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 14 July 2002

9 July 2002

Equity Office Properties Trust is about to hand over the keys to the 6-storey 11,670m² fifth building in strategy & technology consulting firm BoozAllenHamilton’s headquarters campus in McLean, Virginia. The BoozAllen campus has more than 80,000m². The latest building will house more than 500 staff at about 23m²/person. Equity Office has 11.85 million m² in 767 buildings.

Michigan-based Ramco-Gershenson Properties Trust has been added to the Russell 3000 index, which is reconstituted annually. Membership in Russell’s 21 US equity indices is determined by market capitalisation rankings & style attributes rather than by subjective opinion or committee decisions. Russell indexes are widely used by managers for index funds and as benchmarks for both passive and active investment strategies. About $US250 billion is invested in index funds based on Russell’s indices and another $US850 billion is benchmarked to them. Ramco-Gershenson has just over 1 million m² in 59 shopping centres, of which only 1 is an enclosed regional mall.

Mid-America Apartment Communities and Crow Holdings have formed a joint venture to buy $US150 million of multifamily redevelopment investment opportunities in the US south-east & south-central regions. Their first purchase, the 464-unit Preston Hills apartment community at Buford, Atlanta, cost $US33.7 million (at $US72,629/unit). It’s near the new Mall of Georgia in the high-growth Gwinett County corridor. Mid-America owns/manages 34,000 units. Crow Holdings is a group of international, diversified investment holding companies which owns & directs the investments of the Trammell Crow family and manages investments on behalf of the family & its investment partners.

Continue Reading

Snapshot on world property, week to 25 March 2001

Latest: Slim rise for Massachusetts trust, Rampart trust reports loss, Shangri-La Hotels up 15%, Parkway Singapore healthcare down 40%, General Property Trust to modernise Floreat Forum, Kumagai Gumi sells rest of Melbourne Central to General, Mirvac buys out industrial trust at Royal Domain, $S462m tender wins Singapore redevelopment project, big turnaround for Hotel Properties, green light for Sunset Strip project, Kennedy-Wilson buys distribution centres, work starts on Maryland tower, downturn for construction materials distributor Hughes Supply, DBS plans HK onslaught, Hutchison Whampoa gets another Chinese port, 11th St Regis for Starwood in San Francisco redevelopment.

25 March 2001

HRPT Properties Trust of Massachusetts increased revenue and funds from property operations by 1.7% in the December quarter over pro forma results for the fourth quarter of 1999, which assumed certain sales and the spinoff of its majority interest in Senior Housing Properties Trust occurred at the start of the quarter. Revenue for the quarter was $US100.5 million and earnings $US35.6 million. For the year, revenue rose 15% to $US405 million, and funds from property operations 2.4% to $US145 million and those earnings/share by 2.8%.

Rampart Capital Corp of Houston reported a $US1.2 million net loss on $US3.8 million revenue for 2000, said its stock was trading below book value, 2000 was not “a characteristic year,” and acquisitions and capex of $US 8.5 million during the year would have future benefit. Several projects were extended into 2001, such as acquisition of a distressed residential subdivision and golf operation in Newport, where it spent $US2 million on capex and renovation, then collected $US1.2 million from selling a half-interest in 480 lots.

Hotel group Shangri-La Asia raised profit 15% to $$US77 million last year, on strong performances in Hong Kong and China. Occupancy rates were 79% in Hong Kong and Singapore and 68% in China, up from 69% in Hong Kong , 68% in Singapore and 6% in China in 1999. Shangri-La is part of Robert Kuok’s Kerry Group.

Singaporean private healthcare services group Parkway Holdings Ltd earned 40% less, $S23.5 million, on revenue up 1.4% to $S380.6 million last year. But chairman Anil Thadani said the company had sold non-core assets and was in a good position to expand. After selling Parkway Parade last June, the company’s property profits fell 27% to $S15 million, but it was also able to cut its debt by 44% to $S362 million.

General Property Trust of Australia will modernise its Floreat Forum shopping centre in Perth at a cost of $A45 million, with an expected yield of 9%.

General Property Trust also said it had bought Kumagai Gumi’s remaining interest in the Melbourne Central complex of four linked buildings. The complex has a 46-storey office tower, a shopping centre and two carparks. General bought in for $A408 million in 1999 and has paid Kumagai Gumi $A17 million to take its holding to 100%.

Mirvac Group has taken full control of the Royal Domain Centre on St Kilda Rd in Melbourne, paying joint venture partner Macquarie Goodman Industrial Trust $A41.7 million. The industrial trust inherited its stake in 1999, but is concentrating on industrial property and suburban office parks.

