European Property Investment Markets. Sorbonne Immo 13 Juin 2007

Transcription

1 European Property Investment Markets Sorbonne Immo 13 Juin 2007

2 European Direct Commercial Property in bn. Euro 250 Investment by sector Office Retail Logistics Others Source: PMA, JLL, DTZ, Catella, CBRE

3 European Direct Commercial Property Investment in bn. Euro 250 Domestic Cross-border Source: PMA, JLL, DTZ, Catella, CBRE

4 European Direct Commercial Property Investment by country in bn. Euro UK France Germany Benelux Southern Europe Nordic CEE Others Source: PMA, JLL, DTZ, Catella, CBRE

5 Cross-border investment in Europe Cross-border investment in Europe by investor nationality % 3.7% 3.8% 4.9% 6.7% 14.4% 4.3% 0.6% 37.8% US / Global UK German Irish French Australian Dutch Canadian Other European Middle Eastern Far Eastern 7.1% 13.3% Source: PMA sample based on investments worth 86 bn

6 in mio. Euro 20,000 Sale-and-lease back activity picking-up Portfolio sale-and-lease-back where known yield gap in % 2.0% 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, % 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0 0.0% Source: PMA; yield gap = office yields key European Centres minus 5 yr SWAP rates

7 Growth of non-listed sector Data from INREV database

8 Prime office yields move in Offices 9.0% CE3 West Europe 11 key German key Nordic Southern Europe UK 8.0% net initial yield in %. 7.0% 6.0% 5.0% 4.0% 3.0% q2 01 q q2 02 q q2 03 q q2 04 q q2 05 q q2 06 q Source: PMA, CW, JLL, CBRE

9 whilst government bond yields move out slightly 10 Prime Offices Real Govt Bonds Nominal Govt Bonds % pa Source: PMA, OECD, Consensus Forecasts

10 squeezing the real yield gaps Yield gap of net initial yields vs. 10-year real government bonds 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Offices Europe key CE UK 1.0% q2 01 q q2 02 q q2 03 q q2 04 q q2 05 q q2 06 q Source: PMA, EcoWin

11 3.0% Yields often below finance costs Net yields minus 5 yr swap rate as at Q % 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% Net initial yields minus 5 year swap rates London: West End London: City Manchester Glasgow Edinburgh Birmingham London: Docklands Madrid: City Dublin Barcelona Paris: CBD Stockholm Copenhagen Paris: La Défense Amsterdam Milan Vienna Paris: WBD Munich: City Frankfurt: City Rome Rotterdam Prague Helsinki Hamburg Dusseldorf Berlin Warsaw Brussels: City Lisbon Budapest Lyon Marseille -2.5% Source: PMA; Haver Margin = 100bp

12 Prime Market Returns in % pa. 30% 25% 20% 15% 10% 5% Office Property Markets have performed Offices extremely well 10 years 5 years 3 years 3 yr weighted average 14.4% 0% -5% Source: PMA UK Sp CE3 Fra Nordic Neth Ger It

13 Prime Market Returns, a combination of Offices Prime Market Returns in % per annum Source: PMA; average of Western European markets

14 Capital growth and income return 25 Offices Capital Growth Income return in % per annum Source: PMA; average of Western European markets

15 Capital growth driven by Offices 25 Capital Growth Rental change Yield shift in % per annum Source: PMA; average of Western European markets

16 Initial yields / target rate in % How does a 3.75% yield in the West End make sense? Risk free return Volatility Liquidity Transparency Net initial yields Target rate or wealth preservation? Source: PMA, CBRE, JLL

17 Investor intentions passing the peak? Offices only; question on buy hold - sell net responses UK Fra Ger Sp It Neths / Ams Nordic CE3 Source: ULI / PWC Emerging Trends in Europe

18 Inward yield shift also evident in retail:- (1) prime shops Prime yield, % 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% Budapest Prague Stockholm Paris Milan Madrid Munich London Dublin Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Source: Cushman & Wakefield

19 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% (2) and prime shopping centres 2006 Shift Shift France Spain N'lands Italy Germany Sweden Portugal Greece Hungary Poland Czech Rep UK Source: CBRE

20 Retail property investment in Europe 2006: UK and Germany dominate France 4% Other 6% Italy 4% E Europe* 5% Spain 6% CE3 6% UK 36% Total estimated investment volume: 48.7 billion Nordic 7% * Incl. Turkey Source: PMA, CBRE Germany 26%

21 What s being bought and who s buying it? Retail property investment, 2006 Who? What? UK USA Irish German French Dutch Australian Other Nationalities Shopping Centres Big Boxes Store p'folios, units, etc billion Source: CBRE, PMA

22 Top retail deals in 2006: corporate / store portfolio transactions dominate Portfolio (PF) / Property Name Country Purchaser Value ( m) Comments KarstadtQuelle PF GER KarstadtQ (DE) / Whitehall Fund (USA) 5,500 Incl. 85 dept & 12 sports stores Printemps PF FRA RREEF (DE) 1,100 70% stake in dept store chain PF of 4 SCs UK The Mall (UK) 798 Sold by Prudential Merry Hill RSC UK Queensland Investment Corp. (AUS) % stake sold by Westfield Portfolio 4 SCs GER Merrill Lynch (USA) 700 Sold by Brune Tesco PF UK BA Pension Fund (UK) / Tesco (UK) year j-v; includes 16 stores PF of RPs UK Hammerson (UK) 627 Acquisition of LXB Covent Garden UK Capital & Counties (UK) 609 Market & surrounding assets Lidl PF GER Babcock & Brown (AUS) Lidl stores SC PF POL AXA REIM (FR) % stake in Apollo-Rida portfolio Source: PMA

23 What s been bought where? % of investment value2006, retail 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Other Big Box SC/FOCs 0% UK Germany Nordic CE3 Spain Eastern Europe* Italy France Other * Incl. Turkey Source: PMA, CBRE

24 Europe s biggest retail investment deal in 2007: CentrumKompaniet Portfolio, Stockholm Several bidders for major mall portfolio 10 SCs with ca. ¼ million sqm GLA Sold to Boultbee in May 07 for 1.13bn

25 Office is the most volatile sector Retail Offices Logistics 20.0 Prime total returns in % pa Source: PMA; average performance in Europe

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