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Most Europeans prefer to invest nearer home

Posted on 18 Mar 2010 | Comments Off

But for 21% of investors Asia is the target, says survey

European property investors are focusing on opportunities in their region in 2010, with many seeing the rising UK, German and French markets as the most attractive, a CB Richard Ellis survey said yesterday.

Of 271 investors polled, 60 per cent said they were planning to invest in Europe, 21 per cent are looking to Asia, and 12 per cent in North America, CBRE said in the report, released at the MIPIM property trade fair at Cannes, France.

‘This European preference is probably not surprising given that the vast majority of respondents are based in, and predominantly invest within, the region,’ Nick Axford, head of EMEA research and consulting at CBRE, said.

‘However, it is noteworthy that 40 per cent see the best opportunities lying elsewhere, with Asia a clear target for many,’ he said.

Of those investing within Europe, 31 per cent pick the UK as the most attractive market, with France and Germany equally preferred by 18 per cent. Another 17 per cent were looking further east, towards Central and Eastern Europe, the survey showed.

‘As yet, investors see fewer opportunities in the distressed Spanish market, perhaps believing that the window for entering this market will remain open for longer here than elsewhere,’ CBRE said.

Offices are the most attractive target to 39 per cent of investors, while 34 per cent preferred retail properties, in particular shopping centres.

The survey showed more than half of the respondents believed the risk of a ‘double dip’ recession or a weaker-than-expected recovery in occupier demand posed the biggest threats to the property market, CBRE said.

Fears of forced sales by banks and debtors – a key investor concern last year – appears to have ebbed however, it said.

‘Respondents are right not to be too concerned . . . the support . . . from governments and asset protection schemes will help to extend the period over which problem debt can be tackled,’ Philip Cropper, CBRE executive director of real estate finance, said.

Source : Business Times – 18 Mar 2010

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Posted in Overseas Property

Tagged European Property Investors

JLL lands CBRE investment banking team

Posted on 18 Mar 2010 | Comments Off

Team arranged US$20b of debt and equity transactions in last 10 years

Jones Lang LaSalle Inc (JLL), the second-biggest publicly traded commercial property broker, has hired an investment banking team from larger rival CB Richard Ellis Group Inc (CBRE), as it prepares for US real estate sales to rebound.

Thomas J Melody, 48; Michael J Melody, 47; and Thomas O Fish, 47, started their new jobs this week, Chicago-based Jones Lang said in a statement. The Melody brothers worked at Houston- based LJ Melody & Co when it was sold to CB Richard Ellis in 1996 and went to work for the acquiring company. Mr Fish joined them later that year.

The men, who Jones Lang said arranged US$20 billion of debt and equity transactions in the last 10 years, will lead their new employer’s US real estate investment banking unit. The division handles commercial property sales and arranges financing for transactions. In 2009, it generated about a third as much revenue as a similar unit at CB Richard Ellis.

‘Our desire is to be a market-leading business,’ Jay Koster, president of Jones Lang’s Americas capital markets group, said in an interview before the announcement. ‘That means taking on all of our competitors in that space.’

The new hires will be based in Houston, Jones Lang said.

‘Mike and Tom Melody and Tom Fish are fine producers,’ said Robert McGrath, a spokesman for Los Angeles-based CB Richard Ellis. ‘We wish them the best.’

The decision to leave was ‘very tough’, Mr Fish said in a telephone interview. ‘CBRE’s debt and equity-finance platform is an established one,’ he said. ‘Tom, Mike and I wanted to be in a position of helping to grow a platform.’

Jones Lang LaSalle generated US$203 million in revenue last year from selling real estate and arranging financing for transactions, the smallest share from any of its units, according to a February company presentation.

About US$38 million came from the US, where commercial property values have fallen 41 per cent since peaking in October 2007.

‘Our capital markets business is not a contributor at this point in time,’ Jones Lang’s CFO Lauralee Martin said of the division in a Feb 3 conference call.

CB Richard Ellis reported US$569.8 million in revenue from global capital markets in 2009, according to a February investor presentation.

The number combines revenue from property sales and the commercial mortgage brokerage businesses, Mr McGrath said.

Jones Lang’s new hires have known each other for 30 years. They grew up in Houston, attended college together at the University of Texas at Austin and each belonged to the Kappa Alpha fraternity, said Paige Steers, a Jones Lang spokeswoman.

Shares of Jones Lang LaSalle have fallen 44 per cent from their July 2007 peak to close at US$68.82 in New York Stock Exchange composite trading on Tuesday. CB Richard Ellis slid 65 per cent from its July 2007 peak, closing on Tuesday at US$14.42.

Source : Business Times – 18 Mar 2010