Real Estate

Metrovacesa bid battle turns into Mexican standoff

22 Sep 2006

Neither side gained the decisive victory it wanted. The result is an impasse and, oddly, a rocketing share price. The gains seem built on hopes one bidder will eventually launch a full takeover offer. Perhaps. But the stock is already very expensive.

Metrovacesa bid battle is a game of musical chairs

18 Sep 2006

When there aren t enough chairs to go round, the winning strategy is to aim for the one that other players are least likely to run for. The same is true for the E7.9bn Spanish property company because two competing partial bids aren t enough to take out all the free float.

American economists draw false parallel with the UK

15 Sep 2006

Many believe that the US will experiences a similar experiences as the UK economy after the British real estate market cooled in 2004. However, the differences between these markets are more pronounced than the similarities.

UK house price split reflects unbalanced economy

18 Jul 2006

Once again, house price growth in London is far outstripping the rest of the nation. Blame big bonuses in the finance industry. But the capital's strength is potentially destabilising. The UK suffers from a new type of the Dutch disease overreliance on one sector.

Buffett won’t let go of his baby

27 Jun 2006

The renowned investor has structured the world s largest charitable gift so as not to change the status quo at Berkshire Hathaway. But that may not be in the best interest of the Gates foundation nor of Berkshire s shareholders.

New housing futures contract faces dim prospect

19 May 2006

With US property prices vulnerable to a downturn it might seem a good time to launch a housing futures contract. Yet previous efforts to offer housing futures have floundered due to lack of liquidity.

Buffett ignites M&A guessing game

10 May 2006

The billionaire told Berkshire shareholders he s close to making a $15bn acquisition. Now everyone's drawing up shortlists. Suitable targets fit, like Heinz, Campbell s, Hershey, Masco, Aon and Harley. But it s the stretch ideas Ford and GM that titillate

Expect no more home runs from Buffett

8 May 2006

The billionaire downplayed expectations at his AGM. But he still believes the Berkshire Hathaway culture creates a longterm advantage. But it's difficult to see how the "faith" uniting the conglomerate and its shareholders can survive the inevitable departure of its boss.

Tesco considers putting the Reit in UK retail

24 Mar 2006

As one of the UK s biggest property owners, Tesco is an obvious candidate for putting its £12bn freeholds into a listed vehicle. The retail group s stability would make a Tesco Reit attractive to investors too. The risk is that less suitable candidates follow suit.

German property-fund reform may come too late

23 Jan 2006

The liquidity crunch facing openended real estate funds including KanAm and DB Real Estate has generated sensible suggestions for reform. But that might not repair the reputational hit to the funds industry, which sold these products when equities were out of favour.

Nothing wrong with UK reit proposals

8 Jan 2006

The UK property industry is up in arms over government plans to impose ownership limits and a gearing cap on real estate investment trusts. But the potential valuation uplift from conversion to reit status means the market can easily navigate its way past these obstacles.

The UK house price bubble never existed

12 Dec 2005

UK property prices will end the year higher than at the start, confounding those who predicted a crash in 2005. Why did people get it wrong? Perhaps because they failed to take account of the substantial shift in the longterm equilibrium level of house prices to earnings.

Karstadt’s real estate sell-off improves nothing

9 Dec 2005

The German retailer wants to sell and lease back stores to repay all its debt. The reasoning? Karstadt would then be debtfree. But this isn't logical. Karstadt would simply have turned financial debt into lease obligations. That doesn t change the economics at all.

British Land disposals signal further break with past

24 Nov 2005

The UK property company s decision to sell two key properties shows CEO Hester is serious about more actively managing the portfolio. Combined with strong rental growth in retail and City offices, British Land will continue to perform even if yields stop falling.

Rising rents rescue the UK house market

10 Oct 2005

Well that was the slump that didn t happen. After a spring lull, UK house prices have started to rise again. Higher rents may help explain why. They ve supported the marginal UK house buyer current and prospective buytolet investors.

Hammerson shrugs off retail downturn

30 Aug 2005

The UK property group has posted an impressive 8% rise in rental income at a time when its core retail customer base is struggling. Now that property investors can't rely on easy gains from falling interest rates, Hammerson s performance is particularly encouraging.

Hester stamps his authority on British Land

23 May 2005

The British Land boss is buying Pillar Property not just for its retail parks and fund management business but also its management team. He hopes they will spearhead a cultural change at British Land, but he will have to sweat to make the £811m deal work.

Metrovacesa bids for E5.5bn French rival

15 Mar 2005

At first glance, this looks amazingly ballsy. The Spanish property company is bidding cash for Gecina, which is twice its size. But it's not so big a bite. Gecina's REIT status gives the Spanish the tax benefits of full ownership without buying the whole company.

UK property companies could enjoy a premium

30 Jan 2005

Traditionally, they ve traded at a big discount to net asset value. That has already shrunk. But the probable launch of real estate investment trusts could justify a premium. That is what happened in Europe and the US.

Foreign investors pile into German property

16 Dec 2004

The big residential portfolios companies and municipalities are selling generate stable cash flows and can be geared aggressively. The odd thing is that German investors have stood aside so far. It's not clear why but it's allowing foreigners to make hay.