankfurt from German fund managers GLL Real Estate Partners
19,800 sq.m. Lafayette building and 16,500 sq.m. Stratège property outright,
and KanAm. The purchase price was not disclosed but Expo Real sources in
with HSBC providing a five-year loan covering around 60% of the price. But it
Munich put it at just over €250m. The 250m office tower adjacent to Frankfurt
has also signed a memorandum of agreement with CAA to form a partnership
Fair was sold in a share deal, according to legal firm Clifford Chance, which
focused on acquisitions, and the insurer will take a 45% stake and once ap-
advised the seller. n pie
proved by EU competition authorities. n pie
❚ Unibail to sell €300m
Nice asset, €1bn more malls
Photo: Franziska Sbresny
Franco-Dutch giant REIT Unibail-Rodamco is set to sell a mall in Nice for
❚ French Primonial pays €196m
for Paris office
French real estate fund manager Primonial REIM has acquired a Paris office
building from REIT/SIIC Eurosic for €196m for institutional investors in a club
around €300m and is seeking buyers for a further €1bn of French shopping
deal. The Grand Seine asset is located in the Austerlitz area of the 13th district
centres. The disposals would put the group on course to achieve its five-year
of the French capital and includes 22,177 sq.m. of office space and four retail
asset sales target well ahead of time. Unibail is expected to sell the Nice Etoile
stores at street level. It was delivered in 2005 and is let to four tenants, with
mall to Allianz Real Estate for just under €300m in 2015, said newspaper Le
investment bank Natixis renting all the office space. The deal will help Primo-
Figaro. With GLA of 21,800 sq.m. the mall was acquired by Unibail in 2000. The
nial REIM towards its projected 2014 investment total of €1.5bn. The company
group has also mandated Goldman Sachs to find buyers for another €1bn of
has grown rapidly since its 2011 launch and assets under management
French malls. n pie
reached €3.5bn at mid-year. n pie
❚ CBRE GIP buys 20% in
Paris La Défense tower
❚ Starwood to sell Louvre Hotels
for €1.2bn-€1.5bn
CBRE Global Investment Partners, the multi-manager unit of the giant inves-
US private equity group Starwood Capital is seeking a buyer for its France-
tor, has acquired a 20% stake in the Tour Adria office tower in the Paris busi-
based international budget hotel operator Louvre Hotels in a sale expected to
ness district of La Défense, joining a club of French and Asian insurance firms
raise €1.2bn-€1.5bn, say French media.
who bought the other 80% in 2013. CBRE GIP bought the stake from Spanish
Starwood completed the sale of its Concorde Hotels luxury chain in 2013, sell-
Testa, which acquired it for over €560m in 2006. An OPCI fund run by French
ing its Paris Concorde Opéra hotel to Blackstone for around €150m and four
manager Primonial REIM bought Testa's Tesfran unit, the vehicle holding the
hotels in Paris, Nice and Cannes to Qatar sovereign wealth fund Qatar Holding
asset, in July 2013, in a €450m share deal. n pie
for a reported €700m-€800m. n pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
55
central & eastern europe
Deutsche Asset & Wealth Management bought the Metropolitan office (pictured) in
central Warsaw from Aberdeen.
DAWM’s €190m buy
raises Poland to €1bn
Deutsche Asset & Wealth Management, part of the
Deutsche Bank group, has raised property holdings
in Poland to over €1bn by acquiring the Metropolitan office in central Warsaw for €190m from Aberdeen’s German unit.
DAWM said it bought the asset on Warsaw’s central
Pilsudski Square for one of its German institutional
funds, and now holds over €1bn worth of assets in
Poland, making it one of the largest investors in the
country. Completed in 2003, the seven-storey office
offers 38,000 sq.m. space, which includes a retail element. The trophy asset encompasses three interconnected buildings, each with separate reception areas.
Gianluca Muzzi, DAWM head of real estate Europe said the building is unique in design by Norman
Forster, in addition to its location in Warsaw’s city
centre - one of the CEE’s most vibrant and growing
business centres, makes it an attractive investment
opportunity.” pie
Gazit’s Atrium pays
€122m for Polish mall
Listed Atrium European Real Estate, an affiliate of
Israel-based Gazit, has acquired the Focus Mall
shopping centre in Bydgoszcz Poland from Aviva
for €122m. Atrium said the purchase is in line with
its aim to be the dominant player in Poland, Czech
56
and Slovakia through the purchase of strong income
producing malls.