A consortium of Hongkong Land, Cheung Kong (Holdings) and Keppel Land has won the tender for the white site at Raffles Quay/Marina Boulevard in Singapore, with a price of $S461.8 million for the 147,770m² gross floor area, which is designated for commercial, residential and hotel development. The property was offered for sale by Singapore’s Urban Redevelopment Authority on a 99-year lease.

Hotel Properties Ltd, of Singapore, raised pre-everything operating profit 28% to $S118 million on turnover up 32% to $S407 million. The big difference in the bottom line came from earnings attributed to associates, $S18.8 million in 2000 but a $S68 million loss in 1999. The bottom line was a $S43 million profit, turning round from the $S57.2 million loss the year before.

24 March 2001

California’s Appeal Court has rejected Save the Sunset Strip Coalition’s claims against the Sunset Millennium Project and West Hollywood City over redevelopment of three blocks of the Strip, approved two years ago. The main retail component and renovation of Playboy’s offices are under construction. Work on a hotel offices and more shops is to start next year.

Kennedy-Wilson International Inc has paid $US10 million for two distribution centres in San Antonio, Texas, containing 35,800m² in five buildings, with 5.7ha of development land available to build an extra 22,300m².

22 March 2001

Fremont Properties, an arm of the started work this week on the Washingtonian II tower in Gaithersburg, Maryland. The 29,400m² first tower in the development was sold to the state government.

Hughes Supply Inc of Orlando said the US construction market slowdown and bad weather combined to cut its fourth-quarter net profit before after-tax charges by 30% to $US8 million, or from 49c to 4c/share. The charges, and a gain on sale of its pool business, took the bottom line to a $US9.1 million loss. The company distributes construction and industrial materials.

21 March 2001

The Development Bank of Singapore has set aside about $S6 billion for expansion into Hong Kong. The Singapore Government has sold down its interest in DBS from 58% to 38%.

Hutchison Whampoa has won the bidding for 49% of the second phase of Ningpo’s Beilun port, next to Shanghai, conditional on Chinese Government approval. The company already controls eight Chinese ports and handled 25% of all Chinese container traffic last year.

Starwood Hotels & Resorts has been joined by Massachusetts contractor Carpenter & Co to build the St Regis Museum Tower on land bought from the San Francisco Redevelopment Agency. The first 20 floors of the 40-storey tower will have 269 hotel rooms, with 100 apartments of 130-520m² above. It’s the last significant project of the Yerba Buena redevelopment plan and is in the city’s fastest growing area, South of Market. The project, due for completion in 2003, will incorporate an African American cultural centre and the historic Williams Building will be rehabilitated.

Continue Reading

Snapshot on world property, week to 26 May 2002

24 May 2002

US leisure & real estate group Cendant Corp has sold National Car Parks of Britain to Cinven Ltd http://www.cinven.com leading private equity provider for big European buyouts and owner of the William Hill betting agencies and Odeon cinemas, for £820 million. The parking company has 535 town centre parking operations, many of them multi-storey, which Cinven plans to sell & lease back.

20 May 2002

Lend Lease Corp Ltd announced an international search for a successor to its chief executive of the past 7 years, David Higgins, ahead of his contract’s expiry. Chairman Jill Ker Conway said Lend Lease still expected to make more than $A210 million after tax this year, but expected growth for 2003 to be at the lower end of analysts’ forecasts.

Continue Reading

Snapshot on world property, week to 8 June 2003

5 June 2003

Deutsche Office Trust has cut its June 2003 half earnings forecast from A4.61c/unit in the previous half to A4.22c/unit, but will use retained earnings to boost its distribution to A4.95c for a steady A10c/unit total for the year. It’s forecast earnings of A8.65-9c/unit for the June 2004 year and has set an A9c/unit minimum distribution for the year. Deutsche appointed 3 independent directors in March and is reviewing its manager’s fee structure, the business model & new business areas with potential to deliver higher returns. Meantime, it cut its forecasts because of a high number of leases expiring in the next year, uncertainty over a gst court case with the state government relating to Governor Macquarie Tower, the planned sale of its 45 Clarence St building and general economic uncertainty.

Macquarie Office Trust said it would meet its 2nd half forecast A2.75c/unit distribution, making the forecast A11c/unit for the year, but is forecasting earnings of A10c/unit for 2004. It will use retained earnings to produce A10.25c/unit of distributions.

Continue Reading

Snapshot on world property, October 2000

Latest: Shanghai underground network, US home ownership at record level, Australian construction workforce slump forecast.

31 October 2000

Shanghai is to add 11 underground rail lines to the existing two, to relieve congestion in the city of 13 million people.

28 October 2000

US home ownership has reached a record 67.7%, according to the Department of Housing and Urban Development. Urban home ownership is up from 48% in 1994 to 51.9%.

26 October 2000

Australia’s construction industry workforce is expected to fall more than 8% next year from a 717,000 peak. The survey released at a Housing Industry Association conference also showed the rankings of construction companies had been shuffled since last year.

