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World property Sun14Dec14 – Leighton offloads to Chinese, German housing, Sydney redevelopment, 270ha Melbourne subdivision, Valad trades, transit-linked mall, New Scotland Yard

Leighton sells John Holland to Chinese company
Sovereign fund joins German housing joint venture
Wynyard Station redevelopment advances
270ha masterplanned subdivision for Melbourne fringe
Valad sells Berlin complex
Construction to resume on Copenhagen transit-lined mall
Abu Dhabi investor to replace New Scotland Yard with apartments

Leighton sells John Holland to Chinese company

Australian construction group Leighton Holdings Ltd said on Friday it had entered into a binding agreement to sell its John Holland Pty Ltd subsidiary to China Communications Construction Co Ltd for an enterprise valuation of $A1.15 billion, subject to certain adjustments.

China Communications Construction’s subsidiary buying the ASX-listed company is CCCC International Holding Ltd (CCCI). The parent company is the fourth largest construction company in the world by revenue, is listed on the Hong Kong & Shanghai stock exchanges and has a market capitalisation of $NZ25 billion.

China Communications Construction has also been on a World Bank procurement blacklist for 6 years, and is scheduled to remain on it until January 2017, for fraud & corruption by a company which is now a subsidiary.

Leighton is 69.62% owned by German construction company Hochtief AG. Hochtief chief executive Marcelino Fernández Verdes, who is also Leighton’s executive chairman & chief executive, said the sale conformed to the strategy outlined in June to strengthen Leighton’s balance sheet. Notably, though, he reflected this in Australian terms, although John Holland, like Leighton, is a very international company, including a New Zealand presence: “Following a comprehensive & extensive global sale process, we have achieved a value for John Holland which reflects its position as one of the country’s leading engineering & construction companies.

“The divestment of John Holland supports our focus on further reducing gearing and strengthening our balance sheet so we can be sustainably competitive. Proceeds will also be used to finance future growth, particularly in public-private partnerships.”

For Leighton, Mr Fernández Verdes said indicative impacts were a reduction in gearing of about 10 percentage points, an $A3.7 billion reduction in annual revenue and $A5.4 billion of work in hand, and about 4100 employees transferring with the John Holland business.

Mr Fernández Verdes said: “The existing John Holland management will work closely with CCCI to ensure a smooth transition so the business continues to safely & efficiently provide services to its clients.”

The sale is subject to customary approvals including by Australia’s Foreign Investment Review Board.

The Leighton Group is a major international contractor and the world’s largest contract miner. The group provides development, engineering, construction, contract mining and operation & maintenance services to the infrastructure, resources & property markets.

John Holland provides engineering, contracting & services to the infrastructure, energy & resources and transport services sectors in Australia, New Zealand, South-east Asia & the Middle East.

The World Bank recently clarified its sanctions regime to ensure that successor organisations – through purchase or reorganisation – will be subject to the same sanctions applied to the original entity, making CCCC ineligible to engage in any road & bridge projects financed by the World Bank Group.

CCCC is the designated successor entity to China Road & Bridge Corp, which was debarred by the World Bank for 8 years, beginning January 2009, for fraudulent practices on the Philippines national roads improvement & management project.

Links: Leighton
World Bank blacklist
The Bribery Act, CCCC debarment
HiPipo, blacklist allegation dismissed

Sovereign fund joins German housing joint venture

A niche property market in the northern hemisphere, portfolios of German housing, continues to attract investors, often through international partnerships.

A €300 million joint venture established this week is between a Berlin-based manager, Kauri CAB Management GmbH, an investment & asset management specialist in northern European property with bases in London & Stockholm, Apeiron Capital Ltd, and an unnamed sovereign investment fund.

They’ve started the joint venture with a €130 million portfolio of 1675 residential & 105 commercial units within 61 residential buildings, 70% in Berlin and the rest in Magdeburg.

The seller of the portfolio is another German residential investment specialist, ZBI AG.

Kauri sold a portfolio of 25 Berlin residential buildings €78.6 million in July, after holding it for 3 years with Pramerica Real Estate Investors, the $US1.1 trillion real estate investment & advisory business of Prudential Financial Inc of New York.

Links: Kauri
Apeiron

Wynyard Station redevelopment advances

Sydney media said this week Brookfield Property Partners LP’s $A1 billion Wynyard Place development (marked in red in aerial picture above) had moved to the final stage of the New South Wales Government’s unsolicited proposal process.

Brookfield proposed combining its One Carrington St development with improvements to the public access areas for Wynyard Station, a major underground commuter stop in the heart of the Sydney cbd. Brookfield wants to create a new 68,000m² commercial & retail development over & including the eastern access ways to the station concourse from George St through to Carrington St, which was given concept plan approval in 2012.

It would involve demolishing Thakral House on George St and the Menzies Hotel on Carrington St, and refitting the heritage-listed Shell House from a hotel to office space. The 99-year land leases would be extended by 21 years, running to 2110.

Wynyard Station’s old low-clearance tunnel entry would be replaced by an open shared thoroughfare with natural light and the provision of new public domain spaces.

Links: Brookfield Property Partners
NSW Government, unsolicited proposals
$100 million Wynyard Station upgrade to begin
Wynyard Station upgrade, Transport for NSW

270ha masterplanned subdivision for Melbourne fringe

Villa Word Ltd & CVC Ltd have bought 270ha at Donnybrook in Melbourne in 2 transactions for a masterplanned residential subdivision. Total purchase price was $A22.775 million ($A84,352/ha).

