Real Estate

Deutsche’s loan to Trump put hope over experience

1 Dec 2008

Deutsche Bank hoped the US property magnate s early1990s meltdown was a onetime affair. But, like its problems with Harry Macklowe another developer with a troubled borrowing past its decision to overlook The Donald s record and extend him credit is now causing grief.

London’s hedge fund alley won’t disappear

25 Nov 2008

Even if a third of the hedge funds clustered around Mayfair s Curzon Street went under, over 250 would remain. The financial sector s travails will push down rents, but the district should remain a destination for smaller, statusconscious financial firms.

CMBS woes show economy is growing threat

19 Nov 2008

Interbank lending is thawing, so lack of liquidity no longer appears to be a mortal threat to banks. But they re not out of the woods the commercial real estate mortgage meltdown shows how the US economic downturn is just beginning to take its toll.

US mortgage initiatives leave bad taste

11 Nov 2008

It s legitimate to modify home loans to avoid the cost, contagion and human fallout of foreclosures. And unlike bailing out Wall Street, it helps ordinary people and stabilizes the mortgages at the heart of the credit crunch. But prudent US taxpayers can still feel hard done by.

Candy brothers dodge first of many bullets

30 Oct 2008

The luxury apartment developers have moved to limit the damage from partnering with Icelandic banks on two schemes. Their Qatari backers on the huge Chelsea Barracks project in London are more secure. But the brothers still have to shift a lot of luxury flats in a bad market.

Europe’s largest mall opens in worst of times

30 Oct 2008

Any enemy of Westfield couldn t have hoped for better. The Australian developer is opening Europe s biggest shopping centre in London, just as the UK goes into recession. But the White City extravaganza won t go down without a fight. Competing retail hotspots will also suffer.

Gulf needs its own financial giants

21 Oct 2008

The liquidity squeeze should trigger consolidation amongst the region s fragmented financials. Bigger banks would better meet the Gulf s own needs and reduce dependence on foreign banks. Dubai property lenders Amlak and Tamweel are already courting. Abu Dhabi's banks look next.

Spanish banks face another mega property refinance

17 Oct 2008

Metrovacesa is a complicated variation on the same theme of double leverage in Spanish property companies. The controlling shareholders, the Sanahuja family, are creaking under more than E4bn in debt. The company owes another E7.1bn. Even so, Metrovacesa will probably survive.

US bank rescue worsens mortgage mess

17 Oct 2008

The government s plan to back Wall Street s borrowings has led investors to dump mortgage bonds in favour of bank debt pushing home loan interest costs up sharply. That should reverse, given time. In the meantime, the US has few options to give home buyers a break.

Tchenguiz won’t be the last ailing property tycoon

9 Oct 2008

His stakes were sold at a £1bn loss. In better times, leveraged real estate investors in negative equity were safe banks wouldn t repossess properties. But the sector s in tatters. Others will suffer Robert Tchenguiz s fate. And they won t only owe Icelandic banks.

Hypo Real Estate wakes up to funding nightmare

29 Sep 2008

Thanks largely to an illjudged acquisition in late 2007, the E395bn German bank has the wrong balance sheet for a credit squeeze: hyperleveraged and almost no deposits. That model is so broken that a E35bn publicprivate loan guarantee may not be enough to ensure survival.

Dubai works overtime to avert property crash

29 Sep 2008

The emirate is pushing to merge its mortgage lenders, and developers look next. Dubai s new real estate fund will also help shore up prices. In a market dominated by government entities and where just 30% of buyers need to take out a mortgage, it s a mighty effort.

Canary Wharf can ride out the financial storm

23 Sep 2008

The Docklands home of many of London s financial firms looks vulnerable to Lehman s woes and high gearing. But Songbird, the biggest landlord in Canary Wharf, has solid rents and low vacancy rates. The district can sing a happier song than its rival, the City.

Lloyds takeover would be best solution for HBOS

17 Sep 2008

The UK mortgage giant s reliance on wholesale funds has sucked it into the vortex. But it is too big to fail and a private sector solution is better than a bailout. Still, if the authorities need to grease a deal significantly, HBOS shareholders should be wiped out.

Colonial lenders dodge Spanish property bullet

15 Sep 2008

Lenders to the troubled Spanish real estate company have agreed to restructure E6.5bn of debt, one of the largest deals of its type in the nation s history. The complex plan, which includes a E1.4bn convertible bond, may let banks avoid taking a hit to profits for now.

Fannie rescue shouldn’t egg UK on

9 Sep 2008

The US government s support of its quasigovernment mortgage banks could inspire a British imitation. But the right lesson is the opposite governments should stay away from housing finance. The UK should let falling prices clear the market. A rescue would only slow the process.

Let the market kill the GSEs – politicians won’t

8 Sep 2008

Fannie Mae and Freddie Mac have no place in a wellordered economy, but are difficult to euthanize. The market, which has brought them down, should finish the job. The GSEs' guarantee fees should be raised enough to make them uncompetitive once the mortgage market recovers.

Nakheel IPO echoes DP World

5 Sep 2008

The Dubai stateowned property developer has good reason to mull an initial public offering. Its $3.5bn convertible Islamic bond matures in a year and a listing would ease repayment costs. DP World used an IPO to similar ends, but Nakheel will hope the likeness ends there.

UK’s house fixes won’t work, but will cost

2 Sep 2008

A oneyear holiday from the transaction tax only invites buyers to purchase homes that will lose value. Incentives for builders will add to the supply of unsold properties, further depressing prices. The scheme's main effect: to worsen the government s fiscal position.

Foreign snub of GSE debt has silver lining for US

2 Sep 2008

Overseas investors are paring their holdings of Fannie and Freddie debt, despite the US government s backing of the GSEs. But erstwhile buyers appear to be ploughing funds into US Treasury bonds instead, helping to keep rates low, thereby benefitting the world s biggest debtor.