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 13 April 2003

10 April 2003

Centro Property Trust’s management company applied to the Australian takeovers panel today for a declaration on whether its takeover bid for AMP Shopping Centre Trust (No 1) would trigger pre-emptive co-ownership agreement rights enabling AMP Life Ltd to take over a large slab of the shopping centre trust’s portfolio. The Australian Stock Exchange also issued a letter to every listed property trust asking if they had any pre-emptive rights agreements. The exchange said these rights created uncertainty, impacting on the reputation of this market segment.

8 April 2003

Macquarie Goodman Industrial Trust has bought 25% of the Colonial First State Industrial Property Trust from the Commonwealth Property Office Fund for $A475 million, and Macquarie Goodman Management Ltd has taken over management for another $A25 million. The Colonial trust has 22 industrial & high-tech properties. As part of the transaction, Macquarie has sold 25% of both the Colonial trust & management to Singapore-based industrial space provider Ascendas. The management position is a rolling 5-year contract, subject to annual performance & fee audits conducted by independent external consultants. The deal takes Macquarie Goodman’s total assets to $A2.5 billion, 88 properties, 2.26 million m², 96% occupied (the Colonial portfolio is 8.7% vacant), average capitalisation rate of 9.25%.

The ING Industrial Fund has paid $A8.48 million for a 16.2ha development site next to its 38ha ParkWest industrial park in Melbourne, which will increase the lettable area of the park to 270,000m², with a capital value exceeding $A150 million. The existing industrial park area is fully committed and the additional space will be developed in 2 stages, the 2nd part after Mazda Australia’s lease expires in 2006. Significant infrastructure investment, including the western ring road and Citilink, have made west Melbourne more attractive, offering shorter travel times to the port, airport & the city’s inner suburbs.

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Snapshot on world property, week to 1 December 2002

28 November 2002

Lend Lease Corp has been socked with an $A95.3 million tax bill — 3 days before the statute of limitations would have stopped the Australian Tax Office issuing its amended assessment. The bill — $A40.7 million of extra company tax, $A20.3 million pf penalties at a 50% rate, and $A34.3 million of interest — related to a 7 June 1996 forward sale & 4-year warrants issue agreement with County NatWest Securities Australia Ltd for 100 million Westpac shares owned by LL Trust, as part of its strategy to exit its 10% holding in Westpac ordinary stock as a result of a change in financial services strategy.

27 November 2002

Richard Rainwater, chairman of Texas-based Crescent Real Estate Equities Co, which he took public in 1994, has spent $US36 million in 4 months increasing his stake to 13.5%. He also adjusted his stake in the Crescent operating partnership for company charter reasons. Crescent invested heavily in cheap office buildings in Dallas, then in Houston, in the mid-90s, hiking rents, then got burned buying into psychiatric facilities & cold storage businesses. Mr Rainwater is a member of the consortium which took control of New Zealand listed company Richina Pacific Ltd.

Conversions of commercial/industrial premises to residential use continue internationally — they’re not just a New Zealand phenomenon to make use of unwanted low-grade space. The $US5 billion Forest City Enterprises Inc has done several — it transformed the Boston bakery where the 1st Fig Newton was made in 1891 into the 142-unit Kennedy Biscuit Lofts, adapted a Second World War officers’ barracks (& President Eisenhower’s summer retreat) in Denver into loft apartments, restored 2 historic theatres on New York’s 42nd St (moving 1 50m to become a spectacular lobby) to create more commercial space, and transformed the former Tobacco Row warehouses along the James River in Richmond, Virginia, into loft-style apartments. Now Forest Enterprises has started a $US24 million conversion of the historic Ashton cotton mill in Cumberland, Rhode Island, into 200 apartments & several retail outlets.

Boston Properties Inc has sold the 88,145m² 1 & 2 Independence Square in south-west Washington to Wells real estate investment trust for $US345 million. Boston Properties will repay $US190 million of 1st-mortgage debt with the proceeds.

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Snapshot on world property, week to 22 July 2001

Latest: AMP listed trust buys Gold Fields House, Lend Lease takes ING Office stake.

17 July 2001

AMP Office Trust of Australia has signed to buy the former Gold Fields House at 1 Alfred St, a Circular Quay landmark now dwarfed by its neighbours, for $A182.5 million from AMP’s unlisted No 2 statutory fund. The office trust will raise $A145 million from a rights issue at $A1.17/unit and $A50.2 million of new debt to buy the 27-floor building, erected in 1966 and substantially refurbished in the 90s. The No 2 fund bought it for $A25.6 million in 1986, spent $A70 on ridding it of asbestos and refurbishing, and has sold on a 7.2% yield. The latest sale price equates to $A7517/m2 on 24,279m2 net lettable area. It will take the trust’s market capitalisation over $A1 billion and could put it in the S&P/ASX 100 index, increasing the trust’s institutional investment appeal.

Lend Lease Corporation has taken a 5.09% stake in ING Office Fund.

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Snapshot on world property, week to 16 February 2003

11 February 2003

Principal Real Estate Investors (Australia), fund manager of the Principal Hotel Group, will spend $A22.5 million refurbishing Sydney’s 503-room Hotel InterContinental. Project & construction manager Bovis Lend Lease will also be responsible for initiating an alternative development concept and managing the development approval process for the 2nd stage works, which include integrating Transport House with the hotel. 85% of the rooms will be completed before the Rugby World Cup in October.

