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 8 September 2002

8 September 2002

Cleveland-based Forest City Enterprises Inc’s net earnings fell 18% in the second quarter to $US12.7 million, or 26.4% to US25c/share, but the company wasn’t fazed, saying earnings before depreciation, amortisation & deferred tax (ebdt) gave a more consistent picture. Ebdt rose 17.8% to $US43.6 million, or 8.8% to US87c/share, on consolidated revenue up 4.2% to $US239.9 million. The company focused on high-entry-barrier markets. Growth came from opening 12 projects in 2001, 14 (5 new, 9 acquisitions) in the first half of 2002, and from several project milestones this quarter. At Denver’s old airport, Stapleton, 650 of the 665 house sites have been sold to builders, who have sold 345 homes. Forest City opened the 62,500m² Quebec Square power centre and opened 2 office buildings costing $US103.2 million & containing 31,200m² of office space in the University Park at MIT, Boston, office & biomedical park. It opened the $US14 million 5300m² Bessemer Court at Station Square riverfront retail/restaurant/entertainment/parking (now about 4900 parking spaces, biggest in Pittsburgh) redevelopment of part of the old station (the whole of Station Square covers 21ha, slightly more than Auckland’s Quay Park, and has about 50,000m2 of premier office space). In New York, former World Trade Centre tenant Bank of New York will move 1500 staff into the $US74 million 36,000m² Atlantic Terminal office building above retail in Brooklyn, and 2 state government agencies will move into a similar 13,000m² office-over-retail development in Harlem.

Equity Office Properties Trust has got a $US50 million lease termination agreement out of Californian technology company Inktomi, which signed 13-year & 15-year leases on the 37,000m² of 2 new San Francisco buildings in 2000. $US21.5 million of Inktomi’s payment is in a promissory note. The deal relies on sale of Inktomi’s Bayside Towers headquarters, or alternatively Equity Office taking possession of Bayside Towers. Equity Office also gets 5 million Inktomi shares, which now have no value.

5 September 2002

Debut Services Ltd, a joint venture between Bovis Lend Lease Ltd and Babcock International Group plc, has been named preferred bidder for the first stage of the British Defence Ministry’s single living accommodation modernisation programme, worth £1 billion over 10 years.

The Glimcher Realty Trust has sold 13 properties (11 community retail centres & 2 single-tenant assets) in the US Mid-west & South-east for $US106 million. The properties have 196,561m² of gross lettable area ($US539.27/gross m²) The trust has another 9 assets under contract to the same buyer, a group of private investors not previously involved with Glimcher. The trust has used the cash proceeds to repay a mortgage and get below a 60% debt:market capitalisation ratio. The properties sold range from a couple of 3500m² & 6000m² to 24,000m². Glimcher still owns/has an interest in 85 properties containing 2.6 million m² gross lettable area, most of that in 23 regional malls.

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Snapshot on world property, week to 3 November 2002

3 November 2002

Torto Wheaton Research said net US industrial space absorption in the 3rd quarter was 1.33 million m², the 1st positive quarter after 6 negative quarters. AMB Property Corp, which owns/manages/is developing 9 million m² of industrial property (1000 buildings in 27 markets), said its industrial absorption indicator forecast positive absorpition of 4 million m² for the 4th quarter, but less than 100,000m² for the 1st quarter of 2003. “While we don’t interpret our newest positive absorption forecasts as a signal of an imminent strong recovery, we do feel that the worst is over,” AMB research director David Twist said.

30 October 2002

Equity Office Properties Trust the biggest real estate investment trust in the world, reported 3rd-quarter funds from operations down 4.6% to $US362.3 million, a fall of 5%/fully diluted share to US77c. Total revenue fell only slightly (0.24%) to $US881.5 million. Same-store net operating income fell 5.4% (gaap basis), same-store occupancy fell from 94.9% at the start of the quarter to 89.7% at the end. Office portfolio occupancy fell from 93.7% a year ago to 90% in June, 89.2% in September. Industrial portfolio occupancy fell from 97.2% a year ago to 91.3% in June, 88.1% in September. Terminated leases averaged $US36.21/ft² & expiring leases $US27.92. The average rate on new & renewed leases, $US26.53, was a 12.5% cut.