Villa World chief executive & managing director Craig Treasure said on Thursday the 2 adjoining sites were inside Melbourne’s urban growth boundary, 46km out from the cbd in the northern growth corridor. That’s about the same distance from the cbd as Puhoi in the north and the Bombay Hills in the south are from the Auckland cbd.

Mr Treasure expected a planning process taking 2-3 years, potentially yielding more than 2000 lots. He said the project should start contributing to revenue in the 2019 financial year.

Links: Villa World

Valad sells Berlin complex

Thiemann Quartier, Berlin.

Thiemann Quartier, Berlin.

Real estate investment manager Valad Europe has sold Thiemann Quartier in Berlin Neukölln, Germany, to Concarus Real Estate Invest GmbH for €46.75 million, reflecting a net initial yield of 7.76%. The sale was completed on behalf of Valad’s V+ Germany mandate.

Thiemann Quartier’s 15 buildings contain 53,000m² of warehouse, office, leisure & retail space.

Valad Europe’s head of German business, Andreas Hardt, said this week the company had extended the leases of the 2 anchor tenants and agreed a long-term lease with a new tenant, getting the complex almost fully let, mostly on long-term leases of up to 10 years, before marketing it.

Valad Europe, a subsidiary of Valad Property Group of Australia, manages €4.9 billion of real estate assets & investment capacity and €1 billion of development projects for 20 funds & mandates. Concarus is owned by 2 entrepreneurial German families.

Link: Valad Europe

Construction to resume on Copenhagen transit-lined mall

Vanløse mall, Copenhagen.

Vanløse mall, Copenhagen.

A shopping centre directly linked to a railway station and also on a main bus route, in an affluent suburb 5km from the centre of Copenhagen, will be completed in the second half of 2016 after a European investment fund bought the half-finished structure.

Holberg Fenger Invest A/S stopped construction 2 years ago. It had planned a total 36,000m², including 18,000m² of shops, 3000m² for restaurants & cafes and a 9-storey office tower, with 350 parking spaces for cars, 400 for bikes.

EPISO3 (European Property Investors Special Opportunities 3), a fund advised by real estate investment manager Tristan Capital Partners & joint-venture partner Solstra Capital Partners, plans to spend €90 million completing the Galleria development in Vanløse, Copenhagen.

Links: Tristan Capital Partners
Vanløse

Abu Dhabi investor to replace New Scotland Yard with apartments

The famous New Scotland Yard police headquarters in London has been bought by a multi-billion dollar alternative investment company, Abu Dhabi Financial Group, for £370 million – £120 million more than the guide price and 3 times what was originally paid for the site freehold in 2008.

The building will be demolished to make way for apartments. Once redeveloped & sold, the Victoria St site is projected to yield up £100 million in stamp duty.

The London Mayor’s Office for Policing & Crime (MOPC) replaced the Metropolitan Police Authority in 2012, and mayor Boris Johnson has earmarked proceeds from this sale to be invested in cutting-edge technology and a leaner, more modern police property portfolio.

The building also houses many artefacts & policing memorabilia dating back to the formation of the Metropolitan Police in 1829, none of which are on public display. Some of the sale proceeds will be used to relocate this collection to a dedicated museum site.

The police headquarters is shifting to the refurbished Curtis Green building on the Victoria Embankment, less than 1km away.

Link: London Councils

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

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Hart sells Carter Holt head office & other properties to Valad

Published 1 August 2007

Paper, packaging & building supplies company Carter Holt Harvey Ltd, now privately owned by Graeme Hart, has sold its head office at Manukau and a portfolio of other properties to Valad Property Group of Australia for $A277.3 million in a sale & leaseback deal.

 

Valad will acquire the head office on Great South Rd, 15 Carters retail warehouse depots in New Zealand & 10 packaging plants, 5 in Australia, 5 in New Zealand, on a 7.1% yield with a 9+6+6-year leaseback to Carter Holt Harvey.

 

“Valad remains on the lookout for great opportunities like this in our own backyard or further afield in Europe & Asia,” chief operating officer Jeff Locke said.

 

“While our recent deal with Scarborough in the UK & Europe has received a lot of attention, the Australasian market remains a core operation for Valad and we will continue to allocate significant resources to this part of the world.”

 

Valad will acquire the packaging plants & Auckland office property on behalf of the Valad Property Trust for $A160.3 million. The $A48 million portfolio of Carters depots is earmarked for a new Valad managed fund. The development sites were acquired for $A69 million on behalf of Valad Funds Management Ltd.

Purchase of the New Zealand assets is subject to approval by the Overseas Investment Office.

 

“The Carter Holt Harvey transaction represents a unique opportunity for Valad Property Trust to secure a significant industrial portfolio in 2 national markets that continue to show steady & consistent growth,” said Mark Frinsdorf, Valad’s head of real estate investment capital transactions.

 

He said Valad would take advantage of the portfolio’s considerable development potential.

 

Valad, a diversified property funds management company founded in 1995, has achieved significant growth since listing in 2002 and now has $A16.8 billion of assets under management.

 

In New Zealand, it has taken interests in Albany developments this year.

 

Website: Valad

 

Earlier stories:

29 May 2007: ING buys Oteha leasehold in venture with Albany City

24 January 2007: Valad takes 2 bites of Albany City project

 

Want to comment? Click on The new BD Central Forum or email [email protected].

 

Attribution: Valad release, story written by Bob Dey for this website.

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