We announced the following at our last CREOpoint member get together in London and Hong Kong:
Since many friends could not travel to Paris for the annual European Urban Land Institute conference, CREOpoint and its partners The Wall Street Journal and Real Capital Analytics are bringing you the buzz from the two-day action.
Over 600 attendees from 27 countries met in Paris recently for the 15th annual ULI Europe conference. The event kicked off the European real estate calendar under the title “Nothing is certain but debt and taxes.” If you were there, you may see some of the news you may have missed. If you could not travel to France, this is the next best thing to being there!
I had a chance to meet a number of fascinating people: Christian Delaire (CEO of AEW Europe), Dan Fasulo (MD Real Capital Analytics), David N. Bradford (Global Risk and Investment officer, Pramerica Real Estate Investors), Gerhard Dunstheimer (ECE Deputy CEO), Gerard Groener (Corio CEO), John Forbes (Partner Real Estate Funds PricewaterhouseCoopers), Karl-Joseph Hermanss-Engel (Board Member, Union Investment Real Estate), Laurent Lehmann (Deputy General Manager, CBRE France), Patrick L. Phillips (CEO of the Urban Land Institute), Roger Cooke (Chairman Cushman & Wakefield EMEA Capital Markets) and Roger Orf (head of Apollo Global Real Estate Europe). If you are interested in what some of them said, scroll down.
The consensus view was that Europe’s recovery was slowly underway but it was difficult to be confident due to:
- Low economic growth
- Sovereign debt crisis (with the fear of a larger country like Italy failing and a question about how much core Europe would have to bail out weaker countries)
- Reduced government spending
- Clouds over new regulations (e.g., Basel III, Solvency II, the Alternative Investment Fund Managers Directive, over-the-counter derivatives, lease accounting)
- Maturing European loans (usually 5 yrs Vs. 10 in the U.S. so 2007 loans will need refinancing next year despite values having dropped an average of 20%)
- More investors looking for higher returns in growing countries (like Brazil, China, India and Turkey)
- Weak lending market (although there’s hope insurance companies and the Chinese will replace European banks)
Or as Jim Morrison would have said: “The future’s uncertain and the end is always near.” Somehow I left the conference feeling the bold ones will be those who can look beyond uncertainty and doubt and continue to quickly adapt and move ahead.
What I heard from 12 global property leaders
 Dan Fasulo, MD Real Capital Analytics: "Despite reaching $160Bn in commercial property sales, the year on year increase in Europe was paltry versus what was seen in the US and Asia. Investors will continue to work around sovereign debt issues in 2011, and expect some countries and markets poised to outperform as capital moves to higher yielding assets in secondary locations."
 Karl-Joseph Hermanss-Engel, Board Member, Union Investment Real Estate: “We spent Billions for acquisitions in 2010 but wonder what will replace German lenders who are withdrawing”
 Christian Delaire, CEO of AEW Europe: “Secondary and tertiary markets, and countries perceived as too risky (e.g., Spain and Hungary) should remain very illiquid, leaving space to opportunistic deals. It will also be important to stay close to the assets, and rely on the right teams with a real local knowledge (both real estate and financing/structuring) and proper retention policy.”
 David N. Bradford, Global Risk and Investment officer, Pramerica Real Estate Investors: “We are working hard on answering tougher questions from investors who got burned across the board. I’m now cautiously optimistic about job growth. Values in places like London and Washington have recovered with unprecedented speed. Capital came in fast to close the opportunity.”
David also reminded us of this quote: “Character is not built in a crisis, it’s only displayed”
Global research firm Real Capital Analytics (RCA) is well known for its tracking of real estate capital flows. Our friends at RCA have a special limited-time offer for CREOPoint members which I would strongly urge you to take advantage of:
RCA is offering for free its latest Europe Capital Trends report on the Year in Review. The report details European property investment trends over the last year and includes a thorough analysis of property sales activity, top buyers, sellers and brokers, rankings of top markets and deals, plus a summary of the benchmark transactions of 2010. To better understand key aspects of the capital environment, download this complimentary issue from Real Capital Analytics.