Multiplex, which has moved strongly into New Zealand, went from fourth to ninth, doubling its contracts from $A302 million to $A593 million. Inhouse shopping centre developer Westfield Projects, which has also entered New Zealand, undertaking the Glenfield Mall expansion for Westfield Trust, went from 14th to eighth. Leighton Holdings was top as Baulderstone Hornibrooke slipped from first to sixth.

25 October 2000

In Hong Kong they have the answer to land shortages — keep filling in the harbour. A mid-90s plan to reclaim 2.56ha of the Tamar Basin has been revived to ease the tight Central office supply market. It would be used for government buildings and could take 380,000m² of offices.

Singapore’s Government is considering extending 99-year leases which began 20 or 30 years ago as a measure against urban decay. Restrictive lending practices on properties with shorter lifespans have brought about the proposal.

Citibank wants to sell its last commercial property holding in Singapore at $S1000/ft² — $S45 million for 27 strata-titled units covering 44,885ft² (4170m² ) on four floors of the 40-storey UIC building on Shenton Way, which is one-third of the way through a 99-year lease. A building double the size could be built on the site, if the lease is extended.

24 October 2000

Mack-Cali Realty Corp will add two towers, Plazas 5 and 10 containing 140,000m² to its Harbourside Financial Centre on Jersey City’s Hudson River waterfront, straight across the water from downtown Manhattan. Financial services company Charles Schwab has signed a 15-year lease on 28,000m², but the project will start with only 25% commitment. The centre, with 195,000m² in four plazas already, can take a total 750,000m². The million square metre waterfront is one of the strongest submarkets in the US, with zero A grade vacancy for nearly two years.

19 October 2000

Singapore Government-controlled property companies DBS Land and Pidemco won the support of minority shareholders yesterday for their merger into a company with $S18 billion of assets and $S7 billion in shareholders’ funds, and for the merger of the two companies’ hospital and serviced apartment arms, Ascott and Somerset Holdings. The hospitality companies’ merger approval meetings will be held on 23 and 25 October, to form a $S1 billion company, which will retain the Ascott name. Shares in the new parent company, CapitaLand, will start trading on 21 November.

18 October 2000

Lend Lease Real Estate Investments and Italy’s third-largest insurer, the Milan-listed Assicurazioni Generali, have formed European property fund manager GLL Real Estate Partners, based in Munich, to raise funds from European institutions. The two partners will hold 40% of GLL each, with the other 20% held by management.

12 October 2000

Australia’s Federal Treasurer, Peter Costello, has changed tack on taxing property trusts and syndicates with fewer than 300 unitholders. The previous proposal would have made them collective investment vehicles, to be taxed like companies. Now those that distribute their income without discretion (most of them) will be called fixed trusts and will keep their flow-on tax status.

Westpac Bank has joined Australia’s syndication industry, signing up for a 16-storey, $A43.4 million office building at 350 Collins St, Melbourne, on a 10.5% yield and offering investors an initial 9.5% return.

After a two-year struggle with US reit Colony Capital, 64-year-old Adrian Zecha has won back control of the boutique luxury hotel chain he founded in 1987, Amanresorts. Interests supporting Mr Zecha secured control after a British Virgin Islands court case. The remaining stake held by Credicom Asia has been bought by Singapore-listed hospital and healthcare group Parkway, its 36%-owned Lee Hing Development, listed in Hong Kong, and two Schroders funds. One of those funds, Schroder Capital Partners, is now run by Mr Zecha’s former Amanresorts partner Anil Thadani, and has also bought control of Parkway. Amanresorts made one unsuccessful attempt at building a New Zealand hotel, on the cliffs at Piha.

9 October 2000

Macquarie CountryWide Trust has settled on its $A58 million purchase of eight Progressive Enterprises supermarkets, bought at a 10.6% yield compared to 7.5-8.5% for comparable Australian properties, and has options on four development sites. The trust now has 76 properties worth $A537 million and is looking to expand into the US.

Early 70s Singapore structures, the Change Alley Aerial Tower Plaza and Overseas Union House on Collyer Quay, may be demolished for a $S800 million redevelopment by the listed Overseas Union Enterprise, which is considering an office, retail and serviced apartment project.

6 October 2000

MTM Funds Management has offered to reduce its fee for managing the MTM Office Trust to the level proposed by James Fielding Investments, in an effort to stave off sacking at the hands of Kerry Packer. Mr Packer’s resolutions go to a unitholders’ meeting on 16 October. MTM Funds said it would not take more than 0.35% of gross assets for the first two years after practical completion of its one asset, the Citigroup Centre in Sydney. The units would have to trade above a 5% discount for 20 days for the manager to improve its take.