The deal will be financed from existing cash resources. With this acquisition, over 55% of Atrium’s
total income producing portfolio by value is in Poland, with 77% located in countries which have sovereign ratings of A- or above. “The acquisition allows
us to add another dominant and modern shopping
centre to our income producing portfolio in line with
our strategy of acquiring established assets in the
strongest CEE economies,” said CEO Rachel Lavine.
Focus Mall, developed in 2008, comprises 41,000
sq.m. of retail space on two floors currently 96.1%
let to anchor tenants including a 2,800 sq.m. Alma
supermarket, a Saturn electronics store and a Cinema
City, as well as other fashion brands. It is located in
the centre of the northern Polish city of Bydgoszcz,
the country’s eighth largest city with around 360,000
inhabitants. Jersey-based Atrium, listed on the Vienna and Euronext Amsterdam exchanges, has a €2.5bn
portfolio of 153 malls and other retail properties
spread across seven countries. pie
Austria’s Erste in Budapest buy from Futureal
In a further sign that Austrian investors are returning
to central Europe, Erste Open-end Real Estate Investment Fund managed by Vienna-based Erste
Group has bought the new Vision Towers (North)
office block in Budapest from developer Futureal. No
price was given.
The building, which serves as the headquarters of
audit group KPMG, has had a high profile since the
start of construction as it was conceived by Futureal in
place of the former Hotel Volga, one of the best known
and most frequented locations in Budapest. With a
gross leasable area of 11,125 sq.m., the asset acquired
is the first phase of the Vision Towers project.
Gábor Futó, co-founder of the Futureal Group, selected by KPMG to develop the project, said the sale
is the first in Futureal’s Partnership Program. Erste
Fund Management President Balázs Pázmány said
the premium-category office building meets the investment goals of Erste Open-end Real Estate Investment Fund from every aspect. The building has ultramodern architectural features, and includes
energy-saving civil engineering systems, distant heating, four-pipe air-conditioning, raised floors and suspended ceilings, latest-generation shading system,
bicycle storage and cloakrooms. In addition, it has a
“very good” rating under the BREEAM certification
system. pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
central & eastern europe
Central Europe property
investment to top €7bn
Commercial property deals could top €7bn in central
Europe this year and may match 2007’s record within
two years, global advisor Cushman & Wakefield says.
Retail should join the bounce-back through next year.
Investment transaction volume in Poland, Czech
Republic, Hungary, Slovakia and Romania hit
€1.56bn in 3Q14 and 9-month activity is 25% up on
last year and 42% above the five-year average, C&W
said in a report. Several large transactions signed in
3Q14 include P3’s acquisition of €523m industrial
portfolio from Tristan Capital and its JV partner VGP.
“In recent years, only third quarter volumes in
2011 and the record year 2007 exceeded 3Q14. Given the pipeline of transactions which may close by
end of December, this year’s total is expected to be
the highest in the last seven years and the trend is set
to continue into 2015,” said James Chapman, C&W
head of Capital Markets. “The market is on a trajectory to hit volumes similar to the peak of 2007 within the next two years. Short-term challenges with
over-supply in specific sub-markets will be outweighed by a structural desire to source long-term,
intrinsic value... This will redefine market pricing
expectations and further promote liquidity.”
The highest investment in 3Q14 was Poland’s
€425m while Romania notched up €375m, Slovakia
€325m and Hungary €157m. pie
Polish retail said led by
East, smaller cities
Development of shopping and outlet centres in
smaller cities and eastern areas of Poland are driving
growth in the nation’s retail, advisor JLL says. But
consolidation in the food sector was a notable feature
of the third quarter.
JLL shows in a new study that 340,000 sq.m. of
retail was delivered in the first nine months of 2914
while in 3Q4 alone, 75,100 sq.m. was opened, including 64,000 in two assets in cities smaller than
200,000 inhabitants. A further 814,500 sq.m. is under construction with 12 retail parks also being developed, mostly in the smaller cities. JLL’s Marta Augustyn said retail chains are doing well. “The last
three months have been busy for new entrants and
those already present are actively but selectively expanding,” she said. Prime assets in the main cities attract most demand and landlords in secondary or
very competitive areas face downward pressure on
rents. But JLL anticipates prime rents holding stable
in the short to mid-term.
Total retail space in Poland has now reached 12.2m
sq.m., including 8.76m of shopping centre stock.
