TOP 100 INVESTORS: DEALMAKERS Part II

Consolidation and new flotations are setting the tone across Europe’s listed real estate sector. Here are profiles of three listed property companies that made the biggest splash in the past 12 months, according to the latest edition of PropertyEU's Top 100 Investors.

KLÉPIERRE
By how much has the company grown in the past 3 years?
French REIT Klépierre is set to consolidate its position in second place in the ranking of top listed retail players in Europe after Unibail-Rodamco following its planned acquisition of its smaller Dutch peer Corio, announced in July 2014. The deal will create a platform of over €21 bn.

Is this the first big deal for the company?
The Corio deal marks the second big takeover for Paris-listed Klépierre in the past decade: in 2008 it teamed up with Dutch pension fund ABP to acquire a controlling stake in Steen & Strøm (56.1%), the largest shopping centre owner in the Scandinavian region, for a total investment volume of €2.7 bn.

Where is the company active?
In the past two-and-a-half years, Klépierre has shed the remaining assets in its office portfolio and focused on becoming a pure-play retail specialist. The addition of Corio’s €7 bn retail portfolio will allow the Paris-listed property company to develop strong bases in three new countries (the Netherlands, Germany and Turkey), while reinforcing its positions in France, Italy and Iberia. It is no accident that Klépierre’s accelerated strategic refocussing and expansion have coincided with the arrival of US retail group Simon Property as a new shareholder. Simon acquired a 28.9% stake in the French REIT in March 2012 from French financial group BNP Paribas which retains a 13.7% stake following the Corio takeover while Simon will see its shareholding diluted to 18.5%. Klépierre’s portfolio comprises more than 125 owned shopping centres across 13 European countries. In early 2014 the company completed the €2 bn disposal of a portfolio of small and medium-sized Carrefour-anchored retail assets in France, Italy and Spain which no longer fit in with the company’s focus on dominant shopping centres.

PATRIZIA IMMOBILIEN
By how much has the company grown in the past 3 years?
Patrizia Immobilien was the fastest-growing player in our 2013 ranking and again ranks as one of the biggest movers this year. After virtually doubling its assets under management to €12 bn between 2011 and 2013, the figure continues to rise and stood at €14 bn at end-August 2014.

How has the company grown and where?
Patrizia Immobilien has expanded rapidly across Europe in recent years and now employs nearly 700 people at offices in Germany, Amsterdam, Copenhagen, Helsinki, London, Luxembourg, Paris and Stockholm. In the past couple of years, the Frankfurt-listed company has specialised in arranging €1 bn-plus consortium transactions in its home country, particularly in the residential sector. It is also active in other sectors such as offices and now has a presence in the UK through the purchase of London-based real estate investment and asset management company Tamar Capital Group in 2013. In addition, it has a joint venture with Oaktree in the UK where it recently pulled off its second business park acquisition.

What is now on the agenda?
In July 2014, the Augsburg-based firm acquired a major residential portfolio in the Netherlands from a local housing corporation in the biggest deal of its kind in the country. Elsewhere in Europe, it is eyeing markets in France and Spain where it recently appointed new local managers as well as Scandinavia. Patrizia covers the entire real estate value chain and offers private and institutional investors direct and indirect property investments in Germany and across Europe. The company operates as a portfolio manager – and in many cases as a co-investor – on behalf of insurance companies, pension funds, sovereign wealth funds and savings banks. It also issues special real estate funds via its asset management companies.

KENNEDY WILSON
By how much has the company grown in the past 3 years?
Kennedy Wilson has literally come from nowhere to become one of Europe’s biggest real estate success stories since the onset of the financial crisis. The company entered Europe in 2011 with the acquisition of Bank of Ireland Real Estate Investment Management (BOI REIM) and has since continued to develop its portfolio both in the UK and on the continent. The company raised €1.1 bn following its flotation on the London Stock Exchange in February 2014 and has since embarked on a shopping spree across Europe.

How has the company grown and where?
Founded in 1977, Kennedy Wilson is a privately-held international real estate investment and services company headquartered in Beverly Hills, California with 24 offices in the US, UK, Ireland, Spain and Japan. It specialises in opportunistic and value-added acquisitions in both real estate and debt and offers an array of real estate services including auction, conventional sales, property services, research and investment management. Since its listing earlier this year, the company has completed the acquisitions of the Fordgate Jupiter portfolio in the UK, the Central Park and Opera property portfolios in Ireland and the Liffey Trust building in Dublin for a total of £685 mln (€855 mln), including £202 mln of debt. Following completion of these acquisitions, the company has invested, or committed to invest, over 85% of the net cash proceeds raised through its IPO carried out in February.

What is now on the agenda?
In early September, the company announced it had entered into a three-year debt facility of up to £225 mln (€285 mln) with a bank syndicate. The London-listed company intends to use the funds for general corporate purposes, including acquisitions of certain property and loan assets, working capital requirements and the payment of capital expenses. Kennedy Wilson Europe Real Estate said it intends to raise its LTV ratio to 50% in the future.