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

Continue Reading

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.

Continue Reading

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.

Continue Reading

Snapshot on world property, week to 8 April 2001

Latest: Patronis seeks local expertise in international growth plan, Burnham Pacific sells 19 malls, Starwood buys Geac hotel management system, Milestone slims, CBL buys out partners at $NZ8234/m², exchange looks outside City for HQ, Deutsche Bank buys two Boston stakes, Sunland buys St Kilda Rd highrise site, Investa gets $A170-190 in St Kilda and $A460 gross in Sydney cbd, Cendant ties up more timeshare business, Lexington starts office investment programme, Gables Residential and JP Morgan trade five, Hersha sells Best Western at $NZ51,580/room, Pacific Property continues aggressive turnaround policy, trade slips for community developer Del Webb, Amoy chairman warns on slowdown, Hyatt plans global ad campaign, Singapore house prices continue fall, WR Grace enters Chapter 11.

7 April 2001

The New York-based Patronis Group has signed a four-partner joint venture to develop the 226 1/2-bedroom rental unit Coral View Apartments, 5km from downtown Miami, above 1700m² of shops and a 421-space parking garage. Patronis’ objectives are to create an international diversified real estate investment business through both direct and indirect investment. It seeks to access local partners to identify opportunities, provide local expertise and operate the property, in a capitalisation range of $US20-50 million that will benefit from a value enhancement strategy. In this venture its partners are private investment firm Granite Associates, European-American investment advisory firm Creative Capital Management and Miami architect, developer and project manager BAP Development.

Burnham Pacific Properties Inc has completed the sale to Weingarten Realty Investors of 19 Californian grocery-anchored shopping centres for $US145.5 million cash and the assumption of $US143 million in debt. The portfolio has 230,100m² of gross lettable area, which puts the sale price at $NMZ3085/m² gross lettable area. Burnham has decided to liquidate and has disposed of 28 properties. When the liquidation plan was announced last August, Burnham had 59 properties worth about $US1 billion and was 60% geared.

Starwood Hotels & Resorts Worldwide Inc, owner of the Sheraton, Westin and other major hotel brands, has bought the hotel systems division of Geac Computers Inc for $US1 million, which will enable Starwood Technology & Revenue Systems (Stars) to manage all hotel operations more effectively.

Milestone Properties Inc of Boca Raton, Florida, reported net income down 75% at $US541,000 on revenue down 32% at $US13.3 million. Pretax, it turned round from a $US553,000 loss to a $US976,000 profit. Milestone has $US52 million of commercial property, down 18%. It has reduced its gearing from 73.5% to 66.6%.

Tennessee-based CBL & Associates Properties Inc, third-largest US mall owner and biggest in the US south-east, has bought out its two partners, who held 50% of the Madison Square mall in Huntsville, Alabama, for $US19.5 million equity and assumption of $US23.8 million debt. CBL built the 87,000m² two-level regional mall in 1984. It serves an immediate catchment of 567,000 people and achieved sales of $US311/ft² ($NZ8234/m²) last year. CBL has 51 enclosed malls in a total portfolio of 158 properties, covering 5 million m². Sale price equates to $NZ2453/m².

The London Stock Exchange is looking outside the City of London for its new headquarters after 228 years being next to the Bank of England. One site is in the Docklands, where several investment banks have migrated.

Brookfield Properties Corp has completed the sale of 49% in two Boston properties, 53 and 75 State St, to a subsidiary of Deutsche Bank AG for $US337 million made up equally of cash and debt assumption. The two buildings in the heart of Boston’s financial district have 177,000m² of office space.

Sunland Group Ltd of Queensland has signed to buy its first Melbourne highrise site, at 576-578 St Kilda Rd, for $A15.3 million, subject to development approval. The 4646m² site, bought from Medvale Pty Ltd, will be used for a luxury residential tower. Sunland’s first two purchases since it entered Melbourne early last year were the 620-lot Berwick Springs subdivision and 129-lot Sovereign Manors subdivision.

The Sydney-based Investa Property Group has announced a series of new leasings totalling 10,400m² which increase its occupanmcy to 98.5% and extend the average lease expiry to five years. Half the newly leased space has been taken by the Roads & Traffic Authority in Investa’s 110 George St, Parramatta building on undisclosed rent. The NRMA has also taken an extra 1022m² floor there. New leases with disclosed terms are: Austrapay, 1096m² on level 1, Market St, Sydney, six years with two reviews, $A460/m² gross with no incentives; Tech Pacific, level 9, 420 St Kilda Rd, Melbourne, four years from last August when the rent was set at $A170/m² net, again with no incentives; GE Capital, 1540m² on levels 5 and 7 of the same St Kilda building at $A190/m² net.

