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 was raised through secondary issues and £6bn through ﬂoating new companies in initial public offerings (see graph).
Almost £8bn of equity (£7.86bn), or one ﬁfth of the global total, was raised in Europe, the majority of it (£6bn) in the UK. Of that £6bn, £3.6bn was raised in rights issues and £2.4bn in share placings (see table). Altogether, by mid-December, 22 UK property companies and REITs had successfully tapped shareholders.
US REITs and property companies raised the most, at £14bn, with Asian markets the second most, at £11bn. Asian markets saw by far the highest proportion raised through IPOs, at £4bn. There were no fewer than 65 separate corporate bond issues this year, with some of the largest companies going to the market two or three times, notably Simon Property Group and Westﬁeld.
Most of the companies that used the bond markets were from the US, Canada and Asia – especially Hong Kong, Japan and Australia. Only two UK companies raised ﬁnance this way: Segro and Land Securities. The latter raised £360m of long-term ﬁnance in July at 145 basis points over the then 10-year benchmark gilt price of 3.8%, to give a coupon of 5.25%.
The bond was a securitisation structured on the cashﬂows of a lease to a government ofﬁce tenant at 50 Queen Ann’s Gate in London Last month, Segro raised £300m, at a cost of 6.75% French, Dutch and Belgian REITs Unibail, Wereldhave and Coﬁnimmo were the only three other European companies to raise debt this way.