Brookfield Properties Corp, whose $US8.3 billion of assets includes the World Financial Centre (next to the destroyed World Trade Centre) in New York, will split off its $US879 million homebuilding business on 31 December through a $US2 special dividend to shareholders, equivalent to a payment of 1 share in Brookfield Homes for every 5 in the existing company. The stated purpose is to give the residential division better recognition, but Brookfield also forecast a 14% growth rate for the commercial business in 2003, compared to only 10% for the residential business. The homebuilding business operates in 3 areas of California and in northern Virginia.

Brookfield Properties Corp increased its 3rd quarter funds from operations (excluding lease termination income & transaction gains) by 12% to $US100 million, 13%/share. Including termination income & gains took the increase to 31%, while net income rose 40%.

28 October 2002

US homebuilder Meritage Corp increased third-quarter net earnings 50% to $US22.4 million, 26.4%/diluted shares to $US1.58/diluted share, on sales up 59% to $US328.5 million, and increased ebitda (earnings before interest, tax, depreciation & amortisation) 58% to $US49.8 million. Meritage settled on 1311 homes in the quarter, including 250 from July acquisition Hammond Homes, an increase of 40% over the 938 closings recorded in the same quarter of 2001. Next quarter’s results will include Perma-Bilt Homes in Las Vegas, settled this month.

Ohio-based M/I Schottenstein Homes Inc reported third-quarter income up 19% to $US17.9 million, earnings/diluted share up 20% to $US1.15. For the 9 months to September, gross margins were 25% & operating margins 13%. The company expects to earn $US4.30/share for the year, up from a previously forecast $US3.90/share and last year’s $US3.56/share. The company delivered 1067 homes in the quarter, down 9%. It has a $US626 million backlog (3223 homes), average sale price unchanged from the backlog a year ago at $US241,000.

Retail property trust Glimcher Realty Trust, also based in Columbus, Ohio, reported third-quarter funds from operations down 10.6% to US59c, lower after an equity offering and severance payments. The trust’s actual FFO rose 1.2% to $US22.2 million. Same-store mall occupancy rose from 85.3% to 88.1%, and average rents rose by 0.7% to $US22.09/ft². Occupancy at Glimcher’s Polaris Fashion Place, opened at the end of 2001, reached 87.8%, with average rents exceeding $US42/ft². Glimcher lost 12 anchors from its community centre portfolio during the year, cutting occupancy from 93.5% to 81.6%. Same-store revenue in that portfolio fell 9.5% and net operating income 13.7%. The trust cut its debt level from 64.5% to 58.1%.

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Snapshot on world property, week to 27 May 2001

Latest: US new home sales drop, Woolworths and Pick ‘n Pay buy Franklins stores, US home loan rates up slightly, big new Macau theme park for Stanley Ho, FAL negotiating on 35 Franklins, CSR earnings record, Dreamworld revenue slips, Sea World buyout, Brierley sells out of James Hardie, Bass buys HK Regent.

27 May 2001

US new home sales dropped an annualised, seasonally adjusted 9.5% to 894,000 in April after two months of rises. Sales of existing homes fell 4% from March to April, annualised and seasonally adjusted. Median prices rose 1% for new and 6% on existing, compared to a year earlier.

Woolworths Ltd (no connection nowadays to the Woolworths chain in New Zealand) has bought 67 Franklins stores in Australia from Dairy Farm International. Refurbishment at about $A170 million and purchase for about $A250 million would take the cost to Woolworths to about $A420 million. Pick ‘n Pay of South Africa has bought 60 Franklins stores, as well as 20 Fresco supermarkets.

Average US home loan rates rose from 7.14% to 7.2% (30-year fixed) this week but are still lower than last year, a Freddie Mac nationwide survey shows. A year ago the average was 8.62%.

25 May 2001

Stanley Ho Hung-sun will follow his 338m Macau Tower project (designed by Gordon Moller, of Auckland, based on his Auckland Sky Tower design), which offers views across the Pearl River delta and islands of Hong Kong, with a $US112 million Fisherman’s Wharf theme park to be completed in 2003, two years before Hong Kong’s new Disneyland. Mr Ho’s casino-based company, Sociedade de Turismo e Diversoes de Macau (STDM) is developing 15ha next to the Macau ferry pier, including another 4ha of reclaimed land, in partnership with local businessman David Chow.