Australian online real estate business RP Data has launched a takeover bid for Macquarie Bank’s realestate.com.au, valuing it at $A16 million. Macquarie was working towards a joint venture for its listed site with the Fairfax newspaper group’s f2. RP Data also has its own site, realtor.com.au, and 10% of propertypage.com.au, whose other owners are real estate agencies and Queensland Real Estate Institute.

Triden Corporation plans to turn the old Ford factory site on Parramatta Rd, in Sydney’s Homebush Olympic district, into a 12-building campus-style technology park. It bought the site for $A29 million and plans an $A385 million, 120,000m² lowrise development to house at least 6000 people, which would be turned over to the Macquarie Goodman Property Trust. Macquarie’s trust is about to merge with the industrial trust set up in Sydney by members of Nelson’s Goodman family.

Gold Coast businessman Lakhmi Daswani has fled the country as the Australian Securities & Investments Commission seeks his whereabouts, administrators are appointed to his businesses and a string of banks chase their $A50 million exposure to his group. Mr Daswani’s businesses include 15 Surf Dive ‘n Ski shops in Australia, and several other fashionable retail chains. He also has substantial retail and commercial property holdings, and penthouses, in Sydney and Queensland.

5 October 2000

The push by property syndicates in Australia to establish a secondary market is taking shape. The model for the Australian Property Exchange (APX) was lodged with the Australian Securities and Investments Commission this week. Unlike New Zealand, where syndicate investors have been able to exit if they can find a buyer, either through their fund managers, the syndicate manager or Sharemart, there has been no provision for a secondary market in Australia. Among the initial rules: two settlement days a month, no special trades and no short selling.

4 October 2000

A 28.5ha redevelopment planned beside Hong Kong’s eastern harbour crossing in Yau Tong Bay has run into new trouble, failing an environmental impact report mainly because some of the neighbouring shipyards plan to stay in business. The project, headed by six of Hong Kong’s biggest property developers, would see 18ha reclaimed, 39 residential towers up to 160m tall for an eventual 39,000 people, two commercial towers up to 200m tall, and a total 980,000m² of construction.

Westfield Trust has agreed to sell its half of the Indooroopilly shopping centre in Brisbane, which it opened in 1969, to fellow owner the Commonwealth Property Fund for $A300 million at a 5.7% initial yield. The transaction resulted from Commonwealth setting a price it would sell at, Westfield rejecting it and Commonwealth then buying at that price on the expectation of capital growth. The half share of the 85,000m² centre sits (before a recent refurbishment) on Westfield’s books at $A206 million.

The trend toward smaller flats grows in Hong Kong. Government figures show 72.5% of the 15,750 first-half starts this year were for the smallest category, less than 430ft² (40m²) saleable area, up from 61% last year and 56% three years ago. Most are in the New Territories. A standard hotel room is 32-34m².

Australia’s Planning Institute has a “liveable communities” policy, like that being put into practice around Auckland, and wants the Federal Government to establish a national centre for urban design.

2 October 2000

The US

Continue Reading

Snapshot on world property, week to 7 January 2001

Latest: Hotel for old HK industrial site, chasing short-term success, Office Depot closures, Singapore house prices fall, another HK industrial park, Sogo store in HK sold, Reit changes start in US — Hilton the first loser, Cousins buys at 9.75% in Dallas, US home orders up, Soros-backed Medical Properties goes shopping, NZ Corp sells Phoenix site, next Las Vegas megaresort under way, RailAmerica sells non-core track, Wal-Mart to join Carrefour in Japan, Glenborough sells 37 communities, Gables says Houston’s the next development niche, Insignia buys Brooke of HK, Lexington buys Illinois industrial at 10.5%, Oakwood buys Washington serviced apartment project at $NZ353,000/unit, Post sells apartment communities at $NZ267,400/unit, Property sector picks for 2001, Summit exits small, old apartment communities, Burnham finalises shopping centre sales, Wells buys in Oklahoma at 10.7%, contractor wins performance case against subcontractor, bankrupt operator relinquishes top box office megaplex leases.

6 January 2001

Hong Kong’s desire to turn industrial land to new uses, as industrial users head across the border, has an interesting example in Tai Kok Sui which is before the town planning board. Far East Consortium International bought a 357m² pocket handkerchief of the district’s 10ha of industrial land almost two years ago and wants to build a hotel. Cutely, the company figures it could command a higher return given its convenient location. Well, you tend not to fit floor-area ratios of 12:1 on industrial land. The hotel: 200 rooms on 26 storeys, $HK150 million project, 3-4 star hotel. Far East Consortium bought two three-star hotels two months ago at $HK946,779/room ($NZ268,000): the 257-room Pearl Seaview and 100-room Pearl Garden.