But mall density is 227 sq.m. per 1,000 inhabitants,
increasing to 245 sq.m. after completion of construction. This is greater than the European average of 196
but still lower than western Europe’s 260 sq.m. On
investment, JLL’s Adam Kiernicki said total retail
transactions to date reached €410m, with €50m added in 3Q14. pie
Tri-City holds strong potential in Poland – CBRE
Retail in Poland’s in Tri-City region on the Baltic Sea
coast - Gdansk, Gdynia and Sopot - is more attractive for investors than many other regions due to potential for third-generation shopping centres, says
realtor CBRE, which is boosting its presence there.
The commercial space saturation rate for Tri-City is
526 sq.m. per 1,000 inhabitants against an average
rate for other agglomerations of 450 sq.m. CBRE
CBRE relocated to
the Neptun Centre
has opened new business
(pictured), the tallest
lines and relocated to the
building in Gdansk
Neptun Centre in Gdansk.
at 86m.
Neptun is the tallest building in Gdańsk at 86m. and
offers 16,000 sq.m. of office
and retail over 18 floors.
Among CBRE’s notable recent transactions was advising BPH Bank on its 2012
relocation of 3,000 employees from five sites to the
Euro Office Park where it
leased 20,000 sq.m., the
most significant Tri-City
leasing in the last three years.
CBRE Poland Managing
Director Colin Waddell
CBRE has developed into
the leading agency in TriCity office over the last four
years. “This year, our team
in Gdansk has been reinforced with project-management services and we
will launch new business
lines to provide even more
support and enhance our regional network.” pie
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
57
central & eastern europe
Polish office driven by
services’ growth
Employment in business services in Poland is still
growing at 10%-20% a year and is the key driver in
office development, especially outside Warsaw, advisor
JLL says. In Kraków such tenants account for 55% of
occupied space, in Łódź 44% and in Wrocław 41%.
In a combined note with Poland’s Association of
Business Service Leaders, JLL says business services
with foreign capital employ over 128,000 people in
the nation. ABSL Vice-President Marek Grodziński, a
board member of Capgemini Poland, said: “Over the
last 10 years, the business services sector has achieved
maturity. Companies can relocate any type of services
here and organisations already present have the
knowledge and resources to manage virtually any
business processes.” Global brands appreciate this specialisation, and are eager to choose Poland for new
investment or to further develop established centres.
ABSL data show that over 470 centres with foreign
capital operate in Poland, which has 44% of all CEE
sourcing centres and is increasing its share. Anna Bartoszewicz-Wnuk, Head of JLL Research and Consultancy said Poland’s office market is one of the most
dynamic and fast developing in Europe with 7.1m
sq.m. of stock. Some 1.18m sq.m. of space is under
JLL identifies the growth of
business services as key driver
in Poland’s office development. In Krakow, it advised on
a lease by Lundbeck business
services in the Quattro Business Park (pictured).
construction nationwide plus 850,000 sq.m. of vacancies in existing buildings, of which 68% can be found
in Warsaw, followed by Tri-City 8% and Wrocław
6.5%. Monthly headline rents for prime office outside
Warsaw range between €11 and €15 per sq.m. pie
Moscow retail vacancy
jumps as tenants review
Vacancies in Moscow shopping centres leapt to 6% in
the third quarter from 3.5% in 2Q14 as supply rises
rapidly and the Russian economy slows, realtor JLL
says. Many tenants are mulling options as business declines, and it expects vacancies to go on rising in 2015.
New retail supply in 3Q14 reached 285,000 sq.m.,
almost 150% above last year, JLL said in its latest
Russia Retail Market Overview. Two completed
shopping centres represented 20% more new space
than last year, with much more to come. “The majority of developments for 2014 are expected in 4Q14
with another five shopping centres of over 450,000
sq.m.,” said Tatyana Kluchinskaya, JLL Head of Retail. “If all open on time, new space will exceed
750,000 sq.m., the highest ever.” Prime rent in Moscow malls is $3,000-$4,500 per sq.m. a year.
But despite the significant increase, Moscow’s supply of high quality space is still only 319 sq.m. per
1,000 people compared with St. Petersburg’s 407
sq.m., noted Elena Zadorozhnaya, JLL Head of Tenant Representation. pie
Middle East investor backs
Russian logistics fund
A Middle East fund is teaming up with Russia’s sovereign investment fund and Russian real estate firm
Development Group 19 to build logistics sites
around Moscow, marking a rare inward investment
as many international capital remains wary of deals
in the country.
