Archive | Archive – world property

World property W15Oct14 – Mirvac buys Birkenhead Pt, NAB adds UK asset manager, Scotland replaces stamp duty, Sovereign funds trade in London

Mirvac buys Birkenhead Point
NAB buys into UK manager Orchard Street
Scotland replaces stamp duty
Norges Bank buys $1.2 billion London building from GIC

Mirvac buys Birkenhead Point

Birkenhead Point, Sydney.

Birkenhead Point, Sydney.

Mirvac Group has entered into an agreement to acquire the Birkenhead Point Shopping Centre at Drummoyne, 5km from the Sydney cbd, including the adjoining carparking facility & marina, for $A310 million.

CDL Hotels NZ Ltd (now Millennium & Copthorne Hotels NZ Ltd) sold Birkenhead Point to Intro International Ltd (Denis Jen) in 2004 for $120 million. It had been an asset of Kingsgate International Corp Ltd, controlled by CDL & Tai Tak Securities Pte Ltd.

Abacus Property Group & the Kirsh Group bought it in 2010 for $A174 million and upgraded the retail offer into a convenience-based shopping centre & fashion outlet centre. The 187-berth marina was in the final upgrade stages.

Mirvac said its purchase, expected to be completed in November, represented a fully let passing yield of 6.6%.

The 3.7ha waterfront site has a gross lettable area of 33,100m² and parking for 1395 cars. Moving annual turnover is $A228.5 million at $A8082/m².

Link: Mirvac Group

NAB buys into UK manager Orchard Street

National Australia Bank’s global asset management business, NAB Asset Management, has bought a majority stake in UK specialist commercial property investment manager Orchard Street Investment Management LLP from the existing partners.

The bank has 12 other global asset managers operating in all major asset classes, managing $A178 billion in 50 investment strategies.

Orchard Street has grown its assets under management from £800 million to £4 billion in 10 years.

Scotland replaces stamp duty

A new land & buildings transaction tax will replace stamp duty in Scotland next April, and Property Wire editor Ray Clancy said at the weekend he expects this to herald change in the rest of the UK.

The starting threshold is £135,000, up from the stamp duty threshold of £125,000. A marginal tax of 2% will apply to the proportion of a transaction between £135-250,000, a 10% rate will apply between £250,001-1 million and there will be a new 12% tax on properties costing more than £1 million.

The Scottish Government’s Cabinet Secretary for Finance, Employment & Sustainable Growth, John Swinney, announced the rates & bands for the tax last Thursday, as part of the draft budget for 2015-16. The proposed rates & bands are subject to parliamentary approval.

It’s the first tax created by a Scottish parliament in 300 years.

Links: Scottish Government, land & buildings transaction tax
Property Wire, Property tax set for major change in the UK

Norges Bank buys $1.2 billion London building from GIC

The Bank of America Merrill Lynch Financial Centre, London.

The Bank of America Merrill Lynch Financial Centre, London.

Norway’s state-owned investment fund based on oil royalties, Norges Bank Investment Management, bought a 54,350m² London office complex (at left, aerial shot above) for £582.5 million ($NZ1.182 billion) cash last week from the Singapore Government’s sovereign wealth fund, GIC.

GIC bought the property from Merrill Lynch & Co Inc in 2007 for £480 million.

The property, the Bank of America Merrill Lynch Financial Centre at 2 King Edward St, is a freehold office campus consisting of 4 independent office buildings occupying a 1.3ha site. It’s fully leased to Bank of America Merrill Lynch, which will continue to manage it.

The Norwegian fund also bought a 50% interest in a 42,000m² Dutch logistics property last week, through its joint venture with US company Prologis.

Norges paid €12.4 million, again with no debt financing, for the building in Born.

Link: Norges Bank Investment Management

Attribution: Mirvac, Abacus, NAB, Orchard St, Scottish Government, Norges Bank

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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Snapshot on world property, week to 27 November 2011

Contents:

 

Centro survives

Latest from RICS internationally

 

23 November 2011:

 

Centro survives

Centro Property Group got the overwhelming votes it needed yesterday from lenders & convertible bondholders to stay in business. The lenders voted 100% in favour after 28% abstained, and the bondholders were just under 100% in favour of the scheme of arrangement which will see securityholders – 26,000 mostly small; investors with an average holding of around 37,000 securities – get A5.03c/security.

They stood to get nothing if the scheme wasn’t approved and the 2 Centro entities, Centro Property Trust & Centro Properties Ltd, were forced into receivership. The outcome is that all the assets will go to the renamed Centro Properties – Central Retail Australia – which will be owned by its secured lenders in exchange for the cancellation of debt.

The scheme still needs the approval of the NSW Supreme Court, which Centro’s former auditor, PricewaterhouseCoopers, said on Monday it would challenge.

The group was one of the major Australian property casualties of the global financial crisis and has been struggling to stay alive since the end of 2007. It sold its US assets in February for $US9.4 billion but was still not going to be able to meet its debt obligations.

It had negative equity of $A1.3 billion at 30 June this year and $A2.9 billion of debt maturing on 15 December – now cancelled, if the scheme gets court approval.

The scheme was faltering until late last week, when $A90 million of debt was found to offer to shareholders, winning over the largest external shareholder, Marathon Asset Management.