23 May 2001

Foodland Associated Ltd said it was in final negotiations to buy 35 Franklins supermarkets in Queensland and northern New South Wales from 45 properties offered, and may buy some of Franklins’ Brisbane distribution assets. The store purchase will cost $A150 million for properties with annual sales exceeding $A500 million. FAL has 29 Action supermarkets in Western Australia and 65 Foodtown and Countdown supermarkets in New Zealand. It also controls Farmers and recently canned the Deka chain, though it’s now negotiating a sale of the Deka stores not transferred to Farmers.

CSR Ltd made a record $A505 million net profit after tax and before abnormals for the March year, up 7%. It plans to continue expanding in the US at the rate of $US200 million/year.

Revenue from Macquarie Leisure Trust’s Dreamworld, between Brisbane and the Gold Coast, fell 6.8% to $A13.8 million in the March quarter on attendances down 1.9% to 272,000 and spending/head down 4.8% to $A50.69. But the Big Brother TV show, which began filming at Dreamworld on 24 April, has increased interest, particularly the Sunday night eviction shows. The four marinas in its d’Albora Marinas division increased revenue 6.4% to $A3.4 million.

Warner Sea World Units Pty Ltd and DEG Holdings Pty Ltd (John Kirby’s Village group) have extended their bid for all the units in the Sea World Property Trust from 28 May to 4 June, after independent directors of Sea World not associated directly with either bidder got the offer up from A72c to A82c. Independent appraiser DDH Graham Ltd said the new bid was still not fair, after valuing the Gold Coast Sea World operation at A84-90c/unit, based on operating profits up 60% in the first four months of 2001 and forecast cashflows to 2006, but reasonable given links between bidders and the trust and their control over 68.41% of the units. The units were trading around A54c before the offer, so the new bid is at a 51% premium.

Brierley Investments Ltd subsidiary UB Minerals Australia Pty Ltd has sold its 28.7% James Hardie stake for $A567 million through a placement at $A4.75/share. The stake represented 37.2% of Brierley’s net tangible assets last June and the sale will net the group $A234 million over book value. Brierley now expects to report a profit for the June 2001 year.

22 May 2001

Bass Hotels & Resorts has bought the 514-room Regent hotel on Hong Kong’s Kowloon foreshore from New World Development Ltd for $US346 million, at $NZ1,578,400/room, and will rename it the Inter-Continental of Hong Kong. New World has a $HK10 billion debt reduction plan and this sale will take its disposals to $HK4 billion this year, reducing its gearing from 48% to 42%, and net debt to $HK24 billion. New World developed the Regent and an adjoining New World hotel on the Tsimshatsui shore, looking straight across the ferry run to Hong Kong Island, 20 years ago. The hotel’s revenue/available room (revpar) is growing at 12%/year compared to single-figure revpar in Europe and the US, ebitda for the June 2001 year is expected to be $NZ74 million, and the sale price is 10.9 times ebitda, compared to Europe’s standard of 8 times.

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Snapshot on world property, week to 19 January 2003

19 January 2003

San Francisco-based apartment community owner BRE Properties Inc increased net earnings 29% to $US26 million for the December quarter and 12% for the year to $US88 million on revenue up 5.6% to $US278 million for the year. But funds from operations fell 7.5% for the quarter & 5% for the year, and same-store net operating income fell 6% for the quarter. BRE increased its rental portfolio from $US1.8 billion to $US2.1 billion during the year. The company said the poor economic climate combined with seasonal factors to cut San Francisco earnings 9% compared to the 3rd quarter. Issuing debt — which many US reits have been doing while they also try to sell down stock — pushed BRE’s interest bill up. BRE expects weak regional & national economic conditions this year will cut its returns. The company owns 22,371 apartment units and said average market rents fell 4% in the 4th quarter to $US1075/unit. Average occupancy was 94%, down 1% from the previous quarter.
Website: BRE Properties Inc

16 January 2003

Simon Property Group Inc raised its hostile offer for Taubman Centers Inc from $US18/share to $US20/share today, and was joined in the bid by Westfield America Trust. It would cost Westfield $US522 million (funded through Deutsche Bank and UBS Warburg) if the joint venture is successful. The tender offer period will run to 14 February. Westfield’s disclosure showed Taubman as a $US4 billion company, with equity of just under 50%. Average specialty store sales at December 2001 were $US456/ft² and average rents $US40.97/ft² (sales of $NZ9036/m² & rent of $NZ811.98/m²) on occupancy of 88.6%. In their previous joint bid, for Rodamco North America last year with The Rouse Company, the portfolio was broken up after the bid succeeded. In a 2001 comparison Westfield America said its specialty sales averaged $US379/ft² , rent averaged $US35.09/ft² , occupancy 95%, occupancy costs 13.2% against Taubman’s 14.7%, average rent/sales 9.3% against Taubman’s 8.9%. Taubman has far greater population density round its malls (853,000 within 16km compared to 814,000 for Rouse, 797,000 for Westfield, 491,000 for Simon) and behind Westfield on average income of its shoppers.

