July/August 2015 Issue

Growing economy and sound attitude to debt underpin strong market, CREFC delegates heard.

Last month, Fitch Ratings begged to differ with Standard & Poor’s and DBRS over their ratings of the £251m/€131m Mint hotels CMBS. Fitch, which was not mandated on the deal, wouldn’t have rated the senior classes as triple-A, it said.

Why Hypo Real Estate changed track in its sale of pbb Deutsche Pfandbriefbank is not known. Last month the German government-owned bank (and pbb’s sole shareholder) said it would list real estate lender pbb in July, after inviting bids for the bank by the end of May. According to The Wall Street Journal, bids were expected to value pbb at €1.2bn-1.8bn, with China’s Anbang Insurance Group, and Blackstone, thought to be possible bidders. HRE had always said that financial advisers Citigroup and Deutsche Bank would explore a sale or initial public offering (IPO), but it is unclear whether it chose an IPO because the bids it received were considered too low.

Our panel of industry figures discuss the widening range of deals becoming available to Europe's private equity and opportunistic buyers, as a growing field of lenders compete to back higher-risk assets. Opportunistic capital is gushing into European real estate, looking to scoop up good deals while borrowing costs stay low and markets recover. In the past 15 months, funds targeting European opportunistic and value-added real estate have raised €20.2bn of equity, while another €9.4bn has gone into European real estate debt strategies, according to PERE Research and Analytics.

Handful of loans hint at return of speculative UK development finance.

The challenge is that lender/borrower relationships tend to ebb and flow, depending on the state of the commercial real estate cycle. Now, as most lenders would agree, a healthier market with more liquidity is giving borrowers leverage (no pun intended) to make greater demands.

Lenders are adjusting terms to match longer-term work-out strategies for NPL portfolios.

Real Estate Capital market commentary • The largest deal closed was the £620m provided by Lloyds Bank, Barclays, HSBC and Qatar National Bank for Canary Wharf Group’s development of 1.6m sq ft of mainly residential space at the site formerly known as Wood Wharf. The loan, reportedly for five-and a-half years, has a margin of just over 300bps. In March, a […]

PERE Research and Analytics’ monitoring shows 69 debt funds in the market this month, seeking a total of $34.5bn.

The difference between the yields on government bonds and on property is sometimes used to determine if property looks cheap or expensive on a relative scale. Prime property in Europe’s core markets is attractive to a particular sort of investor: international, risk- averse and with high capital allocations. They now dominate many parts of the market and their main targets remain London, then Paris and then the top five German cities.