Monday, November 10, 2014

London

















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Curated by Andrea Eng |  e: HelloTaiTai@gmail.com


'Every transaction for property worth +£100m in central London since September involved foreign buyers'
https://www.ft.com/con…/84281482-05ab-11e7-ace0-1ce02ef0def9

Opportunity | Leadenhall



Greater London is the fifth largest metropolitan economy in the world.

 London accounts for one quarter of UK's population and ~ one-third of its GDP.





Reversing the Trend


London Overview

Canary Wharf

Canary Wharf Group controls development land for a further 9.8 million square feet (910,000 square meters) of property in and around the estate, including 3.3 million square feet of higher-value homes, Songbird said Nov. 28. 
More than 100,000 people work in the 35 office buildings and four shopping malls on the Canary Wharf estate, which is home to companies ranging from JPMorgan Chase & Co. to Gap Inc. The district is best known for the 50-story tower at One Canada Square, the U.K.’s tallest building until the Shard was completed in 2010.

Henry Cheng in London

Anbang bidding for Heron Tower for $1.16 bln

Shimao purchase of GS's Christchurch Court at Paternoster Square for £270m

The 303,000 sq ft office building at 15 Newgate Street, EC1 on Paternoster Square is let in its entirety to Goldman Sachs until 2025, subject to a tenant break option in 2020.      >> MORE

Taiwan-based Cathay Life purchase of Walbrook Building

2015 May 13   The prime Walbrook Building in City of London was acquired by Cathay Life for £ 575 million.

Taiwan's Fubon Life purchases Madame Tussaud

2015 May 26    Fubon Life is paying £332.5m for London tourist attraction Madame Tussauds.

The board of Secure Income REIT said it has exchanged contracts with the Taiwanese insurer to sell the asset in the third quarter of this year.
Secure Income said Fubon Life, which is being advised by Patrizia Immobilien’s UK office, is paying an 8% premium to the property’s December 2014 valuation of £309.3m.
The property is let to Merlin Attractions Operations, owner and operator of Madame Tussauds for at least the next 27 years, with the option for the tenant to extend by up to a further 70 years upon expiry.

Kepel Land purchase 75 King William Street













Keppel Land on Monday (Feb 9) has entered into a sales and purchase agreement with Aberdeen Property Trust for a freehold nine-storey office building in the City of London for £91 million (S$186 million), it announced in a press release.
The property, located at 75 King William Street, is said to be in close proximity to Bank Junction, London's historic and financial centre. Keppel said the investment will be managed by its fund management subsidiary, Alpha Investment Partners.
CEO of Keppel Land Ang Wee Gee said: "With continued growth in the financial services and new emerging industries such as the technology, media and telecommunications sectors, the London office market is expected to remain healthy.”
With a total internal area of 130,000 sq ft, the office building – completed in 1989 – is almost fully occupied by tenants in the financial services, shipping and serviced office industries, Keppel said.
“The above transaction is not expected to have any material impact on the net tangible asset per share or earnings per share of Keppel Land Group for the current financial year,” the developer added.   -- 2015 February 9   CHANNEL NEWS ASIA

