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Co-head of M.Stanley Real Estate to step down
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John Carrafiell, joint global head of Morgan Stanley Real Estate (MS.N), is stepping down from his role in January, a spokesman said on Monday. Carrafiell, who took a leading role in the 1.7 billion pound ($2.51 billion) acquisition of London's Canary Wharf business district in 2004 - Britain's biggest-ever property deal - will hand over his duties to New York-based co-head Sonny Kalsi next month. Carrafiell's next career move is unclear but he will remain a senior adviser to the bank and continue to serve on the boards of Morgan Stanley-backed property companies including Canary Wharf Group, retail developer and investor Multi Corporation, German property company Deutsche Immobilien Chancen AG and Spanish property firm Grupo Lar.
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Year of turmoil brought City grandees low
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With two and a half trading days to go before Christmas, this week, instead of looking ahead, we are peering over our shoulders to work out who fared the best and was left behind in the London market in 2008. Overall, it has been a year of losses: the FTSE 100 is down a depressing 33.6 per cent, while the FTSE 250 has lost over 41 per cent of its value since January. Recession and the paucity of credit have played havoc with stocks across the sectors. But some have managed to weather the storm better than others. The banks fared the worst as writedowns went from bad to worse to unsustainable and wholesale funding dried up, forcing some of the grandest of City grandees to seek help from the taxpayer or find solace in the arms of a better-funded foreigner.
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HBJ signs up Mishcons real estate partner
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HBJ Gateley has been steadily expanding its London presence during the last year. In April, the firm recruited Simmons & Simmons partner Robert Bryan to head up its construction and engineering practice, while in May, HBJ completed a merger with shipping boutique Holmes Hardingham. In August this year the firm bought in litigation partner Debbie Milne in Edinburgh from Biggart Baillie. The firm has offices in Birmingham, Edinburgh, Glasgow, Leicester, London, Nottingham, London and Dubai, with a total of 99 partners and 370 fee earners.
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Are country estates still selling?
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Marsh Court, a 10-bedroom house in Stockbridge, Hampshire, which came onto the market in April 2007 for £13m, was relaunched this June for £10m and sold for £11m in September. Grade I-listed Chicheley Hall, in Buckingham-shire, which went on sale in July last year for £9m, had its asking price slashed to £7m in January and went for close to that in June. Many more sellers are retiring from the fight altogether, including the owners of Furzehill Place, in Surrey, once home to the Victorian explorer Sir Henry Morton Stanley. They have taken the property – guide price £7m – off the market after eight months. It is clear that the City-boy-fuelled boom years are over – but what does the next year hold? “There’s still a lot of money out there, and a lot of people still have an ambition to buy a chunk of England,” says Mark Lawson, a director of The Buying Solution, an upmarket agency. He warns, however, that until buyers regain the confidence to spend and sellers are willing to brave the market, 2009 will be very tough indeed.
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London student real estate market needs more houses
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London could become more of a target for investment property landlords after a study found there is not enough student accommodation in the UK capital. According to consultancy firm Knight Frank, London needs at least another 100,000 student bedrooms, with many of those looking to study in the city not able to find university or private accommodation. The firm also said the current financial slowdown presents an opportunity to expand the student property stock, seen as less risky than more traditional
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Mortgage rate rip-off: banks stand accused
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First-time buyers and people remortgaging recently-bought homes still face 'debilitating' rates of up to or even above 6% - despite the Bank of England slashing its borrowing rate to 2% yesterday. The dramatic gap emerged as Gordon Brown warned banks they must cut the cost of mortgage borrowing or face being carpeted by him and the Chancellor. 'Remember, the last time and the interest rates came down 1.5%, we had to talk to the banks before things moved forward but things did move forward,' he told GMTV. 'And we will be talking to the banks again.' But this afternoon Royal Bank of Scotland, which was bailed out with taxpayers' billions, defied the Prime Minister by refusing to pass on the Bank's one% cut in full. It reduced its standard variable rate by only three-quarters of a point, to 4.44%.
