February 2010 Issue

Ellahi to head Lee’s Langham Ahsan Ellahi (pictured) is leaving Eurohypo, where he was head of structured finance and joint UK MD, to head Sam Lee’s UK property company, Langham Estate. Ellahi said he had had “a very long association” with Lee’s family. Max Sinclair will now be sole head of Eurohypo’s UK business. White […]

Three institutional investors contribute £70m to new open-ended fund

Swedish financial group’s partnership structure may complicate sale

At a recent breakfast hosted by JC Rathbone Associates and attended by more than 100 members of the UK commercial property industry, a panel of experts discussed the main challenge Europe’s property industry faces in 2010: how to refinance an estimated $90bn of real estate debt over the next two years. Despite forecasts of a […]

REC global commentary Global stock markets fell in January, with the MSCI AC World Index down 3.8%. Real estate shares also fell, returning -5.9%. Asian REITs and property firms fell furthest, with a -8.9% return (-12.4% for Hong Kong firms). Spain, France and Russia (the latter up 20.7%) led Europe’s outperformance of other regions; EPRA […]

Fitch Ratings has just launched regular updates on European securitised loans that have fallen due for repayment or are set to mature. In 2010, there is €6bn of maturing CMBS debt in 93 loans that Fitch rates. “The number and volume of loans due to mature ticks up in 2010 then accelerates,” said Fitch CMBS […]

M&G’s new property debt fund raised a modest sum from external investors at its first closing, but manager John Barakat sees growth potential in the gap left by banks. Jane Roberts reports

The private equity arm of hedge fund Duet Group found rare success in reaching a first closing for its debut real estate debt fund, which will target Germany and the UK, writes Jane Roberts

The flip side of the ratings controversy is that some investors have relied blindly on them. “At the height of the market, in some cases, investors carried out no due diligence,” says Conor Downey of law firm Paul Hastings. “They couldn’t – they had committed to buy before the paper was produced.” But by 2011, […]

Europe lags behind the US in providing investors with the data they need to assess CMBS issues

Flaws in credit rating system have been blamed for triggering financial crisis, writes Alex Catalano

Report says banks still hold key to property recovery, despite return of equity, writes Jane Roberts

Liquidity will increase this year, but banks are still cautious about property, reports Jane Roberts

The number of former senior property bankers re-appearing, reincarnated, on the debt-buying side has gone up noticeably in the past few months. These guys (and gals) were the people who worked for the likes of Barclays Capital, Merrill Lynch and Morgan Stanley, where they originated billions of pounds of property debt and pushed it out […]

Ben Jones, manager of Prudential M&G’s £400m Secured Property Income Fund, said that with hindsight, 2007 was not a great time to launch the fund, as property values fell for the next two years. But in the second half of last year the fund, which started with £40m, saw large inflows, with more than £200m […]

While long-term rental growth tends to closely match inflation (see graph), rents are more cyclical. Index-linked rents smooth this deviation. “Limited price inflation is a concept that protects against deflation and modest levels of inflation,” said Legal & General Property MD Bill Hughes. With an income stream designed to rise in line with the Retail […]

L&G plans to meet pension fund liabilities with inflation-proof returns from new property fund

The Church Commissioners has invested about £20m in M&G’s Real Estate Debt Fund, which had its first closing in January. M&G’s fund will invest in Europe, but The Church of England’s investment management body, which manages a property portfolio worth £1.5bn, is also considering committing capital for property debt in the US market, probably via […]

Europe’s largest REIT, Unibail- Rodamco, has spent €715m on seven shopping centres and a half share in five yet to be developed, in one of the largest cross-border property deals since the credit crunch. The interests were sold to the French REIT by retail property company and developer Simon Ivanhoe, a joint venture between US […]

Cannon Capital has teamed up with finance broker Berkeley Taylor to offer finance for private treaty and auction buyers at up to 75% loan-to-value. auctioneer James Cannon, has an exclusive agreement with the broker, which is run by Kristian Hoy. Cannon Capital will hold its first auction on 25 March, with a 35-lot catalogue out […]

