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



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



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….

“ 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 17 December 2000

Latest: LAX upgrade plan, market for kitset homes toughens, apartment blocks at the beach, Swedish deal at 7%, disclosure lacking, post-mall California.

13 December 2000

A comprehensive master development plan for Los Angeles International Airport and access to it has been put out for 180 days of submissions by LA World Airports, a division of the City of Los Angeles which covers four airports. LA International was last upgraded for the 1984 Olympics to take 40 million passengers, but handled 65 million this year. Plans include up to $US3 billion for an airport expressway, a ring road taking passengers straight to a new western terminal, Metrorail green line extension to that terminal, and a people mover to take people from carparks to terminals. Go to External links/US, property news for the airport’s website.

KIT Manufacturing Co of Long Beach, California, dropped its manufactured-homes earnings by 52% for the October fourth quarter and fell 30% for the whole year. Who to blame? Industry-wide excess inventory, lenders’ tightened credit standards and rising interest rates, says the chairman. The company also sells recreational vehicles, and those sales also crashed. The company lost just over $US1 million on $US8.5 million sales for the quarter, and came out just under square on $US48 million sales for the year.

Camden Property Trust of Houston has started building a $US120 million, 538-unit multi-family apartment development, The Park at Harbour View, at Long Beach, California. It will have two nine-storey towers, four of four storeys, 9ft ceilings (2.74m), a fitness centre, two swimming pools, 2300m² of shops and 1440 parking spaces. Future plans include an adjoining highrise condominium and a hotel. Camden has an option on three more residential projects in San Diego worth $US124 million. It operates 145 properties containing more than 51,000 apartments.

12 December 2000

Drott AB of Sweden, one of Europe’s largest publicly traded real estate companies, has bought Fastighets AB Ragne, owner of 26 Malmö properties, giving it 889 apartments in 64,000m² and 38,000m² of office for 750 million Swedish krona ($NZ183.3 million) at an average 7333 krona/m² ($NZ1792/m² ), giving a 7% yield based on rents.

The American business wires announced that KWI Property Fund I bought three highrises in Los Angeles containing 53,500m². We get told often enough we have a cowboy stockmarket in New Zealand, so I’ve fired some questions off to the company to ascertain whether they’re even worse in the US wild west. The buildings on Hollywood and Wilshire Boulevards are 11 storeys (plus separate 6-storey parking), 18 (including 7 parking) and 16 (plus 6 parking), which I’d regard as relatively short over there. Some of the missing detail: the price, funding method, initial yield. Kennedy-Wilson International was previously a residential auctionhouse, which has grown into a major commercial brokerage, including Jones Lang Wootton California, bought from the merged Jones Lang LaSalle, and established a $US250 million fund to buy mostly suburban offices.

Long Beach Plaza in California is getting a remake. It covers eight blocks, has an enclosed mall which was opened in 1982 and shut last year, and demolition began on Monday to make way for CityPlace, an art deco creation which will bring back the street grid and open in early 2002 with 44,000m² of shops, 328 flats, a 138-suite hotel and 2900 parking spaces. “By reintroducing the city street grid and placing ground-level retail below housing units, we will be creating a new urban village in downtown Long Beach,” said the senior vice-president of development for Developers Diversified Realty Corp, Eric Mallory. DDR develops and invests in shopping centres, and has 208 of them covering 4.6 million m² in 40 states. Its partners in the joint venture are a Prudential Insurance division and Coventry Real Estate. Designers were Jerde Partnership, of Venice, California, whose work includes Third Street Promenade in Santa Monica, CityWalk in Universal City and Horton Plaza in San Diego.

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Snapshot on world property, week to 11 February 2001

Latest: Coles Myer sales rise 5.5%, … and then there are meaningless statistics, Equity Office raises Q4 earnings 10.3% diluted and 11.3% for year, retail trust IRT hangs in, Cousins surges, Cromwell buys in Brisbane, Lend Lease secures EY for Indianapolis tower.