Gables Residential of Atlanta tells you in the following statement that it’s a short-term thinker, and a poor short-term thinker (though in a development statement the day before it sounded like it was far better than that): It’s sold most of its Memphis and Nashville apartments for $US60 million, a $US11 million gain on an unstated period, because “our research-based strategic model suggested” these properties wouldn’t help it beat the apartments index on one-year returns. But it’s kept two Tennessee investments because it got tax-exempt finance for them. The reasoning smells of non-performance in the job; beating tax laws is investment-savvy but has nothing to do with Gables’ stated aim of “taking care of the way people live”.

5 January 2001

Office Depot will close 67 US stores, three in Canada and six small express stores in France, out of 863 stores in North America and 126 elsewhere, and take a $US280-300 million pretax charge against fourth-quarter earnings for its restructure. It will leave four US markets completely, cut 10% of its contract sales staff, says sales for the quarter will be down 5% but expects the restructure to bring a 15% earnings lift this year. It will invest in new warehouse technology also continue opening new stores.

Singapore’s Urban Redevelopment Authority says private house prices fell 5.3% in the second half of 2000 for a net fall of 0.9% for the year, after a 34% rise in 1999.

Hong Kong has earmarked a 40ha reclaimed site off Tuen Mun in the New Territories for its fourth industrial park, which would have a new-technology focus, as the third, 74ha at Tseung Kwang O, heads for full leasing in three years. The first two industrial parks are 73ha at Tai Po and 67ha at Yuen Long. Hong Kong also has a science park near Sha Tin and Cyberport at Pok Fu Lam.

Japan’s bankrupt Sogo department store group has sold its Hong Kong property and department store business in Causeway Bay to the Lau brothers of Chinese Estate Holdings for $HK3.53 billion ($NZ1 billion), with 50% to be sold to the family company which controls the New World Development group, Chow Tai Fook Enterprise. New World chairman Cheng Yu-tung said the acquired property and business could return 9-10%. Sogo HK has 37,000m² of retail space and 9300m² of office in the East Point Centre, with about 40% of the retail space leased to hundreds of small shopkeepers.

First changes arising from the US Reit Modernisation Act are underway. The act allows real estate investment trusts to act as their own lessee so long as they have independent third-party management. Memphis-based RFS Hotel Investors Inc has terminated 52 operating leases and four management contracts with Hilton Hotels Corp with a $US60 million termination payment and redeemed $US13 million of shares held by Hilton. Management of most RFS hotels will now be by Flagstone Hospitality Management Co, jointly owned by Angie Mock, who resigns as RFS’ executive vice-president, and MeriStar Hotels & Resorts, formed from a merger 2½ years ago, which has grown by acquisition of the Doral golf resorts chain, South Seas Property Co (Florida’s biggest coastal resort company) and international serviced apartment operator BridgeStreet Accommodations.

Cousins Properties Inc has bought a class A office block in the Synergy Business Park next to the University of Texas in Dallas for $US25.4 million from a technology company liquidating its assets. The four-storey building has 4650m² floorplates and is on a 6ha site where another 5600m² building can be erected. The area is home to 600 hi-tech companies. Cousins expects a 9.75% yield on existing leases, including the cost of the development site, falling to 5.25% if leasing goes to plan, stabilising at 10%. The extra development would stabilise at a 10.8% yield on expected costs of $US35 million.

Beazer Homes USA Inc said new orders for December were up 32% to 592, and new orders for the December quarter were up 19.5% to 1798 units compared to the month and quarter in 1999. Miami-based homebuilder Lennar Corp said December new orders were 1325, compared to 609 in December 1999, and 914 in December 1999 including figures for US Home, which it took over in May.

Nashville-based Medical Properties of America Inc, formed in 1998 and backed by PaineWebber and George Soros through Reckson Strategic Venture Partners LLC of New York, has bought the 5100m² Tomball Professional Atrium in Houston on a 10.5% cap rate. The private company started with seven properties worth $US25 million, then got a $US100 million equity injection from Reckson last May so it could buy and develop another $US500 million of property.

NZ Corp, which started out 90 years ago as the New Mexico & Arizona Land Co, expects to clear $US200,000 from the $US1.3 million sale of 4ha of commercially zoned land in Phoenix to a local investor.

Earthworks have begun on a 31ha site next to the Las Vegas airport and across the road from the Mandalay Bay (scene of the recent Lewis-Tua non-contest) for a project billed as the World Port Resorts, to include hotel/casinos, convention and entertainment facilities. It is led by New World LLC, a partnership of Las Vegas developers and land brokers.

Here’s one for the Auckland region’s politicians: RailAmerica Inc sold the 67km Pittsburgh industrial railroad last week to the Ohio Central Railroad System for $US7.7 million and continued its back-to-basics debt-reduction programme this week by selling the 83km South Central Tennessee railroad and a 115km rail segment in Illinois for a total $US6.4 million. RailAmerica sold $US120 million of line and businesses in 2000, but still has 39 short and regional lines in the US, Australia and Chile covering 17,600km. Last February it paid $US325 million for RailTex’s 6560km of track, which generated $US178 million of revenue.

