Heraclis Economides, managing director, corporate finance, Bridgewell Group.

An opening of the market to more market makers should boost derivatives use.

Michiel Rang, senior managing director, ING Real Estate Finance.

Departing president of the British Property Federation Nick Ritblat in conversation with Peter Lee.

CMBS has been flying in Europe, nowhere more so than in Germany, which had a dramatic year in 2006. So fast did the market move that this year it is struggling to maintain such a relentless pace. Observers, though, believe there is still plenty of potential over the long term. Phil Moore reports.

GE began acquiring real estate in earnest in the 1990s at the suggestion of its commercial lenders. It has acquired so much that it now derives 10% of its earnings from property. Jeffrey Immelt, GE’s chairman and chief executive, has an unexpected problem: if he does not want GE to be cast as a property company, he may need some nimble balance sheet management. Michael Pralle, GE Real Estate’s CEO, tells Peter Lee how it feels to own so much.

Real estate convertibles are the hot ticket

The second set of regulations for Italian Reits were announced in April to the delight of many investors. It is thought that the Italian Reit, the Società di Investimento Immobiliare Quotare (SIIQ) could be the first step towards improving transparency in the Italian markets and increasing liquidity on the Borsa Italiana.

Real estate convertibles are the hot ticket

Fidelity has appointed Alison Puhar to its real estate senior management team as director of UK real estate. Puhar joins from Cordea Savills, where she was head of UK institutional pooled funds, her last step in a 15-year career in property fund management. In her new role, Puhar will lead Fidelity’s UK real estate business and be the principal driver of new property acquisitions in the UK.

Raymond Mikulich, co-head of real estate at Lehman Brothers with Mark Walsh, is to leave at the end of the year. Mikulich and Walsh manage one of Wall Street’s best-performing real estate funds, whose investments include the Chrysler building and 1 Times Square. It is expected that Walsh will become sole head.

Morgan Stanley’s real estate investing business has grown explosively by backing its founders’ ballsy, counter-consensus calls in Germany, Japan, and hotels and developers in emerging markets. While the firm seeks to implant this can-do spirit into its other investing businesses, the real estate arm wants to continue its outperformance in tougher market conditions. Peter Lee reports.

European real estate achieved record volumes of investment in 2006. Some €242 billion flowed in, representing a 39% increase on 2005. That increase, of €68 billion, was another record. In 2007, real estate markets are expected to remain strong, and could well grow further.

For a region that has had a long-term love affair with property, Asia’s first property derivative could mean the start of a beautiful new relationship. In February, ABN Amro and Hong Kong broker, Sun Hung Kai Financial executed Asia’s maiden property derivative based on Hong Kong residential properties.

ABN Amro and Merrill Lynch have executed the property market’s first ever industrial sector swap. The two banks have taken a position of £10 million. The trade is the latest development in a continuously evolving swaps business. For ABN Amro, it completes the set of sector-specific property swaps.

Sam Zell is full of surprises. Having just realized huge returns for shareholders in his Reit by selling it in the biggest ever LBO, he says that if he had owned the whole thing he would have kept it. He argues that the take-private deal is a vindication of public indirect share ownership of real estate, not a retreat from it. He warns new leveraged buyers to be careful when the property market turns, and extols the defensive qualities of Reits. And even while their shares are being de-listed, he predicts the sector will only get bigger. Peter Lee reports on how Zell’s vision for the business has been fulfilled.

Marks & Spencer’s innovative deal to use the value of its real estate to fund its pension deficit without relinquishing control of any properties will intrigue many companies. Many are carrying more hidden value in their property than in their core business. And while they all want to cash in on that, most would rather not cede ownership of the buildings that they need to operate from and which are rising in value. Peter Lee reports

String of hires made to take on the big players.

Until recently, the commercial property market remained virtually untouched by the derivatives revolution that has taken place in other asset classes.

Liquid real estate: What's next in Sam Zell's sights