New Jersey-based Cendant Corp will merge the property management operations of Fairfield Communities Inc with Resort Condominiums International Inc (RCI)’s resort property management unit. RCI Management runs 19 US, Mexican and Australian resorts and Fairfield has 34 in the US and the Bahamas. RCI also has 3700 affiliated timeshare resorts in 100 countries.

Lexington Realty Advisors Inc,an affiliate of Lexington Corporate Properties Trust, has paid $US10 million for the first property in an investment programme which will put $US50 million of equity in up to $US150 million of net-leased office, industrial and retail properties throughout the US. It wants properties with minimum leases of seven years and prices up to $US20 million. The first property is a two-storey 4650m² office building and 6500m² distribution facility in Alliance, Texas.

Gables Residential of Atlanta has contributed three new apartment communities containing 791 units, worth $US82 million, to a joint venture with JP Morgan Investment Management, and taken over JP Morgan’s interests in two other apartment communities containing 532 units. Gables owns 84 communities containing 25,222 units and has another 10 under construction, which will add 2556 units.

Hersha Hospitality Trust has sold the 107-room Best Western motel in Indiana, Pennsylvania, for $US2.2 million, at $NZ50,580/room, so it can concentrate on central business districts and strong metropolitan markets. Hersha owns 21 hotels in New York, Pennsylvania, Maryland and Georgia.

Pacific Property Co, of Palo Alto in California, has signed to buy its fifth property for the year, the 137-unit Suntree Garden Apartments near Silicon Valley in Milpitas, California, for $US22 million, at $NZ395,000/unit. Privately owned Pacific’s portfolio contains more than 4000 units at about 25 sites, bought for a total $US350 million at an average around $NZ220,000/unit. The company was formed in 1998 with the aim of buying properties performing poorly because of capital deficiency or poor management, aggressively turning them round and holding for 2-4 years.

Del Webb Corp, leading US developer of “active adult and lifestyle” communities, said new home orders fell 19% in March compared to March 2000, which was a boom month 18% ahead of the rest of the year to June 2000 in sales. March quarter sales fell 13%. In the active-adult segment, March sales fell 15% and quarter sales 5%. Family and country club community sales fell 29% in March and 30% for the quarter.

Amoy Properties chairman Ronnie Chan Chi-chung said Hong Kong’s residential property market would stay slow for the next year because of the US economic slowdown, and said lower interest rates had not spurred sales. But Mr Chan said unfavourable short-term sentiment wouldn’t deter Amoy from its long-term growth strategies. The company has refinanced with a $HK5 billion revolving credit facility 0.5% over Hibor (HK interbank offered rate), has reached two land-premium settlements for Tsuen Wan and Blue Pool Rd near Happy Valley, and is negotiating land premium for a joint venture residential project with Sun Hung Kai Properties in Sha Tin. Amoy also plans to renovate the Queensway Plaza shopping arcade in Admiralty after securing a 10-year lease with a $HK101.3 million land premium.

Hyatt International, owned by Chicago’s Pritzker family, plans a $US10 million global advertising campaign to boost its Park, Grand and Regency brands. It manages 81 hotels in 38 countries. The separate Hyatt Hotels manages 120 hotels in the US, Canada and the Caribbean. Advertising has traditionally been localised.

4 April 2001

The Singapore Urban Redevelopment Authority’s private residential index fell 3.7% in the first quarter, on top of a 2.8% fall in the final quarter of 2000, which was the first fall in two years. The Housing Development Board’s index of publicly built flats fell 3% on top of a 2.2% December quarter fall.

The overwhelming weight of asbestos lawsuits has finally sent US chemicals and building materials distributor WR Grace & Co into Chapter 11 bankruptcy protection. Grace stopped using asbestos in 1973, but says it’s spent $US1.9 billion defending itself and is defendant in 325,000 personal injury cases. The company’s assets and liabilities are close — $US2.51 billion of assets and $US2.57 billion of liabilities.

Continue Reading

Snapshot on world property, week to 8 December 2002

3 December 2002

The New York Times ran a story on Sunday about young couples buying duplexes (which, there, seem to be a house/unit with room for 2-3 families, in some instances separable spaces, in others sounding more like a boarding house), with more twists than the paper seemed aware of. Nationally, the median price of a single-family home jumped 10% in the year to October, to $US159,000. In New Jersey, the rise was 17% to $US261,000. The buyer of a 2-family home gets to collect rent, which helps pay the mortgage which would otherwise be unaffordable, and thereby pleases the bank. It also generally qualifies the buyer for a much bigger mortgage. There’s a catch for prospective new buyers: demand is up, the median price of a 2-family home rose 25% in Rhode Island compared to 10% for 1-family homes, so it seems this window will be open only briefly to occupants, though it might be a good proposition for investors.

Coles Myer Ltd’s Officeworks business will acquire Australia’s largest direct marketer of office supplies, Viking Office Products Pty Ltd, from US company Office Depot Inc. Officeworks has 62 Australian outlets and plans 45 more. Viking earns $A150 million/year in direct sales through 2 distribution centres.