Lend Lease Corp has built up a 5.7% stake in AMP Shopping Centre Trust since November, on behalf of itself, pension funds & managed trusts.

Lend Lease Corp has bought the 521-unit luxury apartment community Jefferson at Empire Lakes, on 8.3ha next to the Empire Lakes golfcourse in the Empire Lakes master-planned business community, a few minutes from Southern California’s 2nd biggest airport, Ontario. JPI began development of the community, in the city of Rancho Cucamonga 65km east of downtown Los Angeles, in April 2001. GE Capital is JPI’s primary source of equity. Lend Lease bought the community for its Prime Property Fund, set up for pension funds to invest through. The price was not disclosed.

15 January 2003

The Canada Pension Plan investment board has bought 5 Ontario shopping centres for $C300 million in partnership with Osmington Inc, a real estate company set up by Thomson Corp, part-owner of Toronto’s Globe & Mail newspaper. The seller was another pension fund, the Ontario Teachers Pension Plan board. The Canada pension plan has $C17 billion under management, growing to $C160 billion by 2012. It will also move into the prime office sector — which will require other pension funds to reweight & sell — will look to invest in the US & Europe, and may invest in infrastructure.

14 January 2003

Taubman Centers Inc has reached agreement with Sheldon Gordon, chairman of privately held Gordon Group Holdings LLC, which is likely to disrupt Simon Property Group Inc’s hostile takeover bid for Taubman. Gordon is 41% special partner with Simon as 58% general partner in The Forum Shops at Caesars in Las Vegas, and on 13 January triggered a buy/sell provision for Simon to accept a $US590 million price tag on the prime Sunset Strip property (sales exceed $US1100/ft², or $NZ21,857/m²). If Simon doesn’t buy, it must sell out to Gordon. Either way, Mr Gordon said, “my relationship with Simon is ended permanently.” If Simon sells, Taubman will take a 33.3% stake & manage the Las Vegas centre. Under both buy & sell scenarios, Gordon will invest in Taubman. Gordon is an entertainment retail pioneer. It’s developed the San Francisco Centre, Bridgemarket in New York, Pearlridge & Kahala Mall in Honolulu, and is redeveloping the Ocean 1 Pier in Atlantic City, New Jersey. Taubman owns/manages 30 centres. Simon has an interest in 246 US centres and has market capitalisation of $US21.7 billion, making it the biggest real estate investment trust in North America. Simon offered $US17.50/share for Taubman in November and raised the bid to $US18/share in early December. Gordon will buy into Taubman at $US24/share.
Websites: Taubman Centers Inc
Simon Property Group Inc

Calpers (the Californian Public Employees’ Retirement System) is considering a £50 million bid for Chelsea Village, the listed property company which owns the premier league Chelsea football club in London.

Britain’s 2nd-biggest supermarket chain, J Sainsbury plc, is preparing a £3 billion bid for No 4, Safeway plc, but could face drawn-out regulatory scrutiny. Wal-mart Stores Inc of the US, which controls No 3, Asda, confirmed it is also working on an offer. Their bids follows a £4.2 billion offer (including £1.3 billion for debt) by Bradford-based William Morrison Supermarkets plc. Morrison’s offer is priced at 277.5p/share, Sainsbury’s would be at 300p in cash & scrip.

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Snapshot on world property, week to 19 October 2003

19 October 2003

Hometown America LLC, 1 of the biggest privately held owners & operators of manufactured home communities in the US, has completed purchase of Chateau Communities Inc, which was the biggest company in the market and was listed. Holders of $US337 million of Chateau securities have accepted the offer. The combined company will have a portfolio of 261 communities with more than 88,000 sites in 34 states. Hometown’s principal investor is the Washington State Investment Board.

