Real Estate

Simon’s $10 bln bid may not be enough to land GGP

16 Feb 2010

Creditors of the bankrupt mall operator are being made whole and many back the deal. But activist William Ackman owns nearly a quarter of the equity and reckons General Growth Properties is worth up to four times as much. There's little downside for him to fight for more.

Fannie/Freddie predictably late tackling bad loans

11 Feb 2010

The U.S. mortgage giants plan to buy $200 bln of seriously delinquent loans out of securities they guarantee. It's about time. The trouble is that rather than address it sooner, the two firms have wasted money putting it off until an accounting change made it look less bad.

Trillion-dollar CMO market looks vulnerable

9 Feb 2010

Investors in US collateralized mortgage obligations were badly burnt by interest rate hikes in 1994. Some of the contributory factors are once again in place. Banks and other owners of CMOs CDOlike instruments based on lowrisk US mortgage bonds could be set for a spill.

Fannie, Freddie fiction stores trouble for future

29 Jan 2010

The two U.S. mortgage giants are escaping public wrath and much in the way of accountability, despite their 12digit bailout and open spigot of taxpayer cash. Failing to address the downside of government subsidizing home ownership means the housing time bomb is still ticking.

Bonus curbs could undo London’s housing recovery

28 Jan 2010

Bankers with big bonuses usually drive up house prices in the UK capital. But this year's payouts will contain less upfront cash. Meanwhile, housing supply is likely to increase. Add it up, and London house prices look set to give up some of last year's surprising minirecovery.

Housing market still lacks a solid foundation

27 Jan 2010

Obama's bet that home ownership can be as much a part of the solution as it was the problem isn't paying off. Declining home sales and loan refinancing suggest the trillions pumped in so far haven't been enough. The market will probably need more propping up to lead any recovery.

StuyTown may not be top of Tishman’s scrap heap

25 Jan 2010

Buyers including Wilbur Ross are lining up to buy the sprawling Manhattan residential complex after Tishman handed the keys over to lenders. But Tishman also overpaid for Archstone $22 bln worth of U.S. apartments. Of the two, Archstone looks the more promising investment.

Ski battle adds frisson of danger to winter games

25 Jan 2010

When Fortress and Lehman stood at the summit in 2006, ski resort operator Intrawest looked enticing. Now it's a dead property deal being fought over by these wounded participants. The tussle has dragged in the Vancouver Olympics, though that's probably just a sideshow.

DP World London listing could alleviate many woes

6 Jan 2010

The Dubai ports group is looking to take a UK quote that could see it join the FTSE100. A dual listing may address the poor liquidity of its domestic stock. Bluechip status should help the rating. For troubled parent Dubai World, which holds 80 percent, the benefits are clear.

China’s real estate may look more Japanese

5 Jan 2010

Recent curbs show Beijing has more power to cool down a property bubble than Japan did in the 1980s. But the difference may be overstated. True, leverage in China remains low. But falling savings rates, an ageing population and limited land supply mean familiar themes may appear.

US should pull the plug on ResCap

4 Jan 2010

Despite nabbing the bulk of the latest $3.8 bln infusion into GMAC, the car lender's mortgage unit is a mess. ResCap still may not pull through, and there's no reason for taxpayers to prop it up. Like its former subprime lending peers, it should be disposed of or allowed to die.

UK housing market between rock and a hard place

31 Dec 2009

The 2009 spurt in house prices looks to be waning as cashrich buyers see fewer bargains. If rates stay low in 2010, the weak economy will not support increased lending. If rates rise, arrears could jump, prompting forced selling. Don't bank on London being immune, either.

US forges risky new weapon for mortgage battle

29 Dec 2009

Despite the latest CaseShiller numbers, many reckon house prices are set for more declines next year as government supports wind down. Treasury's gift of almost unlimited support to Fannie and Freddie could offset that. But it would be costly, with no guarantee of success.

Walking away will gain cachet

23 Dec 2009

Why bother? That's the question more underwater Americans are asking themselves about their mortgages. Trapped in the abyss of negative equity, more will decide to quit paying. As they should.

Accor split will ease shareholders’ pain

14 Dec 2009

The French hotel group's board will decide this week to spin off the company's vouchers division. The timing is right, since the hotel branch can get by without the highly profitable division's cash flow. Opponents fear this might make Accor a takeover target. So what?

Dubai: what happens on Monday?

11 Dec 2009

That's when the $3.5 bln bond of Nakheel, the troubled property developer, matures. A full, timely repayment looks unlikely and creditors haven't yet agreed a standstill. But Nakheel will still have a 14day grace period. If nothing is done, things could then unravel painfully.

UK commercial property needs more Dubais

27 Nov 2009

Prime real estate yields are tightening fast. Historically low rates are inflating a bubble, because global demand for yield is chasing a shrinking stock of prime assets, bidding prices up. Indebted foreigners who need to sell rather than keep buying could relieve the pressure.

British Land’s merits look underplayed

17 Nov 2009

The UK commercial property group s results are the latest evidence of the realestate recovery. With the sector trading above book value, British Land s sticky rental contracts make it relatively attractive. If it spends its £1bn war chest wisely, that should be reflected.

China’s new imbalance: real estate addiction

12 Nov 2009

The Middle Kingdom s powerful recovery is too reliant on property investment. House prices are soaring. Local governments and developers are rushing to cash in. A USstyle meltdown is unlikely, but the bursting of this bubble could undo some of China s economic achievements.

UK commercial property has hit the bottom

22 Oct 2009

The market fell a long way very quickly. But UK commercial realestate prices probably won t drop any further. A wall of money chasing yield in a low interestrate environment should underpin valuations. Still, don t expect the market to bounce back as fast as it corrected.