PropertyEU Editor's Choice: 20-24 January

Welcome to Editor’s Choice - a 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 20-24 January.

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

A new Chinese name
You don’t need a crystal ball to guess what will likely shape up as one of the key trends for the European property sector in 2014. Indeed, every self-respecting adviser and fund manager is forecasting that more Asian and US capital will head towards European real estate in 2014. Europa Capital is setting the pace: last week the fund manager announced it has teamed up with Beijing-based advisory firm Ilex Partners to boost investment from China’s leading institutional investors, life insurers and property developers into European real estate. Although much of Chinese investment activity has so far been focused on the UK, in particular London, Europa Capital’s founding partner Charles Graham is betting that the focus will steadily broaden in search of return to encompass mainland Europe. Most likely Ilex Partners is just one - and possibly not even the most important - of a string of new names that we will hear more about in the next 12 months.

Bullish reports on prospects for the real estate sector continued to stream into PropertyEU’s email box this week with INREV, the association of non-listed real estate vehicles investors, reporting that investors are set to increase their overall real estate allocations in the coming two years. More than half of Asia-Pacific investors aim to lift their overall allocations over the period, while just under half - or 48.9% - of European respondents are saying the same. INREV’s upbeat report follows hard on the heels of a good news show at EPRA's Amsterdam Insight meeting in mid-January which learned that the US Federal Reserve's decision to begin scaling back quantitative easing, also referred to as 'tapering', has helped bring Europe and its real estate markets back into focus.

Another area that is poised to benefit from growing investor appetite is the UK residential sector. In fact, institutional investors are set to inject up to £9 bn (€10.9 bn) in UK residential as the private rental sector continues to expand. According to Jenny Siebrits, head of residential research at CBRE, one of the legacies of the credit crunch has been a shift in tenure preferences to private rentals. UK listed residential group 'Grainger, is catering to the new trend: this week it announced it has received detailed planning permission for 84 new homes across two sites in Kensington and Chelsea, representing a total development value of £110 mln (€134 mln).

But despite Grainger’s efforts, the sector remains plagued by scarcity of suitable housing stock and that is set to remain an issue for some time, noted Mark Collins, executive director chairman of residential CBRE, during a PropertyEU Investment Briefing in London last week. More product may be coming to the market in the next couple of years, but the government’s target of 42,000 new housing units a year is unrealistic, he told the Briefing. He claims the sector will struggle to get 20,000, while research shows that the UK needs as much as 52,000 new units.

Other sectors to watch this year are hotels: this week Internos Global Investors announced plans to launch a follow-up fund following its ninth hotel acquisition in Dresden on behalf of its inaugural hotel investment vehicle. Internos is itself a player to watch: the London-based company set up by Andrew Thornton and Jos Short has built up a sizeable pan-European platform in the past five years and is now poised for the next phase in its evolution as a fund manager. For an in-depth interview with the pair, keep an eye on PropertyEU daily newsletters.

Judi Seebus
Editor in chief PropertyEU

OTHER DEALS & HEADLINES
AXA RE completes €1.8b of European value-add deals
AXA Real Estate Investment Managers said it completed 11 value-add transactions in six European countries totalling €1.4 bn on behalf of its clients over the last 18 months.

M&G celebrates 150th birthday with record deal volume
M&G Real Estate has marked its 150th anniversary by announcing that it has completed or committed to £3.5 bn worth of deals in the past 12 months.

WP Carey reports €1.3b of global investment in 2013
WP Carey has announced a record total investment volume for its owned and managed portfolios in 2013.

FUND WATCH
Private equity real estate funds raise record €115b in 2013
Blackstone, Brookfield and Lone Star were among the top private equity real estate fundraisers in 2013, according to new research published by Indirex.

AXA to launch €1b pan-European value-added fund
AXA Real Estate Investment Managers is launching a €1 bn pan-European value-add fund, Ian Chappell, head of fund management at AXA in London.

Deka reports €2.8b of property deals in 2013
Deka Immobilien carried out 45 real estate acquisitions and disposals totalling €2.8 bn in 2013.

PEOPLE WATCH
DTZ adds Asian investment specialist to EMEA team
DTZ has appointed Jingjing Ma as Asian inward investment specialist within the EMEA capital markets team.

CBREGI appoints general counsel for EMEA
CBRE Global Investors has promoted Anja Ijlstra to the position of general counsel for the EMEA region.

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