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London Luxury-Home Values Slide for Eighth Month in November
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Nov. 29 (Bloomberg) -- Luxury-home values in central London, the world’s most expensive location for prime real estate after Monaco, fell for an eighth month in November as fewer sellers held out over prices. The estimated average value of a house or apartment in the city’s nine most expensive neighborhoods fell 3.6 percent from October, according to an index compiled by Knight Frank LLP. It was the second-largest drop since the index started in 1976. Property values declined 14 percent from a year earlier, the broker said today. The index covers homes mostly valued at more than 1 million pounds ($1.54 million). “The last few months have seen vendors gradually accepting that prices need to be cut if a sale is to be achieved,” said Liam Bailey, Knight Frank’s head of residential research. “Further price falls are to come.”
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Sibir plunges on planned property deal
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The market value of London-listed Sibir Energy halved on Wednesday after the Russian oil group said it would buy more distressed real estate assets from its key owner for $340m in cash and debt. Sibir had already outraged minority shareholders when it said in October it would buy some $157m worth of real estate from its key owner, Russian businessman Shalva Chigirinsky, in a clear departure from its core oil business.
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Mayor bids to aid London real estate market
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London could be in for a real estate market boost after the city’s mayor announced a £5 billion windfall for housing. Boris Johnson unveiled the Housing Strategy, which is geared to boost building in London during the economic slowdown. Measures include support for the construction industry to get more affordable homes for sale onto the market. The Greater London Authority also said the strategy would see cash used to kick-start some of London’s stalled developments.
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London property, through the looking glass
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In 2006, our fixed-rate time limit ended and we once again had incentive to shop around. This time, my husband secured a new, interest-only mortgage after just a few simple phone calls. Our monthly payments would be even lower than before, though with this type of loan we would not be reducing the principal. Yet seeing that most mortgages are interest-only for the first few years anyway, it seemed a good option. And when we learned that the two-year fixed rate was just 4.59 percent, it seemed too good to be true. Turns out it was. This past February, Northern Rock - a bank that at the time accounted for one in five British mortgages, including ours - had to be bailed out by the government because it over-leveraged. The bank's demise left us staring at a whopping 6.8 percent interest rate if we didn't refinance by June. That meant our monthly mortgage payment would increase by more than a third. Still, in spite of the difficult economic climate, we felt pretty smug about finding a new lender. My husband had just started a new and well-paid job; my freelance writing business was going strong; we had some savings in the U.S. stock market; and we only needed to cover half the value of our house.
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British Land Reports Wider Quarterly Loss as Values Decline
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British Land Co. Plc, the U.K.'s second-largest real estate investment trust, posted a second quarter loss after it was forced to write down the value of its shops and offices by 683 million pounds ($1.02 billion). The net loss for the three months ended Sept. 30 widened to 747 million pounds, or 146 pence a share, from 277 million pounds, or 54 pence, a year earlier, the London-based company said today in a statement. The company's net asset value fell to 1,043 pence a share. British Land, owner of the Broadgate estate in London's main financial district, is enduring the worst commercial property decline in at least 15 years. A freeze on bank lending has cut off credit to most property borrowers, exacerbating price falls. U.K. commercial property values are down 28 percent from their peak in June 2007, according to data from Investment Property Databank Ltd.
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U.K. Property Stocks Dip as Morgan Stanley Sees Slump
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Nov. 6 (Bloomberg) -- Land Securities Group Plc and British Land Co., the U.K.'s largest commercial-property companies, declined in London after analysts at Morgan Stanley said the shares may fall to the lowest levels since at least 1995. A team led by Martin Allen, a London-based analyst at Morgan Stanley, cut its ratings for the stocks because of ``rising concern'' over debt gearing covenants. U.K. property companies have struggled to raise money from sales of real estate as transactions have dried up because of a shortage of bank finance. That has made it harder for them to cut debt and has contributed to a 30 percent decline in the FTSE 350 Real Estate Index in six months.
