Dubai’s skyscrapers may teeter rather than tower 15 Apr 2016 The sheikhdom plans to break its own record for the world’s tallest skyscraper. The new tower will cost $1 bln to build and sit at the heart of a giant real estate project. As falling oil prices force Gulf petrostates to diversify, Dubai may need a new strategy to lure investors.
Wanda trades places in $4 bln property buyout 31 Mar 2016 Chinese tycoon Wang Jianlin may delist his flagship property firm from Hong Kong less than 16 months after its IPO. It’s a bad time for a company exposed to China’s smaller cities to be in the public eye. Wang may nurse big plans, but minority investors have only a bit part.
Dublin is flunking its investment hotspot test 17 Mar 2016 Multinationals like PayPal love Ireland’s 12.5 percent corporate tax rate. But a flawed Irish property market is causing a drastic shortage of homes for their workers to live. Without cutting building costs, Dublin will struggle to capitalise should the UK quit the EU.
Watchdogs’ mortgage spat stems from bigger DC fail 14 Mar 2016 Fannie and Freddie’s regulator and the U.S. Treasury disagree about whether the home-loan agencies’ minuscule capital buffers are a problem. Money is available for another bailout. But that a debate exists at all is a reminder lawmakers have flunked fixing mortgage finance.
Carlos Slim builds Spanish empire at skinny price 10 Mar 2016 The Mexican tycoon has been building stakes in builder FCC and property firm Realia. He has made bids for both, at low premiums, after exceeding a 30 pct threshold. Slim has no incentive to offer target shareholders a sweeter offer unless the regulator forces his hand.
Restoration Hardware gives new excuse for failure 25 Feb 2016 The U.S. furniture retailer said sales slowed because of January’s stock market jitters. Given the high prices of Restoration products, it’s not far-fetched to believe its affluent customers have some sensitivity to the wealth effect. But this sounds like the new bad weather.
German real estate M&A fiasco leaves no winners 10 Feb 2016 The failure of Vonovia’s hostile bid for Deutsche Wohnen spares investors a long legal battle. The bidder comes away empty handed with at least 42 mln euros of costs. Wohnen’s defence involved a pricey acquisition. It’s time for German real estate to become boring again.
Lowe’s makes an offer even Canada can’t refuse 3 Feb 2016 The U.S. home-retailing chain has won over Rona with a 104 pct premium valuing its northern counterpart at C$3.2 bln. Protectionism helped thwart a bid from Lowe’s in 2012. A strong dollar made a knockout bid easier now. And it turns out the color of money suits any flag.
Germany’s listed landlords better off detached 21 Jan 2016 Deutsche Wohnen investors have until Jan. 26 to decide on rival Vonovia’s 14 bln euro hostile bid. Yet synergies are disputed, and a 14 pct fall in the bidder’s shares makes a stingy offer even less compelling. Wohnen can grow on its own, and its shareholders should say No.
Retail real-estate spin looks like short-term fix 11 Jan 2016 A warm U.S. winter has wrought more distress on Macy’s and Kohl’s. Shares in the companies are down by double digits, lending activists a stronger hand for separating out property assets. Reversing consumers’ growing aversion to big department stores will prove more difficult.
London’s bankers should retrain as builders 28 Dec 2015 The City’s banks are sacking thousands of staff. Meanwhile, the construction sector needs 120,000 new pairs of hands to boost UK housing supply to a level that eases house-price inflation. For bankers smarting from accusations of social uselessness, it might make a decent change.
Even Facebook can’t make distance disappear 18 Dec 2015 The social network is virtual, but in the real world it’s paying staff $10,000 to live near its campus. Silicon Valley draws strength from bringing smart people together to cross-pollinate ideas. A downside is having to keep pace with rising real estate costs and commuting times.
Trump’s Muslim tirade fails basic capitalist test 9 Dec 2015 The GOP candidate’s call to ban Muslim visitors ignores the openness on which the system that made him rich relies. U.S. deficits, banks and property have all benefitted from Arab money. Closing doors to people could do the same to capital, which a president can ill afford.
Deutsche Wohnen takes hostile bid defence too far 30 Nov 2015 The German landlord has complicated a 14 bln euros approach by rival Vonovia by buying apartments worth 1.2 bln euros and taking on debt. True, it shows that Wohnen can gear its balance sheet up under its own steam, but there are less risky ways to make the case for independence.
UK housing market policy gets ever more misguided 25 Nov 2015 Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.
Keep one eye on Sam Zell’s "For Sale" sign 26 Oct 2015 The U.S. real estate mogul’s Equity Residential is offloading a collection of apartments for $5.4 bln. While Zell got the timing right as a seller in 2007, so did buyer Barry Sternlicht’s Starwood in 2009. The one big difference is Zell’s two extra decades of investing experience.
Time is missing brick for Vonovia merger ambition 22 Oct 2015 The residential landlord has shot down a tie-up of rivals Deutsche Wohnen and LEG. Instead, eventually, Vonovia and Wohnen are likely to merge. But stretched Vonovia is ill-placed to table a convincing bid right now. It can come back after having digested previous acquisitions.
UK may have way round property-fuelled bank busts 21 Oct 2015 The Bank of England is looking at judging commercial real estate borrowing on long-term property values, not market prices. Good plan - too much bank lending just pushes up prices, inflating bubbles. But it will be hard to extend the plan to excess-prone housing markets.
Blackstone learns from Tishman’s Stuy Town mistake 21 Oct 2015 The private equity giant is leading a $5.3 bln deal for the vast New York apartment complex. The price almost matches what its rival paid in 2006 – before ceding the property to creditors. But with the help of more equity and City Hall support, there’s a foundation for success.
Home intrusion could pay for German landlords 14 Oct 2015 Residential landlord Vonovia is upsetting 8.1 bln euro rival Wohnen’s agreed merger with LEG, offering to acquire the buyer instead. At first glance, the new deal would leave Wohnen’s shareholders better off. In return, they cede control and take on the risk Vonovia has overreached.