Oz Buys into King's Cross Regeneration for £200 million











2015 February 13
2015 February 15














Malaysian buys in Hammersmith

Malaysian developer Eastern & Oriental has bought Landmark House and Thames Tower in Hammersmith, west London for £57m.
Eastern & Oriental Property (UK) has bought the 1.2-acre site in the heart of Hammersmith, which has the potential for a significant mixed-use redevelopment, from Dubai-based education provider Gems Education Board.
The UK subsidiary of Malaysian-listed Eastern & Oriental will now become the platform for a push into London property.
It now owns three property assets in London, including Princes House acquired in 2012, ESCA House acquired in 2014, and the latest Hammersmith project which together have a combined gross development value of £269m.
The site at Hammersmith Bridge Road is prominently located along the A4 which is the principal road connecting central London to Heathrow airport via the M4 motorway.
Currently, two existing and connected office buildings occupy the site: the 11-storey Thames Tower and 15-storey Landmark House, which were both constructed during the 1960s.
Allies & Morrison architects has drawn up a plans for a development of up to 22 storeys at the site, which it hopes will appeal to the upper end of the residential market as well as office occupiers.
The proposed scheme would provide a residential tower in the centre of the site as well as a terrace of houses on Angel Walk and an office building in the eastern area of the site.
Thames Tower is currently vacant, while vacant possession will be obtainable for Landmark House by the end of September 2015.
Dato’ Terry Tham, E&O group managing director, said: “This prime freehold parcel in the established commercial hub of Hammersmith represents a significant refurbishment or redevelopment opportunity for E&O in the future. Subject to the relevant authority approvals, there is the potential to create Grade A office space and residential accommodation in an area where demand for quality new build property is strong.”
Paul Nicholls, director at CBRE who acted for the vendor, said: “This transaction underwrites the growing interest we have seen from both domestic and international developers who want to capitalise on the wave of value spreading out from the core central London market.  Hammersmith is a strategic location with excellent transport links and has significant growth potential.”   -- 2015 January 19   PROPERTY WEEK

Retail

Stamp Duty














Telegraph Stamp Duty Calculator 


Asian investors

Asian investors, including insurers and banks, are buying into European properties as a way to diversify their portfolios as they seek steady yields of between 5 and 6 per cent.

Wanda faces challenges in its first project in London











    Foreign buyers have fuelled soaring home prices in London in the past few years. Photo: Bloomberg

    It is going to be a tough start for Dalian Wanda Group in Britain, industry experts say, as the mainland property-to-film conglomerate begins its first London project amid rising competition for clients and contractors, just as the tide in the city's prime home market appears to have begun to ebb.
    Wanda will market the One Nine Elms project in Hong Kong over the weekend, just a week after a Malaysian consortium started the sales process here for the iconic Battersea Power Station project.
    The two projects are about 1km from each other, both at the waterfront along the south bank of the River Thames, at the redevelopment zone of Nine Elms that comprises more than 20 different developments.
    Wanda's project is of a smaller scale, some 213 flats in the first release, and sits on existing infrastructure, said Michael Purefoy, a deputy general manager of Wanda's international real estate centre in Beijing.
    He told the South China Morning Post that clients' response from London, Singapore, Beijing and Shanghai had exceeded expectations, as global awareness of the Wanda brand grew amid the company's aggressive expansion in countries including the United States, Spain and Australia.
    Wanda bought the site last year in London near the new US embassy in its first foray into overseas markets. The 1.13 million sq ft scheme comprises two residential towers of 439 flats - one of which will be central London's tallest residential building - and a hotel. It is due for completion in late 2018.
    Foreign buyers have fuelled soaring home prices in London in the past few years. However, a survey by the Royal Institution of Chartered Surveyors showed expectations for housing inflation in the British capital were falling at the fastest pace since before the global financial crisis on worries about a strengthening pound, rising interest rates and possible punitive taxes on overseas buyers.
    Mark Farmer, head of residential at consultancy EC Harris in London, is more concerned about the delivery.
    "Wanda is bringing forward One Nine Elms in one of the most challenging London development markets of recent years," he said.
    "There are big contractor and supply chain capacity problems at the moment which are making the selection of construction partners very difficult."
    An EC Harris report in October estimated total prime residential units in the pipeline would hit 12,000 in the next three years with a peak in 2017, and planned completion would overshoot a deliverability ceiling of no more than 2,500 to 3,000 units per annum in the years between 2016 and 2019, considering both financing and human resources.
    London media said Wanda had appointed architects, project managers and cost consultants, but has yet to finalise the decision on its main contractor.
    Meanwhile, the 42-acre Battersea development has also yet to pin down the contractor for its third-phase construction, which will offer 539 apartments. It had fixed-price contracts for the first two phases. Delivery will start from mid-2016 until 2025.
    "The constructors are busy but there is still a lot of competition in the market," said Simon Murphy, chief financial officer of Battersea Power Station Development. "So we are comfortable that the numbers we have in our appraisal will be delivered in terms of cost, and we have funded the whole project."
    Murphy, a former HSBC banker, is betting on the history of the Battersea Power Station, which at its peak supplied a third of London's power but ceased operation in 1983, to attract Asian buyers against rivals. But he said developers including Wanda can help rebuild the old industrial Nine Elms neighbourhood.  - 2014 November 5,  SOUTH CHINA MORNING POST
    International Investors