The new-look listed property trust will own 43 Australian shopping centres worth $A4.4 billion. Combining that with its syndicate business, the group will have assets of $A7 billion.

 

Latest from RICS internationally

The RICS (Royal Institution of Chartered Surveyors) global real estate weekly updates, which I was having trouble connecting to initially, can be reached from this link: RICS, grew.

Want to comment? Go to the forum.

 

Attribution: Compiled & story written by Bob Dey for the Bob Dey Property Report.

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Snapshot on world property, week to 6 November 2011

Contents:

 

RICS weekly update at foot of page

Simon files case against home state for not collecting net sales tax

Goodman wins China award, has 5 new Chin projects underway

Goodman European Logistics Fund launches rights issue, group starts 3 new European projects

New Woolworths chief ponders property float, Dick Smith options, multi-channel retailing

Valad resumes growth under Blackstone ownership

RICS weekly update

 

6 November 2011:

 

The Snapshot on world property is, I think, a more effective way of letting you know about many overseas property events, succinctly, rather than trying to put a handful of them into “proper” story format… and losing the lot because I don’t have time to do that.

It’s been in abeyance since February 2004, along with most of the other Snapshots, when numerous changes were made to The Bob Dey Property Report.

 

RICS weekly update at foot of page

 

Introduced this week, at the foot of the page, is the weekly update on world property news from RICS (the Royal Institution of Chartered Surveyors; New Zealand fits into the Oceania branch of it).

 

Simon files case against home state for not collecting net sales tax

 

Simon Property Group Inc took up the battle of bricks-&-mortar retailers against internet sales on Thursday by filing a complaint against its home state of Indiana for not collecting sales tax from Amazon on sales made within the state.

Simon, biggest retail real estate owner, developer & manager in the US, filed its complaint against the state in the Marion County Circuit Court. The company said it wasn’t seeking monetary damages, but “to benefit all of Indiana’s taxpayers and the state’s bricks-&-mortar retailers, many of which are Simon’s tenants at its 27 shopping centres in Indiana….

“Amazon.com is required by Indiana law to collect & remit sales & use taxes to the state, for sales made over the internet, but has consistently refused to do so even though it is required by current Indiana laws.”

 

Goodman wins China award, has 5 new Chin projects underway

Goodman Group was awarded the Westpac business excellence award for large companies at the end of October for its performance in greater China. The company entered the China market in 2005 and has $US2 billion invested in the region.

It’s become one of the largest industrial landlords in Hong Kong, with a portfolio of about 900,000m² with a value of $US1.3 billion. Its latest development project, Interlink, is due for completion in January and is the largest industrial development in Hong Kong for over 10 years, offering 223,000m². It’s also the first building of its type to be awarded both a LEED certification and the HK BEAM Gold standard certification. In mainland China, Goodman owns & manages a portfolio of 7 warehouse & distribution facilities, with a combined value of $US215 million. Over the last 12 months, Goodman has also started 5 new development projects with a total estimated completion value of $US255 million. Goodman has a 2 million ft² (186,000m²) China land bank capable of delivering 1 million ft² of prime warehousing space.

Goodman European Logistics Fund launches rights issue, group starts 3 new European projects

The Goodman European Logistics Fund launched a €400 million underwritten rights issue last week and an €800 million debt refinance package, ensuring the fund maintains its gearing below 40%. It will refinance €400 million of secured facilities and have a €400 million unsecured facility structured to allow the fund to transition to debt capital markets to diversify its long-term funding sources. Goodman Group chief executive & fund investment committee chairman Greg Goodman said the refinancing would also provide about €500 million of investment capability, giving the fund capacity to increase gross assets to €2 billion and improving financial flexibility. The fund is continental Europe’s largest unlisted logistics fund, with €1.6 billion of logistics assets under management and a weighted average lease term of about 5 years. In the last 3 weeks, Goodman has announced planning consent for a 12,000m² facility at its Thurrock commercial park in Essex for A&N Media, which will invest £50 million in the new plant; a 78,000m² logistics centre for e-commerce retailer Zalando at the Erfurt freight terminal in the centre of Germany, pre-leased on a 16-year term; and a 45,000m² design-build facility in Hanover for Volkswagen Commercial Vehicles – Goodman’s ninth German development this year.

Link: Goodman

New Woolworths chief ponders property float, Dick Smith options, multi-channel retailing

Woolworths Ltd’s new chief executive, Grant O’Brien, mentioned a float of the group’s multi-billion-dollar property portfolio in a wide-ranging investor briefing in Sydney on Wednesday.

The property float wasn’t mentioned in company releases and didn’t extend to more than 2 paragraphs in news stories from the briefing. Mr O’Brien raised it alongside a strategic review of the Dick Smith consumer electronics business, Woolworths’ intention to become Australia’s leading multi‐channel retailer and the opening of 61 new stores this year (a net 44 after closures to a total 117).

Mr O’Brien said he’d report further on the Dick Smith review at its half-year results in February. “Consumer electronics as a retail category has been experiencing significant challenges, particularly in relation to tightened customer spending on discretionary products, category deflation and the effects of the high $A.”

Dick Smith operates 386 stores in Australia & New Zealand, with 2011 sales up 4.2% to $A1.86 billion but ebit down 14.9% to $A26.8 million.