4 January 2001

US retailer Wal-Mart plans to open a 15,000m² store in Japan next year, following Carrefour’s entry last month. Local discount stores have been flourishing at the expense of traditional Japanese department stores. Carrefour, of France and world No 2 to Wal-Mart, plans to have 13 stores in Japan by 2003.

3 January 2001

Glenborough Realty Trust Inc has completed the sale of 37 apartment communities to affiliates of Westdale Properties America I Ltd for $US400 million. Westdale owns and operates 38,000 units around the country. The sale leaves Glenborough as an office (75%) and industrial (25%) trust, with 1.3 million m² of space in 88 properties, and 12 projects containing 102,000m² being developed.

Gables Residential, an Atlanta-based trust which owns 83 residential communities containing 24,774 apartments and has another 10 communities under development in Texas, Georgia, Tennessee and Florida, will develop the 296-unit Gables Meyer Park II on the basis of a projection that Houston occupancy will be the highest in 15 years at the end of 2001. Units will average 1000ft² with rents averaging $US1.06/ft²/month (93m² unit average, $NZ5.94/m²/week, or about $NZ550/week for a standard unit). The trust expects most of its Meyer Park customers to work in three office submarkets within a 7.2km radius, which contain 4.6 million m² of offices. The $US27 million investment cost gives the units an average $NZ218,000 cost, in an area next to one of Houston’s most highly priced suburbs.

Insignia Financial Group of New York has acquired Brooke International, a Hong Kong commercial real estate services company headed by Nicholas and Margaret Brooke and their son Chris. The new-look Insignia Brooke also has offices in China and Thailand.

Lexington Realty Advisors Inc, an affiliate of Lexington Corporate Properties Trust, has bought a 13,890m² cold storage distribution facility on a 7.7ha site in Danville, Illinois, for $US8.89 million ($NZ276/m² land, $NZ1530/m² building), with a 15-year lease to Sygma Network Inc. The company will use 77.3% mortgage finance at 9% fixed to buy. The property is returning $US933,300/year, or 10.5% on the purchase price, and has capacity for another 9300m² of building.

Lexington Corporate Properties Trust has entered a joint venture with an unnamed institutional investor to buy two adjoining office buildings of four and five storeys containing 31,600m², plus a parking structure, for $US81 million, at $NZ6125/m². The buildings in Parsippany, New Jersey, have a net lease in place to Aventis Pharmaceuticals to January 2010. The deal was 65% debt financed. Lexington has completed seven deals in its joint-venture programme, spending $US235 million in the programme last year.

International serviced-apartment company Oakwood Worldwide has paid $US61million (at NZ353,000/unit) for a Virginia development 3km from Washington’s Dulles International Airport. Nine of the 12 buildings are completed. It will have 413 units on 8ha, with unit sizes ranging from 64-121m². The Jefferson at President’s Park, renamed the Oakwood Dulles, has an 880m² clubhouse containing a pool, fitness and business centres and billiards room, and the units have 9ft ceilings.

Atlanta-based Post Properties, which develops and operates upmarket apartment communities, has sold two in its home town, containing 421 units, for $US47.1 million (at $NZ267,400 each for mid-90s stock). Post owns 35,000 units in 100 communities and said it was selling to reduce debt.

Sanlian Group, whose interests include real estate and retailing, will pay 300 yuan ($NZ82 million) to China Cinda, the main creditor of Henan province-based Zhengzhou Baiwen, which otherwise faced bankruptcy and would have been China’s first delisting. China Cinda was owed 1.9 billion yuan of the 2.5 billion yuan Baiwen debt. The company has assets of less than 600 million yuan, but will get an asset injection from Sanlian for its backdoor listing.

Circle K Convenience Stores (HK) will list this month to finance its expansion into China, where it plans to open 100 outlets in the next three years. Its main compeititon will be from the Jardine Group’s Dairy Farm International, owner of Woolworths in New Zealand, which has 50 7-Eleven stores in Shenzhen and Guangzhou.

Heller Financial’s real estate group head, John Petrovski, has highlighted 13 property investment sectors in the US for 2001. Heller finances middle-market investments in the US and Canada, and has spread internationally. His first: US consumers continue to demand more luxury, which means more holiday homes, second homes and upmarket hotels. In some historically popular markets demand for office space is endless — New York, Washington, Chicago and San Francisco — creating office refurbishment opportunities on main routes. Mr Petrovski doesn’t see a development surge, and regulators are keeping a close eye on construction. The need for affordable housing has exploded, and middle-income rentals will be a significant development opportunity, mostly through upgrades. Trusts (reits) will consolidate, be able to tap equity markets, and will offer mid-market developers an exit option. Commercial mortgage-backed securities will continue to finance the property industry, has become more respected in the bond market, and a pending investment rules relaxation means pension funds will be able to invest all the way down to BBBs. Niches: Mr Petrovski sees opportunities in ethnic markets, consolidation of the seniors housing market, internet server buildings and “foreign” markets (each side of the US border and Japan), privately developed and operated student housing, telecom hotels and retail refurbishment.