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Madonna’s messy divorce a hot topic in London property circles
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Over the years the Material Girl developed into something of a real estate mogul, collecting an impressive portfolio of properties in London, New York and Beverly Hills. Industry executives are already speculating that some of those properties may hit the open market, depending on what happens in the wake of the settlement with her soon-to-be-ex hubby, director Guy Ritchie. The couple reportedly owns five buildings in London, plus Ashcombe House, a Georgian mansion on 1,200 acres in Wiltshire. Their portfolio also includes a building in London’s West End used as a Kabbalah headquarters. A partial list of the couple’s properties can be found here. If it went on the market, Ashcombe might be the big prize. The estate could attract more than €25 million, property agents say. “We look forward to hearing from Guy or Madonna if they are interested in selling,” estate agent Mark McAndrew of Strutt & Parker told the London Times.
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Office real estate still on the floor
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Deals have dried up. Just £17 billion of commercial property has been sold so far this year — the same amount that was sold in the third quarter of 2007 alone. In central London CB Richard Ellis (CBRE), the world’s biggest real-estate agent, says only £5.2 billion of office buildings have been sold in the year to date, compared with £17.5 billion for 2007 as a whole. Meanwhile, values are plunging. CBRE predicts that property values will have dropped roughly 20% by the end of the year — but that figure could rise after the collapse of Lehman Brothers and the events that have followed in the global economy.
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1-UK real estate trade shrinks further in Q3
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UK commercial property worth five billion pounds ($8.92 billion) changed hands in the three months to end-September as the market continued to shrink due to a lack of debt funding and falling prices, data showed on Wednesday. Property services firm Jones Lang LaSalle said British direct real-estate investment in the third quarter was down about 17 percent on the previous three-month period when 6 billion pounds traded. Jones Lang LaSalle said the year-to-date total for the market stood at 18 billion pounds -- a 58 percent drop compared with the first nine months of 2007.
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Citigroup upgrades UK real estate sector
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Sept 25 (Reuters) - Citigroup upgraded the UK real estate sector to "neutral" from "underweight" as it envisages a recovery in direct real estate, but said it remained unclear on the timing. In a research note, analyst Harry Stokes said while he sees glimmers of light in lower interest rates and profitable lending margins, he also sees near-term risks associated with global financial services and the UK economy.
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U.K. Property Stocks Gain the Most in Almost 23 Years
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U.K. property companies led by Land Securities Group Plc and British Land Co. climbed the most in almost 23 years in London after the U.K. and U.S. stepped up efforts to ease the credit-market seizure. The FTSE 350 Real Estate Index rose as much as 15 percent, the most since the index started at the beginning of 1986. It was 5.3 percent higher at 9:55 a.m. in London, paring this year's decline to 16 percent. ``It has to come down to the action that is happening on both sides of the Atlantic,'' said John Perry, a property analyst at Deutsche Bank AG in London. ``Real estate preceded the broader market on the way down and from a fundamental standpoint, it was closer to the bottom than other industries.''
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ING UK Real Estate sells London retail property for 10.5 mln pounds
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LONDON (Thomson Financial) - ING UK Real Estate Income Trust Ltd. said it has sold a London retail property for a total 10.5 million pounds to Waitrose Ltd., to help complete repayment of outstanding non-securitised borrowings before the end of 2008. The Guernsey registered closed-ended investment company added that the sale price reflects a net initial yield of 3.57 percent. Completion is due on Sept. 19.
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London Luxury Real Estate Down for 1st Time in 5 Yrs.
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Luxury residential real estate prices in central London, the world's most expensive city, have had their first annual decline since 2003 due to worsening economic conditions. The average price of houses and apartments in London's nine most expensive neighborhoods fell 1.6 percent in August from a year earlier, according to an index of properties valued at $2 million or more, Bloomberg reports. While it's no secret that London prices have been dropping - my colleague Deidre Woollard reported on the trend in July - this is the first time the full scope of the decline has been assessed. Total prime residential sales in London are down an astounding 46 percent from last year; the downturn is being blamed on "pessimism in the financial services sector." Some mega-rich moguls, such as Ukrainian billionaire Viktor Pinchuk, who paid over $150 million for a five-story London townhouse earlier this year, are doing their share to prop up the market.