On becoming Australia’s leading multi‐channel retailer, Mr O’Brien said: “We are really seeing a revolution in retail as customers integrate mobile, social networking and other internet‐enabled technologies into their bricks & mortar shopping experience. It isn’t a question of online or offline, it’s about integrating the 2 seamlessly, and we are increasingly finding that our most valuable customers are ones who do both – for example, in our supermarkets business, customers who shop both in‐store & online spend 70% more than customers who only shop in‐store.”

Link: Woolworths

Valad resumes growth under Blackstone ownership

 

Valad Property Group – listed on the ASX until its takeover by Blackstone Real Estate Advisors LP in August – said on Friday it had bought a 6011m² light industrial park just north of Paris for €6.1 million for its Parc d’Activités fund, which invests in multi-let industrial estates, mostly in the Ile-de-France area. Valad’s 42 properties in France, worth €500 million, are held in 4 of its 15 funds.

Valad Property Group manages $A9 billion of property in 7 geographic regions, through 23 offices in 13 countries. Its core business is value-adding real estate, specialising in multi-let commercial & industrial property, with local asset management teams taking care of about 8500 tenants in 900 properties.

2 affiliates of Blackstone Real Estate Advisors completed their acquisition of Valad’s securities on 26 August 2011. The $A1.80/stapled security price was 56% above the closing price before Blackstone’s offer was launched, but about 33% below net portfolio value.

Valad’s results for the December 2010 half showed its predicament – gearing up to 51.3%, lenders willing to extend its $A200 million facility to the end of 2012 but an $A51 million net loss for the period.

 

Link: Valad Property Group

 

RICS weekly update

 

In this week’s edition, the RICS global real estate weekly focus is on:

Australian monetary policyEuropean monetary policyUS construction spending and new housing initiativesUK construction sentiment

Link: What’s new on RICS Global

Want to comment? Go to the forum.

 

Attribution: Compiled & story written by Bob Dey for the Bob Dey Property Report.

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Snapshot on world property, week to 20 January 2002

15 January 2002

The US central business district vacancy rate hit 12% at the end of 2001, up from 7.1% a year earlier and from 10.6% at the end of the September quarter, according to Cushman & Wakefield. The firm attributed the highest vacancy level in four years to corporate cutbacks and the 11 September terrorist attacks. Cushman & Wakefield’s third-quarter research showed great potential for more empty space — leasing for the first nine months of the year, at just under 4 million m², was marginally ahead of the total of completed construction and office space under construction. Outside the cbd, the September vacancy rate was far bigger — 15.3%, with a big volume of buildings to be completed. However, non-cbd leasing, at just under 11 million m², was again slightly ahead of the total of construction completed (4.48 million m²) and offices under construction (6.3 million m²).

Singapore’s Housing & Development Board said on 9 January it would stop building new flats in new towns, plans to dispose of 17,500 unsold flats and will offer new flats in older estates to the public, the first time it has stepped outside its sales system to do that. Demand for new flats fell from 22,000 in June to 11,000 at the end of 2001.

Massachusetts-based Senior Housing Properties Trust completed its $US600 million acquisition of 31 senior living communities from Crestline Capital Corp on 11 January. Simultaneously, these 31 properties were leased to Five Star Quality Care Inc, Senior’s former subsidiary which was spun out to Senior shareholders on 31 December 31 to operate as a separate company. All are managed by a Marriott International Inc subsidiary on long-term contracts. The minimum rent is $US63 million/year, with revenue-based rises starting in 2003. The properties’ 7487 living units are 90% occupied. This deal takes Senior’s holdings to 112 properties containing 18,045 units in 28 states.

Crestline Capital Corp, of Maryland, (see above) said it would concentrate on the lodging business. In the past year it has also sold $US350 million of inns and leased hotels, and now has $US500 million in cash — $US30/share. Chief financial officer James Francis said 2002 would be a rough year for the lodging industry and he expected the company to only break even before interest income. Subsidiary Crestline Hotels & Resorts manages and leases 36 hotels, resorts and conference & convention centres with nearly 7000 rooms in 13 states and Washington.

KB Home of Los Angeles, one of the biggest residential builders in the US & France, announced record fourth-quarter & November year results. Net income for the quarter rose 20.6% to $US88.5 million, but only 6% on an earnings/share basis (after a substantial equity increase through a conversion), from $US2 to $US2.03, on revenue up 16.3% to $US1.4 billion. Construction operating income rose 11.2% to $US135.1 million, the gross housing margin rose 0.2 points to 20.8%. Average selling price rose 5.2% to $US178,800. For the full year, KB produced 24,868 homes, 2000 more than its previous best year (the year to November 2000), for revenue up 16.3% to $US4.57 billion and net earnings up 25.8% to $US214.2 million. The company has increased house sales at a 19% compound annual rate over five years. It cut its debt:total capital ratio 4% to 49.9% and still ended the year with $US281 million in cash & $US564 million available credit. Average return on equity has exceeded 20% for the past five years. Year-end forward orders exceeded 11,000 for the first time.

