Invista EUR Prf Discussion Threads

[kenny] 30/10/2013 22:51

Let's hope this surge expands to commercial property all over France:

France's second city Lyon 9mth investment surges 54% - JLL

30 October 2013, 10:49 PM

Real estate investment in the southern French city of Lyon, the nation's second largest, has been particularly dynamic this year, surging 54% to €515m in the first nine months, says realtor Jones Lang LaSalle. Investment has topped €500m for the first time since 2008.
Full year investment is expected to reach €650m, in line with the long-term average but below the 2012, which was boosted by two large transactions - REIT ANF's €300m sale of most of its Lyon portfolio and Unibail-Rodamco's €120m sale of Lyon Tour Oxygène tower.
Strong demand for secure assets has driven yields down to around 5.75% for prime properties in the Part-Dieu area of the city. Among the biggest transactions, ANF bought a 36,000 sq.m. turnkey development for Alstom Transport for €91m and LaSalle Investment Management acquired the City One office building for a German fund for around €62m. Offices accounted for 83% of deals in the first nine months. "A few other operations are under way which should be signed at yields of around 5.70%," said JLL.
Lyon accounts for quarter of all French real estate investment outside the Paris region, but investment tends to be dominated by French buyers, who account for 77% of business so far this year. SCPI and OCPI funds and private French investors display a particularly strong appetite for Lyon assets, but foreign investors are not ignoring the city. "Foreign investors have represented a quarter of the offers that we have received in 2012 and 2013, but French investors are very keen to buy and have plenty of funds available and they are not going to make it easy for them," said Vincent Delattre, JLL head of French regional investment. pie

[badtime] 30/10/2013 13:01

You can buy at 81.5

[kenny] 30/10/2013 08:22

ERET, whose loan was in the Project Hampton pool of loans put up for sale by Lloyds, has today announced a refinancing with Lloyds. This is an interesting development albeit it is hard to know if there will prove to be a "read across" to IERE/IERP.

IERE would still need a rights issue to negotiate the same, but it is all looking more possible!!

[kenny] 24/10/2013 17:06

Update on Project Hampton:

hxxp://www.costar.co.uk/en/assets/news/2013/October/Lloyds-2bn-Project-Hampton-shortlists-emerge-as-KPMGs-78bn-Project-Rock-NPL-out-next-week-/#

I think this is positive for us in the sence that if the loan pricing is at a small discount, then the view must be that the underlying property will yield enough to pay off the entire loan; over the entire portfolio - and I think the IERE loan is one of the better quality loans.

[kenny] 23/10/2013 00:09

Here is an article indicating that a major bank is offering loans up to 70% LTV on European commercial property. Hopefully, the directors of IERE (and Rothschild who are advising on refinancing) will read this article!!

Allianz to build up €5b debt portfolio by 2017
Date: 23 October 2013

Allianz Real Estate is targeting a €5bn debt portfolio over the next three to five years, according to the newly-appointed real estate finance chief Roland Fuchs.

Allianz currently has about €1bn invested in debt, largely in France and Germany. ''We will be active in markets where we are also an equity investor, targeting quality long-term sustainable investments. Our strategy now is to roll out our debt strategy beyond the borders of Germany and France throughout continental Europe,' Fuchs said.

Fuchs joined Allianz in October from the French office of German bank Helaba.

He noted that margins are 'tremendously' under pressure in Germany, which is currently the most competitive market in Europe. In order to compete with traditional lenders, Allianz is prepared to go an extra mile by offering flexible solutions including longer terms of up to 12 years in addition to traditional 5-7 year loans, he added.

'We have the flexibility to adapt and team up with partners and alternative lenders. We can team up with other institutions as well, especially for higher LTVs or for large ticket financings. We can also distribute the financing between the different entities of the Allianz group.'

The company can offer loans with leverage of up to 70%, he added. In terms of markets, the company will be focusing on countries where it is already present with its real estate equity team. 'We will mainly focus on core style investments although we can do core plus and value added in Germany and in France.'

Fuchs has over 20 years of experience in the European real estate finance business, both in origination and portfolio management. Fuchs is based in the Paris and Munich offices of Allianz Real Estate and reports directly to CEO Olivier Piani. He is also a member of the Allianz Real Estate executive committee.
hxxp://www.propertyeu.info/index-newsletter/allianz-to-build-up-eur-5b-debt-portfolio-by-2017/

[badtime] 22/10/2013 10:24

MM's not encouraging mych business with that spread

[kenny] 22/10/2013 10:17

Yield falls, rent rises back up European recovery picture - CBRE

21 October 2013, 11:45 PM

Falling yields across all European commercial property sectors and a moderate increase in rents provide further evidence of growing momentum and backs up a picture of recovering investment, says international realtor CBRE. Increasing capital is targeting the sector.