10 February 2003

US shopping centre owner Simon Property Group Inc increased funds from operations by 11% to $US233 million in the December quarter and 12% to $US735 million for the whole of 2002. The rise represented 4.5%/share to $US1.17/share for the quarter and 8% to $US3.79/share for the year. Diluted earnings/share rose 108% to US52c/share for the year. Occupancy rose from 91.9% to 92.7%, same-store sales rose 2% to $US391/ft², and overall sales 2% to $US386/ft². Average base rents at year end rose 5%, or $US1.42 to $US30.70/ft². Average initial base rent for new leases rose 24% to $US40.35/ft². Simon bought 9 properties for $US1.6 billion, sold 17 for $US589 million and said it would buy Gordon Group Holdings LLC’s interest in The Forum Shops at Caesars in Las Vegas, for $US174 million in cash. Completion of the 16,260m² Forum expansion in 2004 should bring a 12%-plus return. The sale was forced when Gordon Group chairman Sheldon Gordon sided with Taubman Retail Centers Inc against Simon’s hostile bid for Taubman. Simon said it was heading for a 5.8% increase in funds from operations, taking it to $US4.01/share. The company owns or has an interest in 242 properties containing a gross lettable 17 million m².
Website: Simon Property Group

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Snapshot on world property, week to 7 December 2003

3 December 2003

East Baltimore Developments Inc, a not-for-profit organisation which has the task of bringing a Baltimore City Council redevelopment project to fruition, began levelling the 1st row of houses this week to create a $US800 million life sciences & technology park on it. It wants to attract companies that have working relationships with the neighbouring Johns Hopkins University and incubating companies. The project will use a comprehensive financing programme including the use of tax increment financing & new market tax credits. The biotech park will cover 9ha of a 32.ha redevelopment. It will get nearly 200,000m² of biotech space for about 8000 staff of up to 50 companies. The neighbourhood will also have 1500 new or rehabilitated homes and some revitalized retail.
Website: East Baltimore Developments Inc

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Snapshot on world property, week to 24 February 2002

18 February 2002

Enron Corp’s collapse has had a huge effect on major US property investment company TrizecHahn Corp. Enron was TrizecHahn’s fourth biggest tenant, leasing 74,000m² of office space. Enron paid up to the end of January but is returning 62,000m². Enron Oil & Gas, a separate entity, has taken 11,000m² and another 22,000m² has been leased. TrizecHahn wrote off $US600 million in charges for 2001, taking the company to a $US418 million loss compared to a $US191 million profit in 2000.

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Snapshot on world property, week to 20 May 2001

Latest: Hudson asset switch, South Australian manufacturing park to float, Macquarie moving Big Dipper to Dreamworld, General Property Trust moves to quarterly updates, Healthscope buys Sydney Clinic, Washington Group (ex Morrison Knudsen) on knees.

20 May 2001

Hudson Timber & Hardware Ltd (which was to have been one of Jihong Lu’s participants in the Britomart transport centre project) will pay Hudson Investment Group $A25 million for Australian Hardboard Ltd, sole Australian manufacturer of Masonite thin hardboard panels. It has a plant near Brisbane. Hudson Timber will pay $A5 million cash and issue 50 million shares at A40c and 20 million options, exercisable before 1 July 2003 at A40c. The deal gives Hudson Timber $A40 million more sales revenue, $A5 million more ebit, $A17 million more assets, a 335ha development land bank at Ipswich and 1760ha forestry land bank at Helidon, both in Queensland.

AI Automotive Ltd of Perth has hired Paterson Ord Minnett to float its 23ha South Australian Manufacturing Park. AI has just commissioned an $A7 million E-coat painting facility and installed a new dashpanel conveyor oven for the GMH vehicle range, expanding its business range from traditional metal stamping. Directors classified the park as non-core, but now see it as providing infrastructure for the new expansion. They propose that AI should hold 20-50% of a new property trust, with the rest floated through a rights issue. The park has $A2.9 million/year net passing income and has 8ha earmarked for development. The indicative spin-off price range is $A20-22 million, for a trust with an asset base of $A21-23 million and about $A13 million of borrowings.

Macquarie Leisure Trust has bought the Big Dipper rollercoaster from Luna Park Sydney and will move it to Dreamworld, between Brisbane and the Gold Coast. The Big Dipper is 13-storeys, or 40m high, weighs 1000 tonnes and is the biggest high-speed gravity rollercoaster of its kind in the Southern Hemisphere. It has 900m of track, a 360-degree loop and sidewinder. Riders reach 85km/h at the fastest.

Sydney-based General Property Trust has moved to quarterly portfolio updates.
General Property Trust moves to portfolio updates

Australian private hospital owner/operator Healthscope Ltd has bought The Sydney Clinic, a private psychiatric hospital licensed for 34 beds located in Waverley. The acquisition follows Healthscope’s recent purchase of Palm Beach Currumbin private hospital, Queensland’s largest private psychiatric hospital, and Dubbo private hospital in New South Wales. It also owns the Melbourne Clinic, largest private psychiatric hospital in Australia, and the Geelong Clinic.

Big US builder the Washington Group International has filed for Chapter 11 bankruptcy protection in Nevada, though its headquarters are in Boise, Idaho. Headed by a specialist in taking over troubled companies, Dennis Washington, the group was previously Morrison Knudsen, which sold control of New Zealand contractor McConnell Dowell (now controlled by an Anglo-American subsidiary in South Africa) when it struck trouble several years ago. The parent Washington company and 22 subsidiaries employing 17,000 people filed for protection, leaving another 70 subsidiaries and 18,000 employees carrying on as usual. The bankruptcy cause was a dispute over the amount of debt assumed when Washington acquired Raytheon Engineers & Constructors last July for $US53 million plus $US450 million debt. Washington claimed the debt level was $US700 million, costs on some contracts over-ran and returns were below expectation.

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