UBS Global Asset Management Global Real Estate has launched a new Investment Circle fund to focus on UK assets.
From the Current Issue
Estavis AG has acquired 10 residential buildings in Berlin with a total of 214 apartment units.
First Property is launching a new UK commercial real estate fund, Fprop Sterling Income Fund (FSIF), which is expected to have an investment strategy similar to the firm’s UK PPP fund, an ungeared UK commercial property fund.
Helical Bar has acquired a 3,250-square-metre UK office property from Joint Fixed Receivers for £14.1 million (€16.7 million).
Invesco Real Estate has agreed to acquire an office property in central Manchester on behalf of the Invesco Real Estate – UK III Fund, which invests on behalf of a group of German-speaking institutional investors.
Schroder Exempt Property Unit Trust (SEPUT), a unit trust that invests in UK property for UK tax-exempt investors, has acquired a property in London’s new technology centre, an area that is being called Silicon Roundabout.
The £2.4 billion (€2.8 billion) Teesside Pension Fund, a UK pension plan, has hired CBRE to manage the expansion of its direct property portfolio, which is currently valued at £107 million (€126 million) or approximately 4 percent of total assets.
There was a brief moment earlier last year when commercial real estate investor interest started to wander further out on the risk curve looking at properties beyond Europe’s Big Three cities of London, Paris and Frankfurt. Then, in the heat of the summer, the euro crisis boiled up and investors scurried back to the cover of the prime markets.
The world has changed. Countries have changed. The United Kingdom has changed. Investment strategies that have been appropriate for the past 50 years are almost certainly now past their “sell-by” date.
As the economic turmoil in the euro zone continues, investors across the globe are searching for safety and security. Government bonds, for those countries considered relatively safe, are trading at levels not seen in generations. Even the loss in 2011 of the coveted AAA rating does not seem to have made much of an impact on US Treasuries. The recent placing of the United Kingdom on a negative outlook, with a 30 percent chance of an actual downgrade from its AAA rating within 18 months, does not seem to have affected the country’s borrowing costs. Other safe havens include investment-grade corporate bonds, with US corporate bonds, for example, trading at levels not seen since records began in 1973.
As strengthening fundamentals in key real estate markets again attract the attention of institutional investors, real estate investment analytics are undergoing significant changes. Behind these changes lie shifting investor and regulatory expectations that stem from the financial crisis, powerful new technology capabilities and outsourcing-based business models. With their heightened sense of risk awareness, investors are looking to real estate fund managers for increasingly detailed information as they monitor investment performance more closely than ever. At the same time, regulators and policy-makers are raising the bar for reporting requirements. While technology offers a ready means to meet these demands, its cost and complexity can be daunting. As a result, investors and fund managers are turning to the expertise and scale of third-party providers for solutions.
It is a risky business these days penning articles on property prospects, especially when key milestones that could dramatically influence the outcome pepper the terrain between keyboard and print. That said, and writing in early February, things do seem to have cheered up quite a bit in comparison with the gloom of last year. While we can be under no illusion about the deleveraging challenge facing the economies of the industrialised world, the rally in financial markets at least reflects improving lead indicators in the United States, emerging markets and, to a lesser extent, even the euro zone, where liquidity, if not solvency, concerns have abated. Perhaps the markets sense that we are past the point of maximum uncertainty.
Jeremy Stewardsonis executive director of ANREV, the Asian Association for Investors in Non-Listed Real Estate Vehicles. In November 2011, ANREV held its annual conference in Singapore, where findings were presented from the organisation’s development of the first Asian property fund index. Alex Eidlin,managing director – Asia Pacific for Institutional Real Estate, Inc, spoke with Stewardson not long after the conclusion of the event to discuss ANREV’s purpose, the conference and what the new Asian Index will mean for investors.
Deka Immobilien GmbH has sold a 16,000-square-metre office property in Milan for €45.5 million.