From the Current Issue
The C$129.7 billion (€98 billion) Canada Pension Plan Investment Board has entered the German real estate market for the first time with the purchase of a shopping mall, Hürth Park, as part of a joint venture with LaSalle Investment Management, for e173.3 million.
UK-REIT London & Stamford Property Plc has acquired a five-property portfolio of UK distribution assets for £123 million (€145 million).
The real estate industry as a whole has gone through tough times over the past few years due to the financial crisis. This also had a huge impact on the non-listed real estate fund industry. Many non-listed real estate funds ran into trouble, mainly due to the declining values resulting from rising yields, decreasing rents and increasing vacancy in combination with high leverage.
Mint Investments, a central European developer formerly known as CEC Capital, has launched a closed-end property fund to invest in core and core-plus commercial real estate in central Europe.
Norges Bank Investment Management (NBIM), which manages the €362 billion Norwegian Government Pension Fund – Global, has agreed to invest in The Crown Estate’s Regent Street properties in London.
Plaza Centers NV has begun development of a 22,000-square-metre shopping centre in Kragujevac, Serbia.
European real estate debt markets are beginning to loosen up, reports CB Richard Ellis in the firm’s Q3 2010 MarketView: European Capital Markets, especially in markets with stronger fundamentals.
RREEF Investment GmbH has purchased two office properties in Warsaw on behalf of the open-end real estate fund Grundbesitz Europa for €80 million.
The Solvency II directive is likely to have an impact on real estate investments, according to research conducted by Preqin. Solvency II updates the regulations affecting insurance firms in the European Union, and many of these insurance firms are significant investors in private real estate.
Standard Life Investments’ European Property Growth Fund (EPGF) has raised an additional €60 million in equity from Aviva Investors and Henderson Global Investors.
It comes as no surprise that, in times of turmoil and uncertainty, investors pull back into their safety zones. With overall investment in the EMEA region still down approximately 75 percent from its height in 2007, it’s obvious that, for some, being safe means stuffing their available capital under their mattresses and not investing at all. But for others, who still want to invest but want some security, it means focusing on the largest, most commercial property markets in the world, which tend to be the capital cities.
In 2009, the world economy went through a deep recession. Since then, we have come a long way. The main European economies have returned to growth and forecasts continue to point to a muted average GDP growth recovery of about 2.5 percent per year over the next three years across the core European countries. In this environment, property occupier markets should also be close to their trough, and we should see investors starting to deploy capital strategically in order to benefit from the new cycle that is emerging.
The Aberdeen European Shopping Property Fund, which is managed by Aberdeen Asset Management, has acquired a portfolio of High Street shops in Flensburg, Germany.
Bauwert Investment Group plans to develop a high-end residential project in Berlin’s Charlottenburg district with a total investment volume of €25 million.
Funds of funds that focus on the unlisted real estate sector have considerable variation in the fees that are charged, according to a study of fee structures and fee levels by INREV, the European Association for Investors in Non-Listed Real Estate Vehicles.
It is now widely accepted that, for investors, REITs represent a liquid, transparent and professionally managed asset class that allows for diversified exposure to real estate returns over the medium to long term and high cash dividends. But less often considered in Europe, perhaps, are the collective benefits that the growth of REITs and the listed property sector can deliver as a whole.