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MIPIM News www.mipim.com
Tuesday 8 March 2011
East-West alliances help drive recovery
London mayor Boris Johnson
LONDON mayor Boris Johnson is kicking off proceedings at this year’s MIPIM. Representing the UK Country Of Honour, Johnson is set to give the first keynote address at 14.30 in Auditorium A.
NEWS ZORLU’S ISTANBUL DUO
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ZORLU’S ISTANBUL DUO Turkish developer unveils two major schemes in Istanbul — the mixed-used Zorlu Centre and the Zorlu Levent office project
NEWS WESTFIELD SETS THE BAR HIGH
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Australian developer unveils the first office project at the London Olympic site
MAKE YOUR VOTE COUNT The 21st MIPIM Awards will be celebrated on Thursday. You can help to select the winners by casting your vote in the Awards Gallery (level 01) from today until midday on Thursday, March 10
ASIAN countries are encouraging international investors to become involved in their development markets. Ten territories, including Japan, South Korea, Vietnam and Singapore, are among this year’s strong turnout from Asia. For the first time, officials from the Chinese city of Chongqing are exhibiting at MIPIM (see page 4). Developments in the Azerbaijani city of Baku (page 25) and the Yujiapu Financial District in Tianjin (page 18) are also being showcased. As well as international investment, Asian project promoters are looking to the wider opportunities for collaboration presented by the multidisciplinary MIPIM audience. The message is that, while large-scale projects draw the headlines, there is an equal demand for smaller urban-renewal and regeneration initiatives, particularly in Asia’s more mature economies. One example of this is Japan, where foreign investors are now being encouraged to look at projects in the country’s smaller cities. Mariko Saigo and her sustainable urban redevelopment team from Tokyo University’s Machizukuri Graduate School are at MIPIM to exhibit their ‘smart shrink’ projects in Japan’s second-tier cities, which have been shortlisted for a MIPIM Award. Already under way in Takamatsu are ‘compact city’ projects, which revitalise previously decaying urban cores and have the backing of the Japanese government.
“If we do it right, there’s a chance for private investors to benefit too,” said architect Hisaya Sugiyama. “It’s a different model. We look for the hidden treasures of the city, and get the maximum out of them.”
Mariko Saigo: ‘smart shrink’ projects
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unique as Istanbul As
As as
uniqueasas exceptional Istanbul, exceptional as Istanbul as Istanbul
ZORLU CENTER AT MIPIM STAND R 27.10
A project as unique, vibrant and visually stunning as Istanbul…
Shopping Mall
Adding a new dimension to Istanbul’s rich architectural and cultural heritage… Maximizing the potential of an outstanding location overlooking the Bosphorus at the heart of this dynamic metropolis… Enriching the city’s social and cultural life while creating a new green space where a bustling city can catch its breath, both literally and guratively… Bhe obXectives we set ourselves were ambitious to say the least Bo achieve them, we have ac_uired a uni_ue , s_uare meters property at the Xuncture of Europe and Asia and begun making investments that will total CA # billion @ecognition has been _uick to follow, with our proXect earning the award for {Master >lanning| at 1ity Acape, 2ubai & and {1ommercial Architecture| at the Europe and Africa >roperty Awards '
Horlu Center will be Istanbul’s premier showcase for the world’s most exciting and admired brands, giving the city’s most discerning residents and visitors the opportunity to enXoy shopping for the world’s top names in design in an atmosphere that itself is a design statement. With , s_uare meters of built space nestled in a beautifully landscaped green area, the Horlu Center Ahopping Mall deftly combines indoor and outdoor spaces to accommodate nearly famous retailers, signature ne and casual dining restaurants, twelve cinemas seating up to ,# , a children’s recreational center and a ', s_uare meters anchor store. Capturing the cultural and historic mosaic that has made Istanbul one of the world’s most enchanting cities, the Horlu Center Ahopping Mall will welcome millions of visitors a year and transform the city’s retail and leisure landscape.
CurZey{s unique ve Uunction \iged use project Residence Bhe @esidences at Horlu 1enter bring Istanbul’s most distinguished families an exciting new lifestyle option, combining outstanding location, breath-taking views of the Bosphorus and award-winning architecture with the city’s nest entertainment, cultural and leisure facilities, including four outdoor pools, an indoor pool and a , s_uare meters sports and tness center 2esigned to appeal not only to highpro le Istanbul residents but to tastemakers from around the world, Horlu 1enter will feature both {Bower @esidences| and {Berrace @esidences|, ranging in size from % s_uare meters to %!! s_uare meters
?erUor\ing Arts 2enter
Bhe Horlu 1enter >erforming Arts 1enter has been specially designed to host Broadway and West End spectacles, bringing a new dimension to Istanbul’s cultural life Bhe # , s_uare meters facility features a main performance hall with two balconies that can accommodate up to ,! spectators and has been speci cally designed for high-energy, ampli ed performances 4or performances of acoustic music or more intimate stage productions, the Performing Arts Center also boasts a %# -person hall In addition to its role as Istanbul’s new home for the performing arts, the Horlu Center Performing Arts Center will also serve as an important new visual arts exhibition space.
Hotel Horlu Center will offer a new standard of premium luxury accommodations for business and leisure travelers alike, combining its cultural and entertainment offerings with a best-in-class hotel to offer guests a truly uni_ue Istanbul experience. Embodying Horlu Center’s design philosophy of liberating open spaces, room sizes will start at $ s_uare meters, and the hotel will feature ne-dining at a range of signature restaurants along extensive meeting facilities, including a ballroom for , along with a fully-e_uipped business center.
>U ce
Complementing the at management structure of today’s most dynamic companies, of ces at Horlu Center are laid-out horizontally, rather than stacked vertically in a tower, enhancing ef ciency and promoting a positive workplace environment. :ocated at the center of Istanbul’s business district, Horlu Center offers , s_uare meters of prime commercial and service industry space for top-tier companies with an exceptional portfolio of tenant services, including valet parking and enhanced security.
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CONTENTS
MIPIM News 1 The official MIPIM daily newspaper Tuesday, March 8, 2011 Director of Publications: Paul Zilk Editorial Department Editor in Chief: Paul Strohm • News Editor: Graham Parker • Reporters: Chris Bown, Steve McCormack, Anika Michalowska, Mark Moore, Doug Morrison, David Taylor • Sub Editors: Julian Newby, Joanna Stephens • Proof Reader: Debbie Lincoln • Technical Editor in Chief: Herve Traisnel • Deputy Technical Editor in Chief: Frederic Beauseigneur • Graphic Designers: Carole Peres,Veronique Duthille • Head of Photographers: Yann Coatsaliou • Photographers: Christian Alminana, Georges Auclaire, Olivier Houeix, Michel Johner • Editorial Management: Boutique Editions Production Department Content Director: Jean-Marc Andre • Publications Production and Development Manager: Martin Screpel • Publishing Product Manager: Chealsy Choquette • Publishing Coordinators: Emilie Lambert, Amrane Lamiri, David Le Chapelain, Bruno Piauger • Production Assistant: Veronica Pirim • Production Assistant, Cannes Office: Eric Laurent • Printer: Riccobono Imprimeurs, Le Muy (France). Published by Reed MIDEM • BP 572 11, rue du Colonel Pierre Avia 75726 Paris Cedex 15, France Contents © 2011, Reed MIDEM Market Publications • Publication registered 1st quarter 2011
www.mipim.com
Printed on 100% recycled paper
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MAYOR JOINS MAKUZA TO PROMOTE ‘INVESTOR-FRIENDLY’ RWANDA RWANDA’s Prime Minister, the Right Honourable Bernard Makuza, is leading the country’s first ever delegation at MIPIM in a bid to reinforce its position as the gateway to East Africa. The Prime Minister will deliver a keynote speech on Wednesday when he will outline investment and development opportunities, including plans for a new central business district in Kigali City. The $9bn development lies at the heart of an ambitious masterplan to regenerate Kigali, which itself is part of Rwanda’s Vision 2020 economic programme to secure the country’s future through private sector investment. Fidele Ndayisaba, Kigali’s newly elected mayor, believes the package will prove attractive to developers. Ndayisaba told MIPIM News that recent planning reforms have accelerated regeneration alongside simple taxation and a stable inflation and exchange rate. The long-term aim is to turn Kigali into a financial services and ICT hub for the region. “We have registered good, consistent economic growth — 8% a year over the past decade,” Ndayisaba said. “The environment we have is investor-friendly. The high level of security and the stability we have in political matters should benefit worldwide investors.” Mayor of Kigali, Fidele Ndayisaba
NEWS FEATURES
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New-look awards get the vote 64 The MIPIM Awards are evolving and adapting to a new world order. Chairman Michael Strong talks about the new developments, which include a new voting methodology and a new category A world of two halves 66 Asia bounces back from the economic crisis with a bigger presence on the world’s investment stage Global funds bet at the bottom in Tokyo 72 Tokyo is Asia’s biggest commercial real estate market. Markets are recovering and there have been significant movements in the last six months By leaps and rebounds 76 After hitting the buffers in 2009, eastern Europe’s commercial sectors are showing encouraging signs of growth Brazil scores two goals and aims for third 83 Brazil is about more than the football World Cup and the Olympic Games. Sao Paulo’s mayor reveals the city’s ambitious plans
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Barcelona and London’s Newham explore reality of Olympic dream DELEGATIONS from Barcelona and London’s borough of Newham are using MIPIM to share advice on furthering their economic agendas — from one Olympics host city to the other. The two parties, which signed an accord at last year’s MIPIM, have been sharing knowledge and expertise during a number of visits to each other’s regions on issues including highspeed rail, ‘Meanwhile’ or interim, uses for developable buildings and creative-industry quarters. “The idea is to develop thoughts and ideas, and share experience of an economic character,” said Clive Dutton, Newham’s executive director of regeneration, planning and property. Discussion subjects have included the creative district of 22@Barcelona, whose CEO Josep Miquel Pique has already helped to judge the Meanwhile
Henderson and RLAM swap HENDERSON Global Investors and Royal London Asset Management (RLAM) have swapped two central London office investments. Henderson has handed 12-13 Henrietta Street in Covent Garden to RLAM in return for RLAM’s Bishops Court in Artillery Lane on the eastern fringe of the City of London. A balancing payment will be made by RLAM to Henderson. Henrietta Street provides 2,428 sq m of office, retail and ancillary accommodation over basement, ground and four upper floors. The property is let to four occupiers. Bishops Court provides 4,975 sq m of office and ancillary space on seven floors, let to HSBC Insurance Holdings.
London interim-use project which is in the Royal Docks. Jordi Sacristan, marketing and inter-
national economic promotion director at Barcelona City Council, said the high-speed rail link between Madrid
and Spain, completed two years ago, was the one thing that would have made the Barcelona Olympics easier — an important lesson for Stratford International station in London, which is not yet a stop for international trains. “Where the train stops, regeneration occurs,” Dutton added.
Olympic team players: Newham’s John East (left), Clive Dutton and Jo Negrini with Barcelona City Council’s Mario Rubert and Jordi Sacristan
Chongqing puts itself on the map FOR THE first time, MIPIM welcomes a delegation of top officials and developers from Chongqing, one of China’s fastest growing cities. The city’s municpal government is also sponsor of the MIPIM Asia Lunch. As much as 137,000 sq m of commercial, industrial and residential property has been built in Chongqing as a result of China’s urbanisation programme. The city is also reaping the rewards of urbanisation on the global stage and is increasingly seen as an investment destination. International investors will this week learn more about the market from representatives of Chongqing city government, as well as developers Longhu Properties, Chongqing Jinke Group, Chongqing City Construction Investment Co and Chongqing Sincere Holding (Group).
Chongging, one of China’s fastest growing cities
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Visit us at MIPIM in Cannes, 8-11 March 2011 Booth LR 4.04 (Rotunda Lérins)
Show Piece
„Kokerei Zollverein“, Essen
A world heritage has taken on a new dimension. The former coking plant “Zollverein” near Essen is our star project. The site uniquely combines spectacular monuments to Germany’s industrial heritage with state-of-the-art office buildings, to be completed over the next few years. All of this set within seven hectares of an extremely attractive and exciting development site. Our experience and expertise in transforming former industrial sites into thriving mixed-use developments is unrivalled. It is what we have been specialising in for over 30 years. For further information visit www.rag-montan-immobilien.de or call us on +49 (0) 201 3780 RAG Montan Immobilien GmbH Am Technologiepark 28 45307 Essen
Die Zukunft ist unser Revier.
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NEWS
Survey seeks out office hotspots STANDARD Life Investments has scoured the globe to find positive notes in property. In its latest House View publication focusing on global investment hotspots the company says that while excessive supply in several key markets such as China may hold back growth, offices in places such as Australia remain supported by a good demand/supply balance. In North America, Standard Life says the best prospects are in under-developed industrial locations in Canada and the cyclical US office markets, where future supply is at a 30-year low. In Europe, key centres such as Paris and Stockholm are benefiting from the same positive demand and constrained supply factors as supported London’s earlier yield rally. And in the UK, despite shortterm yield pressures, Standard Life Investments says it continues to expect strong relative returns over cash on a three-year holding period.
UK market tops investor list and Poland rising fast, survey says A NEW survey from consultant Savills indicates that Poland will continue to see increased interest from international investors in 2011. Poland ranks ninth on Savills investment market list The survey cites the country’s strong GDP prospect as a key driver with an average 4.2% annual growth forecast over the next five years and an expected 4% rental growth in Warsaw’s prime offices by the end of the year. The Savills survey reveals the top investment markets in terms of volumes transacted and finds the UK, which represents approximately 42% of total European investment volume in 2010,
is clear leader followed by Germany, France, Sweden and the Netherlands. In terms of top cities, the international real estate advisor finds London, Paris, Stockholm, Berlin and Hamburg as the top five destinations respectively in terms of investment volume. Giles Wilcox, Savills head of European cross border investment, said: “We have seen the UK dominate the investor's shopping lists for a while with France and now Germany also firmly on the map. The markets of particular interest that have more recently come back into focus are Sweden and Poland.”
