Singapore Economy Singapore economy grew 4.9% on-year in Q1: MTI Singapore's GDP growth forecast for 2014 will remain at 2 to 4 per cent, after the economy grew 4.9 per cent on a year-on-year basis in the first quarter. Source: Channel News Asia / Singapore SINGAPORE: The Ministry of Trade and Industry announced today (May 20) that it has maintained its gross domestic product (GDP) growth forecast for 2014 at 2 to 4 per cent, after the Singapore economy grew by 4.9 per cent on a year-on-year basis in the first quarter. The expansion in GDP during the January-March period was lower than the government's initial estimate of 5.1 per cent, partly due to the change in base year from 2005 to 2010. Using 2010 as the base year, GDP growth in 2013 came in at 3.9 per cent instead of the previously announced 4.1 per cent. The median estimate of economists polled by Reuters was for an expansion of 5.5 per cent in the first three months of 2014. The manufacturing sector grew by 9.8 per cent on a year-on-year basis during the first quarter – faster than the 7 per cent expansion in the previous quarter. This was largely driven by a sharp rebound in the biomedical manufacturing cluster, as well as stronger growth in the chemicals and transport engineering clusters, the ministry said. Construction grew by 6.7 per cent year-on-year, slower than the 7.3 per cent growth in the preceding quarter, while finance and insurance grew by 5.4 per cent, slower than the 10.5 per cent growth in the previous quarter. Growth in the accommodation and food services sector slowed to 0.9 per cent on a year-on-year basis from 3.4 per cent in the previous quarter, due to weaker expansion in the accommodation segment. On a quarter-on-quarter, seasonally-adjusted and annualised basis, Singapore's economy grew by 2.3 per cent during the first quarter, down from 6.1 per cent in the fourth quarter. GDP is the broadest measure of economic activity in a country. Singapore releases advance GDP estimates shortly after the end of each quarter, and follows up with a detailed survey of the economy about a month after the initial report. - CNA/cy http://www.channelnewsasia.com/news/singapore/singapore-economy-grew-4/1112956.html Singapore Real Estate Knight Frank sees sustained demand for dual-key homes No let-up in developers' interest in the concept introduced in 1986 Source: Business Times / Property WITH dual-key units in private residential projects still well sought-after by home buyers, they could potentially unlock value for both developers and buyers in the current tight market. According to global consultancy Knight Frank, demand for dual-key units is likely to be sustained from yield-seeking investors and families looking to house multi-generations under one roof. "In a price-quantum sensitive market, larger units in a development tend to sell at a slower pace. The dual-key concept is one strategy adopted by developers to move the sales of these larger units," said Alice Tan, director and head of consultancy and research at Knight Frank.
Another strategy deployed by developers is having larger units to be prime-facing, she added. -By Lynette Khoo
http://www.straitstimes.com/premium/money/story/developers-still-keen-dual-key-units-20140520 Some housing projects seeing little to no demand Source: Straits Times At least eight housing projects on the market here have sold fewer than 10 per cent of their homes - and some none at all, a new report shows. Home seekers may have helped to drive healthy sales at some new property launches of late, but the report indicates that buying interest has yet to spread to projects on the market for some time.
Irving Industrial Building put up for collective sale Asking price for the 30 years old building is $220m Source: Business Times / Singapore THE buzz around Tai Seng MRT Station is set to increase with Irving Industrial Building nearby put up for collective sale. The asking price for the six-storey property, believed to be about 30 years old, is $220 million. This works out to about $1,164 per square foot of potential gross floor area (GFA) including an estimated $46 million development charge. The 65,309-sq-ft freehold site can be redeveloped into a new project with 228,581 square feet maximum GFA. It is zoned for Business 1-White use, with a 3.5 maximum gross plot ratio. Of this, at least 2.5 plot ratio (translating to 163,272-sq-ft GFA) shall be for Business 1 use and the remaining GFA of up to 65,309 sq ft will be for white uses.