8 February 2001

Coles Myer said first-half sales, to 28 January, were up 5.5% to $A12.3 billion. Including gst, customer outlays rose 6.8%. Second-quarter sales rose 5% to $A6.7 billion.

I read a BBC story this week on house prices in the UK — misleading, minus one vital fact, using distortion to emphasise a view. The first half of the story, based on Halifax Bank’s house price index, shows a 0.1% rise in average house prices for January, or 0.9% year-on-year. It says that’s a real-terms fall because inflation has been running higher than that. It doesn’t say what the British inflation rate is (that’s the absent essential fact). Then the BBC mentions a story quoting the Nationwide Building Society, which found house prices rose 2.5% in January, the biggest monthly gain since October 1994, giving a year-on-year rise of 11.2%. Why the difference? Most of Nationwide’s business is in the south, Halifax’s in the north. So as a national gauge, the story is meaningless.

7 February 2001

Equity Office Properties Trust raised fourth-quarter funds from operations 31% to $US262 million, 10.3% on a fully diluted basis, on revenue up 33% to $US657 million. Same store net operating income rose 7.9% on a GAAP basis and 8.9% on a cash basis. For the whole year, funds from operations rose 21.5% to $US911 million, up 11.3% on a fully diluted basis, on revenue up 16.6% to $US2.264 billion. The trust leased 370,000m² during the fourth quarter at a 32% better average than expiries, $US32.48/ft² ($NZ792.56/m²).

6 February 2001

IRT Property Co, which owns 900,000m² of retail space in 92 shopping centres in south-eastern US, last a substantial tenant, Jitney Jungle, through bankruptcy last January and never quite caught up. At year’s end, five of the 10 vacated tenancies were still vacant. IRT reported funds from operations down 12.5% to $US10 million in the fourth quarter, though down only 1c to US30c/diluted share. For the full year those earnings fell 1.7% to $US42.3 million, but the return to investors rose 2.5% to $US1.20/diluted share. IRT, like many US reits, turns over property more frequently than has been the case in New Zealand in the past decade. It got two Publix supermarket leases that will enable development to start on two sites, and has two other developments due to start. It bought a 100% leased, 10,900m² Fort Lauderdale centre for $US11.6 million, at $NZ2406/m², and sold five centres totalling 30,000m² for $US17.4 million at $NZ1316/m².

Cousins Properties Inc said fourth-quarter funds from operations rose 24% to $US25.7 million, or 21%/share after a 3:2 split distributed at the start of the quarter. For the year, funds from operations rose 17% to $US95.2 million, or 16%/share. It began $US231 million of new office and retail projects, bought $US60 million of properties with development opportunities, opened $US224 million of office and retail property, sold one property for $US27 million, and ended the year 98% leased in office, 93% in retail and 90% in medical. The trust’s debt:market capitalisation ratio at 31 December was 33% and interest cover 4.35 times.

Listed Australian syndicator Cromwell Corporation has signed unconditionally to buy a 24-storey Brisbane tower, 200 Mary St, from AMP for $A30 million, is seeking to raise $A16.4 million, and is offering investors a 10% return in the first 10 months, forecast to rise to 14.5% at the end of the 10-year investment period.

Lend Lease’s US Office Trust has leased 5400m² on four floors of its 84,100m² Bank One Centre in Indianapolis to Ernst & Young, which is taking two vacant floors and two being vacated early by another tenant. The lease is for 10 years and gives Lend Lease 97% occupancy and a lease term average over five years.

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Snapshot on world property, week to 9 September 2001

4 September 2001

Hai Sun Hup, the Singapore-based owner of the Stamford hotel chain, is reconsidering its plans for an $A55 million 235-room five-star hotel next to Woodside’s new headquarters in Perth. Because of a hotel industry slowdown, Hai Sun Hup is now looking at building 90 apartments and 50 hotel rooms. Deutsche Office Trust’s $A245 million Woodside building will have 46,000m² of office space in its 24 storeys. Work has begun there and it’s due for completion in September 2003.