Continue Reading

Snapshot on world property, week to 28 September 2003

26 September 2003

Houses outside prime central London and the South-east produced the highest residential rental returns in England in the 2nd quarter at 5.9%, the Association of Residential Letting Agents said in its quarterly report. For houses in the South-east the average was 5.2% and in prime central London it was 4.8%. For flats, prime central London returns averaged 5%, elsewhere 5.4%. The survey shows that, on average, achievable rent levels have decreased marginally over the past 6 months.
Website: Association of Residential Letting Agents

25 September 2003

Malaya United Industries Berhad, owner of the Corus & Regal hotel chains (most of the 80 properties in Britain, 3 in Australia, 2 in Malaysia) has announced a new selldown of hotels & undeveloped land to repay 3.5 billion ringgit of debt. It hopes to raise another 2.1 billion ringgit by selling convertible debt securities to affiliates owed money. The MUI group, which also controls British retailer Laura Ashley Holdings plc, lost 35 million ringgit in 2001, 997 million ringgit in 2002, and put 30 hotels on the market in February.

Boston-based Heritage Property Investment Trust has bought a Mississippi mall and entered the Texas market by buying 7 grocer-anchored malls from Trademark Property Co for a total $US160 million. The centres have a total gross lettable area of 124,200m² and are on average 93% leased. Heritage expects to fund the deal through assumption of existing mortgage debt, its existing credit line plus some extra debt. Heritage acquires, owns, manages, leases & redevelops neighbourhood & community shopping centres in the US east & mid-west. It owns 155 centres in 27 states containing a gross 2.9 million m². Its overall portfolio is 92% leased.
Website: Heritage Property Investment Trust

23 September 2003

Macquarie CountryWide Trust of Australia and Regency Centres Corp of the US have expanded their joint venture, with Regency selling 75% of 3 shopping centres to the venture for a gross $US103.3 million, representing a 7.6% 1st-year yield. Regency will hold the other 25% and continue to manage the centres, 2 in California & 1 in Cincinnati. Macquarie CountryWide & Regency now jointly own 23 centres worth $US334 million.
Websites: Macquarie CountryWide Trust
Regency Centres Corp

The Macquarie ProLogis Trust has signed to buy a 90% interest in 9 North American industrial properties built by ProLogis in the past 3 years (7 in the US, 2 in Mexico) for $US107.8 million, reflecting an 8.5% initial yield. Macquarie said it would increase nta by an estimated A2c/unit. The properties include a $US36.8 million strategic east coast distribution centre for General Electric Appliances in Baltimore. The trust will finance the purchase through an $A45 million placement at $A1.08/unit, proceeds from its dividend reinvestment plan, 10% ProLogis equity & $A92.3 million debt. The trust’s gearing will rise from 49.6% to 51.4% in December but should fall to 50% in June. The 10-year internal rate of return on the purchase price is 9.62%. The deal adds 231,220m² of industrial space to the trust’s portfolio, taking it to 1.9 million m².

Macquarie Goodman Management Ltd has raised $A30 million from a 1:14 non-renounceable entitlement offer and expects to raise another $A5 million from a retail offer, all at $A2/share. Most of the money will be used to settle a Macquarie Bank Ltd bridging facility, which was used during Macquarie Goodman’s takeover of the AMP Industrial Trust.

The Financial Times said it expected Canary Wharf Group’s independent directors to recommend, on Thursday, a £1.76 billion offer from an investment banking-backed group to acquire the company at 300p/share, but a new bid could come in from Canadian Brascan group. The favoured bid is from the real estate investment arms of Morgan Stanley and Goldman Sachs. The share price closed at 271p last Friday.

Pittsburgh-based General American Corp (GAC), which provides technology solutions & settlement services to the US real estate & mortgage banking industries, has agreed to be bought for an undisclosed price by the Fiserv Inc lending systems & services group, an international group based in Wisconsin.
Websites: General American Corp
Fiserv Inc

Continue Reading

Snapshot on world property, November 2000

Latest: Singapore Government tightens market, AMP shops in Melbourne, Hawke sells to Quest, Bovis gets Docklands trio, going down…, Nomura in German deal, Wendy’s sells, HK mortgagee sales, Grollos freed, new Sydney IT park, Ariadne deal, Mitsui loss.

30 November 2000

The Singapore Government will drop its residential land sales to 6-7000 next year, from 9000 this year, to meet a slower and price-sensitive market. It will also release a net 180,000m² of commercial land, including 12,000m² earmarked for entertainment, and land for 470 hotel rooms.

AMP Henderson has bought the tired 20-storey Monash House on Williams St in Melbourne for $A25.5 million from Singaporean hotelier Thakral Holdings, which paid $A40 million for it in 1991. AMP plans to spend $A75 million redeveloping the property, bought for a superannuation fund. AMP has already spent $A300 million buying three other Melbourne buildings this year.