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For Real Estate Investors, London Is Calling
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There is a battle brewing in the ashes of the British property market. Liberty International, a London-based real-estate investment trust that specializes in shopping malls, appears to be the subject of a takeover battle between U.S.-based Simon Property Group and Australian-based Westfield Group. The rumble in the City comes as property prices in Britain have fallen dramatically and could be a sign that a bottom has materialized in certain market segments. British property stocks have seen their value cut in half since REITs were first introduced in the country in January 2007. Liberty, which owns London’s famed Covent Garden, has fared better than most of its counterparts, falling just 22 percent during the same time period. The stock may have held its ground as others crumbled due to its primary investment in shopping centers and active buying from opportunistic suitors.
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The Duke of Westminster's property company Grosvenor is developing a framework
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The Duke of Westminster's property company Grosvenor is developing a framework to lock in specialist contractors for work on its 120 ha London estate. The £12.9 billion development and investment firm has more than 760 properties across the estate, which encompasses upmarket Mayfair and Belgravia and has been under the management of the Grosvenor family for 330 years. Project management director Stephen Brewer said the company now wanted to enter a formal arrangement with specialist contractors so as to have "a consistency of approach". He said Grosvenor had established a three-year renewal framework for general building works across the estate last year, which was won by Renew subsidiary Walter Lilly and property management firm Grangewood.
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Pinoys laud CREBA real estate fair in London
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London-based Filipinos the Manila-based Chamber of Real Estate Builders Association (CREBA) for recently organizing a real estate fair in coordnation with the Philippine embassy. They said that the fair introduced them to the industry and provided them with more options and information in purchasing houses and lots in the Philippines. "Natutuwa kami at dumating ang CREBA at ipinaliwanag ang kanilang mga housing at real estate projects sa Pilipinas at nakakaenganyo ang kanilang mga sinabi lalo na sa mga overseas foreign workers na nasa Europe," said nurse Rolando Sotelo of the Philippine Nurses Association-UK. A total of 12 groups from CREBA participated in the event and showed overseas Filipino workers presentations of the real-estate industry in the Philippines.
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Forced sales loom over UK property scene
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LONDON, July 14 (Reuters) - Britain's economic slowdown heralds a wave of forced commercial property sales that could yet tip a downturn in real estate markets into a 1990s-style property crash. Some new buildings could be left empty, while others could be taken over by creditors, causing the all-too familiar drag effect that haunted the industry for more than a decade last time around. It took almost 13 years for UK commercial property values to regain their 1989 highs, according to Investment Property Databank. Far fewer new offices are going up in London than was the case almost 20 years ago, and creditor banks have learned that foreclosure can make a bad property situation worse, but property derivative traders sense trouble ahead as occupier demand begins to wilt. Much like UK housing index derivatives, commercial property index derivatives have priced in expectations of a total drop in values of about 35 percent from last summer peaks to 2010/11. Insolvency experts are also gearing up for an expected surge in commercial property-related business, even though any debt-related distress has so far been limited to overstretched buy-to-let speculators and regional residential developers.
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Huntons builds real estate with LG hire
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Marshall, who will head Hunton’s City property offering, joined this week from LG, where she has been a partner since 2002. Prior to joining LG, Marshall worked at Scots leader McGrigor Donald as well as a stint in-house at Pearl Assurance. Her clients include Scottish Mutual Assurance, for which she advised on the sale of 81-100 Kings Road, Chelsea, to Allied Irish Bank for £55m. She also advised Scottish Mutual Assurance on the sale of 11 The Strand, which comprised a freehold mixed office and retail building totalling approximately 47,167 sq ft. Her other clients include Zurich Assurance, Halifax Bank of Scotland and Capmark.
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London property prices tumble
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Property prices in London have continued to fall as the slump in value intensifies, according to a leading property consultancy. The price drop accelerated in June and properties in the capital are now worth 1.7 per cent less than they were in May, said Knight Frank. Amounting to a loss of 3.1 per cent in value over the last three months – the largest quarterly fall since 2002 - the trend is expected to continue.
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