M/I Schottenstein Homes Inc, a 25-year-old Ohio-based company, established several records — it delivered 1303 homes in the fourth quarter, up 8%, and 4227 for the year, up 4%, both records. Its year-end order book of 2331 homes worth $US559 million is at an annual sale price of $US240,000. The company will report its 2001 results on Thursday 31 January.

New Jersey-based residential builder Hovnanian Enterprises Inc completed the $US176.5 million acquisition of The Forecast Group LP, a privately held Californian company, on 10 January, taking Hovnanian to eighth-largest US homebuilder. It expects to build more than 8500 houses for $US2.1 billion this year, a 20% increase. Hovnanian now controls more than 45,000 lots, more than 70% controlled under option contracts which reduce the company’s risk and allow it to maintain balance-sheet flexibility & liquidity. President & chief executive Ara Hovnanian said the transaction price represented 3.1 times expected ebitda for Forecast over the next 12 months and the acquisition should be accretive to earnings immediately. He expected earnings/share to rise 30% to $US3, including a US50c gain from Forecast. Hovnanian operates in 11 states, has eight brands and says it’s “one of the nation’s largest sellers of homes to Active Adults, under the name of K. Hovnanian’s Four Seasons communities.”

Lehman Brothers analyst David Shulman predicted 7% returns for US real estate investment trusts in 2002, with no bounce for another two years. Lehman predictions for the overall market are for returns of 15-20% in 2002, making reits a boring sideshow. Mr Shulman said most reits were trading at or near net asset value, making stock picks based on valuation harder. He estimated the sector was trading at about 9.4 times 2002 funds from operations, making it expensive on the prospect of 4% growth. And he said much of the growth would come from refinancing expensive debt, not from higher rents or better occupancy, developments or acquisitions. Among the reits he downgraded, TrizecHahn Corp went from strong buy to buy. But he continued to rate Vornado Realty Trust a strong buy for its 12% projected growth, likely dividend rise and its position as the leading Manhattan office owner.

Lehman Brothers announced on 10 January it had formed a $US1.6 billion real estate merchant banking fund, Lehman Brothers Real Estate Partners, the latest in a series of private equity funds set up over four years as part of Lehman’s focus on alternative asset management. It will make private equity investments in properties, operating companies & service businesses ancillary to the real estate industry, primarily in North America and Western & Central Europe. About $US400 million has been placed so far in 15 investments.
http://www.lehman.com

Jones Lang LaSalle said on 9 January that Microsoft Corp had selected it as preferred worldwide provider of real estate transaction & project management services. The new assignment excludes Microsoft’s corporate headquarters in the greater Seattle area, but covers 740,000m² everywhere else in the world. “We selected Jones Lang LaSalle because they were the only service provider that offered consistent integrated service delivery and a sophisticated information technology system to streamline Microsoft’s real estate transaction & project management services worldwide,” said James Ableson, manager of US & international real estate for Microsoft. JLL international director Thomas Wilkinson has become global account manager for Microsoft.

Liberty Property Trust has sold its 13 office & industrial properties in Charleston, South Carolina, to Jupiter Realty for $74 million. Charleston was the smallest metropolitan area where Liberty operated and the 70,000m² portfolio made it the largest office & industrial landlord. The trust said the market was too small to support its full-service style and growth opportunities were insignificant.

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Snapshot on world property, week to 13 May 2001

Latest: Ripplewood takes Seagaia, Law Lords find minister’s dual powers don’t infringe developers’ rights, Babcock & Brown bids for MTM Entertainment Trust, AMP Diversified raises profit 2.4%, Henderson Land restructure, bid to sell half-finished Chinese projects, ING reshuffle.

13 May 2001

Private New York equity fund Ripplewood Holdings LLC, which took over Japan’s Long Term Credit Bank and turned it into Shinsei Bank, has taken control of the Seagaia Resort, which ran up Â¥122 billion ($NZ2.36 billion) of losses in seven years. Seagaia, in the south of Japan, has hotels, golf courses, and a wavemaking machine at a huge artificial beach. Ripplewood will pay $US229 million to buy Seagaia, $US147 million to pay off debt, and $US81.5 million over four years to get it performing (not quite $NZ1.1 billion).

The Law Lords have found developers’ rights are not infringed by the dual powers of Britain’s Secretary of State for the Environment, on one hand being responsible for planning policy and on the other having a quasi-judicial role in planning appeals. The English Appeal Court had found the minister’s dual capacity breached article 6(1) of the European Convention on Human Rights, guaranteeing citizens the right to a fair trial by an independent tribunal, which came into effect in England and Wales this year. While it was suggested to me that finding the system breached human rights would have paralysed the planning system, we have the same conflict here at council level, where councillors daily find they are setting policy and judging on planning issues. That conflict is the cause of many appeals to the Environment Court.

10 May 2001

The second party to the Force Entertainment Centre ownership dispute is being bought out. The developer, Force Corp, has been taken over by Sky City NZ Ltd, which saw synergies for its business in retaining the Queen St entertainment centre. MTM Entertainment Trust of Sydney, which was determined not to proceed with the centre acquisition, is now subject to takeover by investment banker Babcock & Brown Pty Ltd, part of a group formed in the US in 1977, now owned 20% by Germany’s second largest bank, HypoVereinsbank, and the rest by staff. Sunderton, a Babcock & Brown company, has offered A34.5c/unit for the MTM trust and has options to buy Multiplex Constructions Pty Ltd and Inanda Associates Pty Ltd out of the management company, which has already lost management of MTM’s industrial trust to James Fielding Investments. Sunderton’s deal also includes buying the $A9.2 million Perth Imax from Multiplex.