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Snapshot on world property, week to 30 March 2003

30 March 2003

Stockland Trust has bought 15% of AMP Diversified Property Trust, spending $A232 million at $A2.95/unit. “We regard our investment in ADP as strategic. We welcome an opportunity to enter into discussions with AMP on the future direction of the ADP,” Stockland managing director Matthew Quinn said in a Friday release. AMP Diversified bought 50% of the Botany town centre, Lynmall and Manukau Supa Centa from the unlisted New Zealand AMP Property Fund last August for $NZ188.125 million. The AMP Shopping Centre Trust is subject to full takeover from Centro Property Group and Westfield Trust has taken an equal 19.9% stake in that trust.

26 March 2003

Singapore-listed City Developments Ltd, up the parental chain from the CDL hotel & property group in New Zealand, increased earnings/share by 181% to S18.88c in 2002, on net profit up 181% to $S151.2 million, revenue up 2.8% to $S2.3 billion, gross profit up 3.8% to $S1.15 billion, profit from operations up 15.6% to $S424.3 million, pretax profit from ordinary activities up 75% to $S243 million and aftertax profit from ordinary activities up 132% to $S199.7 million. $S62 million of the turnaround in profit from ordinary activities came from a $S11 million writeback of foreseeable losses on development properties, after a $S51 million allowance for them in 2001. Net asset value rose from $S4.71 to $S4.82/share.

Leighton Properties Pty Ltd and Queensland developer Kevin Seymour have sold their jointly owned MacArthur Central retail centre in Brisbane to the Investa Property Group for $A96.95 million. The centre has 14,347m² of retail on 3 levels and is the 1st part to be built in a complex which includes a 24,800m² office block, a residential component and 323 parking spaces. It backs on to the Brisbane GPO and has 3-street frontage to Queen Edward & Elizabeth Sts.

Downer EDI Ltd signed on Monday to buy CPG Corp Pte Ltd from Singapore Government company Temasek Holdings Pte Ltd. CPG, previously called PWD and before that as the Singapore Public Works Department, specialises in facilities & project management and engineering consultancy. It’s forecasting earnings of $S200 million for the March 2004 year. Downer also owns Works Infrastructure, New Zealand’s former Ministry of Works. Downer managing director Stephen Gillies said the acquisition was struck on an enterprise value:ebitda multiple of about 3 times, with the enterprise value put at $76 million.
Websites: Downer EDI
CPG Corp
Temasek Holdings

25 March 2003

Lend Lease Corp Ltd has agreed non-binding commercial terms with financial services company Morgan Stanley and Co Inc in the US which will form the basis for ongoing negotiations & due diligence for a joint venture with Lend Lease’s US Real Estate Investments equity advisory business. The discussions don’t involve other parts of the USREI business. Lend Lease also said it was still continuing its strategic review of that business.

Starwood Hotels & Resorts Worldwide Inc, has signed a binding agreement to sell 4 hotels containing 382 rooms & a 51% interest in its 2400ha of undeveloped seafront land assets at the Costa Smeralda luxury resort in Sardinia, Italy, to Los Angeles-based Colony Capital LLC for 290 million euros plus additional consideration. Colony also gets the Porto Cervo marina, host to the Yacht Club Costa Smeralda, and the Pevero golf club. Starwood also recently sold the Hotel Principe di Savoia to the London-based Dorchester Group Ltd for 275 million euros. The 2 transactions take Starwood over the $US500 million of assets the company said it would sell this year.
Websites: Colony Capital

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Snapshot on world property, week to 18 January 2004

17 January 2004

Villa World Ltd lodged a development application in December to redevelop the Dolphin Arcade site in central Surfers Paradise, with approval anticipated by September. The company plans 2 towers, 1 of 50 storeys and the other of 36, 398 apartments in a mix of 1-3 bedrooms, an arcade, 3500m² of shops on the bottom 2 levels, and various recreational facilities including a lap pool & 2nd pool area. But the company might still sell, or enter a development partnership. Chief executive Brent Hailey said several parties had expressed interest in buying the landmark site or a joint venture. Villa World bought the 7240m² property from Far East Consortium Properties of Hong Kong for $A33 million in 2002. A report on Villa World’s website says Far East bought the arcade in 2 bites in 1995 (80% of it for $A34.5 million, the rest for an undisclosed sum 6 years later) from the Rockman family of Melbourne, who rejected an $A82.5 million offer for the arcade in 1990.
Website: Villa World

