European property funds have taken a battering over the past 18 months and investors have sought to cash out. A temporary freezing of redemptions has given managers breathing space and they’re using the time to convince investors to stick with them. Rachel Wolcott reports.

The vast market in distressed commercial real estate debt expected at the end of 2008 has yet to materialize not least because banks have been unwilling to offload their holdings. Potential investors are still in line for bargains. Phil Moore reports.

Substantial amounts of equity are piling up for commercial property. But the price needs to be right and the difficulty of accessing leverage is a serious impediment to mobilizing funds. Phil Moore reports.

It’s back to basics for US and UK mortgage financing, with more transparency, a better alignment of risks through a mortgage’s life cycle, and attempts to revive sound securitization. Rachel Wolcott reports.

Al Madina A’Zarqa, one of Oman’s largest developments, is part of the Sultanate’s plans to diversify its oil-centric economy. This project has already fallen behind schedule. Richard Russell, its newly appointed chief executive, speaks to Chris Wright about getting back on track.

As the UK market limps to the end of 2008, property valuations have once again come in for criticism. Opinion differs on whether values dropped too far, too fast or still have some way to go. Has valuers’ reluctance to face up to reality prevented the market from bottoming out and delayed a recovery? Rachel Wolcott reports.

Over the past five years the world’s biggest investment management firms have increased allocations to property, propelling the asset class into the mainstream. Now the sector has stumbled, will they desert? Rachel Wolcott speaks to the largest asset managers active in real estate.

So far, the country’s economy has not been hit by the global downturn but analysts have been predicting trouble for some time. The country’s real estate sector will probably not escape unscathed. Philip Moore reports.

While much European commercial real estate is struggling, the logistics and warehousing sector has been comparatively buoyant. But in uncertain times, is the sector’s relative strength sustainable? Laurence Neville reports.

Two of the world’s leading logistics developers have reached a turning point in their fortunes. ProLogis is restructuring its business in the face of the global downturn, while Gazeley’s new Middle Eastern owners could catapult the company into the big league. Stuart Watson reports.

Investors are busy in the country’s many retail, residential and hotel development opportunities, but in one source of funding – nearby Greece – local real estate investment companies are keeping money closer to home. Philip Moore reports.

Once a property paragon, Singapore’s CapitaLand has been confronted with fundamental questions about the viability of its business model. Will the complex structure that has served it so well ultimately diminish the company’s standing in Asian property? Chris Wright reports.

Firms with large real estate portfolios are turning to specialists to manage their holdings and realize cost savings. Outsourcing is gaining in popularity as the global economy worsens – a boost for those companies up to the task of handling clients’ complex portfolios. Laurence Neville reports.

UK property: Valuers come under fire

Real estate investment trusts’ performance has seen better days. Julian Marshall considers which sectors have problems or potential.

Logistics: Everything in its proper place

Alison Carnwath is the new chairman of Land Securities, replacing Paul Myners who has left to become minister for the City after two years with the firm.

The impact of the credit crunch has been far-reaching, with global property markets left severely damaged. What started off as a largely isolated problem of the US sub-prime mortgage market and some structured credit intensified and spread across the globe over the course of 2008. The repercussions will continue to impede business and thwart growth in property throughout 2009.

The decline in valuations in developed markets is causing some investors to take another look at opportunities in the US and UK but not necessarily at the expense of emerging market allocations.

When setting out to raise capital during one of the worst financial crises of the past 100 years, it helps to have a strong bank as a big shareholder. That’s what Klepierre, a French retail property specialist, found when it raised €356.2 million through a rights issue completed at the end of November.

James Buckley as been appointed head of Asia property multi-manager at Schroders, a new position in the firm.

International derivatives exchange Eurex will launch property futures in the first quarter, a move that could improve liquidity. The first contracts will capture the annual returns on the IPD UK All Properties Total Return index. With the introduction of IPD Index futures, Eurex aims to work with present market participants to provide the benefits of an exchange-traded contract and to attract new market participants and liquidity.

The onset of winter has brought cold comfort for the world’s two largest commercial property services companies. Shares in CB Richard Ellis (CBRE) and Jones Lang LaSalle (JLL) have taken a beating because of weak third-quarter results and fears that the real estate market might deteriorate further.