The Australian AMP Diversified Property Trust, managed by AMP Henderson Global Investors Ltd, raised operating profit 2.4% in the March year (there was no tax) to $A83.24 million on revenue up 6.6% to $A107.2 million and its share of associates’ net earnings, up 9.3% to $AAA35.6 million. Earnings/unit were A19.03c (A19.13c), final dividend A9.95c/unit, year’s dividends A19.1c/unit (A18.6c/unit), net asset backing $A2.35 ($A2.31). Consolidated operating profit before abnormals and tax represented 77.66% (80.78%) of sales revenue, and consolidated operating profit after tax 7.93% (8.29%) of equity at the end of the period. Gross assets were $A1.47 billion.

8 May 2001

Lee Shau-kee, chairman of Henderson Land Development Ltd, has fuelled speculation about a group restructuring after pushing Henderson Land’s share of Henderson Investment Ltd to 74.77% with $HK422 million of buying this year. Henderson Investment increased its stake in Miramar Hotel by 5% to 39.5% last year.

A Chinese Construction Ministry subsidiary, Pan-China Engineering, is to set up a Hong Kong company to help China’s four state asset-management companies dispose of half-finished property projectsand bare development sites untouched since Beijing moved in 1998 to cool the overheated property development market. The asset management companies have custody, but no money to run the projects.

ING Industrial Fund has contracted to sell three Victorian properties for $A12.77 million, fractionally above book value. The fund will use the money on developments in the Parkwest industrial estate in Victoria and at Longlea, Queensland, where the average initial yield is 10%, compared to 8.82% on the properties being sold.

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Snapshot on world property, week to 4 November 2001

31 October 2001

Equity Office Properties Trust reported third quarter funds from operations up 12.5% to $US379.7 million, or from US72c to US81c/fully diluted share, on revenue up 39.4% to $US893.7 million. Fully diluted earnings/share rose 44% to US49c, same-store net operating income rose 5.9% (GAAP basis), 8.8% (cash basis), same-store occupancy fell from 94.1% to 93.8%, the total portfolio was 93.7% occupied & 94.3% leased. Higher margins from the industrial portfolio acquired in the takeover of Spieker Properties helped increase the operating margin from 65.3% to 68.5%. The office operating margin was 68.1%. The weighted average gross rent on leases signed in the quarter rose 21.2%, from $US25.65/ft² to $US31.08/ft².

29 October 2001

Starwood Hotels & Resorts Worldwide Inc said the 11 September terrorist attacks had a significant impact on its third quarter results. Same-store revpar (revenue/available room) fell 19.4% in North America & 8.2% internationally, total ebitda (earnings before interest, tax, depreciation & amortisation) fell 29% to $US288 million and the ebitda margin was 30%, earnings/share fell 72% to US14c, same-store North American occupancy in the last fortnight of the period (to 15-30 September) fell 32 points to 48% & revpar fell 49%. Occupancy in those hotels rebounded in the three weeks 1-21 October to 66%, down 13 points on a year ago, resulting in a 27% revpar fall. In the fourth quarter, Starwood expects severance & other restructuring charges will cost it $US75-150 million, worldwide same-store revpar to fall 25-30%, ebitda of $US200-225 million, and a probable small earnings/share loss through depreciation costs before the restructuring. Assuming an economic recovery, Starwood forecasts 2002 revpar should be flat to 15% down, ebitda should be $US1.25-1.3 billion, earnings/share $US1-1.20 (including US24c from the new accounting rules pertaining to goodwill & intangible assets. Starwood is planning on $US200-250 million capital spending in 2002, including maintenance. Starwood owns/manages 725 properties in 80 countries. The company, whose hotels include the Sheraton brand, details performances of all its chains, provides geographic comparisons and comparisons between owned & managed premises.

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Snapshot on world property, week to 25 May 2003

25 May 2003

Centro Property Trust has extended its offer for the AMP Shopping Centre Trust to Tuesday 10 June. Centro has just under 20% of the AMP trust, but so too does Westfield Trust, which has launched a full cash bid.

24 May 2003

Simon Property Group Inc and Westfield America Trust have extended their $US20/share hostile bid for Taubman Centres Inc to Friday 27 June as litigation over the bid continues.

Urban Retail Properties Co will manage, lease & co-ordinate the $US300 million development of Branson Landing, a mixed-use waterfront development in downtown Branson, Missouri, to feature the city’s 1st major convention centre, new town square, marina, 300-room hotel and a wide range of destination retail, dining & entertainment venues. It will cover 32ha bordering a 2.4km boardwalk along the shore of Lake Taneycomo, and will have 18,000m² of retail space and a 20,000m² convention centre. Branson draws 8 million tourists/year and expects this development to raise that by several million.
Website: Urban Retail Properties

23 May 2003

Investa Property Group of Sydney has taken an 8.4% strategic stake in Principal Office Fund.