Giles Wilcox, head of European and cross-border investment at Savills
Uruguay is ripe for investment Punta del Este, Uruguay
Talking property SUSTAINABILITY will be a recurring theme from the Urban Land Institute (ULI) as it shines a spotlight on real estate trends across Europe with a series of events at MIPIM. The ULI kicks off this morning on the City of Barcelona stand with a briefing on private-public partnerships followed in the afternoon on its own stand with a talk on the UK’s urban development problems – focusing on Chester. ULI Europe chairman Alexander Otto said: “I am pleased that ULI Europe has a stand at MIPIM again this year. This allows us to offer our members as well as other interested delegates a forum.”
Alexander Otto
URUGUAY is represented in Cannes this year by Destino Punta del Este, Uruguay XXI and the city of Maldonado. The Uruguayan presence is here to promote the country as international destination for tourism and residential investors. Uruguay is considered politically and
economically stable, with areas of great natural beauty, and is already popular with international investors, especially from Europe. This week will see the launch of the Guia de Inversiones (Guide to Investments), a document that explains how best to invest in the country. The
document is available in three languages and is intended as a useful tool for those who want to do business in Uruguay. The country will also participate in the Investment Lab: How To invest In Latin America, which is held on March 9.
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Twitter and Brussels represent twin challenges for UK market THE REAL-estate sector faces two conflicting challenges beyond the usual ebb and flow of market forces over the next decade, according to the British Property Federation (BPF) —
a ‘twitter revolution’ among occupiers and greater regulation from Europe. And it is clear that the internet and legislation will take centre stage for the foreseeable future, judging by the
views of the senior property players who will spell out their vision for the industry at a BPF-organised roundtable debate later this week. “Occupiers will continue to become
more knowledgeable and empowered as information becomes increasingly accessible and more easily shared through social media — something that the sector as a whole has been slow to adopt,” said Neil Young, chief executive of fund manager Young Group. At the same time, BPF chief executive Liz Peace believes the industry needs to be wary about “suffocating EU legislation”. Peace said: “Because we are now regarded as an integral part of the capital markets, it is very difficult to persuade Brussels law-makers that we should not be lumped in with the rest of the investment community.” She added: “Trying to get across to EU officials that investing in property involves more that an act of pure financial speculation and actually requires serious ‘production’ and management of the assets we own is proving challenging.”
BPF’s Liz Peace: beware “suffocating EU legislation”
GERMAN colleagues Dortmund’s Detlev Lachmann (left), metropoleruhr’s Lutz Pietrass, Dortmund’s Friedhelm Merschhemke and Essen City’s Klaus Kipper-Doktor making final preparations on the North Rhine-Westphalia stand in the Lerins Hall
BUILDING on the success of Dubai Festival City, proposals for Cairo Festival City are on show in the Lerins Hall. The 3 million sq m mixed-use community is planned for a site on the outskirts of Cairo, just 15 minutes from the city’s international airport
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refurbished office buildings: first tower, paris
country of honour uk: kpmg canary wharf, london
one jackson square, new york
business centres: international commerce centre, hong kong
Kohn Pedersen Fox Finalist for 4 MIPIM Awards KPF is proud to have been recognised over 20 times in the history of the MIPIM and MIPIM Asia Awards and would like to thank Reed MIDEM and MIPIM for consistently honouring international excellence in Architecture and Urban Design. Please visit us at stand 13.01 .
www.kpf.com
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Breakfast with the Russians THE ANNUAL Russian Breakfast at MIPIM will be held in the Croisette Salon in the Hotel Majestic, 9.00–11.30, Wednesday, March 9. This year an intense programme will focus on three topics: Russian Economy - Post Crisis Overview; Real Estate Investment Market In Russia Where Is The Money Coming From?; and Economic Growth And The Office Market. Over 250 foreign and Russian experts will share their vision and give forecasts for the coming year.
New-look for VPS INDEPENDENT research commissioned by property security provider VPS — which surveyed 770 property owners and managers in France, US and UK in January 2011 — showed that vacant property is affecting around 60% of property owners and managers in the UK, France and US. The company has re-branded itself ads VPS (The Vacant Property Specialists) and has announced key changes to the company’s senior management team. This initiative underlines the company’s new direction and ambitious international growth plans that will deliver even greater customer focus. The new identity will be unveiled this week at MIPIM where VPS UK and VPS France are exhibiting. The restructure brings VPS operations in the UK, US and Europe under one umbrella brand to drive greater strategic focus and to help customers care for their vacant property using a strong combination of local knowledge and expertise, through a recognised global brand.
Joint venture targets strong growth in Mozambique SETTING the investment and development scene alight and bringing projects from “vision to reality” in Mozambique is MIRCO, the Mozambique Infrastructure Resource Company, a joint venture with SBT Juul from South Africa. The new company specialises in developing office blocks, hospitals, waterfront developments and marinas, shopping centres and mixed-use developments. With one of the highest economic growth rates in Africa, Mozambique’s strong economic indicators have encouraged increased foreign direct investment flows into the country, MIRCO says. The current investment climate offers international investors opportunities to explore various sectors as the country and region move towards greater economic integration.
An estimated 36 million ha of arable land can be said to enjoy good soils, climate, and good access to water. Opportunities for investors are plentiful, particularly in adding value to primary processing. Mozambique provides investors with an enormous array of donor and government backed projects, MIRCO says, aimed at developing the infrastructure of the country. It is rich in potential energy sources, with its vast water supplies a source for large hydroelectric dams, its coal mines providing the coal for power stations, and the recent discovery of the Cabo Delgado offshore gas reserves. Tourism is thought to be the key to the country, supporting as it does a long coastline that has some of the most
Trevor Juul, chairman and founder of SBT Juul
stunning beaches on the African continent, with its sub-tropical islands, azure waters and unspoilt coral reefs. Furthermore, its vast potential in wild life and internationally recognised nature conservation areas such as the Gonezhou National Park, form one of the largest transnational parks in the world spanning three countries.
The renovation programme for Saint-Quentin-en-Yvelines is presented at MIPIM by Robert Cadalbert, chaimain of the city’s intercommunal district; Herve Manet, chairmain, Icade Promotion; Christophe Sirot, CEO, Codic France; and architect Denis Valode, Agence Valode & Pistre. In the scheme, the first of its kind in the city, the 30,000 sq m Start office building will undergo a massive rebuild and renovation by Valode & Pistre, preparing the building for HQE-BREEAM certification. The Start building is located in the city centre, 300 metres away from the Saint-Quentin-en-Yvelines railway and shopping centre. Works will start in early 2011, with delivery scheduled in 2013.
New award honours law students JURIDIM, an association of Real Estate legal specialists, together with
Didier Moutard
law firm Herbert Smith and notairies Michelez Bonduelle, has launched a new annual Award intended to recognise top achievers in the study of property law in France. The first Best Real Estate Law Student Prize will be awarded by Alain Taravella, CEO of Altarea-Cogedim, on April 7. The nominee will be awarded a €5,000 grant and offered a trainee appointment in his or her field. Juridim’s principal ambition is to be a think tank on real estate legal issues.
The association was founded in 2009, following a meeting at MIPIM, by Didier Moutard, general counsel at STAM Europe, with three other counterparts, Edouard de Soultrait, real estate law manager at Amundi, Marianna Nitsch, general counsel Europe at GE Capital Real Estate and Cecile Le Roy-Maillard, formerly legal manager, Compagnie La Lucette. One year later, the association is already some 40 members strong and is rapidly gaining widespread recognition.
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March 9th at 10 – 11.30 am, MIPIM Palais des Festivals, Auditorium I, level 4 Program 10.00-11.00 11.00 -11.30
Presentations by Invest in Skåne, ESS, Max IV, the cities of Copenhagen, Malmö, Lund and Helsingborg. Refreshments and discussion time
Photo: skane.com©Perry Nordeng
Please register by sending an e-mail stating your name and organisation to mipim@skane.com
Invest in Skåne is a regional promotion agency that facilitates inward investment to Skåne - Sweden’s southernmost region and one of the most exciting economic zones in Northern Europe invest.skane.com
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Zorlu enhances Istanbul with duo of value-added projects TURKISH developer Zorlu Property — sponsor of tonight’s Opening Night Party — is promoting two major projects at MIPIM: the mixed-use Zorlu Centre and the Zorlu Levent office project, both located in Turkey’s largest city Istanbul. The Zorlu Centre project, designed by the joint venture of Emre Arolat Architects and Tabanlıoglu Architects, won the MIPIM 2011 Architectural Review Future Project Awards in the Regeneration and Masterplanning category. Zorlu Centre — set in 10.6 ha of which 7.8 ha will be green space — is described as Turkey’s “first and only five-function multi-use project”. The five functions in question are retail, residential, hotel, offices and a 3,000seat performing-arts centre. Zorlu board member Emre Zorlu
The proposed Zorlu Centre, Istanbul
said: “We have invested more than $2.5bn in Zorlu Centre, $300m of which has gone into the performingarts centre alone. Zorlu said that the philosophy behind the two schemes was to create “dis-
NEARLY there: testing the final connections on one of the many interactive models on the London stand, which is located this year in the Sunset Hall close to the beach
tinctive and unique projects that add value to the whole city of Istanbul. And we believe the Zorlu Centre makes a huge contribution to the process of making the new Istanbul an attractive city.”
Zorlu Property’s next project, the Zorlu Levent in Istanbul’s business district, will “satisfy the need for quality offices in Istanbul and add further value to the Levent district”, Zorlu added.
KRASNODAR region is showcasing details of venues for the 2014 Sochi Winter Olympics. The Russian region is also outlining opportunities for development in the wake of the games
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Getting down to business MIPIM DELEGATES, YESTERDAY, AS THEY PREPARED FOR DAY ONE OF MIPIM 2011…
Checking in at MIPIM’s new self-service registration booths are NLA’s Nick McKeogh from London (left) and from Malmo, Sweden, Midroc Property Development’s Magnus Skiold
Swedish colleagues Jesper Ericsson of Handelsbanken Corporate Finance, Carl Magnus Lundquist and Mikael Glahns of Estate Capital Nordic
Delegates with not too far to travel: Francoise Audouard and Tim Levicki representing the city of Cannes at MIPIM
Reed MIDEM’s Michelle Lee with Byunghyun Jeong from the Jeollanam-do provincial government, South Korea
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Annonce MIPIM-News 230x300 11 indd 1
04/03/11 11:15
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Europe set to surge IN 2011, direct investment in commercial real estate in Europe will rise by up to 30% on last year’s figures. That is the forecast from Jones Lang LaSalle’s European Capital Markets Bulletin, which claims that liquidity has returned to the market, driven by crossborder investment from equity-rich private and institutional investors.
Paribas strong PHILIPPE Zivkovic, chairman of BNP Paribas Real Estate, leads the consultancy’s presence at MIPIM on the back of strong financial results. Group turnover increased 17% to €618m in 2010 and pre-tax profits rose 79% to €139m after what Zivkovic called “the strengthening of our hold on the various European markets”.
Tianjin calls for investment in ‘model’ financial district ONE OF China’s largest proposed commercial projects — the 9.5 million sq m Yujiapu Financial District in Tianjin — is to be unveiled to prospective investors at MIPIM. The district, which is less than an hour away from Beijing, lies at the heart of the Tianjin Binhai New Area, which is north China’s fastest growing economic zone. Tianjin Innovative Finance Investment Co, the agency presenting the plans this week, also aims to make Yu-
jiapu the world’s most eco-friendly financial district. The site will include 1 million sq m of green spaces conceived by giant US design firm AECOM. Another leading architecture firm, SOM, has put together the overall masterplan for the scheme, which includes offices, hotels, a convention centre, and retail, leisure and educational facilities. To complete Yujiapu’s multinational credentials, Japanese architect Nikken
Sekkei has designed an intricate underground transport system, which is intended to make the best use of space as well as cut carbon emissions. The construction of phase one started in 2009 and is scheduled to finish this year. However, the overall project masterplan will take up to a decade to complete. Tianjin Innovative Finance Investment Co believes that its “low-carbon model city” will attract investors and occupiers from around the world.
Yujiapu Financial District in Tianjin, China
Philippe Zivkovic
Porte Pouchet CONSULTATION for the 15 ha Porte Pouchet scheme, located to the north of the 17th arrondissement of Paris, opens today at MIPIM. Semavip’s development includes a three-star, 1,000 sq m hotel and 25,700 sq m of office space.
Calais gives shape to ambition CALAIS’ new urban dynamism will be given concrete form at 11.30 tomorrow morning, when Natacha Bouchart, mayor of Calais and president of Calais Promotion, unveils a model of the Calais area, created by model-maker New-Tone. “The model demonstrates the ambition that has driven the city’s authorities over the last three years to transform
the Calais territory into a future-oriented, high-potential, sought-after destination,” Bouchart said. New urban projects include Port 2015 — the seawards extension of the port facilities — a convention centre, the Descartes-Bleriot and Coubertin ecodistricts and the renovation of the public areas in Calais Nord. Many of the projects are to be com-
pleted by 2015. Bouchart stressed the close economic links between Calais and the UK and welcomed the impact on her region of the 2012 Olympic Games in London. “We can be in a win-win situation if we look at projects together,” she said. She added: “It is important that we convey to British and international investors the new dynamic image of Calais.”
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Resolution’s unlocking tactic RESOLUTION Property is to launch a €1bn investment programme to provide equity to unlock added-value investment opportunities and developments in the UK and Europe that have stalled due to the constrained supply of bank finance. The company is looking to use the remainder of its Resolution Real Estate Fund III to provide equity to bridge the debtfunding gap on projects, working with the incumbent owners or developers as either joint-venture partners or development managers. Top of Resolution’s UK targets are good town-centre locations with strong demographics and the potential to add value to shopping-centre and leisure investments. Resolution is also actively pursuing office and residential projects in London and the South East of England. Resolution investment director Robert Wolstenholme said: “A typical UK project would require between £10m-£75m [€11.6m-€87m] of equity to kick-start development. We can fund schemes to a point where they become financeable or, in some cases, provide 100% equity finance.” Resolution is also targeting France, Germany, Poland and, possibly, Spain, the Benelux and Scandinavia for retail, office and selected mixed-use investments valued between €30m-€130m. The company said it may also look selectively at major city markets in Central Europe, as well as residential property.