Former Australian prime minister Bob Hawke’s company, The Mansion Group, has sold its Mansion on Bourke to serviced-apartments operator Quest, which now has 61 properties in Australia and New Zealand.

Bovis Lend Lease has won the $A125 million contract to build three new towers in Melbourne’s Docklands for local developer MAB Corporation. The 589 units in four buildings — the first is due for completion in a year — are 80% sold.

29 November 2000

At Â¥44.6/NZ$1, Japanese accounting can look like astronomy. The troubles of 330-supermarket retailer Daiei have headed into orbit. Consolidation of loss-making companies under new accounting rules, including several real estate companies which previously didn’t appear on the group books, will raise group debt by 35% to Â¥2.4 trillion ($NZ54 billion). A proposed rescue package credit line will add Â¥500 billion to that, and Daiei’s main banks plan to take up Â¥1.2 trillion in new preferred shares. On the bright side, Daiei’s negative net worth on the new accounting will be Â¥100 billion ($NZ2.24 billion), but snappier retailers are taking away its business.

Nomura’s Principal Finance Group will lead a consortium of local German state property companies in the purchase of 114,000 flats from Deutsche Bahn, the national railways company, for DM7.6 billion ($NZ8.25 billion, about $72,000 each with an average $28,000 to be spent on upgrading). The rental stream will be securitised.

Wendy’s International will close 18 underperforming restaurants in Buenos Aires.

Hong Kong banks have sold 5025 repossessed properties in 18 months and at June 30 had 3300 more to sell, says the special economic zone’s monetary authority.

Flamboyant Melbourne builder Bruno Grollo has walked free from a tax fraud case over alleged profits from construction of the Rialto Tower on Collins St in the mid-80s, minus an estimated $A60 million, including an $A42 million settlement with the Tax Office three years ago. The Crown prosecutor conceded yesterday that evidence in the Supreme Court trial, which had been running for four weeks, was not consistent with evidence in the committal hearing two years ago and a conviction would be unlikely. Mr Grollo, his brother Rino and their accountant walked free. The Tax Office alleged the Grollos used false book entries to hide an $A25 million profit, declaring on $A66,000 from the Rialto job.

The St Hilliers development company has bought a 2.2ha former Goodman Fielder site in the Sydney airport suburb of Mascot to turn into an $A100 million high-tech office park, but director Tim Casey has conceded the company will need to get a better parking ratio out of the South Sydney City Council to compete against similar parks already under way.

Challenger International has bought Tourism Queensland House in Brisbane for $A38 million from local developers Ariadne Australia, Watpac and SPB Australia. Ariadne and Watpac bought the vacant 14,700m², 24-year-old building from the state government for $A9.7 million and spent $A7 million upgrading it. A nice present for Ariadne, the company formed by Bruce Judge and now managed by ex-Mainzeal boss Peter Deane, which has its annual meeting today.

23 November 2000

Singapore-listed Hongkong Land Holdings, biggest landlord in Hong Kong’s Central with about half a million square metres owned or under its management, has launched a buyback tender for 10% of its stock, which at the top tender price of $US2.20 would cost it $US572 million. The tender closes on 21 December. It would strengthen the Keswick family’s hold on the Jardine group. Jardine Strategic lifted its stake in Jardine Matheson to 38% after a similar tender in September, and would hold 38% of HK Land if this tender is fully taken up.

United Engineers (Malaysia), the country’s largest construction company, has offered to buy parent company Renong Berhad’s stakes in six listed and two other companies for 6.7 billion ringgit ($NZ4.4 billion), a proposal which has had the shares of both stocks suspended this week and unnerved investors already jittery about Renong’s future. Opus International Consultancy of New Zealand is part of the group.

One month after reporting third-quarter bottom-line earnings up 3.6% to $US74.3 million, on net sales down 1% to $US836 million, Philadelphia-based international flooring and ceilings company Armstrong Holdings has announced its subsidiary, Armstrong World Industries, has defaulted on a $US50 million commercial paper repayment, but that its business continues as usual. Aside from normal business issues, Armstrong has a huge contingency for asbestos compensation to deal with, estimated at $US759 million to $US1.36 billion. It paid a net $US64 billion in the latest quarter, compared to $US35 million in Q3 1999, on asbestos claims.

The battle for Noosa continues, with one victory to environmental protection this week. Agreement has been reached for RF Thompson (Queensland) PL’s plans for the 36ha Settlers Cove project to be cut from 1200 to about 400 residential units on 3.5a, a second commercial site including a hotel and 250 more units, and 75% of the land turned over to conservation and a national park. Next up are Ariadne Australia and Leighton Properties, which are facing the same stiff opposition to plans for a resort and residential development on Noosa Hill.