The Transmetro Corp Ltd has bought the 4-star 19-room Pentura Hotel on Pitt St, Sydney, for $A16.5 million through Hudson Hotel Group Pty Ltd, in which it has a 30.3% interest. Metro will also take over management and will rename it the Metro Hotel Sydney. The company has 4-star hotels in Perth & Melbourne and wanted to shift its focus from the midmarket Inn brand.

19 May 2003

Lend Lease Corp Ltd has agreed to sell its housing & community investing business to Municipal & Mortgage Equity LLC (MuniMae) for $US102 million. Book value is $US94 million and Lend Lease’s transaction costs would be about $US4 million. “HCI has achieved strong growth over the past two years and has been a good contributor to Lend Lease’s profits. However, the strategic review clearly identified the business as having limited synergies with other parts of the group,” Lend Lease chief executive Greg Clarke said. Lend Lease said the business was a leading provider of tax credit investments to corporate investors. The low-income housing tax credit was created to provide financial incentives for the development and/or rehabilitation & preservation of privately owned affordable rental housing. To this end, investors in affordable housing receive US federal tax credits for 10 years. Since 1987, the business has raised & invested $US3.5 billion of equity capital in more than 1000 low-income housing tax credit properties. It invests in about 100 properties/year on behalf of its clients.

US cinema company Reading International Inc attributed most of its $US2.5 million 1st quarter revenue rise to its 10 screens in Wellington. The Wellington complex on Courtenay Place opened at the end of the 1st quarter last year. Reading increased revenue 12.8% to $US22 million, ebitda (earnings before interest, tax, depreciation & amortisation) 19.3% to $US1.2 million, average attendance 5% to 11,790/screen and total revenue/screen by 13.1% to $US92,404/screen. The company made a $US1.9 million net loss, up from $US900,000, mostly through higher depreciation expense (some from Wellington) & higher interest expense due to the expensing of interest on the Wellington centre which was previously capitalised. Reading operates under the Reading and Berkeley names in New Zealand. It has 222 screens in its $US188 million portfolio.

Village Roadshow Ltd is forecasting an $A25-30 million full-year net loss because its theme parks, ahead of budget at the December half, saw foreign tourist numbers slashed as a result of the Sars virus. Village Roadshow will net €50 million from the €225.65 million sale of its 50%-owned Warner Village cinema circuit in Britain, after repaying its Exhibition global debt facility. Sale proceeds are €2 million below book value and will take €5 million/year off earnings. The return to Village Roadshow has fallen $A55 million over the negotiating period because of the pound’s fall against the Australian dollar.
Website: Village Roadshow

Wal-Mart Stores Inc reported record earnings, up 14.1% to $US1.86 billion and from US37c to US42c/share, on sales up 9.7% to a record $US56.7 billion for the 30 April quarter. Same-store sales rose 2.2% Wal-Mart has 1536 Wal-Mart stores, 1309 Supercenters, 526 Sam’s Clubs & 51 Neighborhood Markets in the US, and 1300 stores outside the US. In Japan, it owns 35% of Seiyu Ltd, operator of 400 stores, and has an option to go to 66.7%.
Website: Wal-Mart

Leighton Properties Pty Ltd and Ariadne Australia Ltd have settled the purchase of the Bayview Noosa property which is to be turned into an integrated residential & resort development, Viridian. The 6 luxury homes in 1 precinct have been priced at $A2.7-3.2 million, the 23 apartments in the 2nd precinct (13 3-beddies & 10 2-beddies) from $A1.19-1.66 million. Ariadne chief executive Murray Boyte said the resort precinct would have 147 apartments and extensive central facilities including restaurant & conference venues for up to 400 people. Construction will start in July. The resort is due to open in early 2005. The whole development has been given an $A180 million completed value.

Lend Lease Development Pty Ltd has exercised its 1st right of refusal to acquire the Twin Waters resort on Queensland’s Sunshine Coast from the Victorian Government’s Tricontinental Corp Ltd, price not disclosed. The acquisition includes the resort land & buildings, 18-hole championship golfcourse & resort operating business, and is the final step of the strategy Lend Lease put in place in 1996 for Tricontinental’s staged exit from its investment in Twin Waters & surrounding land assets. Lend Lease plans a staged redevelopment of the 366-room resort hotel & central facilities that will include premium residential precincts, and intends to sell the central facilities, golfcourse & resort management rights to specialist operators. Accor Group is the current resort operator. The staged redevelopment should start in mid-2004 for completion in 2010.

Stockland Trust Group has bought 2 industrial facilities at Granville and Wetherill Park in West Sydney for $A28.6 million, on long-term sale & leaseback agreements with Visy, at a 9% average initial yield. The 16,813m² Wetherill Park office/warehouse was built in 1990 on 4.33ha. Visy’s rent will start at $A75/m², with 3% annual reviews.
Website: Stockland Trust Group

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Snapshot on world property, week to 14 December 2003

10 December 2003

Macquarie Office Trust has bought an 80% interest in 2 US office properties for $US90.2 million, its 1st venture outside Australia. US real estate investment trust Brandywine Realty Trust holds the other 20% of the $US112.8 million investment. The properties, 1 & 3 Christina Centre in the Wilmington central business district in Delaware (a submarket of greater Philadelphia), are both A grade towers containing a total 58,787m² and are fully leased. They’ve been bought at an initial income yield of 9%.

