Scientists may disagree about what exactly caused the extinction of the dinosaurs, but it is safe to assume that it was some kind of global catastrophe, such as a meteorite strike followed by never-ending, freezing winter. Read enough gloomy financial headlines and you might start believing that a similar story is unfolding for the real estate fund management industry. The Blackstone Group might be talking about raising a new multi-billion “mega-fund”, but the days of fund manager behemoths stalking the global property markets with vast reserves of investor capital are well and truly over.
From the Current Issue
Europa Capital LLP, on behalf of Europa Fund II, has formed a joint venture with St Congar Properties Ltd to develop a UK office project.
Invesco Real Estate has acquired a newly built office property in Warsaw from developer Ghelamco Group. The 16,000-square-metre Crown Square was purchased for €63.7 million.
Metric Property Investments Plc, a UK-REIT focused on retail property, has acquired a standalone Bhs store and its surrounding site in the United Kingdom for £12 million (€14 million).
The outperformance of emerging economies such as China and Brazil can be seen in the latest Office Space Across the World report from Cushman & Wakefield, which looks at the rental performance of global office markets.
A subsidiary of Orion Income Return Partners, a pan-European core fund sponsored by Orion Capital Managers, has acquired a 50 percent stake in an Italian shopping centre from Foruminvest Italia.
UK Commercial Property Trust (UKCPT) has acquired a UK retail property for £49.9 million (€59 million) from a fund managed by J.P. Morgan Asset Management.
Union Investment Real Estate GmbH has agreed to buy a class A office building in Warsaw for €76 million from Austria-based S+B Gruppe AG.
There are three main concerns facing the world economy at the beginning of this new decade, namely the US budget deficit, commodity prices and (further) euro contagion. They are all interrelated and the first could end up being a bigger version of the last. The immediately pressing concern is the last, due to the very current nature of the problem and my belief that what happened in Greece and Ireland last year could be a sideshow compared to what could happen in the euro zone if the policymakers get it wrong in 2011.
Does improving sustainability improve value to investors? This seems to be the question that everyone is grappling with at the moment, but this constant quest to identify a green premium is in danger of becoming a red herring for the industry.
The need for a principles-based approach is especially acute for value-add and opportunistic fund managers. If fundamental investment principles are lacking and you merely follow the crowd, you cannot hope to generate consistently above-average returns. Opportunistic strategies may well call for a contrarian stance, requiring a greater sense of direction and a stronger sense of conviction through awareness of competitive advantage.
In a Europe beset by large budget deficits, sovereign debt issues, fiscal austerity programmes and patchy economic growth, Germany stands out as a beacon. Healthy economic growth and falling unemployment numbers not only show that Germany is once again assuming its role as Europe’s locomotive economy, but also that rising consumer demand augurs well for the country’s retail sector, both for retailers and for retail property investors. It is no coincidence that respondents to INREV’s latest investment intentions survey stated that their most-favoured investment sector this year will be German retail. The shop tills are ringing. Editor Richard Fleming spoke recently with Martin Mörl, managing director of Prelios Deutschland GmbH, based in Hamburg, about the company’s development and prospects for the retail sector in Germany.
CB Richard Ellis Investors, on behalf of the CB Richard Ellis Strategic Partners Europe Fund III, has sold a mixed-use real estate property in Brussels to SwissLife France.
Europa Capital LLP, on behalf of the Europa Emerging Europe Fund, has agreed to acquire a retail park in Plovdiv, Bulgaria, from Landmark Property Management for €20 million.