Non-residential construction turnover in Australia was down 5% in the year to June after 10 years averaging 10% growth, and the downturn is expected to continue, according to the Construction Outlook Report.

Mirvac will build a third, 29-storey residential tower at its Yarra Waters site in Melbourne’s Docklands and rival residential developer MAB Corporation has started its second tower.

22 November 2000

Turner Corporation, the biggest builder in the US, completed $US1.4 billion of construction in the third quarter, up 12%, and increased its forward book 24% to $US4.2 billion. Turner was bought last year by Germany’s biggest builder, Hochtief AG (which is also the major shareholder in Leighton Holdings of Australia). Ultimate controlling shareholder is the Rhine Westphalia Electricity Co, RWE.

Perth-based syndicator Glenmont Properties is negotiating on a Sydney building after expanding its portfolio in Western and South Australia to 12 syndicates with $A83 million of assets.

21 November 2000

London’s Millennium Dome will be turned into a high-tech business park according to the plans of the last remaining bidder, Legacy, which is expected to pay £125 million for a disaster which has cost Britain’s national lottery fund £600 million. Legacy was founded by local property developer Robert Bourne and backed by big Irish property group Treasury Holdings.

19 November 2000

Shanghai’s Pudong New Area has beaten nine other locations in four countries to be the site of a $US300 million advanced semiconductor factory which IBM wants completed in 2002.

As part of Hong Kong’s move to better use of brownfields industrial areas, 15ha of the Shek Mun area of Sha Tin will be converted to business zoning, allowing a range of business development uses but not residential, which some owners would prefer. The area is near one of Hong Kong’s racecourses.

The 25,600m² Unity Tower 2 on Singapore’s Shenton Way, due for completion early next year, may be leased in its entirety by DBS Bank. The development is by Singapore Land, whose former chairman, SP Tao, is to get the top two floors in return for vacating his penthouse in Shing Kwan House to allow the development to take place.

British building and real estate company John Laing has put its construction division on the market. The division, with a possible £100 million price tag, contains civil engineering and commercial building operations, and includes the M1 motorway and Millennium Dome among its more famous projects. Construction turnover last year was £1.1 billion for a £5 million loss and in the first half of 2000 it lost £19 million.

Hong Kong retailers are squealing: Turnover fell more than 20% from $HK229 billion in 1997 to $HK180 billion last year, and rents were held back, but this year landlords are seeking double-figure increases. Consumers have the money, but Hong Kong shoppers spent $HK27 billion across the border in Guangdong last year, 15% of the Chinese special economic region’s retail turnover. Adding to their woes, the Hong Kong shopkeepers say wages are rising. Fashion retailers normally expect to lose about 15% in rent, but as sales fall rent is taking up to 25% of what’s left.

Leading US multi-family real estate investment trust Charles E Smith Residential Realty, has bought two new developments in Arlington, Virginia, and Fort Lauderdale, Florida, for $US58 million, after selling an 851-unit garden home complex in Virginia for $US67 million. The 219-unit, 10-storey new Virginian development is expected to return 10.25% in the first year and the 240-unit, six-storey purchase in Florida 8.75% in the first year. Rents average $US1750/month ($NZ1000/week). Smith owns or has an interest in 28,000 units and 1600 more lined up. Its portfolio and operating partnership are worth $US3 billion.

Tarragon Realtor Investors, which owns 20,000 apartments and manages 250,000m² of shops and offices, improved third-quarter earnings from $US2.6 million last year to $US14.2 million, on revenue more than doubled to $US40.4 million, including a $US16.3 million transfer of ownership to a joint venture company. Funds from operations fell from $US2 million to $US1.1 million. Work on a Miami condominium conversion cut earnings this year.

First-home buyers in Australia are said to be avoiding new houses since the introduction of gst because new homes incur the tax whereas existing ones don’t. The answer: a subsidy. Both Master Builders Australia and the Housing Industry Association have lobbied the Federal Government to increase the first home owners grant scheme by several thousand dollars a house. A decision is expected on 26 November.

Golf Trust of America real estate investment trust will sell three courses around Palm Beach, Florida (Emerald Dunes, Polo Trace and Cypress Creek) to affiliates of the lessee, Emerald Dunes Golf Group, for a total $US35 million. The trust has interests in 47 courses.

The old New York Daily News building in Brooklyn is to be turned into 169 93-186m² (1000-2000ft²) condominium lofts, and a 5500m² retail floor, known as NewsWalk, using a $US19 million mortgage and partial equity return deal with Wexford Bancgroup of Chicago.

11 November 2000

Kmart, the third-biggest US retailer, blamed a $US67 million third-quarter loss on a writedown of inventory and slower retail trade as it was also caught by discounting at Wal-Mart and Target. Kmart’s sales rose 3% to $US8.2 billion in the quarter, but average price fell 1.2%.