While the unit land price of $1,163.70 per square foot per plot ratio (psf ppr) looks steep for industrial space, the substantial white component of the project will help make up for this, said Christina Sim, director, investment (capital markets) at Cushman & Wakefield, which is marketing the collective sale. -By Kalpana Rashiwala Four areas with potential to attract property buyers Source: Straits Times Property experts yesterday singled out four potentially popular areas for home buyers: Jurong, Woodlands, Holland Village and the upcoming Bidadari Estate. They were taking part in the STProperty Rise Up To The Challenges In The Singapore Property Market forum, held at The Star Performing Arts Centre. -
Real Estate Companies' Brief Study finds Reit-property return correlation Source: Business Times / Companies INVESTMENTS in real estate investment trusts (Reits) have often been regarded as excellent proxies to property ownership, especially in land scarce markets such as Singapore and Hong Kong. The capital needed to invest in Reits is smaller, their units are more liquid and easily tradable on the market, and transaction costs are much lower too, compared to buying and selling actual properties. But the questions that haven't been answered are: Just how well does listed real estate in Asia expose investors to direct real estate and how correlated are the returns from both asset classes?
A study by real estate intelligence provider IPD released yesterday looked at the linkage between the listed and direct property markets in the Asia-Pacific region over a nine-year period from 2004 to 2012. It found the returns achieved in listed and direct real estate to be positively correlated - after adjusting for potentially distortive factors. -By Lee Meixian Views, Reviews & Forum Open up new sectors for sustained growth Source: Straits Times The economy was a key area omitted in the President's Address to open the second half of Parliament's term after a month-long break (" 'Renew pledge to build a better Singapore' ") Let BCA maintain active oversight of management corporations Source: Today Online / Voices I agree there are loopholes in governance and transparency even if a management corporation complies with the Building Maintenance and Strata Management Act. (“Issues of governance, compliance and disclosure with condo management law”; May 13), Due to the oft-cited rationale that a management corporation is voted in and empowered to act on behalf of the residents, it may sometimes execute decisions that are not fully transparent or partial and, in rare cases, undermine residents’ well-being. It seems the Act is subject to interpretation by individual management corporations and this power can be abused if there is no active oversight by the Building and Construction Authority. For example, I witnessed how the management corporation of my previous condo, despite disagreement from residents, used estate funds for legal fees to get an apology from a particular resident. These developments and the unilateral decisions in this issue were published in the monthly meeting minutes over the course of a year. It culminated at the annual general meeting (AGM), when the management corporation authorised the managing agent and security guards to remove the resident when he was articulating his side of the story. Eventually, the management corporation published in the minutes that it had incurred more than S$10,000 in legal fees, which was absorbed by the sinking fund, as there was no affirmative resolution. It did not explain the use of estate funds for legal fees despite residents’ disapproval and the use of force at the AGM. An isolated occurrence such as this shows how some management corporations, empowered by the authority provided under the Act, can act in a high-handed manner and utilise estate funds unilaterally. Often, it may be a case of poor advice by the managing agent, whose commercial interests take priority to ensure a contract renewal. In such circumstances, other than calling for an internal extraordinary general meeting, which requires a substantial quorum, it seems there is no other expedient external redress channels for amicable dispute resolution. In this respect, the Act should allow the governing authority to maintain active oversight of management corporations and render them accountable, to both the authority and residents, for their actions, especially in financial management. It should also allow the authority to investigate and take punitive measures against management corporations and rogue managing agents.
This would improve governance and transparency, as well as further collective interests and harmony in private estates, whose residents would otherwise live at the whim of the management corporation. -By Chew Kok Kwee http://www.todayonline.com/voices/let-bca-maintain-active-oversight-management-corporations Global Economy & Global Real Estate UGL may shelve A$1.2b sale of property services arm Source: Business Times / Property [SYDNEY] Australian engineering and property management company UGL Ltd will likely shelve the planned A$1.2 billion (S$1.4 billion) sale of its property services arm after it received just one binding offer for the asset, a source familiar with the process told Reuters. Sydney-based UGL will also probably cancel an earlier plan to demerge its DTZ global real estate services business by listing its shares and will instead concentrate on improving the unit's performance, the source said yesterday. Debt-laden UGL had expected four bids from private equity companies for DTZ by a deadline of May 16, the source said, but the only confirmed final bidder was TPG Capital Management LP, the source said, without disclosing a bid price.