The Russian Direct Investment Fund, a $10bn sovereign vehicle established by Moscow in 2011 primarily to invest alongside international firms, announced the agreement Thursday but did not name
the Mid-East investor or how much the parties plan
to allocate. The JV intends to develop Class A logistics space to satisfy growing needs to improve supply
chain efficiency in the country. It intends to focus
initially on Moscow where logistics coverage is about
half other major European cities at 0.8 sq.m. per
capita, and will expand later into the regions. pie
58
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
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Volume 10 | issue 350 | 26 May 2014
Lone Star, JPM win €4.5bn Eurohypo Spanish loans
Texas-based Lone Star, in combination with JP Morgan Chase, is in final talks to buy German Commerzbank’s €4.5bn Spanish real estate loan portfolio, paying up to €3.9bn. (See inside pages for full story)
Spanish Realia’s REIT sale may spark Eurosic bid
Spanish property group Realia is to sell its 59% stake in a French REIT Siic de Paris to French listed Eurosic
for €560m, possibly triggering a full bid by the latter for the target company. (See inside pages for full story)
Three Italian firms near €7bn manager merger
The consolidation in Italian property fund management is set to continue after Banca Finnat, Beni Stabili and Polaris RE signed an LOI to merge fund management into a firm running some €7bn. (See inside
pages for full story)
Italy’s Prelios, US Fortress merger deals near
Italian listed Prelios is set announce a merger of asset management and NPL units with US-based Fortress
Investment by month end for closing by end-July, say PIE sources. (See inside pages for full story)
Italy’s UniCredit shortlists NPL bids; Popolare also
German city
house prices send
investors wider
Property Investor Europe proudly presents the latest in its expert seminar series:
Equity wave
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Logistics Property Breakfast
Bid for €9.7bn
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Where will the logistics goldrush lead in 2014 ... in markets, assets, new players?
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buys €60m
Stockholm office
Australia’s UGL said likely to cancel DTZ sale
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RICHARD CROFT
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M7 Real Estate is a pan-European industrial asset manager with operations in the UK, Denmark, the Netherlands,
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Managing director, realogis, Munich/Zug
Irish Ballymore
seeks £2bn London
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SPEAKER
Realogis, founded in 2005, is Germany’s leading consultant for industrial and logistics properties with over
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Realogis, has gained experience in industrial and logistics real estate since 1994 and to date has handled a
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PHILIP mARSDEN
SPEAKER
int. director – European logistics & industrial, Jones lang laSalle, london
Jones Lang LaSalle is a ﬁnancial and professional services ﬁrm specialising in real estate. Mr. Marsden has
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ALLAN SAUNDERSON
Managing Editor, Property investor Europe, frankfurt
mODERATOR
Logistics property in Europe has undergone a massive re-rating in the last 18 months. The world’s largest capital
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PiE Events
Gaby Wagner-Saunderson
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people
PIE People
FINLAND
Technopolis SAMI JUUTINEN will leave his position at the end of
2014 to join another company. He will continue as a consult with
the firm.
BNP Paribas Real Estate has named BRUNO ANCELIN as director
of its retail investment department. He joins BNPP RE after 17
years with C&W.
KARI KOIVU, senior VP in charge of Sponda’s property funds business has transferred to Certeum after Sponda sold its entire logistics portfolio to the firm.
La Défense Seine Arche management body EPADESA has named
ALEXANDRE VALOT as deputy MD for administration and finance
in place of STEPHAN DE FAŸ.
FRANCE
Guillaume Spinner
AXA Real Estate
AEW Europe has hired THIBAULT CHAUVIN as head of debt
funds. He will be based in Paris and report to RAPHAEL BRAULT,
head of funds and separate accounts. Chauvin was previously MD
at Colony Capital with responsibility for real estate debt strategies
and deal origination in Europe.
AXA Real Estate has promoted GUILLAUME SPINNER to CFO. He
has been with the firm for more than 10 years, having previously
worked for Archon Group in France and Germany.
ANF Immobilier has dismissed COO XAVIER DE LACOSTE LAREYMONDIE, saying its ambitious new strategic goals require a
change in management. CEO BRUNO KELLER will take over de
Lacoste Lareymondie’s responsibilites until a new COO is appointed.
