#exporeal TOP DEVELOPERS: Global players shake up ranking

It is a sign of the times that PropertyEU’s annual ranking of Top Developers, published at Expo Real in Munich, is headed by three non-European players.

For the first time since we introduced it in 2008, the ranking is headed by a trio of logistics companies, each of them from outside Europe. Sydney-listed Goodman Group takes the lead for the fourth year running in terms of floor space delivered between 2012 and 2014 with a total of almost 2 million m2. Its nearest contender, US-based Panattoni, delivered 850,000 m2 over the period. San Francisco-based Prologis constitutes the third player in the overall league, at a short distance behind the number 2.

Hamburg-based retail heavyweight ECE Projektmanagement takes the 4th position overall and the top spot in the retail ranking. Hines Europe has again emerged as the leading office developer in Europe. The ranking is based on projects delivered between 2012 and 2014 and includes extensions.

Hines is by no means the only global developer that is redrawing Europe’s skyline with its mega-offices and mammoth mixed-used projects. The Houston-based company has traditionally played a key role in mainland Europe and remains active in a number of major capitals including Paris and Berlin. More recently, it has shifted its focus to Ireland where it is planning a new town ‘the size of Hyde Park’ on a 390-acre are in Cherrywood, South Dublin after buying the site from receivers working for the National Asset Management Agency and a number of banks including Danske Bank and Lloyds Banking Group.

London remains a hotspot
But the real hotspot for global developers is London. While recently completed office towers like the Cheesegrater and Walkie-Talkie were developed by home-grown players, the development of the Shard introduced a theme which appears to be growing in importance. Designed by Italian architect Renzo Piano, the Shard was developed by Sellar Property on behalf of London Bridge Quarter Ltd and is jointly owned by Sellar Property and the State of Qatar.

Indeed, home-grown real estate giants are being relegated to the sidelines in London as a slew of Middle Eastern and Asian investors and developers enter the fray to grab a piece of the booming office development action in the UK capital. Earlier this year, Japanese conglomerate Mitsubishi Estate submitted a planning application to the City Of London Corporation for a 40-storey office tower in the heart of the City on a site located at 6-8 Bishopsgate and 150 Leadenhall Street.

Asian investors figure heavily in a number of recent deals in London. Earlier this year, a four-member consortium from the UK, Malaysia and Singapore scooped the new £1 bn development of Bankside Quarter, a 130,000 m2 residential, office and retail development. The consortium comprises UK developer Native Land, Singapore’s investment firm Temasek and listed hotel specialist Hotel Properties Limited, as well as Malaysian developer Amcorp Properties.

Meanwhile Chinese investors have landed in London’s Royal Albert Docks where China Minsheng Investment is set to invest in the £1 bn (€1.35 bn) development of a new commercial district unveiled by Chinese developer Advanced Business Park (ABP) in 2013.

The Malaysians are also becoming a formidable development contingent in London. To the west of the City, a Malaysian consortium is the driving force behind a mammoth regeneration project on the south bank of the River Thames, the Battersea Power Station.

A romp around new office-led and mixed-use developments in London would not be complete without a stop at Canary Wharf where Canadian investor Brookfield Property Partners and Qatar Investment Authority ended a long-running battle earlier this year for control of Songbird Estates, the majority owner of Canary Wharf Group. Their €3.5 bn acquisition of the stake in Canary Wharf Group, which in turn owns the majority of the Canary Wharf office estate, gives them a big finger in the pie of new development projects at the district including a new waterside community that has received approval from city mayor Boris Johnson.

Frankfurt leads in Europe
On the continent, Paris is normally the first port of call for global investors but smaller European cities and capitals are stealing a march on the French capital in terms of new developments. Here, too, foreigners have played a key role in starting up the development engine. For example, it was Tishman Speyer who was the first to kick off an office development in Frankfurt in the current cycle. Earlier this year, the US office developer announced it had acquired the former head office of Metzler Bank for the development of a new high-rise office project in the German city.

Located at Großen Gallusstraße in the centre of Frankfurt’s banking district, the site is opposite the Taunus tower, Tishman Speyer’s third high-rise building in Frankfurt after the Messe and Opern towers and its most recent development in the city.

Tishman Speyer is not the only foreign developer with big ambitions for the German city. Elsewhere on the former Neckermann site in the east of the city, listed Turkish investor Servet is developing OSWE 360°, a multifunctional complex located at a stone’s throw from the European Central Bank on what is said to be one of the few remaining sites in Frankfurt with development potential.

Home-grown players dominate retail ranking
While global players dominate our ranking of top logistics and office developers, the retail segment remains the playing field of home-grown companies. Ikea Centres ranked second in our Top Retail Developers ranking this year after German heavyweight ECE Development.

Meanwhile Europe’s leading listed real estate company Unibail-Rodamco retained its third position in our ranking despite the fact that it did not deliver any new projects in 2014 and a 40% decline in the total volume of completed projects between 2012 and 2014 to 337,000 m2 year-on-year.

But possibly the most noteworthy development we signalled this year on the retail development front is the significant number of Turkish and Russian companies that have entered our ranking. No less than four Turkish and three Russian players feature prominently in the top 20. Russia's Amma Development swept into fifth place this year, with Crocus Group and RosEvro Development at nr 8 and 10 respectively. Turkmall heads the Turkish delegation in sixth position, followed by Renaissance Development (12), Torunlar GYO (13), Vialand AVM (14) and Metta (15).

Turkish and Russian developers are set to retain a prominent place in the coming years given the size of their respective countries’ pipelines. While ECE retains its top position in the ranking, the volume of completed projects was lower than last year, suggesting that the retail development market may have peaked in Western Europe or is stabilising.

Top European Developers
(based on completed projects in m2 in 2012-2014)
Company Total Floor space m2
1 Goodman Group 1,982,150
2 Panattoni Europe 850,000
3 Prologis 814,715
4 ECE Projektmanagement 526,000
5 Unibail-Rodamco 490,750