Property Funds World Newsletter

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NEWSLETTER | 8 Oct 2020

Capital gains: Looking for investment opportunities in the post-lockdown London office market

We turn our attention to some of Europe's major cities this week, starting with London and a guest feature from Jonathan Gilbert, Investment Partner at Hartnell Taylor Cook, looking at investment opportunities in the the UK capital's office market – post-pandemic.

According to Gilbert, interest from overseas investors remains strong despite current coronavirus travel restrictions on those visiting the UK from many parts of the world.

"Despite a dip in Q2 of this year, London topped the list of global cities for cross-border investment in the office market, with a total volume of GBP3.3 billion invested in the city’s offices in H1," says Gilbert who is predicting a further uptick in market activity in Q4. "We know that capitalised investors are likely to be seeking opportunities post-lockdown," he says.

Slightly at odds with Gilbert's thinking, new data out this week from Savills suggests that UK investors accounted for 50 per cent of the GBP1.275 billion in deals completed in the central London commercial property market in Q3, taking overall market share for 2020 to 53 per cent, the first time since 2006 that domestic buyers have accounted for more than half of all investment activity in central London’s commercial property market.

Hoping across the Channel to Paris, we report on a new long-term, strategic partnership between Primonial REIM, in'li, PRO BTP and MIDI 21, which is looking to develop intermediate housing in the Grand Paris metropolitan area. And there is a strong social dimension to the partnership too. "The project involves more than simply investing in the housing sector," says Jean-Luc Barthet, Managing Director of MIDI 2i. "We are offering a solution for the many people living in the Paris region who are increasingly struggling to find accommodation; and we are offering shareholders in the fund created for the purpose a social dimension to their investments."

The housing sector in major German cities is next in the spotlight with data from Kryptoszene.de suggesting that purchase prices per square metre for residential real estate have almost doubled since 2012. The average (median) purchase price per square meter for apartments in major German cities was EUR2,921 in the second quarter, compared to just EUR1,500 back in 2012, while Munich remains the most expensive city in Germany, with real estate prices in the Bavarian capital rising by 6.1 per cent since the third quarter of 2019.

Our European tour ends in Madrid where we have news of the forward purchase by PATRIZIA of four warehouses currently under construction at a logistics park in Valdemoro. The 65,800 sq m development will be added to the company's existing Spanish logistics portfolio which already includes more than 515,000 sq m in the Madrid area and 652,000 sq m across the whole of the country.

In other news this week, we report on PIMCO assuming oversight and leadership of Allianz Real Estate in a deal first announced in March of this year, while we also report on the final close of EQT's second real estate fund at its EUR1 billion hard cap.

Property Funds World

Knowing where to look – investment opportunities in London’s post-Covid-19 offices

Thu | 8 Oct 2020, 12:59

By Jonathan Gilbert, Investment Partner at Hartnell Taylor Cook – For decades, London property has been an attractive prospect for both domestic and overseas investors. Whilst the oversea investment in residential property has always been well established in London, in the last 15 to 20 years, there has been a shift to also incorporate commercial assets.

Thu | 8 Oct 2020, 12:59

UK investors accounted for 50 per cent of all deals completed in Central London’s commercial property market in Q3 2020, says Savills, to take a 53 per cent market share (GBP1.435 billion) of 2020 overall activity.

Thu | 8 Oct 2020, 12:59

Primonial REIM, a real estate investment specialist with over EUR22 billion of assets under management, is joining forces with in’li, a developer of intermediate housing in the Paris region and a subsidiary of the Action Logement group, PRO BTP, a group offering social protection for those working in the building and public works sector, and MIDI 2i, a real estate asset management and financial engineering firm, to set up a strategic partnership aimed at acquiring and developing intermediate housing in the most central areas of Grand Paris.

Thu | 8 Oct 2020, 12:59

Purchase prices per square meter for residential real estate in major German cities have almost doubled since 2012.

Thu | 8 Oct 2020, 12:59

PATRIZIA AG, a leading partner for global real assets, has forward purchased the development of four logistic warehouses on behalf of its institutional investors for EUR50 million at a logistics park located in Valdemoro, within the greater Madrid area.

Thu | 8 Oct 2020, 12:59

Fixed income investment manager PIMCO has officially assumed the leadership and oversight of Allianz Real Estate – a global commercial real estate investment business.

Thu | 8 Oct 2020, 12:59

EQT has held the final close of the EQT Real Estate II fund at its hard cap of EUR1 billion in fee-paying assets under management.