The source, who could not be identified because the process was not public, said the sale would likely be in doubt if TPG's offer was below A$1.2 billion and that UGL was unlikely to return to its plan, announced nine months ago, to spin DTZ off as a separate listed company. "That is the sensible thing to do," said Simon Marais, managing director of fund manager Allan Gray, which holds 12 per cent of UGL shares, referring to a possible decision to pull the sale. "You shouldn't sell something just because." -From Sydney, Australia Surging home prices biggest threat to UK economy, says BOE governor Central bank head warns that more needs to be done to check market as economy improves and inflation is under control Source: Today Online / Business LONDON — Mr Mark Carney, Bank of England (BOE) governor, has identified surging housing prices as the biggest risk to the United Kingdom economy, as he outlined potential policy responses. In his strongest warning yet about the property market, Mr Carney said officials could do more to tackle excesses if needed. Among the options are: Imposing more checks on the affordability of mortgages, limiting types of loans or advising the government to rein in its Help to Buy programme. “All those things are possibilities and we will consider them all,” Mr Carney said yesterday in an interview with the Murnaghan show on Sky News. “The biggest risk to financial stability, and therefore to the durability of the expansion, those risks centre on the housing market and that’s why we are focused on that.” Housing is becoming the BOE’s most significant domestic concern now that the economy is improving and inflation is under control. Home prices jumped almost 11 per cent last month, the biggest annual gain since 2007, said the Nationwide Building Society. While Mr Carney has downplayed raising interest rates to cool off the housing market, he highlighted its economic threat. The central bank needs to ensure that lenders are strong enough to make loans and that mortgages are lent to borrowers who can afford them, Mr Carney said in the interview. The gain in prices is broadening and may also be fuelling the need for large mortgages of more than four times borrowers’ salaries, he said. “We would be concerned if there were a rapid increase in high loan-to-value mortgages across the banks,” he said. “If that were much more generalised and particularly if it were accompanied by very high loan-to-income ratios, we’ve seen that creeping up and it’s something we’re watching closely.” Affordability tests came into force in the UK last month, requiring borrowers to prove they can afford repayments even when interest rates rise in line with market expectations. After its March meeting, the BOE’s Financial Policy Committee said a tool to make the tests more stringent will be available as soon as next month. The central lender also could recommend the government curtail its Help to Buy programme. “It’s a pretty targeted programme; it’s a relatively small programme at this point, but it could grow a lot and it could change attitudes in other parts of the mortgage market (and) that’s why we have to be vigilant,” Mr Carney said. Policymakers wanted to avoid the “build-up (of) another big debt overhang that is going to hurt individuals and is very much going to slow the economy in the medium term”, he said. The UK needs more supply in the housing market, which has “deep, deep structural problems”, he said. “There are not sufficient houses built in the UK,” said Mr Carney, the former governor of the Bank of Canada. While there are half as many people in Canada as the UK, “twice as many houses are built in Canada every year than in (the) UK”. Among other risks to the economic expansion, Mr Carney said, weak growth in the eurozone area and “the strength of sterling” are creating “real challenges for our exporters” and the balance of the UK recovery. Slowdowns in emerging markets such as China and geopolitical issues pose other challenges, and the recent low volatility of markets could reverse sharply at some point, he said.