10 November 2000

Centrepoint Properties, part of Singapore’s Fraser & Neave group, has converted two apartment blocks to serviced apartment use, after selling only six of 46 units in Holt Residences and 41 of 99 in Camelot Residences.

9 November 2000

Simon Property Group, based in Indianapolis, increased third-quarter total revenue by 5% to $US494 million, but income available to shareholders was down slightly to $US42 million. Its retail occupancy was up 2% to 90.5%, comparable retail sales/ft² rose 3.8% to $US385 and total sales/ft² rose 5.3% to $US375. Average regional mall base rents rose 4.6% to $US27.97/ft², and the average initial base rent rose 22% to $US38.31.

Australian property trusts love spending up on shopping centres, and Commonwealth Property is the fund with the wallet open at the moment, building an $A1 billion portfolio. In quick succession it has bought the Aurora Place tower in Sydney for $A485 million, $A300 million for Westfield Trust’s half of the Indooroopilly Shoppingtown in Brisbane, and is now looking down on the New South Wales coast at a $30 million shopping centre in Port Stephens.

3 November 2000

Lend Lease Corporation’s new chairman, Professor Jill Ker Conway, warned shareholders at the annual meeting to expect a transitional period of 18 months, while it reshapes as a global real estate services provider, before earnings start to climb again.

Listed Melbourne residential developer Central Equity is to build a 300-unit tower on the former Australia Post site in Bourke St, near Spencer St, its biggest cbd project yet.

Telstra is to outsource its entire Australian portfolio to one facilities manager — 10,000 properties, including 1500 city buildings.

The Miller Law Firm, which specialises in construction-defect litigation on the west of the US, has won $US1.6 million for the 62 members of the Marbeya condominium-owners association in Paradise Valley, Arizona, for dry rot in framing, interior drywall deterioration and leaks from decks and roofs, in a five-year-old development. Miller’s litigation successes now total $US350 million.

Atlanta-based Beazer Homes USA Inc, one of the 10 largest residential builders in the US, reported September year revenue up 10% to $US1.53 billion, ebitda up 16% to $US106 million, net income up 18% to $US43.6 million, home closings up 4% to 7847 and new orders up 9% to 8228. It attributed the 240-point rise in gross margin for the year to 17.8% and for the final quarter to 18.3% to opening design centres, starting mortgage operations and implementing value-created incentives (a version of economic value added). The company is targeting a 14-19% earnings rise in 2001.

Jones Lang LaSalle Inc, listed on the New York exchange, raised third-quarter revenue 16% to $US224.6 million, adjusted operating income 123% to $28.6 million, and adjusted net income 163% to $12.6 million. Taking the $US18 million of non-cash compensation expenses associated with the LaSalle/Jones Lang Wootton merger into account, the company made an actual $US5.3 million loss. The Asia Pacific region reported a $US1.8 million loss, down 151% from the profit last year, on revenue up 6% on the pro forma figure of 1999 to $US95.4 million. Currency conversion rates were against a strong result this quarter.

Public Storage Inc’s third-quarter net income fell 1.4% to $US75.7 million mainly because it increased income allocation to minorities through $US365 million of preferred operating partnership units over nine months. It owns 1351 storage facilities but analyses 950 on a same-store basis. Occupancy fell 0.4% to 93%, annualised realised rent rose 4.2% to $US10.95/ft² for the period ($NZ294/m²).

Mid-America Apartment Communities, a listed owner of 34,000 apartments with $US1.3 billion of assets, reported third-quarter funds from operations down 6.5% to $US13.7 million on steady revenue of $US56.5 million. The reit has a big expansion programme under way, three new subdivisions containing 934 apartments and costing $US68 million completed and 63% occupied, and two more containing 677 apartments and costing $US52 million to finish next year. It expects a first-year net operating income yield of 10% from the new properties. It has 95.4% occupancy on existing properties, average monthly rent of $US637.20 (average value $NZ184,000, rent $NZ147/week, return 10.5% on full occupancy). But the trust is not performing strongly on the sharemarket, buying back 8% of its stock over 15 months.

Chicago-based General Growth Properties Inc, which owns 97 malls, manages another 38 and has market capitalisation of $US7.25 billion, increased third-quarter funds from operations by 21.3% to $US79.1 million, increased total sales by 7.8% and comparable sales by 3.9%. It measures productivity by the square foot, which showed a 6.3% rise to $US355/ft² ($NZ9649.55/m²).

Hospitality Properties Trust, a Massachusetts reit established five years ago, raised third-quarter revenue 5.6% to $US65.8 million, but held net income steady at $US30.4 million. The trust owns 224 US hotels worth $US2.4 billion, including 70 under the Courtyard brand and 39 Marriotts. It will buy another two Marriotts in the next six months for $US55.6 million. In the latest quarter, revenue per available roomnight increased 5.2% to $US70.82 and occupancy rose 3.8% to 78.9%.