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Quotable
"We need new people to handle new times. Our industry has too many attorneys, bankers and engineers who do not have an open mind and are too far away from end users. We need to attract new people with the right attitude rather than the wrong experience”
- Gerard Groener, CEO Corio NV
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Change before you have to!
Olivier Piani, Chairman of the Executive Committee of Allianz Real Estate reminded us of Jack Welch saying: “Change before you have to”
Roger Orf, head of Apollo Global Real Estate Management Europe: “2011 will go down as the year when investors who looked forward, not backwards, planted the seeds of future rewards for themselves and their investors.”
 John Forbes, Real Estate Funds Partner, PwC: “Adapt or die…The key thing to remember is to look forward and not back. In future years we may look back on 2011 as a transformational year for the property industry due to investor constipation and industry consolidation.”
 Patrick L. Phillips, CEO of the Urban Land Institute: "There’s always a lot of talk after a crisis about how things are truly different, but it rarely turns out that way. We usually just muddle along with adjustments at the margins. This time really is different. Capital flows, investor expectations, the role of development, our faith in government institutions—there’s been a fundamental readjustment. Our industry will sort it out and emerge competitive and innovative, even if somewhat smaller than before."
Gerhard Dunstheimer, ECE Deputy CEO: “Pressure drives change. The opportunity is now. Vision will be key.”
 Gerard Groener, Corio CEO: “The market is changing quickly. Technology will have a major impact on retail. We are actively participating in social networking sites and blogs as it’s important to focus on the consumers, maintain their interest, increase traffic and loyalty.”
 Laurent Lehmann, Deputy General Manager CBRE France: “Social media is a tremendous opportunity to target new prospects, to exchange ideas and insights with our clients and to get feedback. Creating a blog was free and our content quickly got amplified. It is a profound change in how we speak on the Internet. There is a learning curve I’d recommend: listen, follow and then participate. Online networks require more content, more spontaneity and more transparency.”
 Roger Cooke, Chairman Cushman & Wakefield EMEA Capital Markets: “Our industry should start to operate the way the word is already going. We have got to be alert to the upcoming generation of clients and colleagues. Technology is helping cut costs and improve the branding of developers and buildings, which is becoming more and more important.”
ULI also recommended that conference delegates start a Twitter account to “tweet” questions and comments throughout the day while following #ULIParis. In the ULI Europe November 2010 report about "Retail and the Internet", ULI also recommended:” It is increasingly important to monitor Facebook groups and respond to consumer comments”
Do you know whether your organization is monitoring this online buzz as you should? You might be surprised by what CREObuzz™ found regarding your brand and your competitors.
The buzz about ULI
Our CREObuzz™ proprietary data-mining algorithm uniquely aggregates the online buzz and derives insights about CRE, drawing on more than 10,000 non-classified publicly available online media sources. As a pro-bono contribution to ULI’s 2011 plans, CREOpoint monitored what was said in English about ULI in the 30,000 CRE-relevant articles we track each day for clients. In the six-month period through Feb. 4, 2011, ULI or Urban Land Institute appeared in 1090 online posts.
In addition to more upbeat comments about the market, the CRE online buzz for ULI was about development, investment, office, residential and U.S. cities.
The sentiment about the market was clearly more upbeat. The word distressed is not as present but they were more positive words like “opportunities” and “great” compared to negative words like “slow” and “problems.”
Products most talked about were office, residential, retail and hotel. Most of the conversations were about the U.S. (New York, California, Washington) while internationally Asia was more covered than Europe and the most talked about cities were Singapore and London. Surprisingly China and France did not appear in the top 200 words. Hot topics also included trends, capital, growth, government and sustainability. The words bubble or REITs did not appear either.
ULI, PwC, JLL, the FDIC and the Fed were the organizations most mentioned. ULI Chairman and Grosvernor Executive Trustee Jeremy Newsum was the only personality who made the CREObuzz™ list.
