Universities Superannuation Scheme (USS) has acquired the UK headquarters of Siemens, located in Frimley, for £42.35 million (€47.5 million), for a net initial yield of 7.0 percent.
From the Current Issue
At the risk of oversimplification, southern and northern Europe have taken variant fiscal and economic paths in recent times. Laid back southern Europe is plagued by sluggish economies, some still contracting, and unsustainable debt-to-GDP ratios. The more austere north is (mostly) perceived as a safe haven of sorts, having its economic house in order. We should not be surprised, therefore, that investors gazing toward the north-west corner of Europe above the 54th parallel see a sunny outlook for real estate on the Scandinavian Peninsula.
The commercial real estate recovery that many investors hoped would take root has now started in earnest. Prime assets in core markets have led the way with strengthening occupancies, diminishing concessions and rising rents. The signs pointing to this recovery have not gone unnoticed, as evidenced by last year’s re-emergence of equity and debt capital and the pronounced decline in initial yields.
In a recent article in the Financial Times*, John Plender addresses two developments that are very relevant, and troubling, for the real estate investment industry. Firstly, financial crises have become increasingly common. Secondly, real estate is generally playing an increased role in crises over time. If real estate is recognised as a volatile asset class and increasingly is viewed as the Achilles’ heel of the financial system, a number of detrimental effects could follow, from lower investor appetite to tougher regulation.
The chaos of the financial markets’ implosion and the ensuing Great Recession has subsided, although significant uncertainty remains. Now that many economies around the world are showing slow but sustainable growth and liquidity has returned to the commercial property markets, investment managers around the globe are moving to shore up their portfolios and also take advantage of favourable buying opportunities and low interest rates.
Arminius Funds Management, on behalf of two investment vehicles, has acquired the controlling majority stake in special purpose vehicles holding 28 German properties from Eurocastle Investment Ltd, which is an investment vehicle managed by an affiliate of US-based Fortress Investment Group.
Atrium European Real Estate, a real estate company focused on central and eastern Europe, has acquired a shopping centre in Poland for €169.5 million, plus an additional €1.5 million on recovery by Atrium of a value-added tax refund.
Two shopping malls in the Czech Republic under the Olympia Shopping Centre name have been sold by the C1 Fund to a Czech investor for €96 million.
Germany-based Estavis has acquired a former brewery in Berlin with plans to redevelop the property for residential and commercial space for a total investment volume of approximately €43 million.
Commercial property in Europe returned 8 percent in 2010, measured in local currency, according to the IPD Pan-European Annual Index. The performance was substantially better than that of 2009, when the index returned 1.4 percent.
Henderson Global Investors has agreed to buy a group of properties in London known as the Leadenhall Triangle at an estimated price of around £190 million (€213 million).
Hines Global REIT, a public unlisted REIT sponsored by Houston-based Hines, has acquired an approximately 70,000-square-metre warehouse complex near Moscow’s Sheremetyevo Airport.
Orchard Street Investment Management, on behalf of a pension scheme client, has acquired a 48,500-square-metre portfolio of industrial properties in south-east England for £50.4 million (€56.6 million).
UK Commercial Property Trust (UKCPT) has acquired a 15,800-square-metre leisure-focused retail property in a suburb of London.