15 January 2004

CNL Retirement Properties Inc, of Orlando, Florida, has agreed to buy 20 seniors housing properties in 6 states, containing 3600 units, from affiliates of WHSLH Realty LLC for $US562 million. All are operated by another Florida company, Horizon Bay Senior Communities Inc. The CNL Financial Group Inc has $US9.5 billion of assets representing more than 4000 properties, all in North America. WHSLH Realty is owned by The Whitehall Street Real Estate Funds, private funds managed by Goldman Sachs & Co.
Websites: Horizon Bay
CNL Financial

12 January 2004

Macquarie ProLogis Trust has bought 2 more US properties from US distribution facilities group ProLogis for $US9.3 million at an 8.44% average initial yield, funded from the trust’s distribution reinvestment plan & borrowings. The 2 properties, both in Texas, are the 4140m² Industry Park distribution centre in San Antonio and the 17,470m² expansion of Vista Del Sol Industrial Centre II in El Paso, where Macquarie ProLogis acquired an interest in December 2002.

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Snapshot on world property, week to 30 June 2002

29 June 2002

A new real estate private equity investment firm, Watermark Capital Partners, has been formed by Michael Medzigian, former president & chief executive of Lazard Freres Real Estate Investors, Cordell Lietz, former senior vice-president of US shopping centre specialist the Taubman Realty Group, and a non-executive, John Muse, co-founder & European operations head of Hicks Muse Tate & Furst.

SL Green Realty Corp and Morgan Stanley Real Estate Fund III LP have sold 469 Seventh Avenue in New York, 2 blocks north of Penn Station, for $US53.1 million, at $US222/ft² ($NZ4808/m²). Their joint venture bought the 16-storey, 22,214m² office block for $US45.7 million in January 2001.

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Snapshot on world property, week to 29 July 2001

Latest: Shoppingtown World Trade Centre, BT to stage 2 on next Phillip St tower, big rent rises at Deutsche towers, Gandel valuations raise NTA 4.5%, Sea World bid short of compulsory acquisition, 5.4% revaluation gain for Deutsche trust, Amcor plans leasebacks, new Lang Walker suburb in Sydney, $HK7 billion unpaid/year in HK downturn.

25 July 2001

Westfield America Inc has signed a 99-year lease on the World Trade Centre’s retail component with the Port Authority of New York & New Jersey. Concurrently, Silverstein Properties has agreed to lease more than 900,000m² of the centre’s office complex. The net leasehold on 40,000m² of The Mall covers 75 specialty stores, restaurants and service retailers, and will be branded Westfield Shoppingtown World Trade Centre. The Mall has one of the highest producing sales volumes in the US with sales exceeding $US900/ft² ($NZ23,575/m²). It serves 40,000 office workers, 150,000 daily visitors and is an important business and tourism hub.

BT Office Trust has appointed Bovis Lend Lease to project manage, through to development approval in the second quarter of 2002, its proposed 30-plus-storey office tower on the corner of Phillip & Hunter Sts, opposite Chifley Square in Sydney. London-based architects Foster & Partners have designed an off-centre core for the tower. The trust has also commissioned Bovis Lend Lease to get development approval for an adjoining residential project at 185 Macquarie St.