Source: CREOpoint, the global leader in using online networking to foster effective and useful communication in commercial real estate. The CREObuzz™ reputation risk management tool is provided to client corporations to help them prepare for the potentially devastating and certainly embarrassing damage incurred when sensitive data is diffused deep and wide instantly. Insights are also used offensively for more cost effective marketing. In the above chart, word size corresponds to frequency of references. Expected words like members, property, real estate, market, ULI and the Urban Land Institute were removed. The above overview is refined for CREObuzz™ clients looking for differentiating insights by market and product, or other leading indicators. You could visit www.CREObuzz.com for more information.
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If a discussion happens online out of our line of sight, did it happen?
Within a few clicks, a hard-earned reputation can really be tainted. Are you sometimes worried that whoever is in charge of risk and reputation management for your organization may be missing something that could spin out of control?
Grounded in millions of conversations, CREObuzz™ uniquely reaches across 10,000 mainstream and new media sources including press feeds, CRE websites, blogs, Twitter, Google Buzz, Yahoo Finance forums, LinkedIn answers and network updates, FaceBook Fan Pages and group walls, YouTube, Digg and CREOpoint. Our researchers then “gold” mine for reliable intelligence, saving our clients a lot of legwork.
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In addition to a grant from Real Capital Analytics, The Wall Street Journal made this newsletter possible
Advertise with THE WALL STREET JOURNAL in the MIPIM Special Ad Section
For the first time THE WALL STREET JOURNAL EUROPE will be dedicating a special editiorial report to MIPIM focusing among other topics on the commercial opportunities available post recession. The report will be a must-read for real estate executives across Europe and will benefit from unrivalled distribution at the show, both in the Palais itself and in all the major hotels and business lounges. This is a unique opportunity to reach the global real estate industry at one of the most important events of the year. There are only days left before the section closes so act fast. For more information please email robert.monaghan@dowjones.com today.
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Grants from GE Capital Real Estate, Real Capital Analytics, RealFoundations, the Wall Street Journal and W.P. Carey have made these CREOpoint newsletters possible
Contact Partnership@CREOnewsletter.com if you'd like to include sponsorship of our exclusive events or global e-newsletters in your budget. CREOpoint will be well represented at MIPM (Cannes), PREA (Washington), IREM (NY), IMN Distressed Assets (NY), NYU REIT Center (NY), IMN Non-Traded REIT (NY), CoreNet (Hong Kong and Chicago), ULI (Phoenix and Los Angeles), ICSC (Las Vegas), NAA (Las Vegas), BOMA (Washington), NMHC Apartment Strategies Update and Finance Conference (Palm Beach), Expo Real (Munich), Multi-Housing Word (Denver), NMHC Apartment Operations and Technology (Dallas) and REITWorld (Dallas).
Back to the Real Capital Analytics ad
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Big deals in Europe... Follow the money:
- Credit Suisse sold a $2.8 Bn portfolio to Apollo at a 60% discount
- Allianz Real Estate was the top investor in Europe with $2.1 Bn in 2010
- Corio bought a $1.8 Bn portfolio of European shopping centers from Multi
- The Carlyle Group bought 6 White Tower Properties in London for $1.1 Bn
- JP Morgan bought London's Bishop Sq. Office complex from Hammerson for $900 Mn
- London's Grosvenor Hotel was bought by Sahara India Pariwar for $760 Mn
- Gecina of France bought 3 office properties from UBS for $595 Mn
- Chinese Estates bought Goldman Sachs UK HQ for $450 Mn
- ING bought 40 Portman Sq. in London from Aerium for $290 Mn
- Union Investment Real Estate sold Whitefriars office for $240 Mn to a Malaysian Fund
- Congratulations to CREOpoint client W.P. Carey for the $210 Mn acquisition of 6 distribution centers from Dutch C1000
You could click here for other recent European deals, compliments of Real Capital Analytics.
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Did you know?