The future shape of the UK mortgage finance market remains uncertain despite the publication on November 25 of former HBOS chief executive James Crosby’s report, which recommends the introduction of a £100 billion government guarantee for mortgage-backed bonds to be issued in 2009 and 2010.

Guy Powdrill has joined CB Richard Ellis from Goldman Sachs.

Chinese real estate: the worst-performing sector in the worst-performing stock market in the worst-performing continent in the world this year. It was little surprise that a large part of the stimulus package China launched in October was designed to put local property back on an even keel.

It has been an annus horribilis for most property professionals. However, closer examination reveals the odd patch of clear sky in an otherwise gloomy outlook. While most traditional property fund managers have been struggling to cope with collapsing asset prices and a flood of investor redemptions, the reverse is true for property hedge funds.

Jon Lekander is the new head of the combined Indirect Investment Management team at Aberdeen Property Investors. This follows Aberdeen’s acquisitions of DEGI and Goodman Property Investors. Lekander was previously chief investment officer of Aberdeen Property Investors. Andrew Smith, former head of strategy at GPI, becomes chief investment officer. Rickard Backlund continues to lead the business.

Peter Hansell has joined Cairn Capital from Lehman Brothers’ global real estate group.

A year ago Gulf economies were touted as being so uncorrelated with those of the rest of the world that they had little to fear from the credit crunch. Now even Dubai – which for so long seemed to operate under different economic forces from the rest of the planet – is facing a property crash.

Land Securities has abandoned plans for a demerger and slashed the value of its portfolio by £1.7 billion. The UK’s largest property company had been planning a three-way split. However, announcing the company’s half-year results on 14 November, chief executive Francis Salway revealed that while the sale of its Trillium outsourcing division would go ahead, further demerger plans had been shelved.

International derivatives exchange Eurex will launch property futures in the first quarter, a move that could improve liquidity.

The impact of the credit crunch has been far-reaching, with global property markets left severely damaged. What started off as a largely isolated problem of the US sub-prime mortgage market and some structured credit intensified and spread across the globe over the course of 2008. The repercussions will continue to impede business and thwart growth in property throughout 2009.

“This is the least costly path,” US Treasury secretary Hank Paulson told Sunday morning talk-show viewers when he was out selling his $700 billion bail-out package at the end of September. At the time, details of his plans for the US Treasury to buy impaired residential and commercial mortgage assets from banks were scant and concerns about the so-called Troubled Asset Relief Program’s (Tarp) wider impact were great.

Axa Reim has an impressive track record of mining gems from unpropitious soil and has identified real estate sectors it feels investors should be entering now with an eye to a market upturn. Duncan Wood reports.

GMAC Financial Services and its subsidiary Residential Capital (ResCap) announced the elimination of 5,000 jobs in the US as part of its survival plan as the downturn in the credit and mortgage markets persists. The move is part of ResCap’s plan to cut back its operation and adjust its lending to refocus its resources on strategic lending and servicing.

TriAlpha has brought out a property fund of hedge funds called the TriAlpha Global Property Strategy fund. It seeks to invest in hedge fund managers specializing in the global property sector. Its portfolio includes funds from Credit Suisse, Thames River and New Star.

The government bailout of mortgage agencies Fannie Mae and Freddie Mac has made the case for covered bonds in the US less compelling. After the collapse of the government sponsored entities (GSE), the need for alternative funding methods should have been clear. Instead, with the debt of both entities tightening post-bail-out and the parallel tightening in Federal Home Loan Bank’s (FHLB) debt, covered bond issuance looks comparatively expensive.

Australia has come out of the credit crunch reasonably well: its biggest banks show no danger of collapse, it has been insulated by its heavy concentration of big resource stocks, and its housing finance industry has been built on more stable foundations than that in the US. One area that has taken a hit, though, is the listed real estate market.

Michael Neal has joined Henderson Global Investors as director of property for its £1.2 billion UK Retail Warehouse Fund. He comes from Goodman Property Investors, where he was responsible for the fund management of Goodman’s two retail park funds: the £550 million Goodman UK Retail Parks Trust and the Two Rivers Trust valued at over £200 million. Neal has spent over 14 years within the retail property industry, primarily working in the retail warehouse sector. He has also held positions at Hammerson, Sainsbury’s and Homebase.