Deutsche Office Trust has followed big revaluation gains on its Sydney towers by announcing sharp rent reviews. The New South Wales Government will pay the trust $A18 million net/year from 1 January 2001, 18% more than two years ago, at $A595/m² for its 30,280.4m² of office space on levels 15-27 and 30-41 of Governor Macquarie Tower. The Government’s licence on 150 secure car spaces rose 20% to $A780/month. In Governor Phillip Tower (50% owned by the trust), Boston Consulting Group will pay 28% more than two years ago for its 1485.8m², at $A800/m² net from 1 December 2000. At the northern hub of Chatswood, Optus Vision will pay 21.1% more –$345/m² net — on 2151.8m² on two floors (8 & 9) in Tower B of the Zenith Centre, 821 Pacific Highway, on a 30-month renewal to June 2003. WA Flick & Co has signed a retail lease at $A400/m² gross on 392.6m² for five years plus five-year renewal option, with 3% annual rises and a market review on exercise of the option. In the Lumley Building (50% owned) at 309 Kent St, Strang Patrick Stevedoring has renewed for two years on its eighth-floor 1070.8m² at $A445/m² gross, a 15.6% rise. The State Government’s Sustainable Energy Development Authority has renewed for three years its lease on 698.6m² on two floors of the KPMG Centre, 45 Clarence St, at $A480/m² gross. In Melbourne, State Street Australia has renewed its lease on 2615m² of the IBM Centre, Southgate Towers, at $A265/m² net, a 6% rise.

The Melbourne-based Gandel Retail Trust raised its net asset backing 4.5% to $A1.16/unit from a $A60 million (3.43%) revaluation gain at 30 June, which took its share of the 12-centre portfolio to $A1.86 billion. The Chadstone shopping centre (50% owned) gained $A100 million (including $A31.3 million capex) to $A1.1 billion on a 6.75% cap rate. The Chadstone valuation rise was 6.87% on a year ago. The Myer Centre in Brisbane, a Chase development at the end of the 80s, gained just over 1% in value, with a $A16 million rise including capex to $A416 million, on a slightly softer 7.87% cap rate.
Warner Bros and Village Roadshow closed their offer for the Brisbane-based Sea World Property Trust on Monday short of the 90% compulsory acquisition target. They bought out 3800 unitholders to reach 85.65% of the trust.

24 July 2001

Deutsche Office Trust has gained $A46 million in 30 June revaluations on four of its Sydney properties. The 5.4% valuation gain is on a 7% rise in rent. Governor Phillip Tower, Governor Macquarie Tower & Phillip St Terraces were give a combined value of $A472.5 million, up $A15 million, or 3.3% for a value of $A10,868/m² ($A10,560/m² ) and capitalisation rate 6.6% (6.3%). Gross passing office rent rose from $A669/m² to $A719/m² , recoverable outgoings from $A128/m² to $A139/m². Australia Square, 50% owned by the trust, rose $A17.5 million, or 10.6% in value to $A182.5 million, at $A7001/m² on a 10.3% cap rate (10.01% last year), gross rent rose from $A562 to $A658 and outgoings from $A124/² to $A150/² . 309-321 Kent St rose $A3 million, or 2.1%, to $A143 million at $A6010/m² on a 7.5% cap rate (7.25%). Occupancy was down from full to 97%, and gross rent was down from $A569/m² to $A447/m², outgoings were up from $A97/m² to $A100/m². 201 Elizabeth St rose $A10.5 million, or 11.4%, to $A103 million at $A5321/m² on a 7.5% cap rate (7.25%). Gross rent was up from $A428/² to $A457/m² , outgoings from $A100/m² to $A107/m² . The valuations on each building are done by a different firm each year.

Amcor Ltd will realise $A174.5 million from a proposed sale/leaseback programme, with a minimum lease of 10 years, on part of its industrial property portfolio. “Amcor targets a return of 15% profit before interest and tax to average funds employed which is higher than that required by investors in land and buildings,” Amcor managing director Russell Jones said. The securitisation programme should be completed in a few weeks.

Lang Walker, who sold his listed company Walker Corp to Australand a few months ago, has lodged plans with the Canada Bay council in Sydney for a $A960 million new suburb on the Rhodes Peninsula, a western industrial area. Mr Walker’s new private development company is McRoss Developments. Australand has an office park planned for an adjoining site.

A Hong Kong construction downturn, lasting four years so far, will leave an estimated $HK7 billion in unpaid debt/year, according to consultants Baker Tilly High Point Rendel. In the first quarter of 2001, construction volume fell 6.23%. The Hong Kong downturn is exacerbated by the arrival of mainland companies, undercutting the competition by up to 20%.

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