Real Estate

West End foray breathes life into UK property M&A

1 June 2020

Capco, owner of much of London’s upmarket Covent Garden district, has bought a 26% stake in $2.4 bln Shaftesbury, which manages large swathes of the trendy Soho area. A merger could follow. The risky punt shows UK landlords are starting to think about life after the pandemic.

Corona Capital: Tech diversity, CNN’s middle age

1 June 2020

Concise views on the pandemic’s corporate and financial fallout: As big U.S. technology companies’ CEOs speak out about racial inequality, working from home trends could give them a chance to make a real difference; and 24/7 news network CNN feasts on Covid-19 as it turns 40.

Mall-to-retailer relationships will get creative

29 May 2020

Brookfield Asset Management launched a $5 bln fund to invest directly in retailers. It’s an effort to salvage some of the Canadian mall owner’s top customers. As Neiman Marcus and J.C. Penney march into bankruptcy, other real estate owners will rethink traditional rents, too.

IWG war chest burnishes anti-WeWork credentials

28 May 2020

The UK office group raised 320 mln pounds to fund acquisitions. Unlike its troubled rival, IWG has little debt and is expanding when competitors are retrenching. CEO Mark Dixon’s plan still relies on the hope that companies will need as much real estate once the lockdown ends.

Virus will accelerate European mall king’s decline

11 May 2020

Unibail-Rodamco is facing a cash crunch as retail tenants withhold rent. Although the crisis looks temporary, the accelerated advance of online shopping is an existential threat to the 7 bln euro Westfield owner. Disposals may be the only way to shrink its 24 bln euro debt load.

Offices will get roomier when the virus passes

4 May 2020

Conventional wisdom seems to be that after the pandemic commercial landlords will be crushed as staff stay home. But there’s a counterargument that cooped-up workers will crave interaction, employers will need to space them further apart and put an end to unhealthy hot-desking.

Corona Capital: GE, Oaktree, M&A back doors

1 April 2020

Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.

Ritz sale suggests some assets are virus-proof

30 March 2020

The high-end London hotel has been sold to an undisclosed Qatari investor for 800 million pounds. While that may not be enough for some members of the feuding family of sellers, it’s what it might have fetched pre-coronavirus. London property remains a safe haven of sorts.

Virus leaves all landlords under same leaky roof

26 March 2020

Blackstone, British Land and Intu’s differing financial shapes mean they can cut coronavirus-hit firms varying degrees of slack on their rent. But major tenants like Primark are refusing to pay. If everyone follows suit, landlords won’t have much in the way of comeback.

China plays chicken with property market

26 March 2020

Indebted developer Evergrande warned 2019 profit could drop 50%, and is slashing prices as sales tank. Rivals are in trouble, too. A real estate crash poses an unprecedented economic threat, but Beijing is maintaining curbs on speculation. That hard line risks hobbling recovery.

Virus may leave deep scars on property investors

17 March 2020

UK retailers such as Debenhams are asking landlords for rent reductions to deal with the outbreak. It’s hardly surprising given many are already struggling. But healthier stores are also asking for cuts or for rent to be tied to sales. The danger is these terms become permanent.

Blackstone unearths rough Chinese property gem

10 March 2020

The private equity firm is in talks to buy Soho China for $6.3 bln. A 101% premium is eye-catching, but the collection of skyscrapers – some designed by Zaha Hadid – look cheap. After Blackstone’s lucrative run selling to mainland buyers, this deal’s timing warrants attention.

Blackstone bets big on Boris British housing hedge

26 February 2020

The private equity giant is buying iQ Student Accommodation for $6 bln from Goldman Sachs in what it calls the biggest private UK real estate deal ever. It’s a play not on whether Brexit is a boom or a bust – but rather the continuing global allure of a proper English education.

Spain tweaks the odds on Blackstone’s property bet

18 February 2020

The left-wing coalition led by Pedro Sanchez wants to control rents on residential property. The move may depress house prices, up by one-quarter since 2014 thanks to a booming economy. Investors like Steve Schwarzman’s firm may be tempted to take some chips off the table.

UK property mess reveals bleak high street outlook

12 February 2020

Landlord Intu lost a third of its value after an investor shunned its capital increase. A $6.1 billion debt load makes any rescue tricky. The bigger issue, for Intu and peers, is a lack of clarity over the value of retail assets, as punters desert bricks and mortar shops.

WeWork needs more than a new adult in the room

3 February 2020

Bringing in real-estate veteran Sandeep Mathrani as CEO is just one step in turning around the cash-guzzling shared-office-space firm. Ending past excesses, focusing on bigger clients and negotiating better deals would help show the firm is more than just an exuberant mistake.

Japanese hotelier bidding war gets status upgrade

30 January 2020

Blackstone and Fortress raised their offers for Unizo. Both now trump Lone Star’s $1.6 bln deal, which cashes out the target’s bosses under murky terms. Activist investor Elliott may play kingmaker. The outcome could be a landmark for the country’s M&A and governance standards.

UK property’s crisis cash call tests Boris bounce

20 January 2020

Intu, the struggling landlord of retailers like Zara and Primark, is looking to raise equity to fix its $6.1 bln debt. Doing so would underpin the UK’s post-election property and stock market gains. But given the scale of what Intu needs, it may instead expose their fragility.

Nasty pieces of WeWork

17 December 2019

The shared-office outfit’s absurd $47 bln valuation wasn’t all that got exposed during a shambolic IPO attempt that led to SoftBank’s bailout. With any luck, founder worship, supervoting shares, weak governance, wacky missions and more will be knocked down a peg – or several.

UK takes small step to solving fund liquidity mess

17 December 2019

Bank of England Governor Mark Carney wants open-ended investment vehicles to offer redemption terms that match the cost of selling assets. The hope is to avoid blowups like M&G’s frozen property fund. Yet discounts could still encourage investors to run for the exit in a crisis.