Real Estate

French retail safer port than UK in property storm

14 Feb 2008

UK shopping centres are like supertankers according to property investor Liberty they're ploughing through the downturn with only modest damage to NAV. But cheaper debt and robust growth mean its French cousins aren't tanking at all. Investors might prefer this port of call.

An Englishman’s home is his millstone

11 Feb 2008

UK homeowners have often seen house price inflation as a boon. But Britons pay too much, borrow too much and work too hard to afford their small, overpriced homes. And high prices also exclude many from homeownership.

Happy birthday, credit crunch

7 Feb 2008

It s the first anniversary of HSBC and New Century revealing mounting problems with subprime loans. Once thought containable, the US s mortgage woes were instead the catalyst for bursting the broader leveraged credit bubble. So far, only more confusion seems to lie ahead.

British Land set to weather UK real estate storm

7 Feb 2008

The UK Reit has slashed asset values by 16%, but its closedend structure means investors, not the company, feel most of the pain. Unless UK property prices collapse totally, British Land will survive the downturn. It could even profit from the distress of forced sellers.

Troubled Spanish real estate firm tempts Dubai

4 Feb 2008

Colonial boomed along with the Spanish market. But now the overgeared company and its overgeared shareholders face a repayment squeeze. Enter Dubai. The sovereign wealth fund has enough money and patience to make a go of Colonial. But it might find easier pickings elsewhere.

Spanish real estate woes could trap cajas

4 Feb 2008

The savings banks have been allowed to expand lending aggressively in Spain, but not raise much equity. As real estate falls back, they look more exposed than the big and internationally diversified commercial banks. Big losses are possible in this politically favoured sector.

Deutsche may pay for succumbing to real estate froth

31 Jan 2008

The bank lent $5.8bn to real estate mogul Harry Macklowe. Now he can't repay the loans so Deutsche is stuck with seven office buildings. Sure, the deal was cut at the top of a frothy market, but the bank should have understood the risks. Deutsche could be facing a big loss.

City job cuts set to hit UK property returns

30 Jan 2008

The fouryear boom in London commercial property looks to be fully over. One survey shows a sharp drop in demand from potential renters. Another suggests 20,000 job cuts in the City. Investors have already been shying away from the sector. They are likely to start running.

US stimulus package may worsen mortgage lender headaches

29 Jan 2008

The fiscal stimulus package before Congress is partly an attempt to prop up the ailing housing sector. But tinkering with the economy often has unintended consequences. The measure could actually hurt mortgage lenders and end up being counterproductive.

M&B pays price for misguided property punt

29 Jan 2008

The UK pub operator has taken a £274m hit equivalent to all last year s earnings on unwinding hedges associated with a failed property joint venture. Chief executive Tim Clarke may have been badly advised, but he is lucky to be hanging on to his job.

Wolseley suffers as construction troubles spread

21 Jan 2008

The UK group only gets about a quarter of its revenue from new US construction. That business has been suffering badly, dragging the share price down. Other markets are now slowing. That s bad news for current profits. And a test for this acquisitive company s business model.

Scottish Equitable adds to UK commercial property woes

18 Jan 2008

The UK investment group is to halt redemptions from its £2bn real estate fund for up to a year after it almost ran out of ready cash. Scottish Equitable hopes this will buy time to sell assets. But with fear clearly spreading among investors, others may have the same idea.

Blackstone’s property team could rock rivals’ foundations

16 Jan 2008

The group run by Jonathan Gray has left real estate magnate Harry Macklowe in trouble. He is selling the GM building because he can t refinance a loan used to buy buildings from Blackstone. Commercial real estate problems could spread. Blackstone might be positioned to profit.

CDO debacle claims another German scalp

15 Jan 2008

Hypo Real Estate s problems are not lifethreatening, as were the losses suffered by IKB last summer. But it doesn t reflect well on the German lender's management. Either they knew the risks of the toxic debt products and ignored them, or didn t understand them.

Synergies give BofA huge buffer in $4bn Countrywide deal

11 Jan 2008

The expected cost savings alone are worth some $5.6bn to shareholders today. Given the fraction of book value Bank of America boss Ken Lewis is paying for the mortgage lender, it would take massive writedowns, approaching some $14bn, before the investment would hit the red.

John Thain’s Merrill set to stay in downtown Manhattan

9 Jan 2008

The former Goldman and NYSE man might feel more at home with the suits of Wall Street than the hockey jerseys of Madison Square Garden. But a better reason for Merrill Lynch to stay put is that it can t afford the cost or public lampooning involved in a flashy building project.

Colonial massacre classic tale of double leverage

3 Jan 2008

Spain's second largest property group is in a tailspin not just because it borrowed excessively to invest in overvalued assets; its chairman financed his own 40% stake by borrowing. When prices rise, double leverage multiplies the gains. When they turn, it magnifies the agony.

US retailers bloated from big box binge

3 Jan 2008

Retail floor space has grown over 20% in the past decade, and now far exceeds other developed nations per capita. The housing bust, tapped consumers and internet competition are causing indigestion. With December sales down, the consequences of the glut are becoming apparent.

UK commercial property proves hard to price

19 Dec 2007

Only £5bn of transactions are expected this fourth quarter, down 75% from last year. Big deals have almost dried up completely. Markets are shifting so quickly that buyers and sellers can t easily find common ground. When they do, it could be at significantly lower prices.

UK housebuilders tarred by US brush

17 Dec 2007

The big UK housebuilders shares are down twothirds from their 2007 peak. Sure, the UK housing market is slowing rapidly. The markdown is as deep for their US peers, which have much more on their plate. That seems excessive.