Summit Properties Inc has continued its strategy of exiting smaller, older, secondary markets to enter larger markets. Its latest sale of a 323-unit Atlanta village for $US22.66 million at $US70,200/unit almost completes its exit from small and old North Carolina and Mid-west communities. Its 2000 sales totalled seven for $US104 million at an average $US62,000/unit ($NZ148,180).

Burnham Pacific Properties Inc has finalised the sale of three Los Angeles area shopping centres totalling 100,000m² for $US109.9 million to a joint venture of Developers Diversified, Coventry Real Estate Partners and Prudential Real Estate Investors. Prudential has also bought another $US158 million of centres from Burnham.

A Wells limited partnership fund and a Wells trust have jointly bought an 11,940m² Oklahoma class A office block, in Quail Springs, mostly leased to AT&T on a 10-year lease, for $US15.3 million at an average cap rate of 10.7%.

A Houston general contractor, Harrop Construction Co, has been awarded $US8.87 million in damages against a subcontractor, Safety Steel Service, for misrepresenting its production capabilities and failing to meet deadlines on three major time-sensitive projects in 1995-96 in Corpus Christi, Texas, worth a total $US22 million. A district judge found the delays and misfabrication of steel damaged Harrop so badly it was ultimately stopped from competing for other public projects.

Entertainment Properties Trust has assumed the leases on two megaplex theatres in California and Idaho which it sold to Edwards Theatres on a leaseback basis in 1998. Edwards filed for bankruptcy protection last August, but continued to pay its rent. Both theatres are listed among the top 100 box office earners in the US.

Continue Reading

Snapshot on world property, week to 5 August 2001

Latest: Westfield America profit rises 38%, GPT net profit up 18.9%, James Hardie raises quick $A200 million, GPT buys BT’s share of Citigroup tower, Prudential expands body corporate portfolio, operating loss for MTM Entertainment Trust, 3% fall for Australian commercial trust, expanded Stockland raises earnings/share and NTA, Delfin shareholders approve Lend Lease takeover terms, profit leap for expanded BT Office Trust, Shanghai gets luxury St Regis, Sheraton opens in landmark St Louis warehouse, Starwood June quarter earnings slip.

2 August 2001

Westfield America Trust increased aftertax profit for the June half by 37.7% to $A91.6 million, for a 5.8% increase in earnings/unit to A6.75c. (The $US/$A conversion was at US60.51c/$A1 and the profit was after US withholding tax, for which Australian investors get a tax credit.) Peter Lowy, managing director of Westfield’s US business, said total specialty store space was 94% leased and retailer demand remained strong. Same-store sales rose 2% to $US1.7 billion. The tidy-up of Westfield’s US interests this year has put 96.1% of Westfield America Inc stock in the hands of the trust and Westfield Holdings, and the trust will now proceed to full acquisition. Westfield America is Australia’s fourth biggest listed property trust with market capitalisation of $A2.7 billion, $US4.9 billion ogf consolidated assets and $US1.5 billion of equity attributable to unitholders. It had no revaluations for the half-year, but increased net asset backing 14.2% to $A1.79. Unitholders will get an A6.75c/unit interim distribution on 31 August. Group finance director Stephen Johns said the quality of the portfolio, continuing demand for space and completion of redevelopments should lead to increased distributions for the second half.

1 August 2001

General Property Trust increased revenue from ordinary activities by 8.2% in the June half to $A265.4 million, for a net profit up 18.9% to $A178.9 million. Underlying earnings rose 2.5% to A9.84c. Revaluations increased reserves by $A85 million and pushed total assets to $A5.7 billion. Asset backing rose A5c to $A2.58. Gearing is 13.8%. In retail, sales/m² fell 1.5% and specialty sales/m² fell 1.9%.

James Hardie Industries Ltd has raised $A200 million at $5.75/share to finance growth in its fibre cement business.

31 July 2001

General Property Trust has bought BT Funds Management’s 16% of the 2 Park Street Trust — the former MTM Office Trust — for $A51.2 million, at $A3.75/unit. The trust’s sole asset is the 89% leased Citigroup Building in Sydney, which Colliers Jardine recently revalued at $A560 million. Media magnate Kerry Packer bought in at $A4.02/unit and still has a stake, after engineering the replacement of MTM Funds Management as manager last year by Greg Paramor’s James Fielding Investments Ltd.