“The level of volatility is very low across a wide range of asset classes,” he said. “That won’t be sustained as the recovery continues; at some point there is going to be an adjustment. That adjustment could be quite sharp, that would tighten financial conditions and that would provide a new headwind for the recovery.” -From London, UK Governor plans to make Tokyo 'first city in the world' He pledges to 'take back' from S'pore its lead as centre of drug development Source: Business Times / Top Stories TOKYO governor Yoichi Masuzoe yesterday laid out a bold plan to make the Japanese capital the "first city in the world" and to "take back" from Singapore the lead it has earned as a drug development centre. He also pledged to push Tokyo ahead of Hong Kong and Singapore as a financial centre. Mr Masuzoe, a feisty politician who developed a reputation for battling officialdom while he was health minister some years ago, meanwhile used a speech in Tokyo to launch a sharp attack on Japan's central government bureaucracy for opposing certain aspects of his plans. By 2020, when Tokyo hosts the summer Olympics, the city could become "unrecognisable" as a leading foreigner-friendly centre for global business, finance and innovation with its own version of the Champs-Elysees and much traffic banished from the city centre, he said. The World Bank puts Tokyo towards the bottom (in 120th position) of a global index on ease in starting up businesses but Mr Masuzoe believes he can shift Tokyo towards the top by banishing unnecessary regulations and reforming approaches to attracting foreigners. Among the 10 projects he has prioritised since becoming head of the metropolis is the establishment of a Tokyo Pharmaceuticals and Medical Device Agency for commercialising generic drugs under a rapid approval process. He also plans to make Tokyo a leading regional healthcare centre. "Singapore is a centre of drug development but I will bring the lead back to Tokyo by 2020," he pledged. Tokyo's development as a financial centre rivalling Hong Kong and Singapore is also one of Mr Masuzoe's goals although it is not among the top 10 priorities, he said. Prime Minister Shinzo Abe's administration has identified five areas as special economic zones designed to minimise economic regulation on a trial basis and encourage foreign investment, especially in high-tech areas. Mr Masuzoe wants to make Tokyo a "special zone for global innovation" and proposals for the formation of a centre for drug development, support for company start-ups, creation of special business districts and access to global human resources are designed with this in mind. But he complained yesterday that some of these plans are in danger of being thwarted by what he called the "Kasumigaseki bureaucracy", or Japanese central government, even though he has consulted Mr Abe and Chief Cabinet Secretary Yoshihide Suga on his intentions. Japanese governments "sometimes use special economic zones as an excuse to do nothing but I intend to achieve something", Mr Masuzoe told a mainly foreign audience at the Foreign Press Centre of Japan in Tokyo. The 10 priority reform areas are within the metropolitan government's power to implement, he said, adding that he intends to garner support from the international financial community in pushing through plans to make Tokyo a global financial centre. He defended published plans to construct what critics claim is an oversized and excessively costly new Olympics stadium in Tokyo to house Olympic events in 2020. The International Olympics Committee requires that a stadium can accommodate at least 80,000 people, he noted.
Several international gambling groups have proposed opening casinos and commercial complexes in Tokyo and Osaka as well as in other Japanese centres but Mr Masuzoe offered only cautious support for this idea. A Tokyo casino where patrons would be only "foreign nationals" might be possible, he added. -From Tokyo, Japan Tax code driving Swedish runaway housing prices Housing board calls for gains tax to be dropped
as many don't want to move Source: Business Times / Property [STOCKHOLM] Sweden's state-backed housing agency says the current tax code is driving prices well beyond what is sustainable. After the government rejected proposals to scale back tax deductions on mortgage payments, the National Board of Housing, Building and Planning is calling for other measures to cool the property market. It's now urging politicians to drop a 22 per cent capital gains tax on housing which, the agency said on May 6, has kept the market "boiling" under a shortage of supply. While record house price gains have made a lot of Swedes rich, many are reluctant to move because they don't want to pay the gains tax. The housing board says that's distorting property prices and often keeping Swedes in accommodation that's unsuited to their needs. Apartment prices nationwide have almost tripled since early last decade, and homeowners have amassed a record level of debt to pay for their properties, central bank data shows. "This so-called moving tax, coupled with traditional moving costs, means that we use our homes in the wrong way - we live too big, too small and in the wrong place," Bengt Hansson, an analyst at the board, said by phone last Wednesday. "The problem is that it becomes very expensive to change homes." -From Stockholm, Sweden Mexico's Ara suspends malls' collective sale Source: Business Times / Property [SAO PAULO] Consorcio Ara SAB has suspended an auction to sell a group of about US$387 million of shopping malls and is now considering selling the centres individually. The company was working with Morgan Stanley on the sale of the malls, which the Mexico City-based builder co-owns with New York-based private-equity firm O'Connor Capital Partners Inc, said investor relations official Alicia Enriquez. While the contract with Morgan Stanley is still valid, Ms Enriquez said the formal sale process stalled when the top bidder failed to obtain sufficient financing. "What we're looking for is the best offer, and we're not in a rush to sell," Ms Enriquez said. Keeping the properties means Ara will forego a cash infusion at a time when the home-building industry is reeling from a shift in government housing policy.
