PropertyEU Editor's Choice: 13-17 January

Welcome to Editor’s Choice - a new weekly snapshot and roundup of the top stories published in our daily PropertyEU newsletter. Here’s our selection of the main news headlines and top deals in the European real estate market for the week of 13-17 January.

For more news from our daily newsletters, please go to our website and click on LAST 7 DAYS (ordered by date)

Europe starts 2014 in recovery mode
The lights appear to have turned to green for large swathes of the European real estate market. In the first two weeks of 2014, the PropertyEU team has filed a string of upbeat reports on prospects for the year ahead. Global adviser Jones Lang LaSalle expects 'exceptionally strong' investment activity in the first quarter of 2014 will boost full-year growth in the European property market to 10%. The forecast comes after a strong performance in 2013 which saw full-year property investment in Europe grow 14% in US dollar terms to $184 bn (€135 bn).

With more regional and global capital being diverted towards property, there appears to be more upside than downside potential in 2014, according to Jan-Willem Bastijn, head of European capital markets at Cushman & Wakefield. The adviser also believes cross-border investment activity is likely to rise further this year in EMEA after reaching over 40% in 2013. This compares with a cross-border investment rate of around 12% in the Americas and Asia over 2013.

A wave of capital from Kuwait, Singapore, China and Germany flowed into the Central London property market in 2013, boosting investment to the highest level ever achieved, according to property advisers Savills and CBRE. As the competition for core real estate assets continues, not just in London but also in other leading cities on the Continent, investors are extending their horizons. According to BNP Paribas Real Estate, investors are showing greater interest in European second-tier markets in their search for value creation opportunities. For the coming year, the adviser has singled out 10 secondary markets with strong potential: Warsaw, Dublin, Amsterdam, Milan, Barcelona, Rome, Madrid, Brussels, Luxembourg and Bucharest.

The renewed focus on secondary cities is also signalled in the latest edition of Emerging Trends in Europe, the annual report published by the Urban Land Institute and PwC. While office investors in Munich are paying yields of approximately 4%, those willing to invest in smaller German markets such as Stuttgart can achieve up to 6.5%, the authors point out.

The competition for prime assets in Europe's major real estate markets is also leading investors to turn to recovering markets such as Ireland, Spain and Italy. But the outlook for the real estate market in Spain looks better than that for Italy, according to Joe Valente, European head of research for real estate at JP Morgan Asset Management. ‘Even though both countries will continue to battle strong headwinds, rental and capital values look as though they have reached the floor in Spain. In Italy the downturn in values will run on for another year,’ Valente said in his outlook for 2014.

Judi Seebus
Editor in chief PropertyEU

OTHER HEADLINES
Mainland Chinese investment in European property triples in 2013
Chinese investment (ex Hong Kong) in Europe tripled last year as insurers, developers and private individuals joined the country’s sovereign wealth funds in seeking to diversify their assets outside Asia, analysis by research firm Real Capital Analytics (RCA) shows.

German investors tighten grip on Amsterdam business district
German investors are stepping up their presence in Amsterdam’s South Axis (Zuidas) business district through a string of forward-funding and new-build deals.

Italian market headed for gradual recovery, says C&W
The Italian property market is expected to experience rising investment levels in 2014, further supporting the correction in property values seen in the first wave of deals over 2013, according to Joachim Sandberg, head of C&W’s office in Italy.

DEAL WATCH
Unibail-Rodamco Dutch chief on sale of Hoofddorp mall
Why did Unibail-Rodamco sell the Vier Meren shopping centre near Amsterdam? PropertyEU spoke to John van Haaren, head of the group’s Dutch operations, about the reasons behind the disposal.

China's Greenland enters Europe with London buy
UK developer-investor Minerva has sold the Ram Brewery development site in London's Wandsworth to Chinese state-owned developer Greenland Group.

OMERS acquires Royal Exchange retail arcade in London
Canadian pension fund OMERS, operating through its Oxford Properties business, has acquired the leasehold interest in the retail space at the Grade I listed Royal Exchange building in the City of London.

OTHER DEALS
Union Investment to invest €1.5b in US growth markets
CBREGI sells Italian retail gallery for €140m

FUND WATCH
LaSalle raises €721m for European real estate debt fund
LaSalle Investment Management has announced the final closing of a £600 mln (€721 mln) European real estate debt fund which will provide whole loan and mezzanine loans secured against real estate in the UK and Germany.

AXA Immoselect clears the decks ahead of wind-up
AXA Real Estate's open-ended Immoselect fund continue√s to shed assets at a discount ahead of its termination in 2014. PropertyEU has the details on the disposal targets.

STOCK WATCH
Carrefour-led consortium creates new €2.7b retail unit
French retail giant Carrefour has joined forces with eight institutional investors to create a new property firm which will own €2.7 bn worth of shopping centres.

EPRA INSIGHT: Panel property picks
Property professionals at EPRA's Insight Amsterdam meeting held earlier this week tipped a range of property sectors for investment in the Netherlands and abroad.

CITY WATCH
ING Real Estate offloads UK development plots
ING Bank's real estate sell-off vehicle has disposed of two inner-city development plots in the UK cities of Chester en Maidenhead. ING Real Estate Development (ING RED) was for several years one of the largest inner-city property developers in Europe.

PEOPLE WATCH
ABN Amro appoints RBS banker to global real estate post
Dutch bank ABN Amro has appointed Jonathan Greenwood as global head of financial institutions and real estate in its corporate and banking division.

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