In Shanghai, private property ownership is taking hold as 700 apartments a day are bought by individuals — more than 180,000 in the past nine months.

Cendant has agreed to buy timeshare sales company Fairfield Communities for $US635 million.

2 November 2000

Labour-intensive industries have been moving from Hong Kong to mainland China, creating the same kind of renewal issue seen on a lesser scale in Auckland. One listed Hong Kong property company, Sun Hung Kai, is examining alternatives for 60 under-used industrial buildings. For starters, one may become an eight-storey old folks’ home and another could be turned over to IT startups.

1 November 2000

Entertainment Properties Trust, which has put together a $US500 million theatre portfolio since it listed three years ago, reported steady third-quarter funds from operations of $US8.6 million on revenue up 9% to $US13.7 million. The trust is a specialty finance company organised as a real estate investment trust, focused on developing cinema properties which it leases to major chains. President and ceo David Brain noted the advantages the trust’s megaplexes had over older multiplexes.

Dallas-based Silverleaf Resorts Inc raised third-quarter revenue 23% to $US75.5 million with vacation interval (timeshare) sales up 22% to $US61.8 million. Upgrades accounted for 34% of total sales and were worth 54% more than a year earlier. But net profit was down 20%, from $US5.4 million to $US4.3 million, or from 42cps to 34cps. The nine-month return is down from $US15.8 million to $US10.2 million, with the pathetic excuse of “marketing efficiencies not yet in line” put out for this 35% fall (on higher sales).

New house sales in the US rose 9.2% in September, boosted by lower mortgage rates.

Starwood Hotels & Resorts had an all-round strong third-quarter performance, but says the euro’s discount and Fijian coup knocked 3c of earnings a share, which were up 32% to US50c. Total revenue rose 16% to $US1.11 billion, ebitda 20% to $US406 million, operating income 26% to $US274 million. Occupancy in its 111 US hotels was up 330 basis points to 77.7%, revenue per available room (revpar) 14.2% to $US115.66. Adding on the 44 hotels elsewhere in the world, occupancy rose 240 points to 75.3%, and revpar 10.5% to $US118.37. The company plans to sell its Ciga Group hotels in Europe in the next year, though chairman and ceo Barry Sternlicht said the state of the euro might be against it. Starwood is the parent company of Sheraton, Westin and a new brand, W. The company expects to meet its growth target of 15% in earnings a share next year, and expects 30% returns from timeshare sales.

Continue Reading

Snapshot on world property, week to 21 January 2001

Latest: Burnham Pacific signs new deal as liquidation continues, 250ha business park for Qingdao, Swire Pacific loses $NZ1.3b arbitration case, Singapore introduces business park flexibility, Kaohsiung rail project starts, spec tower across Hudson from Manhattan, 17% return on three-year Daytona hotel revamp, bidding war for UK housebuilders, Harvey Norman up 11.9%, German-backed Millennium buys six US Ritz-Carltons, Prentiss exits markets and homes in on Washington.

18 January 2001

Burnham Pacific Properties Inc, which became a real estate investment trust in 1987, expanded hugely in the last four years but now has a deathwish, has signed a deal to sell 19 grocery-anchored Californian shopping centres to Weingarten Realty Investors for $US145.5 million in cash plus the assumption of $US143.6 million of debt, $US14 million less than it was to get from a sale which fell over late last year. The centres contain 230,110m² gross lettable area between them, which gives the sale a value of $NZ2823/m². The trust finished 1999 with $US1 billion of property, 40% net equity and a 4.54% return on equity, slightly better than the previous year. That return is now down to 1.51%. Directors started looking at the trust’s options in early 1999 after rejecting a takeover bid at a premium, recommended liquidation of the whole trust last August and have been pursuing liquidation since. Burnham’s portfolio was worth only $US350 million in 1996 and would have been about $US2 billion if it had stuck with a deal to buy AMB Properties.

17 January 2001

Singapore companies Creative Technology and Dragon Land have unveiled plans for a 250ha high-tech communications business park to be developed in Qingdao, China’s second busiest port city with a population of seven million, home to many multinationals and to many local appliance makers.

Swire Pacific has lost a $HK4.5 billion ($NZ1.3 billion) arbitration case over the payment of land fees on developments in Taikoo Shing. The arbitration concerned premium and interest on three office projects and one residential development built in the 80s and 90s. Swire said all but $HK151 million would come from reserves and the decision would not affect the company’s plans to continue Island East projects, including expansion of two where a premium would now have to be paid.

16 January 2001

Singapore’s Urban Redevelopment Authority has decided to eliminate its 15% cap on “white” uses in business parks, which include non-work-related amenities such as shops, restaurants, childcare centres and recreational facilities. It has also halved the minimum land area required for a business park, from 10ha to 5ha.