Competitors Desarrolladora Homex SAB and Corp Geo SAB filed earlier this year for bankruptcy, known as concurso mercantil in Mexico, and Urbi Desarrollos Urbanos SAB is working with Rothschild to consider options including restructuring debt. -From Sao Paulo, Brazil Zoopla to reveal listing plans this week Source: Business Times / Property [LONDON] British property website Zoopla will announce plans this week for a stock market listing that will value the company at about £1 billion (S$2.1 billion), the Sunday Times newspaper reported. The flotation would be a boost for newspaper publisher Daily Mail and General Trust (DMGT) which controls 51 per cent of the seven-year-old company, the report added. Plans were likely to be confirmed on Thursday when DMGT releases its latest financial results. DMGT will sell a "substantial number" of shares in the offering although it wants to remain the largest investor, the report added.
Zoopla refused to comment directly on the report but a spokesman referred to a statement made earlier this year. "As one of the fastest growing online businesses in the UK, our focus remains on developing our business in a sustainable way. Meanwhile, we are continuing to work with our advisers to consider our strategic options," it said. -From London, UK http://www.businesstimes.com.sg/specials/property/zoopla-reveal-listing-plans-week-20140520 Klepierre plans to buy out mall partners in expansion drive Source: Business Times / Property [LONDON] Klepierre SA plans to spend as much as 500 million euros (S$857 million) a year on expansion and the shopping-mall landlord is considering using some of the money to get a bigger piece of what it already has. The Paris-based company, whose largest shareholder is Simon Property Group Inc, may buy out some partners in jointly owned shopping centres as it focuses on the highest quality properties in regions with growing populations, CEO Laurent Morel said in Paris. "There's an opportunity for us to buy minority stakes from partners," said Mr Morel, 51. He cited the acquisition last year of a 50 per cent stake in a mall in Montpellier, France, from Icade SA that gave Klepierre full ownership.
Investors acquired 14.6 billion euros of European stores and shopping malls in the fourth quarter, the most in six years, broker Cushman & Wakefield Inc said in an April 1 report. Buyers are more positive on retail properties in southern European countries including Italy, where Klepierre operates 28 malls, as the economies there began to improve, the broker said. -From London, UK Irvine Co. Agrees to Buy Chicago Tower for $850 Million Source: Bloomberg / News Irvine Co., the developer led by billionaire Donald Bren, agreed to purchase a 60-story Chicago office tower from an affiliate of KBS Realty Advisors for $850 million, according to a regulatory filing. The closely held buyer entered into a purchase agreement for the property at 300 N. LaSalle St. on May 16 after an auction managed by HFF Inc., according to yesterday’s filing. The deal is expected to be completed July 1, said Doug Holte, president of the office-properties division of Newport Beach, California-based Irvine Co. “It’s one of America’s finest office towers,” Holte said in a telephone interview. The building is 97 percent occupied, he said. “The location and the product and the tenant roster make it an opportunity we couldn’t pass up to expand our Chicago portfolio.” KBS Real Estate Investment Trust II Inc. plans to make a special distribution to stockholders “of a significant portion” of the net proceeds from the sale, according to the filing. KBS bought the 1.3 million-square-foot (121,000 square meter) skyscraper in 2010 for $655 million. The building sits on about 1.2 acres (0.5 hectares) of land on the north side the Chicago River. Donald Bren, 82, is owner and chairman of Irvine Co., and his brother Peter M. Bren is KBS’s president. KBS Realty Advisors, based in Newport Beach, California, was founded in 1992 by Peter Bren and Chuck Schreiber to invest on behalf of large institutional investors such as pension plans, endowments and foundations. In 2005, they formed KBS Capital Markets Group, which has raised more than $5 billion as of March. The bidding process was open and competitive, and Irvine Co. would have tried to buy the building even if Peter Bren’s company wasn’t the property’s owner, Holte said.