Conditions are turning tough in Japanese listed real estate. The Topix Real Estate index dropped 23% from mid-May (its peak so far this year) to the end of August, and the TSE Reit index is down 32.2% year to date.

HDG Mansur has added two funds to its roster. The HDGM International Property Fund is modelled after HDG Mansur’s HSBC Amanah Global Properties Income Fund launched in 2002. This closed-end income fund will invest in a global portfolio of properties initially targeted in markets throughout the US and Europe. Denominated in US dollars, the fund’s core investment strategy will be to invest in single- and multi-tenant properties leased to major corporations with stable or improving credit. The fund will be targeted to high-net-worth individuals and institutions and will aim to raise in excess of $200 million.

Concerns have been mounting in recent months that the liquidity schemes offered by the European Central Bank and the Bank of England are being misused by borrowers and are thwarting the recovery of market-based funding, including the MBS market. Announcements from both central banks in September addressed those concerns but their respective timing – one coming before Lehman Brothers’ collapse and AIG’s rescue and the other afterwards – has resulted in a divergence of policy.

KBC Asset Management UK will launch a Japan fund to take advantage of perceived future growth prospects. The seven-year closed-ended fund will invest principally in office, retail and industrial market sectors in Tokyo, Fukuoka, Osaka, and other big Japanese cities.

Property companies remain wary of derivatives

The pall that has settled in over most of Europe has weakened the growth outlook for the Nordic region, home to NCC Property Development. The Stockholm-based company is performing well and Peter Wågström, its president, says there is no lack of opportunities. Laurence Neville reports.

Royal Bank of Scotland’s Vesteda Residential Funding II commercial mortgage-backed securitization has shown that there is appetite for high-quality paper from well-known issuers. The €150 million five-year deal, executed in July, is the only externally placed CMBS in Europe this year, according to RBS. The single tranche of AAA-rated bonds was priced at 100 basis points over three-month Euribor.

The future of US mortgage agencies Fannie Mae and Freddie Mac is in the hands of politicians. Hours after the $200 billion bailout was announced in early September, Senate Democrats were calling for hearings to analyse the causes of the government-sponsored entities’ (GSE) demise. How the agencies look after the credit crunch abates – if they survive at all – will largely depend on whether the Republicans or Democrats are in charge after the November election.

Goldman Sachs’ strong client relationships and creative flare have enabled its real estate investment banking business to strengthen its franchise while competitors struggle to stay afloat. Rachel Wolcott reports.

The UK non-conforming mortgage market – colloquially known as sub-prime – was the only fully fledged non-prime mortgage market in Europe. It was one of the first sectors to suffer contagion from the US sub-prime crisis. Indeed, spreads on non-conforming RMBS began to widen in March 2007 – well before the generally acknowledged beginning of the credit crisis in August of that year. What has now become of that market? Can it ever be revived?

Bahrain-based Ahli United Bank’s real estate interests are not confined to the Gulf region. It is a growing powerhouse in property investment in Europe and an established force in Islamic mortgages in the UK. Elliot Wilson reports.

The firm’s long-established research operation, with a worldwide network of analysts, enables it to offer client-driven information on the whole range of real estate sectors. Laurence Neville reports.

It’s been all change in the real estate market since the last Euromoney/Liquid Real Estate poll was published. The cast of characters is largely the same, despite market turmoil. CB Richard Ellis has regained the top spot in global advisory and consultancy from Jones Lang LaSalle. The Los Angeles-based firm dominated in the global categories, such as valuation, letting, corporate real estate services, topping six. It also made a strong showing in western Europe and Asia.

The FTSE Group, in conjunction with the European Public Real Estate Association (Epra) and the National Association of Real Estate Investment Trusts (Nareit), is readying a new family of real estate indices for emerging markets. The indices, made up of listed property stocks, will be launched in December.

Indian property company DLF is expanding from a base of strength in a Delhi suburb to other booming cities. Returns will contract as interest rates and land prices rise but its high-quality product should keep it at the top of the heap. Elliot Wilson reports.