One of the largest UK property funds is to use derivatives as one of many strategies to be more flexible in investing its cash pile. On 24 February, Scottish Widows Investment Partnership will ask the SWIP Property Trust’s owners to amend the trust deed to allow it to invest in a wider range of financial […]

Russell makes L&G comeback Mark Russell has returned to Legal & General Property as fund manager for the £750m L&G Managed Pension Fund. The fund is LGP’s longest established and has 300 investors. It spent £275m last year, after taking in more cash. Russell worked on LGP’s Linked Life Fund from 2000 to 2006. He […]

Capital poured into unlisted property funds in the final quarter of 2009 at five times the rate of Q3 2009. Figures from The Association of Real Estate Funds showed the highest-ever quarterly commitment by investors, of £3.2bn, or £2.9bn after redemptions of £300m, compared with a net £400m in Q3 2009. More than half of […]

Manager reports inflows of £50m-£60m per month for property funds

The ING UK Property Income Fund has completed a two-year restructuring by raising £22.4m of fresh equity at net asset value. Six of the limited partnership’s 13 investors took all the equity offered, which will be used to pay off debt with lender Nationwide. The partnership was due to be wound up at the end […]

Insurance groups Axa and M&G Investments have helped to underwrite €441m of refinancing for ProLogis’s European Property Fund (PEPR). The insurers were part of a syndicate that underwrote a €300m senior loan facility at 52% loan-to-value, secured on 39 French, Belgian, Spanish and Italian distribution centres. Axa makes senior loans through its Axa Real Estate […]

“We have absolute visibility on an increasing level of stock due to come onto the market… Compared with the desert of stock last year we expect an oasis of assets to choose from later in 2010.” Great Portland Estates’ chief executive Toby Courtauld after releasing the company’s Q3 interim management statement last month “I was […]

Servicer avoids foreclosure on €766m Dutch property loan backing Opera (Uni-Invest) CMBS

Barclays Commercial Bank is financing a second large acquisition for long-standing client M1 Real Estate. The bank provided a senior facility to help the Lebanese investor to secure Victoria House in Bloomsbury Square, London, ahead of 10 other institutional investors, for about £175m. The vendor was Ireland-based investor the Mortiz Group. Barclays plans to sell […]

Bayern Landesbank is back in the property lending market with an ambitious target to provide more than £1bn for UK property deals this year. The German bank, led in London by Mike Worley, has told a number of lenders, brokers and valuers that it has up to £1.2bn available for deals. Part of this capital […]

Consortium seeks to extend bonds’ maturity in a first for CMBS market

Paul Oliver has become a consultant at pan-European fund manager Valad. Oliver was formerly Valad’s chief investment officer and part of the company’s senior management team and played a leading role in investor relations and fund raising. He joined Valad two and a half years ago, when the Australian company paid £865m for Kevin McCabe’s […]

Former property bankers secure commitments of £250m each from five institutions to back platform that will fund new deals and refinancings

 Real Estate Capital UK commentary  UK property stocks lost 4.9% in January, slightly underperforming the wider stock market with relative performance of -1.4%. REITs performed worse at -7.3%. The property sector edged up in the first week of February, aided by a bullish Knight Frank update on central London, before falling in the second week. […]

UK market overview The Jones Lang LaSalle Balanced Fund Index showed a modest 0.51% increase in January, but has fallen 2.61% over the past 12 months, writes Julian Schiller. Taking into account secondary market pricing, the index remains relatively unchanged at -10.27% for the 12 months to the end of January. Secondary market activity is […]

The derivatives market has already priced in the physical market’s rally and suggests capital value growth will slow down CBRE-GFI market commentary The derivative curve’s steady front end and falling back end reflect concern about UK property’s long-term growth prospects, writes Michel Heller. Derivative prices suggest that the physical market’s rally has been fully-priced in […]