Hansteen Holdings Plc and the Hansteen UK Industrial Property LP fund have acquired an 88-asset portfolio of predominantly industrial properties in the United Kingdom from The Spencer Group of Companies for £150 million (€182 million).
From the Current Issue
Heitman, on behalf of Heitman European Property Partners IV (HEPP IV), has acquired two class A office buildings in Budapest.
A Paris office building has been acquired by iii-Investments on behalf of a special fund held by a German pension scheme.
Orchard Street Investment Management LLP recently acquired four UK properties on behalf of its St James’s Place property funds.
Rockspring Property Investment Managers has acquired an office building in Warsaw on behalf of a separate account client.
The UK government is selling the long leasehold interest in the Admiralty Arch in London, an historic office building on Trafalgar Square.
Union Investment has been actively investing in real estate assets throughout Europe.
The real estate derivatives market is a lot like the younger brother of the most popular kid in school. Those who know him say he’s just like his big brother, merely a little younger, less mature and not as popular in his own right. You’d like to have the popular brother at your party but you know he isn’t interested, so you wonder if inviting the younger one would give the party the same cool appeal it’d have if the older one came — but you worry that the party could be ruined by an immature little brother who isn’t the real thing. And a few people have told you they’ve had a bad experience with the younger brother, or know someone who has, so maybe better to stay away.
Over the past year or so, the United Kingdom has garnered a reputation as an investment safe haven from troubled parts of the globe, especially the euro zone. Property investment is seen as a strong medium for gaining exposure to the United Kingdom’s safe-haven status and UK property, especially in London, has witnessed an increase in capital flows from foreign investors. However, this has occurred against a backdrop of particularly worrying economic fundamentals.
This is a testing time for many, not least those in the property industry. The global economy continues to experience widespread turmoil as banks reduce spending and governments tighten their belts, while doubts continue to hang over the future of the euro zone. The City of London’s office stock has experienced its fair share of pain, as capital values plummeted by 50 percent between 2007 and 2009. Nonetheless, the City’s real estate continues to attract international investors, who now account for 52 percent of office space ownership, up from just 8 percent in 1980.
In recent times, it’s become pretty difficult to have a conversation about economics without the discussion turning to the risk of inflation and the ensuing debate about the potential inflation-hedging characteristics of real estate assets. This debate always seems to end up with the inadequate conclusion: at best, the academic analysis can only demonstrate a mathematically weak hedge, even when intuition and behaviour suggests that the hedge is more powerful in practice.
The Global Financial Crisis of 2008 changed everything. Almost overnight, investors moved from a world of apparent certainty and stability to a world of great uncertainty and potential instability. Few would now argue against the conventional wisdom that uncertainty is here to stay, for the foreseeable — or unforeseeable — future.
Poor-quality empty buildings are bad enough, but environmentally poor-quality empty buildings will be unsaleable and unlettable in the future. It’s a stark statement, and I’m the first to admit that not all real estate investors, owners and occupiers have been convinced of this yet, despite the growing evidence. While there are some indications that sustainable properties are more valuable — being easier to let and selling for more — there are some for whom the jury is still out on the commercial value of sustainability.
Graeme Newell is professor of real estate investment at the University of Western Sydney in Australia. He is also currently executive director of the International Real Estate Society. Newell has strong links to the real estate industry, both in Australia and overseas. He recently prepared a second major report for APREA, the Asia Pacific Real Estate Association, titled The Benefits of an Allocation to Asian Real Estate for Institutional Investors,and presented the findings in October 2011 at VIP – Asia Investor Roundtable, a conference jointly sponsored by Institutional Real Estate, Inc and APREA. Newell spoke recently with Jennifer Molloy, editor of The Letter – Asia Pacific,to discuss the findings.
CBRE Global Investors, on behalf of its Pan-European Core Fund, has acquired 13,000 square metres of industrial and logistics space near Frankfurt airport.
Deka Immobilien GmbH has acquired a specialist retail centre in Rotterdam, which will be included in the WestInvest Target-Select Shopping special property fund.