Real Estate

German $6 bln non-LBO is sign of lean buyout times

15 February 2019

Hellman & Friedman and Blackstone are buying classifieds group Scout24. They can’t pile much debt on it, and the return looks way off the level investors usually expect. With buckets of cash, private equity needs to do deals. Buying fast-growing targets offer a little security.

Viewsroom: Down Under’s upheaval

14 February 2019

Falling house prices and slowing Chinese growth are putting Australia’s record of almost 28 years of economic expansion at risk. The banking industry got dinged after a gripping year-long investigation. And a change of government looks likely. Breakingviews dives into the issues.

Mall king Unibail has some wiggle room on dividend

13 February 2019

Boss Christophe Cuvillier unveiled the fruits of a $15 bln takeover of shopping-centre giant Westfield. Though retailers are struggling, Unibail covered its juicy dividend - but not so comfortably as to vanquish worries an economic downturn could still endanger future payouts.

Thoma Bravo finds mortgage cloud’s silver lining

12 February 2019

The buyout firm is paying $3.7 bln for Ellie Mae, a cloud-based U.S. mortgage processing software outfit. Rising interest rates and slipping prices have overshadowed the housing market, but that makes automation more attractive to lenders. A debt-free balance sheet adds allure.

London’s after-Brexit party will be dreary affair

11 February 2019

Property prices in the capital have stuttered since the 2016 referendum. If Prime Minister Theresa May can avoid a chaotic exit, investment may pick up. Yet a rising pound will discourage some foreign punters. And political and economic uncertainty will linger.

China’s property giants have a decent foundation

8 February 2019

Evergrande and other developers are tapping pricey offshore markets to refinance $98 bln of debt maturing this year. Sales are slow, but prices are still rising fast enough for comfort. Things will look even better if officials ease curbs as part of an economic stimulus package.

WeWork offers glimpse of conflicts to come

23 January 2019

The shared-office upstart and potential IPO candidate rents buildings part-owned by its co-founder and CEO. Private-company trends arguably encourage such blurred lines, but public investors tend to distrust them. It’s another reason to doubt WeWork’s high-rise valuation.

Temasek gives CapitaLand a new economy makeover

14 January 2019

The state investor will sell a real estate unit to the Singapore property giant for $4.4 bln. Temasek gets a majority stake in the heavyweight, which it already part-owns. With more exposure to e-commerce and developed markets, CapitaLand gets scale and downside protection.

WeWork needs path to profit, not enlightenment

8 January 2019

The cash-burning office-share outfit – now “The We Company” – wants to “elevate the world’s consciousness.” SoftBank is investing $2 bln more, some at a notional $47 bln valuation. But that’s far less than mooted. Broadening its ambitions as backers shrink theirs is risky.

Warren Buffett finds value in Sears wreckage

7 January 2019

The Berkshire Hathaway boss owns a stake in Seritage, the real-estate firm spun off from the bankrupt retailer. Revamping vacant Sears properties is driving growth and reducing dependence on the ailing chain. But true to form, Buffett has protected his investment with a loan.

LVMH pays luxury price to check into Belmond

14 December 2018

Bernard Arnault’s champagne-to-handbags group is spending $3.2 bln including debt on the owner of Venice’s Cipriani. The multiple of 19 times expected EBITDA is as punchy as a Belmond suite. The French group will need all its limited hotel experience to make the deal work.

Amazon HQ2 meets NIMBY 2.0

13 December 2018

A month after picking New York for its new location, the $810 bln e-commerce giant is being bashed by local politicians and unions. It’s a rude shock for a firm used to getting its way. This kind of opposition can be eased with money. As Amazon gets bigger, the cost rises.

U.S. housing poses headwind for economy

9 November 2018

Online real-estate firm Zillow lowered its outlook, tanking its shares, while DIY chain Lowe’s is shuttering stores. Meanwhile mortgage applications have dropped as loan rates hit a nine-year high. If home buying continues to slow, the effects will be felt more widely.

Colony Capital’s village is built on shaky ground

8 November 2018

The $3 bln real estate firm is gambling Tom Barrack can still build. Yet the founder helped erode nearly half the group’s value with a 2016 merger. Making Middle East introductions for his pal, President Donald Trump, has been a distraction. His best investing days may be over.

Evergrande’s bond bravado baffles bystanders

1 November 2018

The indebted Chinese developer issued $1.8 bln of dollar bonds at eye-watering coupons, but sold $1 bln to its chairman. With housing looking toppy, the yuan sliding, and a listing in the works, Evergrande has a lot of balls in the air. This gesture confuses more than it amuses.

SoftBank in danger of over-WeWorking itself

10 October 2018

The Japanese group may invest up to $20 bln for a majority stake in the office-sharing outfit. That suggests it could wind up as roughly a fifth of SoftBank's Vision Fund. That would be a dangerous amount of concentration risk, especially given WeWork’s unproven business model.

Hadas: Why houses are not like pigs

3 October 2018

Farmers respond to high pork prices, so the hog cycle keeps turning. It’s different for housing. An excess of money, not a shortage of buildings, usually turns prices upwards. And the cycle reverses when the money runs out, sometimes because lenders take fright at new supply.

Fed helps Hong Kong homebuyers at owners’ expense

28 September 2018

Banks are hiking their benchmark rates for the first time in 12 years. As tighter U.S. monetary policy feeds into Hong Kong mortgages, flat prices look set to fall, relieving young buyers. But cooling the world’s bubbliest property market could tax economic activity.

Silicon Valley puts tech gloss on house flipping

27 September 2018

Opendoor thinks algorithms are a better way to buy and sell homes. SoftBank’s $400 mln investment in the company suggests it agrees. Opendoor and its peers can speed up and streamline an inefficient process. They can’t wish away balance-sheet risk if the housing market slows.

Wembley bid is open goal for Britain’s soccer body

27 September 2018

Jacksonville Jaguars owner Shahid Khan has offered a staggering 600 mln pounds for the UK’s national stadium. Given that the Pakistani-American is leaving behind the lucrative hospitality arm and naming rights, the Football Association should put the deal in the back of the net.