Robert Wolstenholme
Gateway to the Netherlands opens on MIPIM trade floor
Atlantic Partners’ Brad Olsen: focus on cross-border investment opportunities
MIPIM 2011 sees the inauguration of the Gateway Netherlands Pavilion. The pavilion will create a networking focal point for international exhibitors and delegates looking to make contact with Dutch companies, city authorities and real-estate professionals. Dutch companies, cities and entities in the pavilion include ING REIM, The Hague, Zuid-As, Utrecht, NVM and Funda. The Gateway Netherlands Pavilion also has its own dedicated conference programme organised by Property EU/NL, VGM and REP. The first sessions take place today, starting at 10.30 with The European Real-Estate Industry Is Redefining Itself – A Dutch
Perspective. Adapt or die is the subtext of this session, as players in the European industry face the struggle of surviving in the post-Lehman era. The afternoon conference — CrossBorder Investment Opportunities In Real Estate — starts at 15.00 and is moderated by Brad Olsen, president of Atlantic Partners. The panel of North American and Dutch fund investors and asset managers, including Rob Reiskin, co-head of Europe at Heitman, and Maarten Vermeulen, director of Europe at Composition Capital Partners, will discuss current and future real-estate market investment opportunities and strategies.
French office market on the up Paris is enjoying increased take-up
WITH take up in 2010 up 19% to 2.1 million sq m, the office market in France is moving out of its two-year crisis, according to Cushman & Wakefield (C&W). Last year saw a marked increase in the number of large transactions to reach the highest level in 10 years. Most of
the demand is concentrated in Paris and the Paris region, especially for new large buildings, as end users look to rationalise their office space. In 2010, some 93 transactions involved more than 4,000 sq m, which represents 51% of the total take up. Prime values increased by 9% on 2009
levels to reach €760 per sq m. C&W forecasts that the upward trend will continue in 2011 provided the market allows large-scale relocations. However, the agent underlines the lack of new office building activity, which could stifle the dynamism of the market in 2012 and 2013.
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TUESDAY 8 MARCH Finance : Beyond the credit crisis
Geographical focuses
A.M.
Sustainable cities
Events
Hotel, Tourism & Leisure
P.M.
8.30-9.30 Majestic Hotel, Salon Royan
ASIA DAY
13.00-14.30
ASIA DAY
Majestic Hotel Beach Restaurant
Investing in Japan breakfast
Asia Lunch
By invitation only
By invitation only
11.30-12.45 Gaudi room, Level 01
14.00-17.00 HTL lounge, Level 3
Investment Lab: doing business in Africa 11.30-12.30 Hoban room, Level 3
ASIA DAY
China: reward versus risk Co-org: DTZ
HTL Presentations - Projects for a better life: Tourism & Leisure destinations Partner: PKF hotelexperts
14.30-15.15 Audi A, Level 3
11.30-12.30 Le Corbusier room, Level 01
Between shock and profit: the global perspectives of German investors Co-org: Immobilien Manager
Keynote Address by Boris Johnson, Mayor of London, Greater London Authority (UK) 15.00-16.00 Le Corbusier room, Level 01
Poland - best investment products in 2011 & 2012 Co-org : Eurobuild CEE
15.00-16.00 Gaudi room, Level 01
Towards a better investment marketplace: reporting, regulation & risk Co-org: IPD
15.00-16.00 Hoban room, Level 3
ASIA DAY
Asian capital: regional plans, global ambitions Co-org: ANREV
16.30-17.30 Audi A, Level 3
Russia: The time is now! Co-org: Vedomosti
16.30-17.30 Hoban room, Level 3
Dense cities: For better or for worse? Co-org: RICS
16.30-17.30 Le Corbusier room, Level 01
Co-org : Warsaw Business Journal
16.30-17.30 Gaudi room, Level 01
France : An attractive target for real estate investors? Co-org : Les Echos Conferences
Co-org: Co-organiser : UK Country of Honour
Access to MIPIM 2011 conferences is free of charge for all registered delegates, within the limit of space available. All information contained in this programme may be subject to change.
19.30 Carlton Hotel
MIPIM 2011 Opening Cocktail Sponsored by Zorlu Property
MIPIM速 is a registered trademark of Reed MIDEM - All rights reserved.
MIPIM wishes to thank its sponsors
Central Europe: Not too hot, not too cold advantage or handicap?
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TUESDAY 8 MARCH Finance : Beyond the credit crisis
Geographical focuses
A.M.
PAGE
NEWS Sustainable cities
Hotel, Tourism & Leisure
25 Events
P.M.
10.00-10.20 Palais des Festivals – Azur Village (N°03)
Opening of the Joint Exposition of the Russian Federation
12.30-13.00 Palais des Festivals - Booth n° R31.03
Vedis Group Company : Results of 2010 Client : VEDIS GROUP
Client: Ministry of Economic Development
13.00-15.00 Majestic Beach 10.30-11.00 Palais des Festivals – Parvis Riviera
MIPIM Inauguration
Asia Lunch, sponsored by Chongqing Municipal Government By invitation only
10.30-11.30 Palais des Festivals - Booth n° 03.23
The European Real Estate Industry Is Re-defining Itself - A Dutch Perspective
14.00-15.00 Palais des festivals – Auditorium I
Baltic Sea Region – Investors’ Panel
Client : DWIRE Dutch Women in Real Estate
Client : BERLIN PARTNER
11.30-12.30 Palais des Festivals - Auditorium J
15.00-16.00 Palais des Festivals - Booth n° 03.23
Top 10 Trends For 2011 On Russia's Real Estate Market
Cross Border Investment Opportunities In Real Estate
Client : THE MOSCOW TIMES
Client : REAL ESTATE PUBLISHERS
15.30-16.30 Palais des Festivals – Booth n° 06.26
Central Bohemia Region Reception with wine tasting Client : CENTRAL BOHEMIA REGION
Azerbaijan invites investment into Baku regeneration project LAUNCHED to the international real estate sector for the first time at MIPIM 2011, the Baku White City Baku White City
project offers investors a wide range of residential and commercial opportunities in the Azerbaijan capital
Baku. The scheme will see the regeneration of 221 ha in the industrial Black City area of the city, which is located on the western shore of the Caspian Sea. Investors will be able to select suitable units for investment and construction, from small villas to large-scale urban projects. Atkins is lead consultant to an international project team that includes architects Foster + Partners and F+A Architects. Preliminary work is under way to prepare the site for redevelopment. Delegates visiting the Baku White City stand will see a scale model of the proposed development, which is highlighted as a future target for outside investment into the fast growing city — which describes itself as one of the world’s oldest oil towns.
Sweden’s China eco project wins SWEDEN’s Tengbom Architects has won in the Big Urban Projects category in the Architectural Review’s Future Projects Awards, for an eco city it is designing in China. The scheme called Sino-Swedish EcoCity Wuxi, is the result of a tender win in 2009 to plan a 2.4 sq km area in Jiangsu province, near Shanghai. The masterplan includes an environmental programme for energy use, waste and water management, landscaping, traffic, and environmentally friendly construction. “Our vision is designed as a framework for Chinese sustainable urban development,” said architect and project leader at Tengbom, Jeremy Thompson. “We hope that it will open doors for Swedish green technology.”
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Mall of Istanbul makes shortlist THE €220m mixed-use Mall of Istanbul scheme is a finalist in the Future Projects category of the MIPIM Awards. The project — one of the biggest mixed-use developments currently on stream in Turkey — is being planned and developed by Turkish developer investor and REIT Torunlar. The Future Projects category of the MIPIM Awards provides an opportunity for planned and uncompleted projects to compete on equal terms with existing and recently completed projects. The winners will be announced at a celebratory function on Thursday.
Lyon Part-Dieu builds itself into world-class office hub
City in spotlight MARKETING Birmingham, which includes 19 private sector partners, kicks off its packed events programme at MIPIM today, highlighting commitment to low carbon infrastructure and focusing on issues surrounding sustainability targets.The city is looking to engage with potential investors on a range of projects, opportunities and hot industry topics. Mike Whitby, leader of Birmingham City Council, said: “We have been coming to MIPIM for some years, launching development plans and initiating discussions with developers and end users, highlighting Birmingham’s vision for future growth. This year the city is demonstrating how it is currently one of the most active regional cities in regards to development and construction, with major schemes under way such as New Street Gateway.”
The 28,000 sq m Tour Oxygene (centre) was a new addition to the Lyons skyline in 2010
LYON Part-Dieu is in the throes of a major urban transformation. With 900,000 sq m of office space, it is now France’s second most important business district after La Defense in Paris. New investment is needed to help adapt the district to the future needs of businesses and residents. The goal is to increase Lyon Part-Dieu’s stock
of office space to more than 1.5 million sq m within the next few years. Two major office schemes will be delivered in 2012: the 14,000 sq m Le Velum building, and the 20,000 sq m Lugdunum building. The Eiffage real-estate programme will deliver an additional 11,000 sq m of office space in 2013, while 2014 will see the end of construc-
tion on the 40,000 sq m Tour Incity and the 33,000 sq m SKY 56 buildings. Lyon Part-Dieu, which is being showcased on the Lyon metropolis stand, benefits from particularly attractive real-estate prices. The price per sq m in the district’s newly delivered office buildings ranges from €250-€300, compared to €500-€700 per sq m in Paris.
Russian red-tape unravelled Birmingham’s proposed new library project
THE RUSSIAN Housing Development Foundation (RHD Foundation) is attending MIPIM to promote its activities in the area of real-estate development and to forge relationships with potential investors and partners. As part of its presence, RHD Foundation is organising a conference —
Doing Business In Russia: Red Tape Relief For Procedures And Approvals —on Thursday, March 10 (12.30; Auditorium I). The panel will look at the way the Russian government is stimulating low-income housing development, new measures to encourage foreign investment in Russia
and the operating policies of international investment funds. Speaking at the session is Alexander Braverman, general director of the RHD Foundation, and Elena Nikolaeva, president of The National Agency for Low-Rise and Cottage Construction.
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Active management and financial engineering
applied to rreal eal estate FIND FI ND OU OUT MOR ORE abou ab out Am Amun undi di & Am Amun undi di Re Real al Es Esta tate te Clu C lub A Am mu un nd dii R RE E JJar ard din in d du uG Gra ran nd dH Hô ôttel el 4 45, 5, b bd dd de e lla aC Cro roise isette tte - Ca Canne nnes
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A company of Crédit Agricole / Société Générale
mipim news 2011 indd 3
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Investment heads to Oz AUSTRALIA has become a magnet for institutional investors, said CB Richard Ellis (CBRE), which calculates that a potential Aus$22bn (€16bn) pool of capital is available globally and domestically to pursue commercial property in this market. Kevin Stanley, CBRE’s global research director, said that Australia is well placed to capture some of this capital, especially from “increasingly sophisticated” Asian pension funds. “Regulations in Asia are changing to allow for these pension funds to pursue global investments,” he said. “These funds are also seriously considering increasing allocations to real estate because of the intrinsic stability the asset class offers.”
Global sporting events make Brazil ripe for investment BRAZIL is set to take centre stage as it prepares to host a series of major world events over the next six years. And the boost to tourism this represents is one of the key reasons the country’s major players are out in force at this MIPIM. Later this year, Brazil hosts the world military games, twelve months after which it welcomes the Rio +20 Global Environment UN Meeting, the FIFA
Confederation Cup in 2013 and the FIFA World Cup in 2014. Then there are the celebrations for Rio de Janeiro’s 450th birthday in 2015 and the Olympic and Paralympic Games in 2016. And this week the Federal District Tourist Board of Brazil is in Cannes to invite investment into Brazil and Brasilia. Rio de Janeiro’s representatives are also focusing on the city’s plan to redevelop 85% of its favelas
(slums) by 2020. In particular, the city is promoting its well connected but under-utilised port area, Porto Maravilha, with around five million sq m available for modern corporate and residential buildings from 10 to 50 floors, and plans for residential, retail and cultural activities. See interview with the mayor of Sao Paulo, Gilberto Kassab on page 82
ARCHITECT Pringle Brandon has announced two new initiatives: a new office in Dubai, which will serve the Middle East North Africa (MENA) region; and a partnership with John Drew, a former Rafael Vinoly director and Foster + Partners partner, to form a new architectural practice, Pringle Brandon Drew. Pringle Brandon Drew combines John Drew’s track record for delivering commercial, cultural and mixed-use developments with Pringle Brandon’s 25 years’ experience of working with developers and corporate occupiers to deliver award-winning workplace environments. It is jointly owned by Pringle Brandon and John Drew, and will be based at Pringle Brandon’s London City offices. Pringle Brandon has been named the number one interiors firm in London for the second year running by Metropolis Property Research, based on analysis of the London fit-out market from 2006-2010.
Photo credit: Rio2016/BCMF Arquitetos
Winning partnership
Copacabana Stadium: The Rio de Janeiro centre for the 2016 Olympic games
Firm banks on future growth MALCOLM Hollis, the UK independent commercial building consultancy, will this week set out its vision for the year ahead, based on its belief in the return of activity in development and investment-focused service areas. As well as continuing with its advisory services, the firm has positioned itself for the growth of services that tailed off as a result of the downturn, but which are now set to return. As investment and development activity rises, service areas such as due diligence surveys, project management, development monitoring and project
implementation issues, are all set to grow in the year ahead. John Woodman, senior partner at Malcolm Hollis, said: “There has been a noticeable rise in demand in 2010 for these ‘phoenix’ disciplines, and we fully expect the requirement for these services to continue growing over the next twelve months.” It is anticipated that the growth of development and investment-focused disciplines will centre on bank activity in the year ahead, as banks look either to dispose of repossessed properties and sites, or to complete stalled development schemes.
