Investors Me Share on commercial real estate

Investors Me Share on commercial real estate

All over the world there has been a new trend. Investors fleeing risk, began to invest in commercial real estate.
For the second quarter of 2012, direct investment in commercial facilities around the world reached 103 billion dollars, which is 10% more than in the first quarter of this year.

This conclusion came by estimation company Jones Lang LaSalle.
The company’s analysts conduct market research in over 60 countries. Now they say that the interest of investors in the shares remain relatively low, and they prefer to invest in other assets, particularly in commercial real estate. According to preliminary estimates, the total investment for the year 2012 in the countries to be about $ 400 billion.
The biggest growth, according to analysts Jones Lang LaSalle, observed in North and South America, where the volume of investments increased by 33% compared to the first quarter.
The four largest deals for the period, according to the company were made in London and Paris.
Property development and investment company Brookfield Office Properties has agreed to buy four existing office buildings and one office project at the company Hammerson City of London. The total purchase price – 518 million pounds.
Brazilian billionaire Moshe Safra (Moise Yacoub Safra) paid 500 million pounds (616 million euros) for the office building Plantation Place in the City of London.
Qatar’s sovereign wealth fund bought the insurance company Groupama shopping complex on the Champs Elysees in more than 500 million euros. The building lease area, for example, Virgin Megastore and supermarket Monoprix.
Malaysian pension fund PNB acquired two sites in London from the portfolio of the German fund KanAm total book value of 590 million euros.

Distribution of direct investment in commercial real estate in the world

Distribution of direct investment in commercial real estate in the world
(billions of dollars)
* EMEA – Europe, Middle East and Africa
Source: Jones Lang LaSalle

On the Russian side

According to the company Jones Lang LaSalle, in the Russian market, investors have also become much more active in the middle of the year. Investment in commercial real estate in the second quarter reached 1.774 billion dollars, which is 192% more than the amount of the first quarter (608 million dollars). Just half a year in commercial real estate was invested $ 2.4 billion of direct investment.
One of the biggest deals – the Finnish investment company Sponda Plc acquired the Moscow business center “Bakhrushin xaus” the fund UFG Real Estate. The deal has not been announced.
According to Jones Lang LaSalle, the most active this year, investors have invested in the retail and office market segments: each of them has given to 42% of total transactions. At the same time, the share of investment in storage real estate increased to 11% compared with 6% in the first half of last year.
Analysts predict that the total investment in real estate in 2012 will be about $ 6.5 billion. Including due to several transactions that will take place soon. In particular, the BIN is close to completion of the acquisition of real estate projects worth 983 million dollars. The portfolio of the acquired projects include Summit, residential neighborhood “Garden Quarters”, “Lyuks Hotel”, and 8.8 ha plot in the Rubber “rubber” in Ochakovo.
Zinkovsky Alexander, Senior Research Analyst, Cushman & Wakefield, said that interest in office properties and is stable at around $ 1 billion in the quarter. But also increased interest in high-quality shopping facilities and appeared strong demand for shopping centers in large cities, for example, in Ufa, Rostov-on-Don, St. Petersburg. Investments in the same office is still limited the Moscow region.
According to Zinkovsky, investors have learned from the previous crisis and now consider commercial property as a serious tool for risk diversification.
“In the market there is a small increase in rental rates, but no increase in sales. Investors are not willing to pay a price comparable to pre-crisis levels, and the sellers are in no hurry to give its assets cheaply, since there is no factor of forced sales “, – said Andrey Lyubimov, Project Manager Ruperti Project Services International.
Over the past six months, looking to invest in commercial real estate was up 10%, says CEO Retail Row Marat Minasyan. The reason – the growth rate and a certain lack of quality space in the market. According to him, hire the A-class offices has risen since the beginning of the year by about 9%, Class B – 12-14% depending on the location of objects. His most rapid and significant increase in rental rates showed small rooms up to 100 square meters. meters – 14-15%.
According to him, in Moscow there is a certain lack of quality retail space, which leads to higher prices. That is why at a very high price – more than 1 billion rubles (over 25 million) was sold to the SEC “Golden Babylon”, located behind the TTC.
Marat Minasyan noted that in the first six months decreased profitability and investment attractiveness of the commercial property market. “A year ago you could buy a retail facility with a yield of 14% and above, but now, having made a similar purchase, the investor will be able to rely only on yield of 10-12%. Capitalization office buildings also fell – from 14-15% last year to 12-13% this “- said the expert.
“Maybe, equity investments become less active, and in real estate, on the contrary, more intense. But you can not say that those who have traditionally dedicated stock market, went out and invested in real estate. I am sure that such cases exist, but they are rare. That is to say the trend is impossible, it is very different markets in order to switch between them “, – says Andrey Lyubimov.
Arthur de Haast, head of global markets and investment company Jones Lang LaSalle, said: “Even in Europe, in the current environment of economic uncertainty, we continue to see strong demand for the best assets.” The banks reduced lending program commercial real estate market is dominated by private equity funds and institutional players. According to analysts, the investment market will continue to be controlled by this group of investors who have access to money and little or no need of debt financing.