Sydney-based Prudential Investment Co of Australia Ltd’s subsidiary, Body Corporate Services, has bought body corporate portfolios from two Melbourne real estate agencies, Woodards and McDermotts. Chief executive Michael Cambridge said BCS wanted to add to its portfolio.

MTM Funds Management Ltd’s directors said the MTM Entertainment Trust would have an operating loss of $A2.7 million for the June 2001 year, excluding the impact the World’s Biggest Screen Pty Ltd, the subsidiary which now runs the Imax cinema chain. In BDO Corporate Finance’s appraisal for the Sunderton takeover of the trust, the Imax assets were written down by $A19.8 million, and the trust’s directors expected more writedowns would be required. Sunderton has underwritten a 1:3 rights issue at A26.5c/unit to raise $A7 million for the trust. The prospectus was issued today.

Australian Commercial Property Trust, of Sydney, reported steady revenue of $A29.77 million, higher expenses but lower borrowing costs to make an $A17.5 million profit before and after tax for the June year, down 3.1%. An $A938,000 extraordinaries bill last year means the result was 2.3% higher than the 2000 bottom line. The trust owns $A234 million of property. Earnings/unit rose from A8.79c to A8.99c and net asset backing/unit from A86c to A89c, but the trust has cut its second-half dividends from A4.5c to A4.4c. The trust is managed by Stockland Property Management Ltd.

Stockland Trust Group increased net profit 73% to $A198.2 million in the June year, on revenue up 90% to $A650.5 million, after expenses up 95% to $A394.3 million, with borrowing costs up 500% to $A35.9 million. Stockland doubled its equity to $A2.4 billion and spent $A1 billion on equity investments. Basic earnings/share rose from A26.9c to A29.2c, asset backing/share from $A2.70 to $A3.01. Final dividend increased from A13.2c to A14.4c after an A1c interim increase to A13.9c.

Delfin Ltd shareholders have approved the scheme of arrangement under which Lend Lease Corp will buy them out for $A172 million. The deal will make the combined group Australia’s largest urban community developer, with a current workload of 55,000 lots.

BT Office Trust increased net profit 77% to $A153.7 million on revenue up 304% to $A528 million (but with expenses up from $A25.5 million to $A351.4 million), basic earnings/unit 12.8% to A10.38c, distributions 3.2% to A10.63c, and asset backing/unit 4% to $A1.56 after an $A74.5 million (4.7%) revaluation gain. The new result was after the office trust merged with the BT Property Trust, increasing investment assets from $A1.2 billion to $A1.7 billion and cutting the debt:total assets ratio from 25% to 15%. The trust collected $A151 million in rent and made $A339 million from the sale of investment properties.

Shanghai HongTa Hotel Co Ltd opened its St Regis Shanghai luxury five-star hotel on Saturday. The RMB800 million ($NZ235 million) 40-storey St Regis Shanghai, in Pudong, has 318 guestrooms, including 48 suites and will be managed by US hotel giant Starwood Hotels & Resorts. Average room/suite cost was $NZ738,035, the standard room is an oversized 48m² (compared to an international standard 32-34m²), and the hotel will provide its guests with 24-hour butler service. The New York St Regis, flagship for the new chain, was built by Colonel John Joseph Astor in 1904. Starwood plans to open more St Regis hotels in Asian gateways over the next five years.

Starwood Hotels & Resorts opened its $US66 million 288-room Sheraton St Louis City Centre Hotel & Suites (at $NZ556,105/room) in mid-July on four floors of the converted 1929 landmark Edison Brothers warehouse on 14th St. The building has 76 condominiums on the next four floors, with 1360m² of ballroom plus the Edison Athletic Club and an Olympic-size swimming pool complete with “outdoor sun deck” (yep, that’s what they said; perhaps it’s for non-GE humans of the future). Developer and owner of the whole redevelopment is Breckenridge Edison Development LC.

Starwood Hotels & Resorts’ June quarter earnings/share dropped US1c to US55c on total revenue down 2.8% to $US1.11 billion and operating income down 10.9% to $US254 million. Starwood owns or operates 725 properties worldwide, with total assets of $US12.7 billion and total debt of $US5.5 billion. For the June quarter, earnings before interest, tax, depreciation & amortisation (ebitda) fell 4% to $US401 million, same-store revenue per available room (revpar) fell 6.8% on an occupancy rate down 500 points to 69.9%, and ebitda margins worldwide fell 100 points to 34.6%. The company expects full-year revpar to fall 2-3% both internationally and in North America. Asia-Pacific Sheraton results showed revpar down 24.5% to $US67.33, the average daily rate down 17.2% to $US105.30 and occupancy down from 70.1% to 63.9%. Fiji closure affected the group, but the figures above are for available rooms.

Continue Reading
WordPress Appliance - Powered by TurnKey Linux