Editor's Choice: Gutsy US trailblazer gets thumbs up from investors

[b]In just three years, US investor Kennedy Wilson has not only blazed a new trail in Europe, it has also hit the jackpot.[/b] Earlier this week, the California-based company raised £910 mln (€1.1 bn) from its initial public offering on the London Stock Exchange and more may be on its way. Adviser Deutsche Bank has been granted an over-allotment option of up to 9.1 million shares, representing up to 10% of the company’s share capital. The option may be exercised within the next 30 days. The proceeds are significantly higher than originally expected: earlier this year Kennedy Wilson said it was seeking to raise £750 mln from its European flotation. The successful IPO is another feather in the cap of the company’s European CEO and president Mary Ricks. Since her arrival in 2011, she has led an aggressive push into the European market, snapping up a string of distressed assets across the UK, Ireland and Spain while more established local players were still debating whether it was safe to show their faces. The company made its debut in Europe with the acquisition of Bank of Ireland Real Estate Investment Management and has since continued to develop its portfolio both in the UK and on the Continent where it targets opportunistic value-added acquisitions in both real estate and debt. Kennedy Wilson Europe has already called the bottom of the retail market in Ireland and is now firmly targeting Spain for more bargains. Commenting on the IPO this week, Ricks said the new funds raised would allow the company to take advantage of its pipeline and create ‘a real estate portfolio of scale and quality’. [b]Stark contrast[/b] The rising star of the privately held investment and services company from Beverley Hills forms a stark contrast with what was formerly one of Europe’s leading listed real estate heavyweights. Last week, Germany’s IVG Immobilien submitted an insolvency plan that will see it swap debt for equity and place the company in the hands of its creditors. IVG, which sought creditor protection last August, said the plan will be voted upon on March 20, 2014. If it is accepted by the creditors and confirmed by the court, the insolvency proceedings can be lifted in the first half of 2014 as planned. IVG Immobilien’s share capital will be reduced to nil and then simultaneously increased by adding receivables and an additional cash component. Creditors taking part in the capital increase would also have to agree on a partial waiver of their debts. IVG, Germany's largest property company by assets under management, entered self administration in November last year. The company filed for court protection after failing to reach agreement with creditors on the restructuring of its €3 bn debt pile. In total IVG has €21 bn of assets under management, including €4 bn of property on its balance sheet and almost €12 bn held in its institutional real estate fund business. In another sign that the status quo in Germany’s real estate market is shifting, savings banks Sparkasse KölnBonn, Stadtsparkasse Düsseldorf and Frankfurter Sparkasse put Corpus Sireo up for sale last week. Corpus Sireo manages €15.6 bn of assets and is currently 50% owned by Sparkasse KölnBonn, with the remaining 50% held by Stadtsparkasse Düsseldorf and Frankfurter Sparkasse. Corpus Sireo's German platform provides asset management, investment management, residential project development and investment brokerage services in Germany. In addition, the company owns a 3,600-strong residential real estate holding which is understood to be part of a separate disposal process. According to news website CoStar, isag, Johnson Controls, CR Investment Management, CBRE and JLL are all thought to be considering bids for the company, whose service business in 2013 posted an EBITDA of €24.6 mln. Corpus Sireo’s three owners have appointed investment bank Lazard to sell Germany’s largest real estate asset manager in a process which is expected to fetch over €300 mln - less than a third of what Kennedy Wilson picked up on the stock exchange last week. And that figure may grow further. Of course, the two are very different types of real estate companies and should not be put in the same basket for comparison, but Kennedy’s Wilson IPO and Corpus Sireo’s prospective sale nevertheless have something in common: in their different ways both processes signal renewed confidence in the European real estate market and a return to normality. [b]Judi Seebus Editor in chief PropertyEU[/b] [b]LINKS TO PROFILED ARTICLES[/b] [link=" Kennedy Wilson closes €1.1b share issue"]http://www.propertyeu.info/index-newsletter/kennedy-wilson-closes-eur-1.1b-share-issue?reference=a61d259212dc4992abe710eccde84ae1[/link] [link=" Kennedy Wilson to launch €912m London IPO - report"]http://www.propertyeu.info/index-archive/kennedy-wilson-to-launch-eur-912m-london-ipo-report/?page=1&feed=[/link] [link=" Kennedy Wilson to acquire UK portfolios after €915m IPO"]http://www.propertyeu.info/index-archive/kennedy-wilson-to-acquire-uk-portfolios-after-eur-915m-ipo/?page=1&feed= [/link] [link=" Kennedy Wilson teams up with Värde for major Spanish buy"]http://www.propertyeu.info/index-archive/kennedy-wilson-teams-up-with-varde-for-major-spanish-buy/?page=2&feed= [/link] [link=" Germany's IVG unveils details of insolvency plan"]http://www.propertyeu.info/index-archive/germanys-corpus-sireo-put-up-for-sale/?page=1&feed=[/link] [link=" Germany's Corpus Sireo put up for sale"]http://www.propertyeu.info/index-archive/germanys-corpus-sireo-put-up-for-sale/?page=1&feed=[/link] [b]OTHER HEADLINES THIS WEEK[/b] [link=" Goodman sets up €500m German JV with Malaysia's EPF"]http://www.propertyeu.info/index-newsletter/goodman-sets-up-eur-500m-german-jv-with-malaysias-epf/[/link] [link=" Corestate closes €1b of deals in 2013, targets value-add assets"]http://www.propertyeu.info/index-newsletter/corestate-closes-eur-1b-of-deals-in-2013-targets-value-add-assets/[/link] [link=" Strong lending volumes help Aareal exceed operating profit target"]http://www.propertyeu.info/index-newsletter/strong-lending-volumes-help-aareal-exceed-operating-profit-target/[/link] [link=" CEE investment reaches €10b in 2013"]http://www.propertyeu.info/index-newsletter/cee-investment-reaches-eur-10b-in-2013/[/link] [link=" Industrial take-up in Central Europe at highest level in 2 decades"]http://www.propertyeu.info/index-newsletter/industrial-take-up-in-central-europe-at-highest-level-in-2-decades/[/link] [link=" Overseas buyers behind 80% of deals in Spain, says Savills "]http://www.propertyeu.info/index-newsletter/overseas-buyers-behind-80-percent-of-deals-in-spain-says-savills [/link] [link=" London captures 23% of European investment in 2013"]http://www.propertyeu.info/index-newsletter/london-captures-23-percent-of-european-investment-in-2013/[/link]