Real Estate

Banks dodge mortgage loan-to-value caps

19 Oct 2009

The UK regulator trusts chastened lenders and tougher capital rules will prevent a resurgence of housing loans with low or no equity. This indirect approach may be justified for now. But the FSA should not be too afraid of imposing blunt rules if the market starts to heat up.

Beware the limits of UK house-price derivatives

16 Oct 2009

Contracts that enable traders to bet on where house prices will be years hence may express a market view on the direction of travel. But this year s predictions have been all over the place. Derivatives are a risky tool for divining future house prices.

FHA follows Fannie and Freddie down zombie path

14 Oct 2009

The US Federal Housing Authority is the smallest and healthiestseeming of the USsponsored mortgage giants. But it ramped up lending to counter housingmarket decline. Robert Cyran explains how the fallout could leave the FHA dependent on taxpayers, like its larger cousins.

Sale and leaseback makes timely comeback

6 Oct 2009

Recent weeks have seen a flurry of deals as confidence has started to return to the troubled commercial property sector in Europe. The immediate prospects for property may be mixed. But the real attraction for investors is the promise of longer term inflation protection.

Too soon to call the bottom on Spanish property

2 Oct 2009

Some indices suggest house prices in Spain are stabilising at last. Things may be not be deteriorating so rapidly. But a recovery would require a turn in the labour market, which looks some way off. And as things stand, house prices still look too expensive.

UK housing recovery still work in progress

2 Oct 2009

House prices have risen for the fifth month in a row, says one big mortgage lender. But gains continue to be driven by a shortage of supply and ultralow interest rates. As the broader economy picks up, rising rates could upset those dynamics.

Crunch casualties siphon off market fizz

23 Sep 2009

Barratt is raising over 75% of its market capitalisation in a £720m rights issue and placing. The UK housebuilder is paying the price for a costly boomtime takeover and positioning itself for a housing recovery. With markets in forgiving mode, others are following suit.

London landmark property deals capture new mood

18 Sep 2009

The owner of the Canary Wharf financial district is supersizing a share issue to £900m with the support of sovereign funds. Meanwhile, Blackstone is buying into London s traditional financial centre. The deals solve twin debt problems and sum up the crisis in miniature.

China deflates a bubble – but the wrong one

28 Aug 2009

The 23% fall in stocks over the past month doesn t mean a return to normality. While valuations now look almost sane, share prices have a limited effect on China s economy. The real worry is real estate, a bubble that's bigger, harder to spot, and devilishly tricky to shrink.

US home price increases may not stick

25 Aug 2009

For the first time in three years, values rose in most major American cities. This good news might be fleeting. An $8,000 government credit has goosed demand, and a large shadow inventory of houses may be sitting on the sidelines.

British Land shares price in too much hope

17 Aug 2009

The UK commercial property group is flying high on speculation of a bid or a partial sale of its prized London office complex to US buyout firm Blackstone. Its Q1 results may mark the trough. But corporate activity is no certainty and the shares look overpriced.

A first step for Fannie and Freddie

17 Aug 2009

As the anniversary of their conservatorship approaches, the $5.4 trillion mortgage giants remain the biggest black holes in the financial firmament. Robert Cyran says there s an easy and fairly painless first step the US could take to begin their reform.

UK house-price bulls should keep champagne on ice

7 Aug 2009

The end of a buyers strike has pushed the average price up slightly. The good news could continue for a few months. But the recovery relies on extraordinary and temporary banking conditions. The most likely outcome remains flat prices with substantial downside risk.

Trump resurrection no bellwether for buyouts

4 Aug 2009

The Donald convinced a bank to bail out his Atlantic City casinos again. But that doesn t necessarily mean financing will start to flow for private equity restructurings, too. And buyout firms are less likely to invest the effort to resuscitate their cratered companies.

Schaeffler alienates as it takes power at Conti

31 Jul 2009

Usually majority shareholders get their way without too much complaint. But Schaeffler s decision to oust the top man at Continental was delayed by board resistance. The fight between the two overindebted German car part makers is making it harder to find a durable solution.

Risanamento can’t blame market for E2.8bn problem

28 Jul 2009

The Italian developer is set to refinance that much debt to avoid becoming the crisis s biggest Italian casualty. A nearly20% decline in property sales has hurt, but an Italian fondness for cosy relations between banks and entrepreneurs probably let it take too many risks.

US housing rebounds, but won’t lead recovery

27 Jul 2009

New home sales, existing home sales and housing starts all rose in June. But housing starts are still far below previous cyclical lows, and sales levels are boosted by fiscal and monetary subsidies. These seem to have brought a bottom, but won t end housing s bear market.

BoE faces QE dilemma

23 Jul 2009

One member of the monetary policy committee has been criticised for suggesting the programme of printing new money may be put on hold. That won t help the government sell gilts but that s hardly the BoE s job. As for QE itself, it doesn t seem to be working.

UK’s CMBS market on shaky ground

30 Jun 2009

Despite a 43% slump in commercial realestate prices since mid2007, asset valuations underpinning much of the UK s £42bn of commercial mortgage securities are flat or up. But many are out of date. Some investors are in for a nasty surprise when the numbers are updated.

Even Lehman stigma can’t stop banker’s rebirth

17 Jun 2009

Mark Walsh, the architect of a real estate deal that helped sink Lehman, has a new gig: sorting out Lehman's property portfolio. It's a striking example of Wall Street's short memory. But former poachers can make good gamekeepers, and the logic holds for Walsh as well.