John Woodman, senior partner at Malcolm Hollis
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Makon makes the most of it
Makon’s Jurgen Scheins
ATTENDING MIPIM for the sixth consecutive year, the German consulting company and service-provider, makon, is in Cannes to meet not only its international clients but also a broad cross-section of its German clientele. In the past, makon focused on showcasing its services at MIPIM, according to managing partner, Jurgen Scheins. “But the success of our participation has now become measurable and we regularly receive commissions down in Cannes. For us, MIPIM has developed into a working forum,” he said. As a result, at this year’s event, makon is investing in its own stand. Scheins added: “We find the participants at MIPIM are at ease in this wonderful ambience and have a little bit more time to engage in interesting conversations.”
Cross-border investment climbs on back of renewed confidence CROSS-border property investment has risen to levels not seen since the boom of five years ago, with investors completing a series of major transactions in recent months. The renewed confidence meant crossborder investment rose to $130bn (€93bn) in 2010, up 40% on the previous year, according to figures released by Jones Lang LaSalle (JLL). “During the downturn, domestic trading held up better globally than cross-border activity as investors focused their attention on familiar
markets,” said Arthur de Haast, head of JLL’s international capital group. “In 2010, however, equity-rich investors led the flight to quality assets in core, mature and transparent markets.” Investors targeted New York and Washington DC in the US, but JLL is now predicting that a lack of available properties will force them to look at other city markets. Across Europe, CB Richard Ellis (CBRE) tracked €38.6bn of deals in the final quarter of 2010 — up 57%
on the same quarter a year previously. The total was skewed by the volume of large transactions, with 79 individual deals worth more than €100m. “Although the market as a whole is dominated by equity, there are all types of buyers involved in these larger transactions, including sovereign wealth funds, insurance companies, pension funds, listed property companies and property funds,” said Jonathan Hull, CBRE’s executive director of EMEA capital markets.
Shining example SEMAVIP, the public/private body in charge of urban development in the city of Paris, is launching SolarVIP, a new subsidiary specialising in photovoltaic energy. Semavip owns 49% of SolarVIP, with the remainder owned by EDF (26%) and Caisse d’Epargne Ile de France and Credit Cooperatif (12.5% each). SolarVIP’s short-term goal is to bring its photovoltaic energy expertise to the first large eco-district in Paris, located north of the city in the Clichy-Batignolles district.
THE EOLIS office development in central Brussels, designed by Assar Architects for CBRE Investors, combines new build with the re-use of the concrete frame from the 1960s office block previously on the site. Glazed facades provide high levels of natural light, giving occupants a spectacular view. The development’s green credentials include HQE certification and compliance with the Brussels EPB 2011 regulations
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McDowell tipped for top award MICHELLE McDowell MBE, BDP’s chair of civil and structural engineering and head of London studio, has been named as one of the four candidates shortlisted to win this years’ Veuve Cliquot Business Woman Of The Year award. The other three finalists are Susie Hewson, director of feminine hygiene brand at Natracare; Jillian MacLean, founder and managing director of restaurant group Drake & Morgan; and Joanna Shields, EMEA vicepresident of social networking site, Facebook. Now in its 39th year, the Veuve Clicquot Business Woman Of The Year award celebrates entrepreneurial women who have made a significant contribution to business life. In addition to the financial results and commercial success of the nominees, the panel takes into consideration a number of other factors, such as each business’ commitment to the community, its employees and the environment. The award citation states that McDowell’s work creating a BDP scheme at Cambridge University to provide bursaries to female students of engineering, as well as acting as a judge for two years running for the Inspire Award For Women In The Built Environment, has encouraged women in what has been historically a male-dominated industr y. The winner of the Veuve Clicquot Business Woman Of The Year Award will be announced at a reception at Claridges hotel in London on March 28.
Polish hotel market on brink of growth spurt, says C&W THE HOTEL market in Poland is likely to see further improvement in 2011, according to Cushman & Wakefield (C&W) Poland. “One factor that will prop up demand is Poland’s presidency of the EU, which starts next July. In addition, preparations for the Euro 2012 football championship will lift hotel income,” said Dorota Malinowska, hospitality consultant, valuation and advisory, at C&W Poland. In 2010, 124 hotels with a total of 5,500 rooms were delivered to the Polish market — 18 more than in the previous year. These were mostly in the two- and three-star categories. Of the new facilities, two hotels have been opened in the Mazowieckie and Podlaskie regions, with the remaining 16 located in the Slask and Malopolska regions. A new phenomenon last year was the move by some hotel operators, including Hilton, to apply for a lower star
rating in order to target a broader group of clients. Some 100-120 new hotels are forecast to enter the Polish market in 2011. Hilton will expand its Garden Inn brand into Rzeszow (the first was opened in Krakow in 2010), while the B&B chain will launch in Warsaw.
Louvre will open two hotels in Wroclaw — one under the Premier Classe brand and one under the Campanile brand — and Qubus will move into Rzeszow, Bielsko-Biala and Poznan. Wyndham Hotel Group’s Super 8 brand is also expected to make its Polish debut this year.
Qubus Hotel Gdansk: one of the 100-120 hotels opening in Poland this year
EDINBURGH’s Hotel Missoni has been named Best New Hotel in Europe. To celebrate, visitors to the Edinburgh stand will be entered into a draw to win a two-night stay at the hotel, tickets to the Royal Edinburgh Military Tattoo, a dinner at the Michelin-starred restaurant Number One At The Balmoral and a bottle of Jura whisky
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Discover excellence in all its facets in Düsseldorf
13th International Trade Show for Property Professionals in Cannes: March 8–11, 2011
Düsseldorf is the flourishing, highly versatile destination for foreign investors, global corporations and thriving new businesses from all industry and service sectors – and a great place to live. Visit Düsseldorf and its Real Estate Partners at the 2011 MIPIM in Cannes, France, a¥aF ! !dd 2 !m= s« 2 ¦¦¦ =£F Fd=p O` F!dF ! F 3ph Reception by the Lord Mayor of Düsseldorf, Dirk Elbers, Wednesday, 9 March 2011 at 12 noon, with a presentation of current figures and projects Image: Jörg Dickmann, Office of Economic Development
Our partners: Exhibit partners
Local partners
Sponsoring partners Colliers Trombello Kölbel Immobilienconsulting GmbH
Catering powered by Brauerei Im Füchschen
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Two awards for Dohaland QATARI development company Dohaland’s flagship project Musheireb has won two awards at the MIPIM Architectural Review Future Projects Awards, through one of its appointed architects, mossessian & partners. In addition to winning an award in the Mixed Use category, Dohaland was also named Overall Winner for the mixed-use cluster of buildings around the Al Barahat Square, a new civic space in Doha, Qatar, and the centrepiece of Phase 1B of Dohaland’s QAR 20bn (€3.9bn) Musheireb development. Founded in 2002, the MIPIM Architectural Review Future Projects Awards include eight categories and are awarded every year for international projects that are under construction. Commenting on the award, Dohaland's chief executive Issa Al Mohannadi said: "The architectural design that mossessian & partners have developed for the Musheireb project has truly been groundbreaking and we share their delight in winning this prestigious award. The recognition underscores Dohaland's leadership position in urban regeneration internationally and is testament to our commitment to engage with the best partners."
Cluttons sees opportunity for London despite tough market LONDON-based property consultants Cluttons’ first-quarter commercial property market outlook research, highlights the challenges facing potential investors during 2011. Despite the generally tough market, it detects a small but significant wedge of opportunity in the market. John Barrett, head of Cluttons’ commercial valuation consultancy, said: “Yields on most secondary property are likely to weaken over coming quarters in markets associated with significant occupier risk. This will enhance the disparities between prime and sec-
ondary yields, and it is here we identify an area of opportunity in the market.” He added: “Good-quality secondary property with asset management opportunities may present investors with the potential for yield driven capital growth in the recovery phase of the economic cycle.” However, Cluttons believes that while inward yield movements have driven returns over the last year, the scope for further capital growth from a hardening of yields is limited. This factor, combined with limited prospects for rental growth beyond the prime Cen-
tral London office and retail sectors, will lead to a dampening of returns. Cluttons believes investor demand will remain focused on the UK capital, particularly in light of a depleting development pipeline in the office market and a highly restricted supply in the retail sector, both of which will boost potential rental growth. Prime national investments, in particular good-quality shopping centres with the potential to boost returns through active management, will also attract investor attention.
Funds target UK INSTITUTIONAL investors have allocated more than £8.7bn for the UK residential development and investment market with 70% of this money earmarked for London, according to CB Richard Ellis (CBRE). Institutions have found it difficult to break into UK residential in the past but CBRE’s research shows the appetite is strong. Most of the demand originates from UK funds but a quarter comes from North America.
Work is well under way on NATO’s new 250,000-sq m headquarters in Brussels. The €1bn scheme, designed by SOM + ASSAR, is set for completion in 2015. Construction commenced last October
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Greater Paris has global goals FOR THE fifth consecutive year, Caen, Rouen, and Le Havre will highlight their opportunities, their synergies and their projects at MIPIM on a joint stand under the banner Normandy Avenue. The Norman urban triangle has been particularly boosted by the strategic role of the Seine corridor, linking it to the Greater Paris region, as well as by the coming of the Norman highspeed rail network. As the largest port complex in France, Normandy Avenue is a major hub for world trade, and a strategic gateway between Europe and the rest of the globe — and one of the goals of the region is to make Greater Paris a major maritime metropolis, similar to London or Shanghai. Two conferences focusing on the region take place on Thursday, March 10, at 11.30 and 14.30 in the Marina Hall. Edouard Philippe, mayor of Le Havre, will present the many urban development schemes of the region and the various investment opportunities.
Marketing Leeds
W hotel adds a touch of style to London’s Leicester Square VISITORS to London can now stay in style overlooking the UK capital’s Leicester Square, at the new €232m W London hotel. The new MIPIM award-shortlisted building, designed by Jestico + Whiles and built by McAleer & Rushe, provides “an integrated lifestyle experience”, with 192 guest rooms including 17 suites. But it also houses 11 two- and three-bedroom penthouses and the 3,200-sq m M&M’s World store, all veiled in a skin of translucent glass suspended off the face of the building, which functions as a large pixel screen. Evoking the cinema district on which it stands, this allows the building to become an electronic mixing palette upon which guest artists can “paint” their visions. “This has very much been a flagship project for the company,” said McAleer & Rushe’s managing director Eamon Laverty. “We have built a hotel that is instilled with the highest
levels of design and exclusivity that one would expect of such a glamorous brand as W.” McAleer & Rushe and Jestico +
Whiles are also working together on the 252-bedroom Aloft London ExCeL hotel at the ExCeL exhibition centre in London’s Docklands.
The new €232m W London hotel
MIPIM meeting brings cash to Coventry A MEETING at MIPIM 12 months ago has turned into a £50m (€58m) project for the UK city of Coventry.
The city, which has been exhibiting at MIPIM for 17 years, met up with UK property development firm Barberry
PROPERTY developer Hammerson is sponsoring the Leeds City Region’s presence at MIPIM as part of its commitment to a £600m (€700) retail and leisure regeneration of the city’s Eastgate Quarters. “Like us, they share the view that the city region offers developers a sound and economically beneficial investment opportunity,” said Deborah Green, chief executive of Marketing Leeds, which is co-ordinating the UK city’s events in Cannes this week. Barberry’s 18,000 sq m Bishop Gate development
Developments in Cannes last year. Following that first meeting, Barberry focused on exploring investment opportunities in Coventry. When the 18,000-sq m former Royal Mail Sorting Centre in the heart of Coventry was brought to the market the company was keen to secure it and work alongside the council. Barberry is now planning a large and comprehensive retail-led scheme on the site, known as Bishop Gate. Henry Bellfield, director of Barberry Developments, said: “We met the Coventry contingent last year at MIPIM and it proved very useful. We were impressed by their approach and enthusiasm, and that meeting was one of the reasons we decided to invest in the city.”
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NEWS
Westfield sets bar high with Stratford’s first office block WESTFIELD kick starts its 100,000 sq m office development at Westfield Stratford City, London, with the European launch of its 13,000 sq m
office building, One Stratford Place. The development will offer topspecification office accommodation on flexible and efficient 2,100 sq m
floor plates, which will be available from September 2011, making it suitable for occupation in time for the 2012 Olympic Games.
Westfield is looking to the London Olympics in 2012 to establish Stratford as an office location
One Stratford Place occupies an iconic location at the end of the pedestrian footbridge that leads into the Olympic Park and commands views across the entire Olympic site, the City of London and Canary Wharf. It will benefit from a wide range of amenities within the surrounding development, including over 300 retail outlets, three hotels and a 14-screen cinema. John Burton, director of Westfield Stratford City, said: “This building proves that Stratford has arrived as a business destination and is likely to appeal to a wide range of corporate occupiers. It is a rare opportunity to acquire a building that sits at the epicentre of Europe’s largest regeneration project.” Following the London games, Westfield plans to deliver a further 100,000 sq m of office space in three phases: First Avenue (56,000 sq m), The Square (20,000 sq m) and Station Square (9,500 sq m). Cushman & Wakefield and CB Richard Ellis are the office-leasing agents for Westfield.