Immoeast’s recent purchase of Constantia Privatbank’s real estate division has set the stage for the next act in the Austrian investment manager’s growth story. Rachel Wolcott reports.

The firm has consistently proven itself in Chinese real estate in recent years, whether underwriting IPOs, advising on M&A, or making acquisitions in its own right. Chris Wright reports.

ING Real Estate has appointed Robert Houston as chairman and chief executive of its global investment management business. Houston has replaced David Blight who has resigned to return to Australia. Houston is a founder of ING Real Estate’s investment management business in the UK.

Property derivative volumes have rebounded, surpassing pre-credit crunch levels. This surge is driven mainly by hedge funds and institutional investors. However, the group of end-users that could benefit the most from these instruments has largely stayed out of the market. Have direct property owners missed a trick? Rachel Wolcott reports.

GE Real Estate has appointed Mark Hutchinson to be president of the newly created GE Real Estate International, covering operations in Europe and Asia.  

Sizing up sovereign investment

by Kenny Ho, head of China research, Jones Lang LaSalle.

A shortage of assets at home sent Australian listed property trusts overseas to seek opportunities. Unfortunately, the global credit crunch has left those invested abroad badly exposed and looking to regroup. Some are making a better fist of this than others. Chris Wright reports.

Any time Norway’s Government Pension Fund makes a move in the markets it is big news. Rachel Wolcott speaks to Martin Skancke, head of asset management at the Norwegian finance ministry, about the fund’s plans to move into real estate investing.

US lawmakers are trying to ease the pain of homeowners caught up in the sub-prime debacle with tighter regulation and a push towards greater use of long-term fixed-rate mortgages over unpredictable adjustable-rate deals. Will a new era of thrift replace the sub-prime excesses? Perhaps not if the US feels the playing field is not level. Julian Marshall reports.

By Michel Heller, CB Richard Ellis/GFI.

by Timo Tschammler, managing director of the international investment team, and Nicholas Spiro, director in the central and east European investment team, at DTZ.

A new kind of crunch

GE Real Estate is at the forefront of a growing trend to acquire real estate loans at a discount. Players such as GE with the ability to put cash to work are able to take advantage of opportunities coming on the market from lenders unable to hold on to loans that have dropped in value or have breached loan-to-value covenants. While GE has completed three large deals in the past six months, others are attracted to the value these assets offer. "We’re seeing banks offloading loans from their balance sheets," says Ian Gleeson, international multi-manager at Morley Fund Management, during a session at GRI’s London event in May. "We are looking at buying private loans at a discount. There are some bargains out there."

A surge in sovereign wealth funds’ real estate activities could bring an estimated $100 billion in investments to the sector annually. However, although sovereign funds are cash rich, they won’t be throwing their money around but rather hunting for bargains. Rachel Wolcott reports.

Despite commercial property values having plummeted some 12% since the start of the credit crunch, London’s lure is still strong for some investors, particularly Middle Eastern sovereign wealth funds.

Borrowers and mortgage lenders are feeling the pinch of an unprecedented credit crunch. Is there any way back to the buoyant days when securitization drove the market? Duncan Wood reports.

Japan’s real estate regulators have given local real estate investment trusts the green light to invest overseas. But are J-Reits prepared for the challenge? Elliot Wilson reports.

Earlier this year, the real estate investment company made its debut on the global stage with its acquisition of a trophy London property. According to Ghanim bin Saad al-Saad, chief executive, that is only the beginning of its ambitions. Rachel Wolcott reports.

Real estate special focus

Real estate special focus

Real estate special focus

Real estate special focus

Prupim, the real estate investment arm of Prudential, has revealed some initial results of its experimental Improver portfolio.

As the global real estate markets feel the pinch of the credit crunch Euromoney/Liquid real estate reports on the most important market developments.

Real estate special focus

As the market for big initial public offerings dries up, Indian real estate increasingly is becoming the preserve of the private equity industry.

Embattled Austrian property company Meinl European Land’s restructuring plans could bring an unwelcome dilutive effect on its shares.

Real estate special focus

First there was MySpace, then Facebook. Now EuroHypo has rolled out a social networking site for real estate professionals.