- The Paris market is seen as attractive due to its size, diversification, lower volatility than London, prices in Euros, liquidity, scarcity of land, low vacancies and investment in transport infrastructure
- Munich holds the top spot for existing investments per PwC, ahead of Istanbul, London and Paris, with Moscow slipping from #1 in 2008 to #24 today
- With capital so risk adverse, cities such as Munich, London and Paris are expected to absorb investment and stand as the only places where tenant demand will remain robust. Other favorites of investors surveyed by PwC are likely to be Istanbul, Stockholm, Berlin and Hamburg
- For the first time, Chinese shoppers have become the largest customers in London West End
- U.K. banks are not lending, and the French banks are lending more than their German counterparts
- Insurance companies in search of higher yield are likely to step into the senior lending market
- Bernard Penaud, Head of France for Tishman Speyer Properties estimates for European Core 6-8%, Core plus 8-11, value add 12-16, Opportunity only 15-17 when before it was 20-25%
- The French REIT association wants to harmonize taxes within the Eurozone
- EPRA continues its campaign to broaden the base of European listed real estate by focusing on German open-ended funds (listed companies account for less than 2% of the market)
- JLL announced a new business model in Europe, Target 2014, with more corporate advisory and long-term services
- Peter S. Rummell was selected as new Chairman of the Urban Land Institute. He was previously president of the Disney Development Co. and chairman and CEO of The St. Joe Co.
- Congratulations also to Joe Montgomery who was appointed as the new CEO of ULI Europe
- Reed Midem named Christophe Chupot as new Director of its Real Estate Division and Filippo Rean as Director of CREOpoint partners MIPIM and MIPIM Asia
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Benefit from free and premium CREOpoint solutions
CREOpoint.com now has over 100,000 members and visitors from over 50 countries. In less than 3 short years we have developed over 40 client relationships and alliances with leading CRE organizations who trust us. Thanks again to this newsletter sponsors Real Capital Analytics and The Wall Street Journal.
Please let me know directly at + 1 914 310 4189 or JCGoldenstein@CREOpoint.com if you or one of your colleagues would like to explore how to also work more closely with us.
I'd also be delighted to meet you at MIPIM if you are also planning to participate? CREOpoint will host an exclusive pre-MIPIM party for VIPs with our partner The Wall Street Journal. We'll also host an informal CREOpoint member get together so stay tuned.
Thanks, JC
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Here's other initiatives you could consider to grow your business:
2. I want to gain unique competitive insights: How is your business positioned relative to its targets and direct competitors? Email Consulting@CREObuzz.com to get your free snapshot of the buzz about you in the blogosphere Vs. 2 competitors (offer valid for a limited time only).
Bridge the gap between your business goals and social media with a strategy that focuses on what you can start doing to make a difference. Visit www.CREObuzz.com today or confidentially contact us at consulting@creobuzz.com for details.
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You could also join our exclusive community if interested
It was good recently seeing CREOpoint members such as Blaise Heurteux (Founder of HBS Research), Edouard Vitry (head of Real Estate, Simmons & Simmons), Mickael Jones, co-Founder of NAI France and many others.
I was also very happy to catch up with my old friend Lionel Richaud (founder of French residential investor BBR Louvre) and had interesting conversations with Florence Bardin and Laure Tubiana (executives at Agence Premiere), Bill Kistler (Senior Client Partner Real Estate EMEA Korn Ferry), Ad Buisman (Global Real Estate Assurance Leader for Ernst & Young ), Dean Hogcroft (Head of Real Estate, Construction and Hospitality for Ernst & Young EMEIA), Denis Tersen (CEO of the Paris Region Economic Development Agency), Erik Sondén (Head of Real Estate Coverage and AdvisoryTWD Asset Management and Président ULI France), Greg Clark (Senior Fellow ULI EMEIA), Jeremy Newsum (Executive Trustee, Grosvenor Estate) and Mark Mogull (Founder and Managing Partner, Benson Elliot). Thanks to Alexandra Notay and Bobby Krueger of ULI for their hospitality.
Not sure why or how? Contact us
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