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NEW BUSINESS OPPORTUNITIES Saphire Concept partners will benefit from numerous business opportunities including: • Access to Saphire Construction and preferred equipment supply chain • Saphire intends to spend up to £50m per annum on design, construction and equipment, rising to £100m per annum • Access to Saphire Intranet of preferred suppliers, for those who wish to participate in intermember transactions • Saphire also plans to invite future partners to help develop the Saphire Concept worldwide The following businesses can benefit through partnerships with Saphire’s new luxury well-being projects: • Local authorities • Banks • Investors and finance companies • Private hospitals • Private clinics • Doctors • Architects • Engineering companies • Developers • Construction companies • Transportation companies • Travel agencies • Real estate companies • Insurance companies • Luxury brands • Food and beverage companies • Spa brand companies • Jewelry brands • Prestigious clubs • High level sporting clubs • Academies
SAPHIRE BLENDS LUXURY AND WELL-BEING A new and innovative approach to safe, healthy living Saphire Invest’s new Saphire Concept brings together the best of both worlds: a luxury residential complex with services matching those of the best five-star hotels, combined with à-la-carte healthcare provided by top professionals working in proximity to the facilities … THE SAPHIRE concept will see the creation of residences that function as an exclusive club offering luxury living, hotel-style services, restaurants, bars and wellness facilities. While Saphire will not qualify, or operate, as a hospital or day-care facility, it will offer guests the same feeling of total security, with the best healthcare services available when required. Many lifestyle and healthcare services available today suffer from a lack of responsiveness in the process of caring for clients. There is often a shortage of qualified staff; poor management in some crucial areas of service and care; a lack of quality in the services provided; and a lack of appropriate facilities. Saphire eliminates all of these problems and instead brings the experience of absolute luxury, combined with skilled and attentive care on request. This innovative new approach of-
fers short-, medium- or longterm accommodation and à-la-carte medical services guaranteed by experts, who will also offer individual follow-up services. Everything is made available to every resident member of the Club — from the best medical services to the most luxurious spa facilities; from state-of-theart sports and leisure facilities to the best restaurants, cafés and bars. The Saphire Concept is all about a high-end, secure and comfortable lifestyle. All residences will be situated in the most beautiful places in the world, close to major cities and with international airports nearby, while offering the experience of an outstanding living environment. Security, high-end services, and a friendly atmosphere will appeal to couples, families, working or retired people — anybody who is looking for the state-of-the-art
residences created to meet their highest expectations. Currently at the design stage, Saphire has a business plan that shows steady income streams that will guarantee the investor a yield above the expected return on investment that other leading European homecare businesses might offer. Saphire is currently in the process of initiating its first operations. The architectural design is now ready and available for viewing, and the company has signed agreements with a project management firm which has supervised the architectural competition, and which therefore has thorough knowledge and experience of the project and its innovative design. Saphire Invest is at MIPIM to meet with potential partners on this exclusive, innovative project that plans to become a worldwide brand of luxury and excellence. (www.saphireinvest.com)
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NEWS
‘Forward-thinking’ Croydon invests in new infrastructure THE LONDON Borough of Croydon has chosen MIPIM to announce new funding to improve its transport infrastructure and kick-start a
€4bn wave of public-private sector regeneration. The infrastructure programme includes improvements to Croydon’s
Croydon’s skyline: poised for new additions
rail stations, increased capacity for the tram network and advances in the masterplanning for the borough. The council’s aim is to underpin an office-development pipeline of 8 million sq ft (743,224 sq m) and plans for 8,000 new homes. To achieve this, it has teamed up with private-sector consortium Develop Croydon to promote the town at MIPIM, and their work is supported by the recommendations of an independent report this week from Centre for Cities. The UK think-tank suggests that Croydon is no longer London’s ‘back office’ and advises the council to strengthen its private-sector economy by reducing barriers to growth in the town centre. It also calls on the council to deliver low-cost improvements to the public realm and office stock to
London Borough of Croydon’s Jon Rouse: “ambition, support and investment”
make Croydon a more attractive place to work and live. Borough chief executive Jon Rouse said: “Croydon has all the pieces of the jigsaw in place and is ripe for relocation opportunities. We have the ambition, the private-sector partnership support and the investment in place to build on the borough’s reputation as a major economic hub and a dynamic, forward-thinking city.”
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NEWS
PHA joins Foster THE TEAM at environmental design consultancy, PHA Consult, has joined architects, Foster + Partners. The move is part of a wider strategy to further strengthen its environmental agenda and commitment to integrated design. PHA Consult’s engineers have been working alongside Foster’s architects for several years. Founder and chairman Lord Foster said: “We have been embracing a holistic approach to environmental design since the early 1970s. In that sense, bringing creative engineering expertise back in-house marks a significant point of return to our roots. Looking ahead, it will allow us to move our creative thinking forward, and that is very exciting."
MIPIM is ‘perfect platform’ for Rowan’s return to growth UK-BASED fund and asset manager, Rowan, is attending MIPIM with a clear message to the market: “Now is the time to buy sound commercial property incomes.” Rowan believes the window of opportunity is now open for carefully selected, good-quality secondary property. According to chief executive Nick Jacobs, Rowan is focused on buying portfolios of commercial property for £50m (€58m) and above on a deal-by-deal basis. Furthermore, it will also continue to look for the right opportunity to create a large-scale fund. Jacobs believes that the fundamentals of property as a highly illiquid cash
generator — particularly in the UK’s relaxed South East market — are sensibly priced at present. Outside the UK, the company is also involved in German stock valued at more than €200m, having been a player in the German market since 2005. Jacobs said: “MIPIM provides the perfect platform from which to reinforce and build key relationships and take advantage of favourable but highly competitive market conditions. MIPIM can mark the start of growing the business again — there are exciting times ahead.” Rowan’s Nick Jacobs: “There are exciting times ahead”
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135_RICS_N1_PIM__ 26/02/11 15:37 Page1
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N1P47+D_Mise en page 1 07/03/11 09:45 Page1
NEWS
Royal approval for automated parking garages in Gulf region SUPPLIER of automated parking garages 5BY2 has announced the formation of a joint-venture company, 5BY2 Middle East, with Her Highness Shaikha Roda Bint Zayed Al Nahyan of the Abu Dhabi ruling family, to address the market for fully automated parking garages in the United Arab Emirates and elsewhere in the Gulf region. A subsidiary of the Dutch engineering group Protechnum, the company has designed and delivered nearly 30 fully automated parking systems for the European market since 1992. The joint venture will design, build and maintain automated garages based on the proven technology of 5BY2. Both parties see the need for automated parking to solve the parking congestion in some areas of the cities in the region, where parking is
scarce and construction costs are high. Kamiel Koot, CEO of 5BY2, said: “We are delighted to be working with Her Highness Shaikha Roda Bint Zayed Al Nahyan and we’re looking
forward to helping local developers reduce their development costs by implementing the 5BY2 system, given the land availability and water table issues in the region.”
The 5by2 system is coming to the Gulf region
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Survey: banks still cautious LENDERS remain cautious about UK commercial property says CB Richard Ellis (CBRE), following a survey of 100 banks. The firm found that while there are 69 banks open to new business in the UK, most are employing conservative lending criteria. German Pfandbriefe and UK banks (both clearing and nonclearing) are the largest lenders to the market, and are expected to continue to hold a dominant position for some time. Since the onset of the downturn, 38 lenders with UK exposure have closed to new lending — of which 70% were European banks, building societies and investment banks, the traditional providers of debt to the industry.
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NEWS
Aerium and Matrix join forces in €71m German retail project EUROPEAN real estate fund manager Aerium has bought a landmark high street retail development project in the centre of Kiel in northern Germany for €71m, and has formed a joint venture with Matrix AG to develop it. Located in a prime retail location in the pedestrian zone of Kiel, the property consists of a vacant Karstadt department store and an adjacent car park. Construction of a new 20,000sq m retail complex together with 667 parking spaces will start immediately upon demolition of the existing structure. The property is already 71% pre-let to tenants on long-term leases including Media Saturn, dm-drogerie, C&A, Karstadt Sport, REWE and QPark. Completion of the development is scheduled for October 2012. This represents Aerium’s first acquisition in Germany since 2008 and marks the first investment for its
Aerium’s upcoming 20,000 sq m retail complex in Kiel
€200m German Retail Opportunity Fund, a sub fund of its Special Opportunities Fund. The closed-ended fund
is targeting large-scale investment and development opportunities in the retail sector across Germany.
Hines readies Cannon Place AS THE UK embraces its Country Of Honour status at MIPIM 2011, international real estate firm Hines is Cannon Place in the City of London
getting ready to complete its new flagship London development. Cannon Place is a 37,000 sq m land-
mark office scheme in the City of London, and is one of only two major developments to complete in the UK’s capital this year. The project is a joint venture between Hines, Network Rail, and London Underground. Designed by Foggo Associates, Cannon Place delivers a brand-new office building with eight 4,645-sq m floors of column-free space. It also incorporates the renovation of Cannon Street station. The project is due to complete later this year. Mark Swetman, project director for Hines UK, said: “MIPIM provides a unique global platform for us to position a major new asset in our portfolio with an international audience. London is a key strategic location for Hines and we are delighted to be completing this landmark scheme in the same year the UK has been recognised with Country Of Honour status.”
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Recovery for Poland in 2010 THE INVESTMENT market in Poland staged a remarkable recovery in 2010 following a year of stagnation in 2009. With a total of around €2bn in 2010, transaction volumes in the Polish market reached the highest figure since the previous peak in 2006-2007, according to Cushman & Wakefield’s latest report on Poland’s commercial real estate market. Most popular with investors in 2010 was the retail sector which accounted for more than 50% of transaction volumes. Office investment deals represented some 32% of total activity, while warehouse deals accounted for about 11% or €215m. Polish investors still only claimed a small share of the market due to the weak Polish capital market. Only two Polish property investment funds — BPH TF1 FIZ Nieruchomosci and PZU FIZ Nieruchomosci — achieved some success, while institutional investors including Unibail-Rodamco, IVG and Union Investment dominated the prime market. According to Cushman & Wakefield, last year’s high level of activity is likely to continue in 2011, producing more yield compression.
Green target SKANSKA Property Poland is seeking to set new green standards in Warsaw with the city’s first LEED Platinum-rated scheme. The company is aiming to win Platinum Certification in the LEED Green Building Rating System for its Green Corner scheme on the corner of two streets, Chlodna and Wronia, which will provide 27,500 sq m of class-A office and retail space when it completes in Q4 2012.
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N1P51+D_Mise en page 1 07/03/11 14:07 Page1
NEWS
Czech cities and regions set sights on world’s investors FOLLOWING their successful attendance at MIPIM last year, the three largest Czech cities — Prague, Brno and Ostrava — are in Cannes to present themselves as attractive investment destinations. In addition, the Central Bohemian and South Moravian regions are back at MIPIM with their own stands. The City of Prague Development Authority’s experts are presenting the Czech capital’s proposed development plan, which encompasses urban,
recreational and landscape areas, including brownfield sites. The Prague stand also features an exhibition showing the urban development of the city over the last 20 years. Brno, which is exhibiting in collaboration with several partners, is promoting itself as a centre of science and research, highlighting schemes such as the International Clinical Research Centre (FNUSA-ICRC) and the Central European Institute of Technology (CEITEC).
It is also presenting its most significant development project — the 135 ha Europoint Brno redevelopment to the south of the city centre. Ostrava is attending MIPIM for the 14th consecutive year. The city’s key projects include the 10 ha Science and Technology Park Ostrava, where a further 20 ha of development land is being prepared. The aim is to create 10,00015,000 jobs in the next 10-15 years in areas connected with IT, engineering and other high-tech industries.
GL Hearn fields 12-strong team THE UK property, planning and development consultancy GL Hearn brings a team of 12 professionals to MIPIM to showcase its expanded planning-development and regeneration division, led by national head of planning Alastair Crowdy.
GL Hearn is one of the five professional partners at the Cherry Orchard Road project stand. The 70,000 sq m mixed-use scheme is being developed by Menta. GL Hearn managing director, Brian Sloggett, said GL Hearn’s decision to strengthen its presence at
GL Hearn’s key team members prepare for Cannes
this year’s MIPIM was prompted by three factors: “It provides us with an unrivalled opportunity to introduce our newly expanded planning team to the property market, allows us to support our existing clients and helps us to forge new relationships.”
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Occupiers ride to the rescue BUOYANT demand for offices is offering more than a glimmer of hope in Ireland, according to CB Richard Ellis (CBRE) in its bi-monthly market report. With office occupiers encouraged by attractive deals on rents, CBRE forecasts take-up of offices to total as much as 110,000 sq m in 2011. But the firm warns that there is “huge concern” in the retail market about proposals by the new Irish government to retrospectively review rental agreements. CBRE research director Marie Hunt said: “Overseas investors are unlikely to commit to any large-scale purchases of Irish real estate until such time as there is clarity on the new government’s intentions with regard to rent-review mechanisms.”
RICS is Business Superbrand THE ROYAL Institution of Chartered Surveyors (RICS) has been acknowledged for the first time as one of the UK’s leading business-to-business brands in the annual Business Superbrand listings. The superbrands are chosen by a panel of experts and business professionals from across the UK. Brands do not apply or pay to be considered and only the top 500 are deemed to be Business Superbrands. RICS achieved top-100 status for the first time this year, climbing over 20 places from its previous position. The voting panel took into consideration the status of each brand within its individual field in an independent selection process that considers thousands of brands from over 50 sectors.
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N1P53+D_Mise en page 1 07/03/11 09:43 Page1
NEWS
Ghelamco celebrates two decades in Polish market GHELAMCO Poland is using this year's MIPIM to promote its major investments in Warsaw. Ghelamco, which moved into the Polish market 20 years ago, was established in Belgium in 1985. During its two decades in Poland, the developer has become one of the country’s main providers of modern business space. It has delivered over 356,000 sq m in 23 projects, including class-A office buildings, high-quality logistics centres and residential developments. "During the past 20 years, a lot of things have changed in the Polish market," said Jeroen van der Toolen, Ghelamco managing director of Central and Eastern Europe. "Many modern, high-quality investments have emerged and many development companies have started up operations. But what distinguishes us from the competition is that we were one of the first to take part in this market change
The Spire office complex: destined to become a new Warsaw landmark
and, after two decades, we are still rapidly growing." In 2011, Ghelamco is to start the construction of the Warsaw Spire office complex. Comprising a 220 m sky-
scraper and two side buildings designed by Belgium’s Jaspers-Eyers & Partners, it will offer 100,000 sq m of lettable modern office, service and retail space, plus parking for over 1,000 cars.
Cristal Campus attracts tenants THALES is to relocate its Parisian operation to the Cristal Campus on the Carre 92 business park. The complex
has been designed by Art & Build Architect for first-time MIPIM exhibitor AG Real Estate.
