December 2009 Issue

PRUPIM has rebalanced one of its funds through £100m of sub-sector swap trades with a single counterparty in the property derivatives market. PRUPIM has made a series of paired trades going short and long on different sectors with Royal Bank of Scotland as the counterparty. Will Robson, PRUPIM’s head of property derivatives, who worked on […]

Many property lenders are asking whether recent increases in property values are sustainable. This is a genuine concern because, although yields have fallen sharply in the past five months, the UK economy is still in recession and rents still falling. The present rises in value are fuelled by scarcity, not by underlying fundamentals, and there […]

EG Capital UK commentary The Macquarie UK REIT share price index rallied in the first half of November to a high for the year of 44.4 on the 17th. But it has drifted down again since then, not helped by what Nomura property analysts called ‘the Dubai effect’ late last month. All UK property shares […]

UK market overview The Jones Lang LaSalle Balanced Fund Index has fallen 10.2% so far this year and 42% from its July 2007 peak, writes Julian Schiller. Taking into account secondary market pricing, peak-to-trough pricing continues to improve, to -35.6% in November, from-37.9% in October. Despite interest from a diverse range of potential buyers, secondary […]

Funds are looking to buy deeply discounted bonds in hope of gaining control of underlying assets

Thames River proves long/short strategy can work, despite the casualties, reports Jane Roberts

Total outstanding property debt has fallen for the first time in the 10-year-old report’s history

Adapting to survive in a post-recession era was main theme of IPF/IPD event, writes Jane Roberts At last year’s IPD/IPF Property Investment Conference in Brighton, property fund managers admitted they were taking as big a battering at work as they were from the rain on the seafront. Terrible performance, run-away gearing and liquidity problems were […]

The scale of RBS’s problem loans is mind-boggling: £69bn already in default or at risk were transferred to the Asset Protection Scheme; 56,650 loans; more than £10bn due to mature this year. The 100-page Treasury report is full of numbers just too large for anyone to get their head around – and this is just […]

European funds of funds made almost no investments in 2009 but hope to make more next year, according to an INREV survey. The survey’s 16 fund-of-fund manager respondents, which run 30 funds with target equity of €10bn, made only five equity investments, totalling €75m, by the time of the survey at the end of September. […]

Orion Capital Managers has bought a position in the restructuring of Spanish property company Colonial, in its first deal since closing its third opportunity fund. Funds managed by Orion, and US opportunity fund Colony Capital, have agreed to acquire Goldman Sach’s €1.5bn portion of the €4.2bn syndicated loan in Immobiliaria Colonial at a discount. A […]

Investor starts a restructuring to turn around loss-making fund manager Internos Real Investors last week embarked on a 90-day plan to start turning round loss-making European property fund manager GPT Halverton. In its first deal since Jos Short and Andrew Thornton launched the firm in early 2008, Internos  acquired GPT Halverton debt-free for a nominal €2 […]

Five banks club together to refinance shopping village’s CMBS loan Barclays has provided a £66.5m, five-year investment loan for Tritax’s £101m acquisition of part of Brindleyplace in Birmingham. Tritax spent five months putting together the purchasing syndicate and negotiating the deal with the Brindleyplace Limited Partnership. It was also on the other side of the […]

UK investment transactions are expected to total between £22bn and £23bn by the end of 2009, representing a big pick-up in activity in the second half. The Property Archive estimates that there were only £8.7bn of deals in the first half. Julian Stocks, head of England capital markets at JLL, said: “It has been a […]

Investors are missing the benefits derivatives trades can bring at all points of the property cycle

UK stocks took the lion’s share of the £7.8bn of equity raised in Europe Quoted property companies around the globe raised £40bn of equity, and £14bn of debt in the capital markets, in 2009. Data from Macquarie’s property securities analysts shows the extent to which shareholders were prepared to support the sector this year: £34bn […]

The Pre-Budget report on 9 December disappointed REIT finance directors by failing to relax the requirement to pay cash dividends. The British Property Federation had lobbied for scrip dividends (shares) to count towards the minimum 90% income distribution REITs are required to make. Deloitte REIT expert Phil Nicklin said: “It’s disappointing that government hasn’t done […]

REIT Workspace has written down its £166m joint venture Workspace Glebe and restructured the company with lender Lloyds Banking Group’s HBOS. The small office specialist is buying the 50% it does not own from Glebe Two’s liquidators for £1 and injecting £15m of equity raised from shareholders. HBOS is cutting the debt from £134m to […]

Nick Cooper, head of ING’s property multi-manager business, said he has ‘no plans yet’ for his next move after quitting ING Real Estate Select at the end of this month. Cooper decided not to move to ING’s Hague HQ as part of an internal reorganisation. ING plans to hive off its real estate management business […]

US pension fund acts after property portfolio’s value falls from $17.6bn to $13.5bn in six months

MGPA has bought residential land assembly company Land Investment Holdings in its first  UK deal for several years. The company was put up for sale in February. The price values the business at £87m and was bid up by competition from a second real estate private equity bidder, Carlyle Group. MGPA is paying £52.5m in […]

A large slice of RBS’s transferred loans are due for repayment in 2009 Three quarters of Royal Bank of Scotland’s £91bn commercial property loan book has problems, according to data published this month detailing loans RBS has put into the Asset Protection Scheme. The Treasury says all of RBS’s 56,650 of transferred real estate loans, […]

Recovery starts with £200m Aviva Investors raised £200m in a first closing on 27 November for the Aviva UK Recovery Fund, a diversified, ungeared, five-year vehicle. Contributions to the fund included £65m from Aviva multi-manager clients, as well as UK pension funds. Aviva said it was considering a second closing  with existing interest. Eurohypo gives […]

Several investors and banks are trying to buy the entire White Tower London office portfolio from its special servicer, CB Richard Ellis Loan Servicing. CBRELS said last month in a note to investors in the £1.15bn securitisation secured on the properties, that it expected to sell the nine assets ‘piecemeal’ between now and the end […]

Liberty International is expected to complete its refinancing of Lakeside shopping centre as early as January. The regional shopping centre specialist said last month that it was “engaged in positive discussions with a number of lenders” about refinancing the Opera Lakeside CMBS deal. Sources believe the company has agreed seven-year bank financing rather than a […]

Duet and partner Forum seeded fund but institutions also contributed

PRUPIM has rebalanced one  of its funds through £100m of sub-sector swap trades with a single counterparty in the property derivatives market. PRUPIM has made a series of paired trades going short and long on different sectors with Royal Bank of Scotland as the counterparty. Will Robson, PRUPIM’s head of property derivatives, who worked on the […]

Central bank’s ABS repurchasing facility is made more expensive to use

Joint-venture partners will launch first new long/short property equities fund for two years and widen investor base of successful Iceberg vehicle Reech CBRE Alternative Real Estate is to dramatically expand its real estate hedge fund products at the start of 2010. Joint-venture partners CB Richard Ellis and Reech Alternative Investment Management will unveil the first […]