    Japan’s Mitsui buys BBC west London site for £87m


    2015 June  Japanese developer Mitsui Fudosan and British partner Stanhope have agreed to buy the BBC’s studios in west London for £87m, the pair’s second deal with the publicly-funded British broadcasting group.   


    Queen of England in a Real Estate JV With Chinese Gov't to Buy Mall in UK




     You might think the Queen would want something a bit more posh than Fosse Park in Leicester.

    The Crown Estate, which manages the Queen of England’s real estate assets, announced late last week that it had joined with an investment-arm of the Chinese government to buy a shopping centre in the UK for £345.5 million ($576.76 million).

     The partnership between the Crown Estate and Gingko Tree Investment Ltd, a wholly owned unit of China’s State Administration of Foreign Exchange (SAFE), is the biggest acquisition ever for the Queen’s asset manager, and the latest in a string of deals in Europe for the UK-registered Chinese firm. The investment was revealed in an announcement from the Crown Estate.

     The deal for the 560,000 square foot (52,000 square metre) Fosse Park retail development in the city of Leicester shows the key role that government relations are playing in China’s outbound investment wave, as well as rising enthusiasm for recovering European real estate markets.

     The joint venture formed by the two companies purchased Fosse Park, which attracts more than eight million shoppers a year, from UK property firm Foyleside. Retailers represented at the centre appear to be distinctly mid-market, including Marks & Spencers, Gap, Clarks, Boots, DFS and Costa Coffee.

    China’s Government Investing Actively in Europe

    While Chinese real estate developers have gained headlines with plans for splashy projects in cities around the globe, the country’s state-owned asset managers have also played a significant role.

    Gingko Tree acquired One Angel Square in Manchester, England last year
    Gingko Tree was China’s most active buyer in Europe’s real estate markets in 2013, acquiring stakes in 16 properties worth a total of $2.44 billion in the London, Manchester and other locations. Gingko’s parent, SAFE, is the government office charged with managing the country’s foreign exchange reserves.

     China Investment Corporation (CIC), the country’s sovereign wealth fund has also been active in the UK market, and earlier this year acquired an office park in London from private equity firm Blackstone for £800 million ($1.34 billion).

     The Chinese government’s growing taste for overseas real estate investment comes as the country’s government asset managers move beyond their traditional strategy of parking the country’s assets in government bonds and other safe investments.

     The decision to move into global real estate markets is partly a search for yield, and is also likely to have been triggered by growing confidence and sophistication among the government asset managers tasked with the real estate investments, as well as among the bureaucrats supervising them.

    Private Investors Following the Government to the UK

    In China, there are few strategies as effective as working with the government, particularly for real estate deals. And the country’s property investors seem to be bringing this approach with them as they head overseas, so the tie-up between Gingko Tree and the Crown Estate is likely to drive still greater interest in UK property among Chinese investors. London has already been established as the favorite target among Chinese real estate investors.


     Wang Jianlin seems to be bringing his government alignment strategy with him on his trips overseas

    China’s richest man Wang Jianlin, who made much of his fortune through relationships with the Chinese government, has worked hard to develop ties with the authorities in the UK. Already last year Wang acquired a site in London to build a $1.1 billion hotel and residential project, and after meeting with British Prime Minister David Cameron in Davos earlier this year pledged to spend another $5 billion.

    England’s capital was the single biggest target for Chinese investors buying real estate internationally, bringing in nearly four times the amount of investment than closest competitor San Francisco, according to JLL. Even the total amount invested in San Francisco, Chicago, and Los Angeles combined did not equal half of that going into London. New York failed to finish among the top five investment destinations for Chinese capital during the period.