Art & Build-designed Cristal Campus in Paris
The brief called for some 87,500 sq m of new-build office space. Nine buildings will house client reception areas, conferences facilities, showrooms, social premises, a staff canteen and several office buildings. A purpose-built structure will meet client requirements for sheltered parking spaces. Planning permission was obtained in December 2010 and work is currently under way. Handover is expected in August 2012. The Art & Build Architect/AG Real Estate team behind Cristal also developed and designed the recently completed Groupe Cheque Dejeuner headquarters — also located at Carre 92 — which is in the running for a 2011 MIPIM Award in the Business Centres category.
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Banking on Edinburgh EDINBURGH has reinforced its position as the UK's second financial centre following announcements by Virgin Money, Tesco Bank and global fund-management giant BlackRock that they will expand their operations in the city. Jonathan Guthrie, Edinburgh City Council's investment promotions manager, said: "Last year at MIPIM, Edinburgh was named Best Small City Of The Future and there has been much that's happened over the last 12 months to demonstrate that, from financial-services growth to exciting new occupiers." Guthrie added: "This is a city that has proven to be incredibly resilient during a challenging economic period and it's very encouraging to see interest picking up."
Llovet joins JLL JONES Lang LaSalle has strengthened its retail capital markets teams in Europe after seeing improvements in market and client activity. Jose Manuel Llovet joins as head of retail capital markets in Spain from Unibail Rodamco. At the same time, Antony Pastiroff joins the capital markets team in Sweden from EFM Sverige.
Jose Manuel Llovet
London on the up HOUSE prices in London continue to outperform the wider UK market, according to Jones Lang LaSalle. The firm forecasts a 2% price growth in London this year, compared with a 2% fall in the Midlands and the North of England, where transaction levels have slumped because of restrictions on mortgage lending.
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N1P55+D_Mise en page 1 07/03/11 09:54 Page1
NEWS
Arizona seeks investment for Surprise Pointe project FIRST-time delegate Mike Gottlieb of Citation Capital Partners is at MIPIM looking for a partner to invest $20m (€14.3m) in the Surprise Pointe foreign trade zone (FTZ) in Arizona. “We believe our project will appeal to a specific European investor who is interested in getting excellent value on a medium-term investment in one of the fastest-growing areas in the United States,” Gottlieb told MIPIM News.“Its location in a newly designated Foreign Trade Zone will create demand for this industrial/commercial/retail project located on a rail-spur.” The designation means tenants of the 157-acre project will enjoy zero import duties and reduced property taxes. Close to both Phoenix and the Mexican border, the site is expected to appeal to big box occupiers, and site
developer ESI Ventures is offering a choice of serviced sites, or will build to suit occupiers’ needs. The announcement of local solar power facilities adds to the site’s attractions, particularly for major power users. Crescent Crown Distributing, the second-largest beverage distributor in the US, has already given Surprise Pointe a vote of confidence by choosing Surprise Pointe for its western distribution hub. “Arizona has a much friendlier business environment than its neighbour, California, and offers large distributors a much more cost-effective way to do business,” said Gottlieb. “We believe that MIPIM will provide the ideal setting to find that unique investor looking to capitalise on this opportunity.”
Citation Capital Partners’ Mike Gottlieb: Seeking unique investor
Makeover for Belgium’s Groupe S THE GROUPE S Building in Brussels, Belgium is designed by A2RC Architects and developed by Groupe S. The project is a 10,200 sq m office building to be erected on the original site of the Groupe S company. The project involves the design reorganisation of a whole city block. All existing buildings will soon be demolished to make room for a new 10-storey office building equipped with a three-level wing comprising retail at ground level, a creche on the second level and housing on the third level, as well as a planted roof-top to be used as an amenity level.
The new Groupe S Building in Brussels
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Businesses will pay for space A PROPERTY industry survey by design firm Gensler and the Urban Land Institute found that 95% of respondents would be willing to pay up to 3% more for property with easy access to quality open space. This could generate an estimated £1.3bn (€1.5bn) of investment for the creation, development and maintenance of new public space, which could offset London’s future deficit of such amenities, projected at 1,100 ha by 2031. The report — entitled Open Space: An Asset Without Champion? — will be officially launched at MIPIM. “Access to open space is the key to making cities more liveable, and clearly to create greater economic value” said Ian Mulcahey, a principal with Gensler.
UK-Nordic deal UK FUND manager Aberdeen Asset Management has been appointed by Danish-owned Provinsfastigheter to manage a SEK 2.7bn (€300m) property portfolio in Sweden. The portfolio is split evenly between offices and housing and is spread across Sweden, although most of the properties are in and around Stockholm. Provinsfastigheter was previously part of the now restructured Allokton group. The current majority owner is a consortium of several Danish financial institutions. Provinsfastigheter chairman Jens Erik Gravengaard said: “Aberdeen’s extensive skills in actively managing individual properties and large property portfolios have been decisive in our choice of manager. This is a very large portfolio where some of the assets will require further development and dedicated asset management. That in turn requires experience and in-house specialist property expertise.”
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It’s a rewrap BANIMMO has breathed new life into a 1970s office building in Brussels’ prestigious Avenue des Arts, in the Quartier Leopold. The ARTS 27 scheme, designed by A2RC Architects, sees an old prefabricated concrete façade removed and the 3,970 sq m building wrapped in black granite frames. © Photograph: G de Kinder
Woods Bagot flies high with airports in Perth and Baku
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Baku Airport: principal facilities to be rebuilt and extended
ARCHITECT Woods Bagot is showcasing designs for two new world-class airport projects located on separate continents — Perth and Baku international airports. Woods Bagot, together with Buro Happold, has been appointed to rebuild and extend the principal facilities at Heydar Aliyev Interna-
tional Airport in Baku, capital of Azerbaijan. This includes a new terminal, an air-traffic control tower and a presidential building, as well as reconfiguring and refurbishing the existing terminal. The airport is located 30 km north east of Baku on the outskirts of the city. The iconic project will see a sub-
stantial investment to triple the capacity of the airport. In November, Woods Bagot also beat competition to secure the first phase of the $600m (€429m) expansion of Perth International Airport in Australia. This will form part of an overall spend totalling $1bn. The first phase is due to be completed by October 2012.
Venice waterfront in full flow THE DEVELOPMENT of Venice’s waterfront is beginning to take centre stage among Europe’s major redevelopment projects. The targeted area comprises over 100 ha of combined water and land surfaces, and half this area — 500,000 sq m — will be given over to business and research space, residential, retail, leisure and hotels, along with exhibition space, and new dock and marina facilities. Italian developer Nova Maghera comes to MIPIM for the 10th time with a mission to promote its plans for the development of the waterfront in the Venice district of Maghera.
Having completed 65,000 sq m of office space — now fully occupied —
Nova Maghera is developing the 12,500 sq m Venezia Lifestyle Centre.
ARTS 27 in Brussels, Belgium
Vosper to RREEF RREEF — the real-estate investment management business of Deutsche Bank’s asset-management division — has appointed Paul Vosper as head of client relations for Europe, the Middle East and Africa. In this role, Vosper will lead the European client-relations team’s fundraising efforts in Europe and the Middle East, developing and maintaining relationships with RREEF’s existing and potential clients across the region.
Romagna sale THE PERF Fund, managed by Pradera Europe, has sold the Romagna Retail Park to Klepierre for more than €69m. The Romagna Retail Park, which opened in 2004, is located in Savignano sul Rubicone, 90 km south east of Bologna. The 40,000 sq m park includes 25,210 sq m of retail units and 13,329 sq m of leisure units. Jones Lang LaSalle advised Pradera. Redevelopment plans for Venice’s waterfront
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Biggest. Deadliest. Worst ever. Disaster headlines keep getting worse. RICS BuildAction helps reduce loss of life, property and livelihoods in the poorest communities.
Can you help?
For more information visit the RICS stand in the Riveria Hall, stand R29.32 or contact info@buildaction.org
Today at Mipim Dense cities – for better or for worse? RICS expert panel discussion Tuesday 08 March, 1630 – 1730 Hoban Room, Level 3, Palais des Festivals, Cannes
www.buildaction.org
N1P59+D_Mise en page 1 07/03/11 15:49 Page1
NEWS
European Commission offices bought for an estimated €78m BELGIUM-based real estate investment company Befimmo has bought the Pavilion office centre in Brussels through the acquisition of Ringcenter, the building’s holding company, from SEB Immoinvest, a German investment fund managed by SEB Investment. The Pavilion offers a total area of 18,734 sq m of office space, fully let to the European Commission (EC) until the end of October 2025. The value
of the building is estimated at €78m, reflecting a rental yield of 5.12%. The office building was developed by Robelco in 2006 and is located inside the Projet Urbain Loi (PUL), the zone in which the EC wishes to centralise most of its services over the next ten years. According to Maxime Kumpen, head of Capital Markets at CB Richard Ellis who advised the purchaser: “Although early in the year, the sale will likely be the most notable trans-
action that will occur in 2011. The Pavilion is a remarkable building in terms of location, lessee and lease length, and these kinds of products are not often offered for sale. “Transactions with similar lease lengths will be limited this year. We therefore see investors increasingly shift focus to more conventional products — in terms of lease length — and a number of these transactions are currently in the pipeline.”
New metropolitan hub for Paris
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German hotel business up HOTEL chains in Germany performed better than in most other industrial countries in 2010, according to research from BulwienGesa on behalf of German firm WGF Finance Group. Leading A-class German cities benefit from the growth in city tourism as well as the increasing numbers of international business travellers and conference visitors. As an example, the revenue per available room in Frankfurt increased by 20% in 2010 compared with the previous year. During the same period the transaction volume of the €800m German hotel investment market more than doubled. Foreign investors accounted for 63% of the investment volume, up from 21% the year before. In addition to the demand for A-class locations, high potential is also identified for B- and C-class locations where mid-sized private hotels with outdated facilities have dominated up to now.
Pick Everard on London stand
Les Ardoines new urban development scheme in the South East of Paris
THE 300-ha Les Ardoines project, located in the South East of Paris, is being launched at MIPIM. The scheme’s promoter, EPA OrlyRungis-Seine Amont development agency, and the Vitry-sur-Seine local authority, will unveil the project
on Wednesday, March 9, at 09.00. This major mixed-use scheme is located just 12 minutes from Paris city centre, and aims to transform a heavily industrial area into a new metropolitan zone. The Les Ardoines scheme will be served by a
newly-constructed transport hub. In the long term, Les Ardoines will include 13,000 housing units totaling 270,000 sq m; 55,000 sq m of amenities and public space; and 15,000 sq m of retail, to be built in phases up to 2020.
BUILDING consultant Pick Everard is returning to MIPIM as part of the London stand. Connections made at MIPIM 2010 led to opportunities with several new European partners, in locations including Oman. Partner Duncan Green said the event provided a valuable platform for the practice to show how it could create opportunities for clients. “We can showcase successful schemes to potential partners, and establish lasting relationships. By creating a stronger presence, we can potentially gain much greater involvement internationally.”
078_LIBREBELGIQUE_RV_PIM__ 04/02/11 17:27 Page1
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NEWS
ISS seminar adds to debate on FM’s role in real estate ISS HOSTS a seminar tomorrow on the role of facility management (FM) in real estate, featuring former International Facility Management Association chair, Thomas Mitchell, as keynote speaker. Mitchell, who is managing director of FM consulting services at Booz Allen Hamilton in San Antonio, US, will give an update on future trends and developments within FM and corporate real estate, and explain how these two areas are linked. He will also provide examples of how real-estate investors have changed their asset-management structures by Booz Allen Hamilton’s Thomas Mitchell: examining FM in a real-estate perspective
implementing a systematic approach to FM — and how they have worked with outsourcing as a means of creating flexible and sustainable real-estate investments. Following the keynote, a panel discussion will be held with experts from across the service and real-estate industries, including Hakan Bryngelson, board member at several Swedish companies and associations; Yann Coleou, CEO of ISS Facility Services France; and Chris Hartley, partner at Rider Levett Bucknall and fellow of the Royal Institution of Chartered Surveyors. The discussion will be moderated by Peter Ankerstjerne, ISS’ global marketing director. The seminar, which starts at 14.00 in Auditorium I, will be followed by a cocktail reception.
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Georgia’s Black Sea proposition UNDER the slogan ‘Become rich, employ people and make Georgia better’, the new Anaklia-Zugdidi Free Zone has been launched by Georgia’s Ministry of Economy and Sustainable Development, with the aim of attracting the construction of hotels and leisure developments on the country’s Black Sea coast. Work on this ‘Pearl of the Black Sea’ has started. While the Georgian government is providing much of the land and infrastructure, including access roads, water supply and a local airport, it is also offering a package of investments and inducements to attract outside investors. These include tax exemption status for 15 years, free casino licenses for developers of hotels with over 100 rooms and the offer of Georgian citizenship for foreign investors.
080_RMGLOBALCITY_N1_PIM__ 11/02/11 10:39 Page1
Under the Patronage of HH General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces
VISIONARY VALUES FOR SUSTAINABLE CITIES 15 - 17 March 2011, Emirates Palace, Abu Dhabi Hosted by the City of Abu Dhabi, Global City is the only international forum where city and political leaders meet the private sector to discuss practical solutions for implementing their visions of urban sustainability and sharing their expertise in solving the challenges confronting global cities today.
Highlights of Global City 2011 The Mayors’ Panel • Showcases of urban sustainability • Interactive masterclasses: Find your city’s DNA • Site visits to Abu Dhabi’s cutting edge developments and buildings • The Leaders’ Summit: A half-day think-tank program dedicated to Mayors and City Leaders - by invitation only
Featuring Visionary Speakers
Dr Jacques Attali
Lance Pressl, Ph.D.