Sigrid Duhamel
CBRE Global Investors
Gecina has recruited SAMUEL HENRY-DIESBACH as head of financial communications. He joins from Kepler Cheuvreux where he
was a financial analyst covering the European real estate sector.
Asset management group La Française has appointed PIERRE
SCHOEFFLER as senior global asset allocation advisor. Meanwhile, La Française Real Estate Partners has named XAVIER BARREYAT as finance director and director of asset and portfolio management and THOMAS AUBERT as investment manager.
ING has hired CHARLES BRIOTET from HSBC as director-origination real estate finance France. HENDRICK VAN DEN BERCH has
also joined the origination REF France team as relationship manager, moving back to Paris from ING’s Amsterdam HQ.
Hui Liu
Colliers International
Savills has recruited WILL WOODHEAD as head of its French office in Paris. He joins from Balzac Real Estate Investment Management, an asset and transaction advisory platform he set up in
2007. HERVÉ BLANCHET, current head of the Paris office, will remain within the Savills group.
Following the takeover of Société de la Tour Eiffel by SMABTP,
PHILIPPE LEMOINE, former MD of Silic, has been named new
CEO, replacing RENAUD HABERKORN. New board chairman is
HUBERT RODARIE, succeeding MARK INCH.
CBRE Global Investors has appointed SIGRID DUHAMEL as country manager of France. She joins from PSA Peugeot Citroën where
she was responsible for the global management and leadership
of the real estate portfolio.
ARGAN has promoted FRÉDÉRIC LARROUMETS to its managment board, responsible for acquisitions.
GERMANY
Colliers International Germany has established a new Asian Desk
to support Asian investment activities. HUI LIU has been appointed to head the desk as senior director investment. She held previous positions with Tishman Speyer, Aareal and Deutsche Bank.
ALEXANDER TROBITZ is new head of hotel services at BNP Paribas Real Estate. He most recently worked at Dr. Lübke & Kelber,
also heading up the hotel division.
Robert C. Spies has added MARTIN ZUNKEN, previously senior
asset manager at Garbe Logistics and project manager at JLL, as
investment manager logistics & light industrial in northern Germany.
BRIAN TUCKER is new partner and head of shopping centre investment at Cushman & Wakefield Germany, based in Munich. He
previously spent seven years as head of retail acquisitions & sales
with Deka and held positions at ECE and Hammerson.
JLL has promoted FRANK ALBERS to lead the buy side business
team in Germany, following MARTYN HARROP who retired. Albers will continue in his role as head of the Hamburg office investment team.
FPL ADVISORY GROUP
FERGUSON PARTNERS
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people
MARC THIEL is heading up the new Soravia Capital, a Munich
subsidiary of Austrian developer Soravia, to channel German institutional money into Vienna property. Thiel started his career at
Aengevelt and other stations include Metro, Euro Ejendomme,
Acron and SynInvest.
Palmira Capital Partners has appointed KLAUS ANSMANN, who
joins from Deutsche Post where he was MD of corporate real estate management, as chairman of its European advisory board.
THE NETHERLANDS
ROBERT VAN DER MOER has been appointed as senior finance
manager of Patrizia Netherlands. He joins from Bouwfonds IM.
SEBASTIAN ZWART was appointed asset manager, moving over
from Savills where he was senior consultant in the investment
team.
NSI has hired PATRICK RUWIEL, previously director at Delta Lloyd
Asset Management, as interim COO to focus on the asset rotation
strategy and financial performance of the Dutch portfolio. The
search to fill the COO position continues.
POLAND
Atrium European Real Estate has appointed SCOTT DWYER as
CEO of its operations in Poland. He has over 15 years’ experience
in CEE and joins from Heitman where he was executive VP and
head of portfolio management.
SPAIN
Hines has appointed SEBASTIAN HUERGO as new co-head of
Spain. He joins the leadership team of JAMIE REA and MIGUEL
RAMOS, arriving from Norges Bank Investment Management,
where he spent three years sourcing and executing transactions
in various markets and product types.
SWEDEN
Castellum has promoted Finance Director ULRIKA DANIELSSON
to the newly created position of CFO. Having been with the firm
since 1998, she has held various executive roles.
BO WIKARE was promoted to VP at Hufvudstaden, having been
with the company since 1994, most recently as head of the Stockholm city east business area. He has been a member of the executive management since 1997.