With headlines about real estate ever more gloomy, it might be reassuring for market participants to observe that Europe’s largest private bank, Sal Oppenheim, is positioning itself for a recovery.

Lehman Brothers and Goldman Sachs have executed what is thought to be the first long-dated Asian property derivative option.

With UK lenders RBS, HBOS and Bradford & Bingley in the market with rights issues totalling more than £16 billion ($31.5 billion) as Liquid Real Estate went to press, and intense speculation that Barclays Bank and others might soon follow suit in order to shore up their capital adequacy, recapitalization looks set to become the financial trend of the season for UK mortgage lending banks.

‘Exaggerated view’ in property index provides buying opportunity.

Mexico’s Hipotecaria Vertice, a mid-sized real estate lender, is set to offer green mortgages. The new product, aimed at lower-income borrowers, offers homebuyers incentives to opt for properties with eco-friendly features in return for interest-rate savings.

Changes afoot at Grosvenor...

Financing the cities of the future

Bank of Ireland has established a property finance team in Frankfurt. The team is led by Claus Proschka, formerly of Hypo Real Estate and Allgemeine Hypothekenbank, and will have a pan-European remit. The move underlines BoI’s international real estate ambitions, after it recently established a property finance business in the US.

As the Northern Rock saga rolls on, UK mortgage lenders that had frequented the now-shuttered residential mortgage-backed securities market are seeking to fortify funding lines. Alliance & Leicester, one of the country’s largest lenders, with a £41 billion ($82 billion) prime mortgage portfolio, is one operation that has been identified as perhaps having been too dependent on the RMBS market.

Pension funds line up for inflation-linked lease exposure

A flood of redemptions from real estate funds has rocked the sector in the UK, forcing leading investment houses to stop customers taking their money out. The industry hopes the worst is over, but market opinion is not unanimous that the future looks brighter. Julian Marshall reports.

Morgan Stanley will scale back its residential mortgage operations in the US in response to the continued deterioration of the mortgage markets. The firm will discontinue its UK-based residential mortgage lending business, Advantage Home Loans. About 1,000 employees in the US and the UK will be affected by this restructuring. These cutbacks were announced in mid-February.

The reputation of commercial real estate stocks among retail investors is sullied. With the possible exception of the internet and technology sector at the beginning of the decade, never has an industry been held in such low esteem by the investing public. But does the old adage about the retail money and smart institutional money always flowing in opposite directions hold true: is there value in European property stocks?

Real estate’s role in corporations’ approach to improving sustainability and showing sensitivity to the environment has never been clearer. A recent survey conducted by the Economist Intelligence Unit of 1,254 senior business executives, including more than 300 chief executives, revealed the role real estate and facility strategies play in corporate sustainability efforts. Nearly half of all respondents named as their leading sustainability priority a goal that is addressed mainly through real estate-related strategies.

US property stock research firm Green Street Advisors is poised to expand into Europe. Its current chief executive John Lutzius is likely to move to London in April. Lutzius will relinquish most of his US managerial duties to lead the firm’s expansion.

Deutsche Bank has cut back staff numbers in its European commercial real estate business, letting go at least 16, including some senior management. Paolo Massi, managing director of commercial real estate for Europe, the Middle East and Africa, was let go at the end of January, as was Morgan Garfield, managing director and head of UK conduit lending. John Nacos, head of commercial real estate, Europe, remains at the bank.

Morgan Stanley slashes US residential business...

Katerina Kalfamanoli joins Colliers as director of investments and commercial leasing. She leaves Cushman & Wakefield, where she was senior surveyor, capital markets. Prior to that she was a managing director and head of agency at DTZ Greece. Spyros Raptis also joins as senior advisor and valuation professional. He previously worked at Axies Lambert Smith Hampton as senior valuer and at Savills Hellas as valuation analyst.

It took six weeks but 2008 finally got its first CMBS deal in mid-February, from Morgan Stanley and Bear Stearns, who sold a $1.2 billion transaction.

Testing the limits of green development

India’s stock markets might be going to rack and ruin but leading domestic real estate firms are queuing up to sell shares in real estate investment trusts (Reits) in Singapore.