Mark Mallory M
Dan Hoornweg
Dr Cheong Chheong Koon Hean Jus Jussi ssi Pajunen
Christian Kornevall
World renowned economic advisor and philosopher
President Chicagoland Chamber of Commerce Foundation, Chicago, United States
M Mayor City of Cincinnati, Ohio, United States O
Lead Urban Specialist, Cities and Climate Change, Chang ge Urban Development, World Bank, USA
Chief Executive Executive Officer, Housin ng and Development Housing Board (HDB), Singapore pore
Director, Energy Efficiency in Buildings Projects & Electricity Utilities, WBCSD, Switzerland
Mayyor City of Helsinki, Mayor Finla and Finland
*To be confirmed
Hosted by
Organised by
Official Newswire
Sustainability Partner
Silver Sponsor
Information Partner
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Associate Partners
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For more information contact: Nathalie Depetro, Global City Director nathalie.depetro@reedmidem.com +33.1.41.90.45.17 (France) or Maud Chevalier, Global City Leaders’ Summit Director maud.chevalier@reedmidem.com +33.1.41.90.46.44
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NEWS
KPMG’s Canada Square building claims ‘Dockland’s greenest’ title ARCHITECTS Swanke Hayden Connell have completed the interior design and fit-out of 40,000 sq m of new offices for KPMG at 15 Canada Square, Canary Wharf, in what is claimed to be the greenest building in London’s Docklands. A greywater recycling system, sedum grass roof, and combined heat and power plant, are among the block’s sustainable features leading to a BREEAM excellent rating. The interior includes a 14-storey atrium, together with pocket atria dotted throughout the building, encouraging flexible ways of working. KPMG pre-purchased the building in 2006 to be its UK headquarters, citing changing ways of working as a key driver in the move from existing
premises. The block was designed by architects Kohn Pedersen Fox and of-
ficially opened by Her Royal Highness Queen Elizabeth II in December 2010.
New offices for KPMG at 15 Canada Square, Canary Wharf
The “who’s-who” of the world's property market. A year-round networking tool to connect you with over 17.500 real estate professionals.
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63
CBRE warns of debt problems EUROPE’s real-estate debt market looks set to tighten in 2011 as banks become more cautious in their lending criteria, according to CB Richard Ellis (CBRE). In its latest European Capital Markets report, CBRE predicts that debt will be more constricted by red tape, especially the new Basel III regulatory regime that will force lenders — with the exception of insurance companies — to increase the amount of capital they retain on their balance sheets. Natale Giostra, head of UK and EMEA debt advisory at CBRE Real Estate Finance, warned that a €500bn ‘refinancing wall’ is due in Europe over the next three years. “It is unlikely that new lending activity can truly re-start as, in the near term, attention will be focused on delivering solutions to legacy problems,” he said.
MAKE THE MOST OF MIPIM Pick up your MIPIM 2011 GUIDE now !
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JURY PRESIDENT
New-look awards get the vote NOW IN THEIR 21ST YEAR, THE MIPIM AWARDS ARE EVOLVING ALONGSIDE THE INDUSTRY THEY HONOUR. MARK MOORE TALKS TO JURY PRESIDENT MICHAEL STRONG ABOUT THE CHANGES THIS YEAR
T
HE MIPIM Awards are going from strength to strength, with every year bringing an increased number of entrants. The seven-strong panel of judges has decided on the shortlist of finalists from which the winners will be announced during MIPIM. In total there were 87 projects submitted for consideration from 27 countries. The 2011 jury president is Michael Strong, chairman and CEO of CB Richard Ellis, Europe, Middle East & Africa. This year, the voting process has been improved. Under the new system, the jury’s votes for each project will be taken into account, alongside the votes cast by the delegates at MIPIM. Strong says the change was necessary because, while the awards are intended to give a global view of the quality of today’s realestate projects, not everyone attending MIPIM is familiar with the wide-ranging and very different projects nominated. “So this year we are including the MIPIM Awards jury’s considered opinions alongside the votes cast by attendees,” Strong says. “This will have the effect of avoiding putting smaller, less familiar projects at a disadvantage, even though they are of good enough quality to win a MIPIM Award.” Voting can take place at any time during MIPIM, from 09.00 on Tuesday, March 8 to midnight on Thursday, March 10. The section
winners and the overall Special Jury Award winner will be announced at the awards ceremony and party, which starts at 19.00 on Thursday, March 10 in the Palais des Festivals’ Grand Auditorium. The new Futura Award for unbuilt projects rewards schemes that have not yet started construction but which the jury believes deserve recognition. “I think it adds a new dimension to the awards,” Strong says. Also new this year is a special tribute award to a UK project, reflecting the UK’s status as 2011 Country Of Honour. Strong says this is appropriate because “the high standard of UK architecture is reflected in the number of international commissions that the UK’s leading architects achieve. Names like Norman Foster and Richard Rogers are synonymous with exemplar design solutions, but they are not the only UK architects now making a name for themselves across the world. For example, it’s great to see David Chipperfield being honoured with a knighthood and undertaking more British commissions, having forged a world-class reputation across Europe.” Looking to the future, the design challenges are going to be huge, Strong believes. “But it’s comforting to know that the stable of young talent emerging looks more than competent to drive the sustainable agenda and create fantastic buildings throughout the world,” he says.
MIPIM Awards jury president Michael Strong: “A new dimension to the awards”
It’s comforting to know that the “ stable of young talent emerging looks more than competent to drive the sustainable agenda and create fantastic buildings Michael Strong
”
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ASIAN MARKET BAROMETER
A world of two halves WHILE ASIAN INVESTMENT IN EUROPE CONTINUES APACE, THE FLOW OF MONEY FROM WEST TO EAST
© Ryan Cheng
HAS FALTERED SINCE THE FINANCIAL CRISIS.THAT MAY BE ABOUT TO CHANGE, WRITES MARK COOPER
Hong Kong: Economic power has moved from West to East and many Asian investors have become more active on the world stage
T
HE SHIFT of economic power from West to East, accelerated by the global financial crisis, has seen Asian investors become more active on the world stage. In Asia, personal, government and corporate balance sheets are stronger than ever. Cash-rich individuals, sovereign funds, pension funds and corporations have all been strong buyers, both within Asia and without. In Europe, the UK — particularly London — has been the main location to benefit. Alistair Meadows, head of Jones Lang LaSalle’s international capital group, says the UK is familiar territory for Asian investors. “Many wealthy Asians will have been educated in the UK, or have had their children educated there. They may have already bought residential property, so buying commercial assets is not so much of a leap.”
London is Europe’s most international city, with a large and liquid property market. Singapore’s GIC Real Estate has had an office there for well over a decade, while South Korea’s National Pension Service (NPS) chose UK investment manager Rockspring to take it offshore. However, both NPS and GIC are unusual in that they have both bought more widely in continental Europe, having started by acquiring assets in London. In December, GIC — in partnership with JP Morgan Asset Management — bought the 70,000 sq m OpernTurm office building in Frankfurt for €580m. In the past five years, GIC has bought assets in Amsterdam, Stockholm, Rome and Brussels. NPS, which began buying internationally in 2009, started with the acquisition of 40 Grosvenor Place, London SW1 — and then hit the headlines with the £772m acquisi-
tion of HSBC’s headquarters in Canary Wharf. These acquisitions were in line with the sovereign fund’s original plan to acquire assets in New York, London, Tokyo and Sydney, targeting the major cities in the Americas, Europe, Asia and Australasia.
NPS fund “willThetarget higher yielding, core-plus assets with secure income streams
”
Robert Gilchrist
Since becoming acclimatised to Europe’s most transparent and liquid market, NPS has bought the Sony Centre in Berlin for €600m and a 51% stake in a French shopping centre on the northern edge of Paris.
NPS bought the controlling stake in the O’Parinor mall, in Aulnay-sousBois, from UK REIT Hammerson. NPS has continued to develop its strategy in Europe, still working with Rockspring. In September, it announced the launch of a fund that will invest up to $1bn ($400m of equity) into real estate across the whole of Europe. The fund also marks NPS’ first use of debt and the adoption of a value-add strategy. Robert Gilchrist, chief executive of Rockspring, says: “Over the last three years, we have created a strong relationship with NPS as it has been expanding its exposure to the European commercial property sector. The fund will target higher yielding, core-plus assets with secure income streams, where we can create value through asset-management initiatives. We already have a good pipeline of deals for the fund and hope to announce our first acquisition shortly.”
198_FIERO_N1-2_PIM__ 02/03/11 10:52 Page1
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A1_3_MIPADV02+D_Mise en page 1 06/03/11 16:12 Page2
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at a later stage. Debt, if used at all, will be used conservatively. New entrants into Europe from Asia include Malaysia’s Employees Provident Fund (EPF), which has awarded $500m mandates for both the UK and continental Europe. Unsurprisingly, the first deals have been sealed in central London, where EPF has been advised by ING
© Thomas Wolf
NPS is unusual in the speed and scale with which it has developed its overseas investment. However, it is a model for how a larger Asian institution will invest. Key is a strong relationship with a trusted manager which, as the success of Rockspring has shown, can be developed in scope and scale. London will tend to be the starting point for investment in Europe, with continental Europe
Real Estate Investment Management. In the last quarter of 2010, EPF bought 65 Fleet Street, 40 Portman Square and 1 Sheldon Square for a total of £480m. At the beginning of the year, Hong Kong company Chinese Estates, which is listed but controlled by billionaire Joseph Lau, spent £280m on River Court, one of Goldman Sachs’ London headquarters buildings. Stephen Down, managing partner of Gresham Down Capital Partners, which advised on the sale, says: “Large, high-profile assets continue to attract strong interest from overseas investors, who view London as their preferred investment location, and a safe haven during this period of global economic uncertainty.” While Asian investors have been active in Europe, they have not moved their attention away from their home region. In contrast, many international property groups have either taken the opportunity to sell assets to domestic buyers or been forced to sell assets in order to shore up investments elsewhere. This has been particularly true of US-based opportunistic investors. A number of European investors suffered after buying near the top of the market in 2007 and 2008. Singapore was a favourite location, due to its transparency, but investors suffered when rents more than halved in 2009. Real Capital Analytics’ Global Capital Trends report shows two Asian buyers — GIC and NPS — involved in the top-10 largest European deals
Jones Lang LaSalle’s Alistair Meadows: The UK is familiar territory for Asian investors
in 2010, whereas there were no European investors involved in any of the top-25 largest deals in Asian. Furthermore, while there were no European names in the list of the 20 biggest buyers in Asia last year, SEB Immoinvest and ING Group were amongst the biggest sellers of assets. However, some European investors have begun to ramp up their interest in Asia, with a number of investment management groups and pension funds starting to look East again. In the past year, AXA Real Estate Investment Managers has set up joint ventures with local players in China and Japan in order to develop new funds. Retail specialist Redevco is partnering with Hong Kong’s Shui On Land for a shopping-centre development in Wuhan, China, while UK institutions Aviva and Henderson Global Investors, which already have platforms in Asia, are looking to expand
London is viewed as a preferred “ investment location and a safe haven
OpernTurm office building in Frankfurt: GIC paid €580m for the 70,000 sq m building in partnership with JP Morgan Asset Management
during this period of global economic uncertainty Stephen Down
”
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and launch new funds. Aviva has been recruiting in Asia and is set to launch a Japanese fund. ING REIM has been a major player in Asia, but has suffered a hiatus while its sale to CBRE Investors was completed. German open-ended funds have been big buyers in Asia, with funds managed by SEB, Union Investment and RREEF buying core assets in China, Japan, Singapore and Seoul over the past few years. Recently, only RREEF has been active as a buyer, acquiring Uniqlo’s flagship store in Osaka for €170m for its Grundbesitz global fund last October. However, Union Investment has up to €1.5bn to spend worldwide this year and some of that cash is likely to be spent in Asia, according to Ulrich Dischler, managing director of Union Investment Real Estate Asia Pacific. Union Investment tends to target core assets in major cities, such as Tokyo and Singapore, although it has also invested in Kuala Lumpur, where it recently took ownership of CapSquare 2, a newly completed office building, which it agreed to acquire in 2008 for €100m. UK-based Grosvenor is unusual in that it has a long history in Asia, buying its first asset in Hong Kong 1996. It has maintained its involvement in the region throughout the
pooled funds, or funds for smaller players. Capital-raisers report more interest in pooled funds — but capital-raising remains tough. However, the best-known and most active pension fund investor in Asia, the Netherlands’ APG, has turned away from pooled funds to target joint ventures and club deals. APG, in-house manager of the giant ABP pension fund, said last year that it plans to increase its real-estate investment in Asia by €1bn in three to five years as it seeks to benefit from the region’s economic growth.
APG will “increase its
River Court, London: Hong Kong company Chinese Estates paid £280m for the building which is occupied by Goldman Sachs
crisis and is currently raising a Japanese fund, developing residential buildings in Hong Kong and Japan, and buying residential and retail property in China. Nick Loup, chief executive of Grosvenor Asia Pacific, says the firm
will be investing from its own balance sheet this year, as well as raising equity for the Japanese fund. European pension funds looking for access to Asian real estate have tended to invest indirectly, via
Redevco and partner Shui On Land are developing this shopping-centre development in Wuhan, China
allocation in Asia to 24% of assets from 21% in the next three to five years
”
Daan van Aert Daan van Aert, head of strategic real estate Asia at APG Investment Asia, says the company will “increase its allocation in Asia to 24% of assets from 21% in the next three to five years”. APG favours residential investment in India and China and, in developed markets, Australian logistics. APG was part of a club of investors that acquired the $1.5bn ING Industrial Fund, a listed Australian vehicle, earlier this year. Grosvenor and APG are exceptions at the moment. Strong competition from local investors and the cost of building a team in Asia mean that European groups that have not already invested in Asia will find it a long and slow road to building presence there.