SWITZERLAND
Alexander Trobitz
BNP Paribas Real Estate
IOSIF BAKALEYNIK has been appointed new CEO of Züblin Immobilien. Since 2008, he has been advisor to the chairman of the
board of Renova Management, VICTOR VEKSELBERG, who took
a majority in Züblin. Interim CEO THOMAS WAPP continues as
CFO and COO.
UK
IAIN GRIFFIN, who previously ran his own development management practice, has joined Harworth’s development division as
development manager. JENNY CUTLER joined as financial controller from Palletways.
JLL has recruited NICK JONES into its EMEA Industrial & Logistics
capital markets team. He will join the firm in January from C&W
where he was a partner in the cross-border capital markets team.
Sebastian Zwart
Patrizia
Aviva Investors has appointed VERONIQUE LEROY and JOLANTA
TOUZARD to its infrastructure team. Leroy joins from Octopus
Investments, as head of infrastructure investment services, Touzard as assistant fund manager from Equitix.
Aeriance Investments has hired CHRIS TESSLER as director of
origination (Greater London and UK Regional). He joins from BLG
to accelerate the firm’s move into development financing to independent residential developers on behalf of the OREL 2 fund.
Schroder Property has created a new property analyst role in Europe within its Schroders Global Property Securities team, hiring
JON CONSOLO from Deutsche Bank to cover the European markets.
Scott Dwyer
Atrium European Real Estate
DUNCAN SUNTER joins Cushman & Wakefield as head of valuation and advisory practice in Sweden. He joins from CBRE and has
over 25 years’ of experience in the property sector.
Ferguson Partners Europe
78 Pall Mall
London SW1Y 5ES
(44) 20 7628 5550
www.fpladvisorygroup.com
forward thinking
forward thinking ❱❱〉
Roll up, roll up, gents, come and buy!
More attractive than Mexican REITs!
Allan Saunderson
I
may have said it before but it is worth repeating: The still
European safe? Yes, my friends, the world is a distinctly unsafe
partially hidden key to European real estate investment
place, particularly if you are investing for 25-year-olds who
now is the globalisation in train - which, in case you
want you to pay them a pension in 40 years. Out-of-region in-
haven’t noticed, is of a nature and extent never seen before in
vestors are putting much, much higher multiples on pan-Euro-
this asset class. It means your valuation metrics have to change
pean property than we at home. New York’s secretive Och-Ziff
and fast. Why this is has been shown in the last weeks by two
hedge fund Och-Ziff’s €1.5bn Real Estate Fund III will also target
perfect cases in point: The Uruguay-based equities dealer who
Europe, we are reliably told. Blackstone opens its fund to add
last month bought one-third of the €360m east German TLG
another $1.5bn because of (US) institutional demand for real
IPO regards it as a “unique investment opportunity in high
estate. There is more to come. The Chinese are here now.
yielding real estate assets in a growing economy with safe legal environment.” Er, excuse me, what about those British Daily
Not unrelated is the white hot state of European property
Mail headlines of crisis in Euroland, German growth grinding
asset management M&A at the moment. London-based Cord-
to a halt, ‘Europe’ in deep trouble? “TLG ratios and multiples
ea Savills, the arms-length manager of Savills PLC, is likely to
appear to be more attractive than those offered by compara-
buy retail manager Pradera; German-based SEB AM is up for
ble Latin American real estate investment companies (e.g.
sale; and London’s Catalyst Capital is seeking a strategic inves-
Mexican REITs or Fibras),” said our Montevideo friends last
tor, insiders say. The moves follow the merger of UK’s GVA into
week. Well yes… we hope so! Sounds like the punchline of a
Germany’s Bilfinger Real Estate, the takeover of Germany’s
joke or the perfect sales pitch south of the border: ‘More At-
Corpus Sireo by Swiss Life – after the latter a year or so ago
tractive Than Mexican REITs!’... But it isn’t. Dead serious. And
already bought out French manager Viveris - and the fast ex-
well may these investors be. South American institutions, like
ternal expansion of Paris-based La Francaise through a JV
thousands of counterparts around the world, are looking not
with Forum Partners and its more recent takeover of former
for fiesta but security right now, and European property has it.
Cushman & Wakefield Investors. And those are only some of
Given the (lack of) alternatives, our nice, safe, boring European
examples. The moves are an attempt to achieve size to ac-
real estate looks like a pearl in a silk cushion of orderly legal
commodate this huge capital and deal demand breaking
and enforcement rules down Mexico way. Our Montevideo
over European real estate now from all sides. The ability to
friends place their capital in a safe - a safe place, that is.
find and manage assets in large size in any - or at least most European jurisdictions is key to catching the breaking wave.