For the past five years or so, commentators have frowned at Australia’s listed property trust sector, which has consistently outperformed every other major asset class in the country, and argued that this success couldn’t last. And for the past five years they’ve been wrong.

Having bailed out the US investment banks in their hour of need, sovereign wealth funds are also turning their vast pools of cash towards real estate. Industry experts predict a doubling of investments by these funds to $10 billion within five years.

It has been a whirlwind few years for Limitless, a division of the sprawling Dubai World group. Founded in July 2005 with the express aim of designing and developing the best environmentally sustainable buildings and cities, the agency has already scored some big successes. Elliot Wilson reports.

The Asian real estate investment trust (Reit) market has weathered the sub-prime storm reasonably well, but a new deal suggests that the grim credit markets are going to lead to significantly different structures this year. Specifically, much simpler ones.

For those dependent on the European commercial mortgage-backed securities market for funding, the credit crunch has prompted a round of soul-searching. The market may be closed for the next six months, forcing some to look elsewhere. What will it take to prompt a revival? Laurence Neville reports.

Chris Jolly, formerly co-head of corporate finance at Jones Lang LaSalle has joined Merrill Lynch as head of its European real estate business.

Axa Real Estate Investment Managers (Axa Reim) has appointed Alan Patterson to the new role of head of European research and strategy. Based in London, Patterson reports to Kiran Patel, global head of strategy and business development, Axa Reim. In this new role, Patterson will manage the expanding European research and strategy team based in London, Paris, Cologne and Madrid. Patterson joins from UBS Global Asset Management, where he was director of pooled property funds and research. Previously, he was property sector analyst at HSBC Investment Bank.

Against a backdrop of the most savage falls in UK commercial real estate values ever recorded – IPD’s UK index fell 3.6% in November and 3.7% in December – the real estate derivatives market has not been found wanting.

The global real estate industry is on the brink of a green revolution. Will the cities of the future be built to be greener, creating a parallel universe of green financing instruments?

Green leases are slowly finding favour among tenants and landlords in the UK. With increasing energy costs and new legislation encouraging sustainable building practices, some market participants believe these contracts will become the norm. Rachel Wolcott reports.

Financing the cities of the future

Banco Santander has completed the sale of its Spanish corporate property portfolio through a series of sale-and-leaseback transactions. The deals, executed over seven months, brought more than €4.3 billion into the bank’s coffers, €1.681 billion of which was a capital gain. The sale of the bank’s Madrid headquarters, Boadilla del Monte, to Propinvest was worth €1.9 billion on its own, making it one of the largest deals to be done in Spain.

European CMBS forced to the brink

The number of so-called distressed and opportunistic funds has grown quickly on the back of the downturn in the property markets. Some believe these investors might be jumping the gun, as truly distressed properties remain few and far between. Market observers say the amount of cash being raised could far exceed the number of opportunities.

The Kingdom of Bahrain’s Real Estate Finance company (Reef) has secured $150 million in warehouse financing to bolster its local mortgage lending activities. The facility, provided by Calyon Crédit Agricole CIB, enables Reef to diversify its funding sources. Ultimately, the mortgage portfolio could be used to back a residential mortgage-backed securitization in either an Islamic or standard format.

A shortage of inflation-linked risk has pension funds turning to real estate for opportunities. With demand rife, developers can negotiate favourable terms on inflation swaps. Duncan Wood reports.

Leading UK pub and restaurant group Mitchells & Butlers has been forced to shelve a £4.5 billion real estate joint venture and has been plunged into turmoil following a disastrous series of hedges that cost £274 million. As Liquid Real Estate went to press, the instability had prompted a bidding war for the company.

Financing the cities of the future

The Greek property sector is growing thanks to a surge in retail development. Concurrent capital markets’ liberalisation has allowed investors and developers greater access to the equity and debt markets. Phil Moore reports.

Financing the cities of the future

Financing the cities of the future

Cash-rich Gulf-based funds are ploughing billions of dollars into real estate in the fast-growing economies of India and China, lured by eager regional and municipal governments and the promise of double-digit annual returns. The economies of China and India are growing at an annual rate of about 12%. US investment bank Merrill Lynch expects India’s property sector to expand to $90 billion by 2015 from $15 billion in 2005.

