As ever here is my completely non-scientific take on the week’s commercial property & construction news – basically the stories that have interested me the most. Any comments – feel free.
British Land sees recovery “across its portfolio”
British Land, Britain’s second biggest developer, provided some much-needed confidence to the property market by reporting that the value of its office blocks and shopping centres had risen 8.2 per cent in the last three months to December 2009; rising to £7.9 billion. The rise in its net asset value per share to 438p – a benchmark measure – amounted to an 18 per cent rise in value over the nine months since its financial year began, and was well above forecasts for a 425p value. Chris Grigg, the chief executive, who replaced Stephen Hester a year ago, said: “The early signs of recovery seen in the second quarter extended right across our portfolio during the last three months of 2009.”
Young Surveyors Networking
Charles Curtis and Sara Brooks, founders of Young Surveyors: The Next Generation or Young Surveyors Biting Back have been speaking about their networking group and how young surveyors are coping in the difficult market. Curtis, of Finn & Company, and Brooks, of King Sturge, met whilst studying real estate management at Oxford Brookes and look to have a good deal of momentum growing behind their young surveyors networking group http://www.youngsurveyorsbitingback.co.uk/ .
Mike McNamara leaves RBS
Mike McNamara, a regional managing director in Royal Bank of Scotland’s real estate finance team, is leaving the bank The former Ernst & Young partner joined the bank in 2007 and was the EMEA head within RBS’s global banking & markets division. He worked alongside Morgan Laughlin and Leon Reardon who head the Asia and Australasian region. At Ernst & Young he specialised in sale-and-leaseback transactions. The press reported that McNamara is exploring a range of opportunities once his departure from the bank is finalised.
Bonanza of real estate distress pickings
Leon Black, founder of Apollo Management, has predicted that an impending crisis in commercial real estate will provide a “bonanza” of investment opportunities for distressed debt investors with money to spend. As about $2,000bn of commercial real estate debt falls due in the next few years, Mr Black said he expected banks and insurers to face increasing pressure from politicians and regulators to sell off some of their property loans. “A lot of the sources of capital [for commercial real estate] have failed,” said Mr Black, speaking at the Super Return private equity conference in Berlin. “So if you have capital there are things you will be able to pick off.”
Pension funds into UK property in a big way
Pension funds and other institutional investors committed the most money to the UK commercial property sector on record last quarter, in spite of continued fears of a further drop in values this year. Institutional property funds raised more than £3.2bn last quarter, dwarfing the previous peak of £1.7bn collected in the boom of the market in 2006. This is the highest since records began in 1998. Official numbers from the Association of Real Estate Funds show that UK unlisted pooled property funds attracted £2.9bn in the fourth quarter on a net basis, much higher than the £400m raised in the third quarter. The sudden influx of new capital from institutional investors reflects the wider shift in sentiment towards UK commercial property, which has seen a bounce in pricing since last summer after almost halving in value.
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