Mirvac Group has joined the investment shift to Sydney’s outer western district, buying a 17ha industrial site at Prestons for $A22 million. The site – the undeveloped former Liverpool Showground — fronts the M7 Western Sydney Orbital near its intersection with the M5 motorway. Mirvac is looking at a 70,000m² industrial business park in the medium/long term.

9 December 2003

Stockland Group has sold the 14,247m² net lettable area City Centre in Rockhampton to the James Fielding Meridian Trust for $A38 million at an 8% yield. Stockland said it was overweight in Rockhampton after buying the AMP Diversified Trust.

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Snapshot on world property, week to 20 October 2002

19 October 2002

An annual report by Lend Lease Corp and PricewaterhouseCoopers, Emerging Trends in Real Estate:2003, said US markets would stay soft for at least another year. Story: US property soft for another year

18 October 2002

US hotel group Host Marriott Corp reported third-quarter net income down from a $US7 million loss in 2001 to a $US38 million loss this year, on revenue down 7% to $US789 million. Funds from operations fell 45% to $US41 million, and from US28c to US15c/share, after a US3c deduction to recognise business interruption insurance proceeds for the New York Marriott Financial Centre and Marriott World Trade Centre hotels. Comparable revpar (revenue/available room) fell 8.9%.

Dallas development family Trammell Crow has sold most of the $US680 million assets of its Crow Holdings Industrial Trust, plus $US820 million of debt, to Clarion Partners, a US unit of the Dutch ING Group. A number of institutional investors have joined ING Real Estate to settle the investment. Clarion will form a new open-ended industrial real estate investment trust based on Crow Holdings’ 250 properties in 22 cities.

Australand Holdings Ltd has sold more than 50% of the 530 units in the first residential tower of its $A750 million Freshwater Place project in Melbourne’s Southbank and will start construction in January. It will also proceed with a 36-storey office tower.

International Living’s global retirement index considered 30 countries & 8 categories this year and placed New Zealand at eighth best place to live for pensioners wanting to live offshore (aimed at US retirees). Top of the list was Panama followed by France, Canada, Portugal, Australia, Italy, Nicaragua, NZ, Malaysia & Chile. Categories taken into account were real estate (prices), special benefits for retirees, cost of living, culture/recreation/entertainment, healthcare, infrastructure, safety & stability, and climate.

George Wimpey will take over John Laing’s homes division for £297 million to become Britain’s biggest residential builder. Laing Homes will remain a separate division to give Wimpey a premium brand.

Filipino mall magnate Henry Sy will take his business public next year. In preparation, he has transferred his retail assets from Shoemart Inc to the proposed public entity, SM Mart Inc.

15 October 2002

Trans Tasman Properties Ltd’s Sydney-based offshoot, Australian Growth Properties Ltd, has sold Penrhyn House in Canberra to Investa Property Group for $A38.6 million. Settlement is due in early December. AGP will use the proceeds to repay the $A26 million amortising loan facility over the property, and the balance for future development & investment initiatives. The price equates to a 9.9% passing yield before acquisition costs for Investa, which will hold 50% through a sub-trust & 50% through a new syndicate offering. Penrhyn House has 12,622m² in 3 interconnected buildings, all leased to the Federal Government at $A328/m² gross. Remaining lease term is 6.7 years.

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Snapshot on world property, week to 18 March 2001

Latest: Sun Hung Kai holds profit though sales slashed, Cheung Kong Infrastructure profit down 3%, Westfield expands in California, industrial owner Monmouth spreads out, writedowns give mall owner JDN Q4 loss, Transfield dispute over, Canadian bank signs $US800m lease on Manhattan tower, Great Eagle profit slightly off, big fall in HK residential construction. big lift for Forest City Enterprises, Raffles City selldown, Ssanyong profit up 125%, Li Ka-shing secures third Australian project, shell & core basis for new HK tower.

16 March 2001

Sun Hung Kai Properties’ sales of property fell 51% to $HK6.38 billion ($NZ2 billion) in the December half, but the company managed to raise profit 0.9% to $HK5.3 billion and earnings/share rose 2c to $HK2.21. Total turnover fell 39% to $HK10.4 billion. The company got $HK282 million of its profit from asset sales. Sun Hung Kai expects a rise in office leasing and plans to develop 750,000m² of investment property in the next five years, more than half of that office, and most of that office space on the Kowloon Station phases 5-7 it won the development right for last year.

Cheung Kong Infrastructure’s profit fell 3% to $HK3.22 billion ($NZ1 billion), including its share of associates’ profits, on turnover down 16% to $HK2.56 billion.

Westfield America Inc opened the first phase today of its $US165 million expansion of Westfield Shoppingtown Valley Fair in San Jose, California, containing 80 specialties, a 21,000m² Nordstrom and foodcourt, all leased. When phase 2 opens early next year it will have more than 260 shops. The development is a joint venture between Westfield and a group of pension trusts represented by JP Morgan Investment Management.

Monmouth Real Estate Investment Corp has bought a new 5092m² industrial building in Newington, Connecticut, for $US3.4 million (at $NZ1610/m²), from the builder, Butler Real Estate Inc, which us built it for the tenant, Keebler Co. Keebler has a 10-year lease. Monmouth has 25 properties spread through 16 states, plus a portfolio of reit securities.