62
Second example: Russian-controlled Cyprus-registered O1
“The market is crazy,” one broker executive says. “I’m a pretty
last week closed its acquisition of 15,954,891 shares of Austria’s
hard-working guy, but I’m not sure I can keep up! The tele-
CA Immo from banking group Unicredit, spending a cool
phones are ringing off the hook; clients are calling me daily to
€295m. O1 today owns 16% of CA and will add another 10% in
ask if I have any new deals to buy.” Cordea Savills CEO Justin
a public offer. Why 26%? Well, no one is saying; certainly not
O’Connor told PIE he has no comment on a story in UK news-
company chief Boris Mints who has not as yet surfaced in Vi-
letter EuroProperty that his group will take over both Pradera
enna - or even Munich last month - instead sending his son
and SEB AM. “As part of a listed company we do not confirm
Dmitry. But let’s do the sums. O1 won the bid at €18.5 per share,
nor deny market speculation,” he said in a mail. OK. Frankfurt-
just over €2.5 above the prior close at €15.94. Let’s assume, as I
based SEB, as usual, is saying nothing. But it is known to be
do, that it offered 50cts or so more than the next guy. That’s
seeking a buyer after Stockholm-based parent Skandinaviska
about €8m more. But the O1 Group - which by the way in sum-
Enskilda Banken decided to halt German open fund activity
mer won an injection of cash from Goldman Sachs - is about to
following the see-saw of poorly thought-through Berlin regu-
deploy another €100m for CA Immo on top of the first tranche.
lations that have damaged the competitive positions of for-
It means that Mr. Mints in Moscow will soon have not much shy
eign-owned private managers, and produced an ‘un-level’
of €400m nicely stashed away in a western European property
playing field. Respected long-time SEB AM CEO Barbara Kno-
portfolio, administered by Bruno Ettenauer’s diligent and high-
flach in summer quietly resigned from German fund associa-
ly-competent and well-practiced team already in place in Vi-
tion BVI where she hitherto played an active and leading role.
enna. What could be better for a Moscow resident watching the
It’s a sellers’ market now. Why German funds are making such
widening loss of any grasp on reality by Vladimir Putin - a resi-
a meal of disposals speaks reams about the overvaluations on
dent who may very reasonably want to hedge his capital in a
book all these years. But that, as they say, is another story. as
property investor europe l Edition 369 l November 2014 l www.pie-mag.com
9th Real Estate Conference Berlin
From enraged citizens to engaged participants –
How to understand, inﬂuence and beneﬁt from citizen
involvement in infrastructure and development projects
When
Where
Tuesday, 11 November 2014, 4:30 pm
Olswang, Potsdamer Platz 1, 10785 Berlin
Rainer Bomba, State Secretary at the Federal Ministry of Transport and Digital Infrastructure
Peter Strieder, Former Chairman of the SPD Party in Berlin, Partner at Ketchum Pleon
Panel discussion

Stefan Evers, Member and Vice-Chairman of the CDU Party at the House of Representatives Berlin

Henrik Thomsen, Managing Director of the Groth Gruppe

Dr. Marc Weinstock, CEO of DSK, Deutsche Stadt- und Grundstücksentwicklungsgesellschaft
To register for the event please visit: www.bccg-events.de
Supported by BF.direkt, EY Real Estate and media partner Property Investor Europe.
Fund
1
Fund
11
A fruitful investment
After the great success of the ECE European Prime Shopping Centre Fund, ECE Real Estate Partners
announce the upcoming launch of a successor fund. Raised with total commitments of €775.5 million
S:
from international investors, Fund I is now fully allocated and opens the way for Fund II.
G NE W first
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K
A
E
s
BR
With a portfolio valuation of approx. €2 billion, the ECE Fund I now manages 12 prime urban
unce
II anno ore than
d
n
u
F
shopping centers throughout Europe with value-add potential, providing a strong driver for
of m
closing00 million!
future returns through active asset management.
€5
ECE Real Estate Partners S.à r.l.
17, rue Edmond Reuter, 5326 Contern, Luxembourg
Phone: +352 26 78 59 29, Fax: +352 26 78 59 79
www.ece.com, [email protected]