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FEATURE
JA PA N E S E I N V E S T M E N T M A R K E T
Global funds bet at the bottom in Tokyo Blockbuster: Tokyo Shiodome Building (centre) sold for $1.1bn
RECOVERY IN TOKYO, ASIA'S BIGGEST COMMERCIAL REAL ESTATE MARKET, IS GAINING MOMENTUM FOLLOWING THAT OF MAJOR WESTERN CITIES. TARO TOKUNAGA, EDITOR-INCHIEF OF THE NIKKEI REAL ESTATE MARKET REPORT, DESCRIBES A SIGNIFICANT INCREASE IN TRANSACTIONS OVER THE PAST SIX MONTHS
T
HE INDUSTRY-focused newsletter of the Nikkei Group, which gathers transaction information from various industry sources, revealed in a recent a report on the 2010 market that the volume of investment sales in Japan increased by 26% on the preceding year, to $23bn,
of which 88% related to the Tokyo metropolitan area. Tokyo was ranked second in transaction volume, after London, and was followed by New York, Paris and Hong Kong, according to the newsletter's partner firm, Real Capital Analytics. These figures include blockbuster deals, such as the Seibu
Ikebukuro department store at some $1.4bn and the Tokyo Shiodome Building, a mixed-use structure with office and hotel floors that houses the Conrad Tokyo, at $1.1bn. Jones Lang LaSalle recently positioned Tokyo at the very bottom of its Property Clock, which suggests the market is about to take off. Leav-
ing aside gloomy headlines regarding the Japanese macro economy, the adjustment of rents in the past two years which led the Tokyo office market to freeze is now complete and the market has thawed. Property prices in almost all sectors, including office and residential, dropped by more than 30% during
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Power P ower Netw Network ork with P Potential otential Partners Partner errs New Ne w fformat. o ormat. . Ne New w cont content. ent. nt.. New New contacts. Leading rreal eal estate pr professionals ofessionals come to together gether at MIPIM Asia to netw network, ork, make deals and assess Asia Pacific Pacific trends. trends. SStrike trike the deals that shape the Asia PPacific. acific . A Attend ttend MIPIM Asia.
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the financial crisis and many experts regard the current levels as the bottom of the market. Rented apartment buildings are proving highly attractive to investors. By the second quarter of 2010, the number of transactions in this sector recorded 293% growth year on year, with 114 deals.
an influx from the countryside and a concentration of international corporate headquarters
”
strategies, are also focusing on the mature Japanese real estate market as a target for diversified investment. CLSA Capital Partners — part of the Credit Agricole Group — acquired 11 rental apartment buildings from a financially troubled domestic developer for over $230m last October. In December, RREEF, the real estate management arm of the Deutsche Bank Group, obtained a retail and office building in Shibuya, Tokyo, from the Goldman Sachs Group for $87m, marking the third investment of the company in Japan in one year. The Tokyo metropolitan area is becoming a popular target for core investments, the attractions including a population that far exceeds
© Y.Shimizu © JNTO
Major US funds, including Angelo Gordon, Blackstone and Elliott Management, along with numerous Chinese individuals, have made their first investments in Tokyo properties in the last few months. One prominent example is the sale of a portfolio of 18 properties originally owned by REIT LaSalle Japan, in September 2010. Elliott Management won the bid at $370m, beating major domestic real estate firms. Coinciding with this transaction, Barclays Capital Japan issued by $93m of fresh CMBS-backed mezzanine loans. This issue was long awaited after Japan’s emergence from recession and was the company’s first such release. European institutional investors, which have long-term investment
Attractions include a population “ the far exceeds those in other world cities,
Tokyo metropolitan area is becoming a popular target for core investments
those in other leading world cities, an influx of people from the countryside and a concentration of international corporate headquarters — 51 firms listed in the Fortune Global 500 list are present. Moreover, the successful listing of Global Logistic Properties, which raised $2.8bn last October, has proved the popularity of a “barbell strategy” between Japan and China. The assets of the company, created from a spin-off of Singapore’s GIC and ProLogis, are a combination of stable Japanese logistics facilities and Chinese development projects. China, which is gaining the status of an economic giant, is a sexy investment target but is there is less
stability. Japan, on the other hand is a dull market in terms of GDP growth rate, but its economy is stable regardless of who is prime minister, and it contains a far greater stock of investment-grade real estate than China. This seems to be the perfect combination for today’s real estate investors seeking to allocate assets in the Asia-Pacific region.
Taro Tokunaga, editor-in-chief of the Nikkei Real Estate Market Report
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EASTERN EUROPE
By leaps and rebounds EASTERN EUROPE WENT DOWN HARD IN THE RECENT ECONOMIC UNPLEASANTNESS. BUT IT IS COMING UP FAST, STEVE KILLICK REPORTS, LED BY POLAND AND THE CZECH REPUBLIC
The A3 Cabriolet production line in Gyor: Audi has made substantial investments in Hungary
A
LTHOUGH 2009 was a grim period for the region’s commercial property sector, this last year has seen some encouraging signs of growth in key areas. The birth of Eastern Europe’s free market began in Poland in December 1989, when democracy was restored — and it is Poland that is
blazing a trail for the rest of the region when it comes to property activity. “2010 was a surprisingly good year, especially coming on the back of what was a dismal 2009 almost everywhere,” says John Duckworth, head of Jones Lang LaSalle’s Central and Eastern European business. Over €3bn of commercial property
One benefit of “ the recession is that it took the heat out of the market
”
John Duckworth
— three times more than in the previous year — was traded in 2010, with the Polish economy growing 3.8% over the same period. That figure, moreover, looks set to increase during 2011 and 2012. Private consumption is giving the Polish economy a big boost, with retail sales growing in December alone by a staggering 12%.
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In view of Poland’s position in relation to other major European centres — it is on the same latitude as Berlin and Amsterdam — Duckworth says that a more sophisticated logistics infrastructure is a priority. “Poland is currently under-supplied due to its need for better quality roads,” he adds. Despite having come a long way in a very short time, Poland’s road network is still in desperate need of improvement. Although some €80bn has been allocated to infrastructure upgrades, with major motorway schemes scheduled for a 2012 completion — in time for the UEFA Euro 2012 European football championship co-hosted by Poland and Ukraine — much work still needs to be done. However on the plus side, Goodman Group has now launched its speculative Krakow Airport Logistics Centre, which has been on the books for years, and will eventually provide up to 160,000 sq m. The company is also due to start work on the 500,000 sq m Pomeranian Logistics Centre adjacent to the newly built Deepwater Container Terminal at Gdansk. The Polish capital, Warsaw, represents the largest Central and Eastern European office market, offering over 3.4 million sq m of modern space. Last year saw the highest take up in the history of the market with 549,000 sq m. The biggest deal involved insurance giant Aviva, which agreed a pre-let on 13,000 sq m at Platinum Business Park IV. With the supply level of new office buildings down 30% on 2009, Warsaw rents are forecast to move gradually up to €25 per sq m over the next year. “One benefit of the recession is that it took the heat out of the market,” Duckworth says. “The right people have now become involved in new developments. And
with the advent of a new metro system, Warsaw is entering its next phase as an international centre.” Duckworth also cites satellite cites such as Krakow, Wroklaw, Poznan, Gdansk and Katowice as increasingly popular centres for outsourcing. “Poland’s wages are lower than in Western Europe, the country’s technical skills are strong and it is culturally a lot closer than the Asian markets,” he observes. But if Poland is pointing the way forward, a number of its neighbours are experiencing mixed fortunes. Question marks remain over Hungary, for example, despite Budapest being recognised as a trading centre long before the overthrow of communism.
The Czech “Republic will continue to attract investors
”
Remon Vos
Duckworth says that doubts persist about the Hungarians’ commitment to embracing tight fiscal measures in a time of austerity. “Hungary is trying to win back investors,” he adds. “It wants to get back to the heady days when it was the region’s most attractive destination for foreign direct investment.” To this end, the Hungarian government is grasping the nettle and pushing through some unpopular cuts to state expenditure. It also intends to relieve some of the more punitive corporate taxes. For all the belt-tightening, last year saw a raft of new overseas arrivals, with big investments by General Motors, Suzuki, Audi, IBM and KBC. However, investor demand remains
largely focused on Hungary’s prime assets. Limited activity has pushed prime office yields to 7.5%, with retail between 7.00% and 7.25%. The Czech Republic — like Hungary, once a favourite with overseas investors — saw a welcome upturn in 2010 following the rigours of 2009. Remon Vos, managing director and co-founder of property developer CTP Invest, says: “It’s not so much the newcomers but the companies that have been in the Republic for the last five to 10 years that are extending their production facilities or adding new ones.” Vos cites the automotive sector as a fast growing area, with the likes of VW, Hyundai, Kia, Audi and Fiat all major players. And it is not just the capital, Prague, that is securing new occupiers. According to Vos, the country’s second and third cities, Ostrava and Brno, have, respectively, attracted the Finnish IT company Tieto and the aerospace giant Honeywell. Meanwhile, the country’s investment in its road infrastructure has paid dividends, with Levi’s moving its European distribution warehouse in Brno, where Michelin Tyres is also based. “The Czech Republic will continue to attract investors,” Vos adds. “Location, a well-developed infrastructure and skilled labour all make the Czech Republic a more attractive destination than Hungary, Romania or Slovakia.” Slovakia has always been perceived at the Czech Republic’s poor relation — and 2009 was indeed jaw-droppingly dreadful for the country, with no investment deals at all. From such a position, there is only one way to go. Investment trades in 2010 reached €66m, with Czech Property Investments Group spending €38m in just two deals.
Jones Lang LaSalle’s John Duckworth: Poland needs a more sophisticated logistics infrastructure
Cushman & Wakefield’s Andrew Thompson: Stable exchange rates make Slovakia attractive to investors
CB Richard Ellis’ Sergiy Markosyan: Investors are turning to Ukraine’s retail market
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Being in the eurozone, unlike its neighbours, has also brought Slovakia benefits, according to Andrew Thompson, managing partner at Cushman & Wakefield in Bratislava. “It means there are not the same jitters over interest rates,” he says. “And we also have stability with exchange rates, which makes Slovakia attractive to investors.” Thompson admits that work is still needed to bring the standard of training up to level found in the Czech Republic and Poland. Unemployment is also still high, although dropping slowly. Call centres, service centres and the automobile industry are providing the bulk of Slovakia’s big deals —
and being within a 45-minute drive of Vienna has also proved popular with Austrian investors. Next year looks set to see steady if unspectacular progress. Over in Kiev, Sergiy Markosyan, director of capital markets for CB Richard Ellis in Ukraine, reports that post-recession investors are turning from his country’s office market to retail — although the bulk of activity remains small scale, with local players dominating the scene. “What we are lacking is sufficient quality investments — prime income-generating properties,” Markosyan says. “Owners are reluc-
“
By 2013, we expect cross-border transactions to account for at least 50% of Ukraine’s investment turnover
”
Sergiy Markosyan
tant to sell and there are significant differences between sellers’ and buyers’ expectations on yields.” Markosyan believes that interest
rates are still too high, and cites weak infrastructure, inflation, bureaucracy and corruption as major hurdles that need to be overcome. However, he is cautiously optimistic about the big investment programmes that are currently under way for the shared Euro 2012 football championships. He also notes that, in 2011, inflation is not expected to exceed 11%. “By 2013, we expect prime yields to hit 10%-11% and cross-border transactions to account for at least 50% of investment turnover,” Markosyan adds. “The Ukrainian real-estate market offers excellent opportunities for international investors and developers.”
Pomeranian Logistics Centre: Goodman Group is due to start work on this 500,000 sq m facility which is next to Gdansk’s Deepwater Container Terminal
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MIPIM APPLAUDS THE UK AS THIS YEAR’S
COUNTRY OF HONOUR
A range of dedicated products and services highlighting investment opportunities and projects in the UK and allowing top level networking with key British players. Programme includes: Expert-led UK conferences The Investor Quest, a new interactive and entertaining event Dedicated UK Networking events MIPIM Awards tribute to a UK project
For more details about the UK Country of Honour dedicated programme, please visit our website: www.mipim.com/UK-country-of-honour-2011
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S AO PA U LO
Brazil scores two goals and aims for third
BRAZIL IS BUILDING UP TO HOST THE FIFA WORLD CUP AND OLYMPIC GAMES BUT SAO PAULO’S MAYOR IS UNVEILING EVEN MORE AMBITIOUS PLANS AT MIPIM. PAUL STROHM REPORTS Sao Paulo: Gearing for growth
B
RAZIL’s double sporting successes — being selected to stage the FIFA World Cup 2014 and Rio de Janeiro’s selection as the Olympic city in 2016 — have served to underline the country’s status as one of the world’s leading emerging economies. Brazil is the “B” in BRIC and in terms of GDP, which grew by about 7.5% last year, now has the fifth-largest economy in the world. But with this economic success and its forthcoming role as World Cup and Olympic host come pressure to upgrade the country’s infrastructure in its widest sense. For instance, social housing programmes are being expanded. Sao Paolo is the largest city in Brazil — and in the southern hemisphere for that matter — and led by its mayor, Gilberto Kassab, will this year participate at MIPIM for the third time. Kassab, who will deliver a keynote address on Wednesday, sees MIPIM
to display Sao Paulo for what it “is: Ithewant financial and economic gateway to the entire South American continent ” Gilberto Kassab
as an opportunity to promote Sao Paulo to international investors and developers interested in the Brazilian marketplace. But more than that he “wants to display Sao Paulo for what it is: the financial and economic gateway to the entire South American continent”. “The growing demand for urban infrastructure expansion to meet existing needs, as well as to set the path for the 2014 World Cup and 2016 Olympic Games, generate excellent business opportunities in Sao Paulo,” he says. The city’s real estate sector faces particular challenges, notably “the need to create new mixed-use districts to replace degraded areas and optimise
urban mobility at the same time”, Kassab explains. He is also presenting two major business opportunities while at MIPIM: the new Sao Paulo Convention Center, a 5 million sq m exhibition complex which he says is a project of great relevance to Sao Paulo's bid to host the World Expo 2020, and the renovation of the Nova Luz downtown area. The Nova Luz project will transform 500,000 sq m of rundown land and buildings in the Republica district of Sao Paulo. Incentives are being offered to attract private-sector organisations to a project that involves renovation and conservation of historic buildings in addition to new development.
Sao Paulo also presents opportunities for co-operation between local and international capital sources. MIPIM attracts a strong following among city leaders and Kassab says he is also keen to meet and interact with fellow mayors, in particular on the subject of sustainable development, and to explore public policies that enhance quality of life in the city.
Mayor of Sao Paolo Gilberto Kassab
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