Prupim, the UK-based real estate investment arm of M&G, has taken steps to further its sustainability efforts. The manager has teamed up with Royal & SunAlliance to provide Energy Performance Certificates (EPCs) for Prupim’s entire property portfolio, thought to be an industry first.

After almost a five-month hiatus the European commercial mortgage-backed securities market is showing signs of life, with a handful of deals being marketed quietly. However, market participants are by no means confident that these deals will herald the market’s resurrection. Dealers have dramatically revised their expectations for 2007 volumes. Instead of the projected €100 million-worth of CMBS, a mere €50 million is hoped for by year-end.

The European residential mortgage-backed securitization market has all but disappeared, and no one knows what the landscape will look like when investors and issuers return in January.

The advent of trades on the Italian and Swiss Investment Property Databank indices has furthered the development of the property derivatives market. This opening up of the market into new jurisdictions is expected to continue, with market experts pointing to the Netherlands, Sweden, Denmark, Spain and Ireland as likely candidates for the next IPD-based trades.

Leading Gulf-based real estate companies look set to benefit from the surging global demand for regional property-related securities, with many set to launch local and overseas initial public offerings over the coming months.

Big changes are coming to the UK real estate market as the government seeks to pass the planning reform bill which is aimed, in part, at streamlining and improving the planning process. If passed, the bill will introduce a single consents regime for big infrastructure projects, create an independent infrastructure planning commission and institute further initiatives to improve the town and country planning system. Now in its first reading in the House of Commons, the proposed legislation could bring the most significant changes to planning in the UK since the end of the Second World War.

The doom and gloom in the US is in stark contrast to the joy and boom in Russia, where there’s an overwhelmingly bullish tone across all segments of the real estate market. Guy Norton looks at the formula for success employed by two leading Russian developers.

A Chinese real estate investment trust market appears to have moved a step closer following comments by the general manager of the Shanghai Stock Exchange.

The Chinese property market is booming, even when the pace of land release is restricted. But concerns about policy and that some developers’ stocks might be overvalued have injected some caution into the market. Chris Wright reports.

London-based Rutley Capital Management, the real estate private equity arm of Knight Frank, is preparing a fund focused on east Africa. The Rutley East Africa fund will aim to raise $200 million to invest in city-centre properties in the capital cities of Kenya, Uganda, Tanzania, Malawi, Democratic Republic of the Congo, Zambia, Botswana, Namibia, Mauritius and South Africa. The fund will formally launch by the end of this year.

Andrea Carpenter, Inrev

The conversion of Hamburg-based real estate company alstria into a Reit at the beginning of October and its inclusion in a new Deutsche Börse German Reit segment in November heralded a new dawn for the German property market. But despite the big long-term potential of Germany’s position as Europe’s largest property market, observers aren’t expecting a substantial increase in the near future in the number of German Reits – known as G-Reits.

In a recent interview, Merrill Lynch’s newly anointed chief executive, John Thain, revealed that the financial institution’s risk management system had ceased to function properly during the sub-prime crisis. That comment raised some eyebrows and provoked speculation about the possibility that Merrill’s particular black box might have been switched off.

Land Securities’ announcement that it will split into three sector-focused specialist companies is unlikely to signal the demise of generalist UK Reits. Other large Reits, such as Hammerson and British Land, have indicated that they will not pursue the specialist route. However, now that their share prices have come under significant pressure, many UK Reits will have to reconsider their structures and strategies, making Land Securities an interesting market test case.

Fitch Ratings has rethought its methodology for rating and reviewing real estate asset managers. The original real estate asset manager methodology was based closely on Fitch’s general asset manager methodology, and this was also changed, in May 2007.

Morley Fund Management is reorganizing its UK property team and has promoted Philip Nell as new lead manager for two leading retail funds.

Guy Ratcliffe, executive director, Morgan Stanley

Market veteran Christopher Casey has joined AIG Global Real Estate in New York as a managing partner and product specialist in the capital markets group.

Full contents

Jon Lekander is the new chief investment officer at Aberdeen Property Investors.

Shaun Stevens, senior product specialist, Fortis Investments

Prudential Property Investment Management has hired two directors for its UK asset management team.