    Other China Related Purchases




    RESIDENTIAL










































    Britain's 10 most expensive streets (average price) 

    1. Kensington Palace Gardens, London, W8, £42,591,972 
    2. The Boltons, London, SW10, £30,288,586 
    3. Grosvenor Crescent, London, SW1X, £22,752,425 
    4. Courtenay Avenue, London, N6, £19,609,231 
    5. Ilchester Place, London, W14, £13,718,746 
    6. Compton Avenue, London, N6, £12,049,363 
    7. Manresa Road, London, SW3, £11,600,920 
    8. Grosvenor Gardens, London, SW1W, £11,321,413 
    9. Cottesmore Gardens, London, W8, £11,037,133 
    10. Frognal Way, London, NW3, £10,702,421

    Rich and under 40

    Figures from Knight Frank show the proportion of properties worth £10m or more sold to thirtysomethings rose from 7.1% to 14.8% between June 2014 and June 2015. Accompanying comment singles out tech and IT money as the source.

    Tax


    JLL 2016 Q1













    Look How Many Towers Are Being Planned





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    Sunday, November 2, 2014

    Private Equity in U.S.












    Richest Are Bullish on U.S. as Family Offices Open Outposts
    As the U.S. powers the global economic expansion in its fifth year, the world’s rich are counting on American companies to help increase their fortunes. 
    At least a dozen family offices, with fortunes made in Europe, Asia and South America, have opened U.S. outposts in the past two years or are making direct investments in corporations from Silicon Valley to the East Coast. Their view is that the Federal Reserve’s aggressive monetary easing, a shale oil boom that’s lowered energy costs, and improving corporate balance sheets give the world’s largest economy an edge over other regions.






    Getty Images

    Peca Ltd., a London-based firm started in the 1990s by a family that made its wealth mainly in financial services, has made about two-thirds of its private-equity and venture capital investments in the U.S. while reducing investments in Europe, said Anselm Adams, who oversees the firm’s alternative investments. A German family that founded an automotive company opened an investment office in New York this year to find deals in the automobile, textile or luxury industries, according to a person familiar with the matter, who asked for anonymity citing a lack of authorization to discuss the firm. 
    “They are looking for diversification and more exposure to the U.S.,” Patrick McCloskey, managing partner at Aeterna Capital Partners, said of the firms. “Many family groups are trying to manufacture yield in a very low-interest-rate environment and are looking for unique and customized ways to do so.”

    $4 Trillion 

    McCloskey’s firm last year opened a New York office for a rich European family looking for deals in the U.S. In September, he helped his client finance a video-distribution company with a loan that pays the London interbank offered rate plus as much as 11 percent.







    Family offices manage $4 trillion in assets globally, about 55 percent of which is based outside of North America, according to a 2014 study by London-based researcher Campden Wealth.  Affluence has grown fastest since 2013 in the U.K., Korea and Denmark, according to a report this month by Credit Suisse Group AG. (CSGN)
    The U.S., where growth accelerated in the third quarter to cap its strongest six months in more than a decade, is “a big bright spot in the world,” said Stephen Cecchetti, professor of international economics at Brandeis International Business School in Waltham, Massachusetts. As the Fed winds down unprecedented stimulus, the European Central Bank is contemplating its own quantitative-easing program to tackle the weakest inflation in five years, and Japan is continuing purchases. 

    Venture Deals 

    Peca has been attracted to venture-capital deals in the U.S., said Adams, who declined to name the family he works for, citing privacy reasons. The firm has taken stakes this year in The Bouqs Co., an online flower-delivery business, and Circa, a mobile news service, Adams said. Both are closely held companies based in California. 
    The family office generally invests $1 million to $3 million, working alongside private-equity firms rather than through funds because it pays no fees or carried interest on co-investments. 
    “One of the things we’ve been very active in, in the last two years, is the venture capital scene,” Adams said in an interview via Skype. 
    McCloskey’s firm usually seeks equity and lending transactions in companies with enterprise values of $5 million to $100 million, he said, declining to name the family sponsoring him for privacy reasons. 