Alarm bells: A US trust reports its fourth-quarter and year-end results “before special charges”. For the quarter, Atlanta-based JDN Realty Corp made a $US14.4 million loss compared to a $US9.2 million a year earlier, on revenue down 7.6% to $US25.8 million. Funds from operations fell 31.4% to $US1.87 million, or by 25%/share. Annual revenue was steady at $US106 million, net income fell 61% to $US18.8 million, funds from operations fell 27.7% to $US37.7 million, leased space rose slightly to 95.6%. The $US21.7 million of writedowns included $US5.7 million deducted from funds from operations. JDN specialises in developing and managing shopping centres. It owns and operates 11 of them in 19 states, but also plans to sell $US100 million-worth this year. JDN has acted on concern at the state of the theatre industry by turning two leases earning $US3 million base rent into $US1.9 million base rent and increased income based on sales. “We expect to sell certain shopping centres anchored with theatres during the year to lower our exposure to this industry,” chief executive Craig Macnab said. The company has developed just over $US100 million of properties yielding an aggregate 9.4% and sold about $US100 million of properties at a weighted average cap rate of 10.5%. On a same-store basis, annualised base rent rose 0.5% to $US7.69/ft² ($NZ200/m²).

15 March 2001

A long-running dispute between members of the family who own the Transfield group in Australia is over, opening the way for the float of Transfield Services, which also operates in New Zealand.

Canadian Imperial Banking Corporation subsidiary CIBC World Markets has signed a 30-year, $US800 million lease on the whole of a 110,000m² Midtown Manhattan tower Brookfield Properties Corp is building. CIBC will move 3000 New York employees in 2004 from four buildings around the city, including space in Brookfield’s One World Financial Centre, which has already been pre-leased to Lehman Brothers. The new 35-storey tower at 300 Madison Ave is between 41st and 42nd Sts, in an area undergoing a major revival.

Hong Kong property investor Great Eagle Holdings Ltd reported profit down 3.5% to $HK623 million ($NZ194 million) after a recovery in office rents, but a failure to revise residential renewals until the second half. Great Eagle is considering selling some overseas hotel assets, but first needs to work out how to minimise the huge capital gains tax that would result.

Official figures released in Hong Kong show new private flat construction fell 27% to 25,800 last year, average prices fell 13% and the rental average rose 0.5%. However, the backlog was reduced as 29,2000 units were taken up, cutting vacancy from 5.9% to 5.4%. The forecasts are for 28,000 completions this year, 30,000 next year.

13 March 2001

Forest City Enterprises opened or acquired 17 properties worth $US535 million in the year to January and has another 14 worth $US545 million under construction. They’re a mix of office, shopping centres, hotels and residential. The 444-room Hilton Times Square is part of the company’s New York 42nd St mixed-use project, which includes 28,000m² of retail and entertainment space. Forest City opened four other retail/entertainment projects in New York, the Battery Park one anchored by a 460-room Embassy Suites hotel. Disposals and reversal of a deferred tax liability totalling $US51.8 million helped Forest City to a 125% net earnings gain for a total $US91.6 million. Net operating earnings rose 15.7% to $US44 million on total revenue up 13.7% to $795 million, earnings before depreciation, amortisation and deferred taxes rose 11.4% to $US148 million. The rental properties side of its business earned 24% more at $664 million.

Raffles Holdings Ltd will seek shareholder approval on 28 March to sell 55% of its $S1.8 billion Raffles City complex to a special purpose vehicle. Raffles City has more than 2000 rooms in two hotels (managed by Westin, to revert to Raffles next January), a shopping centre and an office block. Apart from those two hotels and the famous Raffles in Singapore, Raffles Holdings has 14 other hotels in 10 countries and is negotiating to buy a 20-hotel chain plus some individual hotels. The company is 60% owned by Singapore Government-controlled CapitaLand. The new owner is expected to pay $S972 million, giving Raffles Holdings a net gain of $S357 million, and to finance the deal by issuing $S583 million of 10-year senior bonds with a 5.6% coupon, and place $S389 million in equity notes.

Ssanyong Cement raised profit 125% in the December half to $S18.7 million though group turnover fell 19% to $S79 million as the Singapore construction market stayed soft. Its gains came from the venture capital side of the business.

Hong Kong magnate Li Ka-shing has secured his third major Australian investment for Cheung Kong Infrastructure, with the possibility of a fourth to come soon. Cheung Kong Infrastructure will take $A26.5 million of South Australian Government-guaranteed floating rate notes from the Asia Pacific Transport Consortium, which is to build the $A1.2 billion 1410km railway between Darwin and Alice Springs. The infrastructure company has committed $A3.25 billion to two Victorian and South Australian power projects and related company Hutchison Whampoa is in the running to win management of South Australia’s ports infrastructure.

Hongkong Land’s new $US300 million 53,800m² office block on the site of the old Swire House at 11 Chater Rd, Central, will be offered for lease on a shell and core basis — no ceilings and no raised floors, so tenants can decide their own designs. They’ll be paid for that part of the fitout. Roof space has been set aside so several tenants can install their own mechanical and engineering facilities. The building will have 23 office floors of 1750-1815m² above a retail podium.

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