Martin McGuire is joining Axa Real Estate Investment Managers as European fund manager in London.

Wachovia Securities has appointed four managing directors to run its new integrated real estate platform.

Merrill Lynch has invested $377 million in the Indian real estate market, through the purchase of a 49% share of a portfolio of residential properties. The portfolio is managed by DLF, one of India’s largest developers, and comprises seven mid-income residential projects in Chennai, Bangalore, Kochi and Indore. The deal brings Merrill Lynch’s total investment in the market to $550 million.

India’s real estate sector is simultaneously huge and underdeveloped. Much-needed capital is flooding in from domestic and foreign sources, yet many building plans are still prospective rather than under way while sector-focused financial instruments, including Reits, are absent or at a rudimentary stage of development. Elliot Wilson reports.

German residential properties have fallen out of favour with some of the big-name US private equity investors. Is their withdrawal a signal of market decline or is there still value to be had? Duncan Wood reports.

Vladimir Pantyushin, chief economist of Renaissance Capital, is joining Jones Lang LaSalle, Russia & CIS, as national director, head of economic and strategic research group.

The Gherkin (30 St Mary Axe), a landmark building in the City of London, has been sold to German high-net-worth and private clients through IVG Immobilien’s closed-end fund, EuroSelect 14.

Meinl European Land (MEL), Austria’s second-largest real estate company by market capitalization, is under investigation by its local regulator, the Financial Market Authority (FMA).

Peter Sceats, director, TFS Property.

JPMorgan is building its French and Italian real estate structured finance business with a string of new hires, all taken from ABN Amro.

Roger Blundell is the new finance director at Grosvenor Britain & Ireland, the UK arm of the international property group, which has £11 billion ($22.7 billion) of assets under management.

Local banks have finally started to take the mortgage market seriously. After decades of high interest rates that made residential lending impossible, they are slowly branching out into what could be an enormous market. Chloe Hayward reports on the challenges.

Europe’s retailers are between a rock and a hard place. Activist investors are pushing them to separate their vast property assets and realize value in the short term when the evidence suggests companies that continue to hold the freehold to their properties get higher returns in the long term. But UK supermarket group J Sainsbury could have found a solution for retailers in a joint venture with UK real estate company Land Securities – Harvest Partnership – announced in November.

Monte Koch is the new global head of real estate investment banking at Deutsche Bank. The former mergers and acquisitions head replaces Devin Murphy, who is leaving to pursue other interests, although he will continue to act as an adviser to the real estate business.

AIG Global Real Estate is one of the largest and most prolific investors in emerging markets. Now that Brazil, Russia, India and China are the focus of almost every big investor and developer, the US-based firm is far ahead of the pack. The group’s president, Kevin Fitzpatrick, speaks to Rachel Wolcott about AIG’s history in emerging markets and why enthusiasm for these markets might be overdone.

Aberdeen Property Investors has teamed up with Swedish insurer Folksam to create a pooled fund structure open only to companies within the Folksam Group. Aberdeen plans to roll out this new type of instrument for indirect property investments to other large multinational companies with separate pension plans.

Jones Lang LaSalle, this year's winner of the Euromoney/Liquid real estate poll, is expanding with the global real estate markets. CEO Colin Dyer explains why a local feeling is important in a global market, and why sustainability makes business sense.

Jones Lang LaSalle thrives on size & sustainability

The emerging global asset class • Anatomy of a deal • Maturity brings sophistication • Start at the exit • Credit rules • New markets, proven approaches • Five years leading from the front

Blackstone’s landmark acquisition of Hilton Hotel Corporation in July could spark off a wave of deals in the hotel sector. The $26 billion deal makes Blackstone the number one hotel group globally and has alerted other private equity houses and real estate investors to the hotel market’s potential.

Lehman Brothers Asset Management has hired two portfolio managers from Rotterdam-based Robeco as part of the global expansion of its real estate business.

As volatility spreads across the debt markets, the CMBS market is taking stock. Property derivatives are likely to increase volatility in the market and contribute to spread widening just as refinancing activity – a significant driver of CMBS volumes – slows. But as competition between commercial lenders and conduit lenders expands across Europe, the market is looking to new jurisdictions to maintain growth.