Preliminary work has begun on the Kaohsiung mass transit railway system in Taiwan, a $T200 billion ($NZ13.8 billion) build-operate-transfer (BOT) project which will have a 28km north-south line and a 14km east-west line. Siemens has taken a 10% stake and will supply core train and power systems. The project still has a city council complication — the council has guaranteed the required four-year funding, but still requires annual budget approval. Full construction is expected to start mid-year and the rail company is expected to list at the end of the year. Kaohsiung, at the foot of Taiwan, has the island’s largest port.

SJP Properties began work in September on the first of two twin 13-storey, 51,000m² office blocks in Hoboken City, across the Hudson River from midtown Manhattan in New York, and has decided to spec the second tower in its Waterfront Corporate Centre. It’s part of a mixed-use development by the city, the New York & New Jersey Port Authority and private interests, transforming 20ha of unused waterfront.

Boykin Lodging Co of Cleveland, Ohio, has sold its Daytona Beach Radisson Resort to Oceans Resorts for $US12.5 million three years after buying a 1974 beachfront hotel which it completely revamped. It bought for $US4 million, spent an extra $US6.5 million to get an as-new franchised hotel for $US52,000/room, added one room to the original 205 and sold for $US60,680/room ($NZ137,000/room). The return on the original investment and refurbishment looks like 17%.

The British housebuilding industry is in a spin, with offers of all kinds revolving round the proposed Bryant Group-Beazer merger into Domus. An hour before Bryant shareholders were to vote on the merger, Taylor Woodrow filed a £520 million ($NZ1.7 billion) bid for Bryant. A fourth builder, Persimmon plc, said it would bid this week for Beazer.

15 January 2001

Harvey Norman Holdings reported sales for the December half in Australia and New Zealand up 11.9% to $A1.28 billion, excluding wholesale tax and based on the same number of days’ trading.

Millennium Partners, which is developing a $US3 billion mixture of large projects in six US cities — Atlanta, Boston, Miami, New York, San Francisco and Washington — in response to the demand for dynamic inner-city living, has secured a $US400 million loan to buy six hotels, four new, operated by The Ritz-Carlton Hotel Co LLC in New York, Boston and Washington. Partners include George Soros, Citicorp Real Estate and Goldman Sachs’ Whitehall Fund. Most of the rest of the 40% equity, 60% financing and underwriting comes from German institutions, headed by Ergo Versicherunsgruppe AG. The hotels will have a total 1349 rooms and will be owned by MPE Hotel I LLC.

Prentiss Properties Trust has sold four suburban commercial and industrial properties in Chicago, Detroit and Houston for $US56.4 million at a $US10 million net gain, and bought its third development site in the 186,000m² Dulles Corner area of the Dulles toll road corridor market of northern Virginia, in the Washington metropolitan area. Prentiss’ 10-storey, 24,600m² South Lake building will sit on a 3ha site.

Continue Reading

Snapshot on world property, week to 19 August 2001

Latest: 19% HK office rent fall forecast, Forest City sells one mall and builds three more, Lend Lease profit way down, Hardie profit slashed, Dairy Farm more expansive back in HK.

19 August 2001

Hong Kong office rents rose 80% last year but fell 13% in the first half of this year, and Cushman & Wakefield is forecasting a 19% drop for the year to next June. The agency expects Singapore rents to fall 10%, Manila and Taipei 5%.

17 August 2001

Forest City Enterprises Inc has sold the 120,000m² Tucson Mall in Arizona to General Growth Properties Inc for $US180 million. Forest City built the mall in 1992 and expanded it in 1991. The company is pouring more money into new malls, with three of them worth $US205 million, in Pittsburgh, Atlanta and Queens, New York, opening later this year. The Queens mall, opening next month, is 95% preleased and the other two are 85% preleased.

Lend Lease Corp Ltd made $A151.4 million in the year to June after an $A60 million aftertax writeoff. It made $A432.2 million in 2000, but that included the financial services division, which was sold. To make comparison even harder, Lend Lease completed an $A1.8 billion buyback last October. Earnings/share fell 60% to A33.7c and final dividend was cut from A32c to A8c, fully franked. The company expects to make at least $A210 million in the next year, and should boost earnings if Australia adopts a US accounting standard for amortisation.

15 August 2001

James Hardie Industries Ltd’s June quarter profit fell 92% to $A3.4 million on a 48% slump in US gypsum wallboard prices and 40% fall in Australian housing starts. Ebit from its rising star, the US fibre cement business, was up 25%.

13 August 2001

Jardine Matheson’s Hong Kong-based retail subsidiary, Dairy Farm, is looking more expansive in its home territory than in Australia and New Zealand, where it’s sold the Franklins chain and is looking at selling Woolworths NZ. In Hong Kong, its Wellcome supermarket chain will open 30 new stores this year at a cost of $HK250 million. Six are classified as superstores, upwards of about 3000m².

Continue Reading
WordPress Appliance - Powered by TurnKey Linux