General Growth Properties Inc, 2nd biggest US mall owner, developer & manager, has bought 3 regional malls for $US550 million — the Sikes Senter in Wichita Falls, Texas, 62,700m², 90% occupied, sales at $US275/ft²; The Maine Mall in South Portland, Maine, 102,200m², 89% occupied, sales at $US465/ft²; and Glenbrook Square in Fort Wayne, Indiana, 111,500m², 89% occupied, sales at $US360/ft². They’re expected to earn $US39.1 million in calendar 2004, putting the deal on a 7.1% yield.
Website: General Growth Properties

Forest City Enterprises Inc is heading away from malls and favouring open-air shopping. It’s just turned the 1st sod on Victoria Gardens, a $US180 million, 120,770m² open-air regional lifestyle & entertainment centre on a 59.5ha site in Rancho Cucamonga, a city east of Los Angeles in California. Forest City president & chief executive Charles Ratner said the development of open-air regional lifestyle centers was an emerging priority for the company. In September, it opened Short Pump Town Centre near Richmond, Virginia. “Such lifestyle centres are different than traditional malls, and meet consumer demand for an outdoor-oriented, multi-purpose retail, dining, entertainment & cultural venue.”
Webite: Forest City Enterprises news page

Morgan Stanley has proposed a major rethink for management of listed property trusts in Australia. Now in a bidding war to become responsible entity for the Lend Lease US Office Trust, it’s proposed cutting the aggregate management fee from 0.5% to 0.4% of gross assets under management, said it would ensure an independent majority on the responsible entity’s board and that they would be subject to election (they’re normally appointed). Principal Real Estate Investors (Australia) Ltd and Colonial First State Investments are challenging Morgan Stanley’s appointment and a unitholder meeting has been called for 14 November to decide the issue. The Lend Lease US trust has a $US900 million portfolio.

Essex Property Trust Inc, a US West Coast trust, has bought 2 multifamily communities containing a total 442 apartments for $US41.7 million. It said they were in Seattle’s upmarket east side, where it expects better-than-average rental growth. Essex owns more than 25,000 units in 119 properties.
Web site: Essex Property Trust

Host Marriott Corp has agreed to buy the 806-room Hyatt Regency Maui Resort & Spa located on 15ha of fee simple oceanfront property on Kaanapali Beach, Hawaii, from an affiliate of Blackstone Real Estate Advisors for $US321 million, or $US398,000/room. 2003 ebitda (earnings before interest, tax, depreciation & amortisation) is forecast at $US33 million, including $US10 million depreciation, putting the acquisition price at a 9.7 times multiple to forecast ebitda and representing a 20% discount to estimated replacement cost.
Website: Host Marriott

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Snapshot on world property, week to 24 December 2000

Latest: Houston transaction at 10.48%, InnSuites does poorly, Biltmore sold, Californian developer struggles, Toronto bank sells stakes, Australand readies for land buys, CK Tang makes loss, Rockefeller Centre sold, UK builder buyout, General buys industrials, Master-planned LA development, French cinema merger, UK housing merger, Henderson buys big HK site.

23 December 2000

Wells real estate investment trust of Atlanta has paid $US45 million to add a fully leased, 29,000m² A grade property in the Enclave business park just south of Houston, Texas, to its $US600 million portfolio, at a 10.48% cap rate. The six-storey building sits on 5.8ha, which includes a four-storey 1465-space parking garage and 2ha available to build another 19,000m² of offices.

Another poor US performer: InnSuites Hospitality Trust, owner of 11 modest suites hotels in Arizona, southern California and New Mexico, went from a $US8000 profit in the nine months to October 1999 to a $US506,000 loss for that period this year. A $US682,000 charge for uncollectible rent from the lessee (the operator is separate from the trust) took the latest quarter to a $US514,000 loss. As well, the trust’s unnamed primary bank has decided to stop funding hospitality operations in Arizona, forcing it to a find a new credit facility for three hotels from next April.

The renowned 730-room Arizona Biltmore hotel in Phoenix has been bought by KSL Recreation Corp from Boca Resorts of Florida, which held it for two years. Built in 1929, it was owned for the next 44 years by the family of chewing gum magnate William Wrigley Jr.

Newhall Land & Farming Co, a developer based in Valencia, California, has sold 924 apartments in four blocks to an unnamed investment trust for $US79 million, plus the assumption of $US50 million of debt, so it can pursue its share buyback programme. The company claims its stock is undervalued. Its third-quarter revenue fell 36% to $US46.5 million and it made a $US612,000 loss, down from a $US11.9 million profit.