Irvine Co. is the largest private land owner and developer in California, and has made Donald Bren worth an estimated $14.4 billion, according to data compiled by Bloomberg. In 2010, the company bought the Hyatt Center in Chicago, its first investment outside of California. -By Nadja Brandt and John Gittelsohn http://www.bloomberg.com/news/2014-05-19/irvine-co-agrees-to-buy-chicago-tower-for-850-million.html Irish Jump Into Real Estate Game as Bubble Echoes Grow Source: Bloomberg / News Charles O’Rourke reckons it’s different this time as he jumps into the real estate game. The 81-year-old retiree says he took “massive” losses on his bank stocks when Ireland’s financial system melted down in 2008. Now he’s joined billionaires George Soros and John Paulson in acquiring shares in one of the real estate investment trusts buying property in the Irish capital, Dublin. For Irish property prices, “there’s only one way and that’s up,” O’Rourke said outside a meeting for investors in Dublin-based Green REIT Plc (GRN), the first Irish company to take advantage of laws introduced in 2013 that enabled Irish companies to become REITs. Such sentiments carry echoes of the nation’s bubble era, when a belief that prices could never fall helped fuel a boom that ended in the worst real estate crash in western Europe. As the race for Dublin property reaches a frenzy not seen since the market collapsed, Brendan McDonagh, chief executive of Ireland’s state-owned bad bank, said this month it would be “no harm” if commercial real estate gains leveled off. Prices rose the most since 2006 in the first quarter. “The market is overbought,” said Rogier Quirijns, who helps oversee $49 billion of assets at Cohen & Steers Inc., including shares in Hibernia REIT. “This is not a bubble, just some overheating.” Baturina, TrumpIn the wake of the crash, Irish commercial property values fell two-thirds between 2007 and 2012, while yields rose to 7.5 percent from 3.75 percent. The lower prices and Ireland’s improving economy encouraged investors from Elena Baturina, one of Russia’s richest woman, to Donald Trump to scour Ireland for deals, picking up offices, castles, golf courses and hotels. Buyers spent about 939 million euros on Irish commercial real estate in the first quarter, almost as much as they paid during the four years through 2012 combined, according to CBRE Group Inc. Last week, Blackstone Group LP (BX) agreed to buy a portfolio with a par value of 1.8 billion euros from McDonagh’s organization, the National Asset Management Agency. Michael McAteer, a partner in corporate recovery and reorganization at Grant Thornton LLP in Dublin, was last year hired by a bank to sell a portfolio of real estate and loans with a value of about 70 million euros. “When we opened all of the envelopes, we counted 1.7 billion euros of cash bids on the table,” he said, declining to name the eventual buyer. Best OfficesCommercial real estate prices rose 5 percent in the first quarter, according to Investment Property Databank Ltd. The yield on the best Dublin offices fell to 5 percent in May from 6.5 percent a year earlier. While this is similar to Amsterdam, Oslo and Helsinki, those cities are “more stable with better rental growth prospects,” Quirijns said. Dublin yields should be closer to those of cities such as Rome and Barcelona, which are over 6 percent, he said. Irish yields are now around their historical average, according to CBRE. McDonagh last week told a Dublin conference he would be concerned if yields continue to fall. “Yields have compressed hugely,” said McDonagh, who is selling off 72 billion euros of toxic real estate assets the agency purged from the Irish banking system in 2009. “Dublin is not London.” About 14 percent of Dublin office space remains vacant. While office rents have risen by a third since 2011, they’re still about 45 percent below peak levels in 2006. Shares in Green REIT and Hibernia REIT Plc, a smaller competitor, have dropped this year, paring last year’s gains. Price RiseAs prices rise and yields drop, investors might be rattled by the possibility of REITs not producing the kind of returns they pictured last year, according to Eamonn Hughes, an analyst at Goodbody Stockbrokers in Dublin, who has buy ratings on Green and Hibernia shares. Shares in Green jumped 31 percent last year after their initial public offering in July. The company, which sold another batch of shares last month, has slid 12 percent this