    Sideline Cash 

    Aeterna helped finance RLJ Entertainment Inc. (RLJE), a Silver Spring, Maryland-based video content distributor founded by Robert L. Johnson, because it liked the business, management and risk-reward profile, McCloskey said. Four other lenders were involved in the $70 million deal, according to an RLJ filing. 
    “There’s so much cash on the sidelines ready to be put to work by families that took money out in the financial crisis or that have operating businesses generating a lot of income that they haven’t put in the market yet,” said John Benevides, president of Chicago-based CTC myCFO LLC, which advises family offices and is a unit of the Bank of Montreal. “They are giving us a shopping list.” 

    ‘More Cautious’ 

    That capital has made finding bargains a challenge. Price multiples for U.S. private-equity deals are the highest since 2007, and some transactions are being done with less leverage as more equity is being contributed to the average deal, said Andrew Lee, head of alternative investments for the chief investment office at UBS AG (UBSN)’s wealth-management unit, which oversees $1 trillion. Those factors may make it harder to see returns as attractive as in the recent past, he said. 
    “We’re more cautious on allocating aggressively to U.S.- focused private-equity opportunities,” Lee said. “On a one-off basis there may be situations that may make sense.” 
    Valuations have also risen in U.S. venture-capital deals, particularly for later-stage companies, Lee said. 
    One area where family offices find opportunities are private companies looking for a new, private owner, said Francois de Visscher, whose Greenwich, Connecticut-based firm advises single family offices and family-owned businesses. 
    Every day, about 10,000 Americans born between 1946 and 1964 reach retirement age. Many of them have built businesses, don’t have an heir to take over and want to sell, said Robert Elliott, vice chairman at Market Street Trust Co., a multi-family office established to manage the wealth of the Houghtons, founders of glassmaker Corning Inc. 
    The U.S. is “a good hunting ground, particularly with this generational shift,” Elliott said in an interview. 

    Colombia, Chile 

    “Some wealthy families from countries like Colombia, Chile and Belgium have even established single-family offices in the U.S. with the intent of accelerating their American direct investment activities,” said de Visscher. 
    More than 40 percent of the 330 members in the Family Office Exchange are buying at least one private company a year, said Sara Hamilton, founder of the Chicago-based group. 
    The deals are part of a larger trend among family offices to find investments themselves. The number of family offices seeking equity stakes or lending opportunities directly grew 45 percent this year at Axial, an online network that connects companies to capital, said Peter Lehrman, the New York-based firm’s CEO. 

    Like Minded 

    “We get at least one call a month from a family company that is ready to sell and wants to sell to another like-minded family instead of a private-equity firm,” said Hamilton, whose group is a network of private families around the world with an average of $450 million in investable assets. 
    The New York firm that’s been investing money for the German automotive family was in talks earlier this year to buy a family-owned business based in California, said the person familiar. The family is looking for public or private companies in the automobile, textile or luxury industries with enterprise values between $250 million and $300 million. The transaction fell through, the person said, because of the seller’s lack of speed in closing the deal. 
    “It doesn’t come without risks,” Aeterna’s McCloskey said of international investments. “It’s easier said than done.”  -- Bloomberg  2014 Oct 31





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    Thursday, October 30, 2014

    Berkeley












    Family Trust selling prime Berkeley




















     What could be the most valuable site for a mixed-used development in Berkeley just hit the sales block. Bancroft Center at 2580 Bancroft, a 30k SF retail center, could be converted into a variety of commercial uses. Thanks to the Southside plan's recent increase in height limits and density, the non-entitled property could go the mixed-use route, with 132 housing units atop 21k SF of high-end ground-floor retail.

     The seller is a family trust that's owned it since the original construction.

     The site is unpriced.


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    Wednesday, October 29, 2014

    Paris

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