Toronto-Dominion Bank will stakes in several landmark Canadian properties to Cadillac Fairview for $C1.28 billion ($NZ1.92 billion), which will become sole owner of the portfolio, in which both were involved in developing. The properties include the Pacific Centre in Vancouver, the Toronto Eaton centre and the Toronto-Dominion Centre.

Australand shareholders have approved the issue of $A100 million in preference shares to take advantage of opportunities expected in the first half of 2001 to restock landbanks for the group’s industrial, commercial and apartment divisions.

Singapore retailer CK Tang reported a $S2.92 million ($NZ3.84 million) net loss (compared to a $S1.42 million loss in the previous September half-year) on a 17% sales jump to $S102 million. Local sales rose 18%, but Malaysian trade was unprofitable, blamed on a big increase in Klang Valley capacity. Net tangible assets rose from S85c to $S1.07.

A $US1.85 billion ($NZ4.2 billion) deal signed this week will see the Rockefeller Centre in New York owned by local development company Tishman Speyer Properties and Chicago billionaire family the Crowns, who have bought the 50% interest of the Whitehall Fund, whose partners were David Rockefeller, Italy’s Agnelli family and the estate of Greek shipping magnate Stiavros Niarchos. Mitsubishi bought the centre for $US1.5 billion in the late 80s, and sold it for $US900 million in 1996 to a group headed by Speyer and Goldman Sachs. New retail tenancies and a real estate boom early this year prompted the latest sale decision.

London-based housebuilder Fairview Holdings will be bought out by management for £307 million ($NZ1 billion) at 180p/share, up 41% on the price just before the original bid eight months ago after spirited lobbying by independent directors. Poor sharemarket ratings have forced a re-examination of the whole UK building sector. This will be the third management buyout of the year. It’s been backed by development capital group 3i and a Bank of Scotland division, Uberior.

22 December 2000

General Property Trust, of Australia, has bought two new fully leased industrial properties on Berry St, Granville, in Sydney, for $A26.8 million plus acquisition costs at a weighted initial yield of 9.5% (or 8.9% after acquisition costs).

20 December 2000

Equity Office Properties Trust will provide $US21.5 million (with a one-year note returning $US26.5 million) for Los Angeles developer MaguirePartners to buy a 2.6ha site intended for the 40,000m² Water’s Edge office complex, with an option on taking 80-87.5% of the finished project. It’s in the 440ha master-planned Playa Vista development at Marina del Rey in west Los Angeles, which is being designed to take about 200,000m² of office space.

French movie companies Pathé and Gaumont will merge their cinema operations in to a 700-cinema operation in Europe.

19 December 2000

Two British housing companies, high-density and mixed-use specialist Beazer and greenfields executive home builder Bryant, will merge to form Domus. The two companies have also concentrated in different parts of the country.

18 December 2000

A 1.22ha seafront residential site in Hong Kong’s Sai Wan Ho has been bought for $HK2.43 billion ($NZ727 million), at just under $HK200,000/m² ($NZ60,000), by Henderson Land Development and its associate, Hong Kong & China Gas, in a 50:50 joint venture. They plan to spend $HK4.5 billion, including a 50-storey tower containing three sizes of flats. They’re expected to be priced above $HK6000/ft² ($NZ19,330/m²), compared to an acquisition and project cost of $HK3500/ft² ($NZ11,280/m²).

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Snapshot on world property, week to 25 March 2001

Latest: DBS plans HK onslaught, Hutchison Whampoa gets another Chinese port, 11th St Regis for Starwood in San Francisco redevelopment.

21 March 2001

The Development Bank of Singapore has set aside about $S6 billion for expansion into Hong Kong. The Singapore Government has sold down its interest in DBS from 58% to 38%.

Hutchison Whampoa has won the bidding for 49% of the second phase of Ningpo’s Beilun port, next to Shanghai, conditional on Chinese Government approval. The company already controls eight Chinese ports and handled 25% of all Chinese container traffic last year.

Starwood Hotels & Resorts has been joined by Massachusetts contractor Carpenter & Co to build the St Regis Museum Tower on land bought from the San Francisco Redevelopment Agency. The first 20 floors of the 40-storey tower will have 269 hotel rooms, with 100 apartments of 130-520m² above. It’s the last significant project of the Yerba Buena redevelopment plan and is in the city’s fastest growing area, South of Market. The project, due for completion in 2003, will incorporate an African American cultural centre and the historic Williams Building will be rehabilitated.

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