year. Hibernia is down 10 percent this year. “Whilst Ireland recovered first, others are following,” Hughes said. “After some initial euphoria toward the end of last year, investor expectations for the REITs have been more subdued.” Green and Hibernia have raised at total of about 1.1 billion euros since July from investors including some of the world’s biggest money managers. Paulson, Franklin Resources Inc. and Pacific Investment Management Co. are among Green’s biggest investors. Hedge fund billionaires Soros and Louis Moore Bacon are backing Hibernia. Goldman SachsHibernia last week agreed to buy two offices, with tenants including Goldman Sachs Group Inc., in Dublin’s city center, in a deal which valued the buildings at 60 million euros. The agreement was reached after Hibernia negotiated with the seller rather than entered an auction. “It’s much better just focusing on deals that you know you’re going to get done, rather than getting involved in competitive processes where it may get to a price that you just don’t think is realistic,” Kevin Nowlan, Hibernia’s chief executive officer, said. The two REITs have spent about 543 million euros on properties so far, mostly around Dublin, according to company filings. A third company, Irish Residential Properties REIT Plc (IRES), raised 200 million euros in an initial public offering last month. Good Things“Everyone would be foolish to say they had no concerns. You don’t want this thing to get overheated,” Green Chairman Gary Kennedy said after the investor meeting. He said he has “no major concerns” at the moment. “A lot of good things are happening,” he said. Ireland’s economy, which shrank in 2013, will grow 1.9 percent this year and 2.2 percent in 2015, the Organization for Economic Cooperation and Development said. Many investors are betting that a recovering economy will boost rents, raising yields. “It’ll be hard to make bad investments in Irish real estate at this point in the cycle,” said Michael Shaoul, chairman of Marketfield Asset Management LLC, which owns shares in Green and Hibernia. “Timing tends to be everything.” O’Rourke, the Green REIT shareholder, agrees even after his losses on lenders including Bank of Ireland Plc and Anglo Irish Bank Corp. in the crash. The Irish index of financial stocks, the ISEF, is still 98 percent below its 2007 peak. O’Rourke, wearing a tweed jacket over his checked shirt, described himself as a small shareholder and described the Green investment as a chance to “dip my toe” into property. “What about all the American companies flooding in here buying it, have they got it wrong?” he said. “No. It’s on the up. I wouldn’t be investing otherwise.” -By Donal Griffin http://www.bloomberg.com/news/2014-05-19/irish-jump-into-real-estate-game-as-bubble-echoes-grow.html Deutsche Annington Investors Selling $880 Million Stake Source: Bloomberg / Luxury Shareholders in Deutsche Annington Immobilien SE (ANN), Germany’s largest publicly traded owner of homes, are selling a stake in the company valued at 642 million euros ($880 million). Monterey Holdings I S.a.r.l., which is owned by the Terra Firma Deutsche Annington Fund, and CPI Capital Partners Europe GP LLC are selling a 12.5 percent stake, or about 30 million shares, according to a statement yesterday. The shares are being offered at a range of 19 euros to the current market price, said two people with knowledge of the matter who asked not to be identified before the sale is completed. Bank of America Corp. and JPMorgan Chase & Co. are managing the sale. It comes on the heels of Bochum, Germany-based Deutsche Annington reporting a 26 percent increase in first-quarter profit after cuts in financing costs. Monterey will also distribute the shares it holds to its limited partners, according to the statement. About 162 million shares, or 67.3 percent of Deutsche Annington’s share capital, will be transferred by Monterey to indirect investors, placed in the sale announced yesterday or continue to be held by Monterey as trustee. The individual investors will then be subject to a 90-day hold period after which they can sell their shares. Deutsche Annington rose 1.9 percent to 21.39 euros at close yesterday. They have gained about 19 percent this year. The sale value of 642 million euros was calculated based on the company’s market value yesterday. -By Ruth David and Sarah Jones http://www.bloomberg.com/news/2014-05-19/deutsche-annington-investors-selling-880-million-stake.html |