CBRE's EMEA Prime Yield Indices in third quarter edged lower in the office, retail and industrial sectors by 3-5bp, with office showing the most widespread movements, There, yields sank in nearly a quarter of the locations surveyed, including Amsterdam, Dublin and all the major UK regional cities. Within this group, Belfast and Edinburgh yields fell 50bp, while Dublin yields fell for the fourth consecutive quarter, and are now 100bp below a year ago. Significantly, Madrid and Lisbon office yields also moved 25bp lower. The retail sector also saw significant changes, most notably a shift in the prime central London retail yield to below 3%.

Rental improvement was most evident in prime retai, where nearly a quarter of the locations surveyed saw an increase, twice as many as declined, CBRE said. The increases encompassed some of the most prestigious retail locations in Europe, with rents rising in Paris, London and Milan, as well as further afield in Istanbul and Dubai. Rental momentum is less evident in the office market, where almost as many locations fell as rose. Downward pressure continued in parts of southern Europe including Rome and Madrid. Most increases occurred in smaller markets, although Munich edged up and prime rents in the West End of London hit £100 per sq ft.

Richard Holberton, Director, EMEA Research, CBRE, said: "The yield movements recorded in the third quarter sustain the trend towards gradual improvement in pricing that has been in train since the second half of last year. On average, prime yields have fallen by around 15bp across all sectors over this period, and there are indications of investment appetite spreading to secondary assets in some markets. Rental growth remains patchy, and is most evident in the prime retail sector, but we expect it to become more widespread as European economies continue to recover." pie

[valhamos] 17/10/2013 13:34

Kenny, thanks for your posts; there certainly seems to be a lot more funding available and on easier terms, the placing at RECI being just one example. I am quite optimistic on the situation here.

[kenny] 17/10/2013 11:21

Encouraging news, including for France, and, hopefully, there will come a time when IERE's property valuations will improve:

European Real Estate Investment Activity Rises 21% From a Year Earlier In Q3 2012 - Published on: 17 10 2013

The European commercial real estate investment market had its strongest third quarter since 2007 with €35.5 billion in transactions - up 21% on Q3 2012, according to the latest data from global property advisor CBRE.

Commercial real estate investment in the core Western European markets – UK, Germany and France – was particularly strong in Q3 2013. Investment in UK commercial property was at the highest level since Q3 2007 with €14.1 billion of transactions completed in Q3 2013 - a 19% increase over Q3 2012. Germany, with €6.2 billion in Q3 2013, showed a 21% increase over Q3 2012. France also had its highest Q3 investment activity since 2007 with €4.6 billion - a 39% increase on Q3 2012. These markets also posted sequential gains compared with Q2 2013, with investment activity for all of Europe improving 7% compared with the prior quarter.

The markets that were most affected by the eurozone crisis - Ireland, Italy, Portugal and Spain - recovered strongly in H1 2013 and this trend continued in the third quarter. In Southern Europe (Spain, Italy and Portugal) commercial real estate investment totalled €2.2 billion in Q3 2013, up by 145% on Q3 2012. Investment activity in Ireland increased 354% over the same period. This performance shows that opportunistic investors are returning to Europe and targeting recovering markets.

Central and Eastern Europe (CEE) commercial real estate investment totalled €2.3 billion in Q3 2013, up 33% on Q3 2012. Activity in the CEE was led by the core markets of Russia, Poland and the Czech Republic.

Both the core and opportunistic sectors of the European commercial real estate market are in favour with investors. In Germany, France and the UK, there are still a large number of risk-averse investors focused on core markets and prime assets. However, opportunistic investors are growing in number (and spending power) and this is driving increased investment in those countries that were hardest hit by the euro crisis. In contrast, markets in countries that do not fit either of these categories, such as The Nordics and to some extent Benelux, are not experiencing the same growth in activity as those at either end of the risk spectrum.

Jonathan Hull, Head of EMEA Capital Markets, CBRE, commented:

"Europe showed strong investment levels in Q3 2013, led by core Western European markets and the continued recovery of Southern Europe. With nearly €100 billion of transactions already in the first three quarters, 2013 should post solid gains in investment activity over 2012."

[kenny] 16/10/2013 17:15

It occurs to me that if the final bids for Project Hampton are coming from the likes of Apollo, Blackstone, Cerberus, Deutsche Bank and Starwood then another possible outcome is that the buyer of the loan issues a commercial mortgage backed security (CMBS) in it's place. At, say, a 5% to 6% yield even a 70% LTV CMBS may prove attractive to potential investors.

The profit for the buyer of this part of Project Hampton would come from packaging a CMBS - essentially the difference between what they pay Lloyds and the face value they receive on sale of the CMBS, less their costs of putting it together.

Could be a very quick profit for the buyer on this part of the portfolio and would bring certainty for IERP holders. I think this route would still require IERE to undertake a material fundraising.

[pejaten] 13/10/2013 08:39

It is a just a notice to warrant holders. The conversion rights are worthless to irrelevant now

[mega_trader] 10/10/2013 17:17

Some news here ...

Referes to a 2009 document. Any thoughts?

[ydderf] 10/10/2013 12:39

There are called Preference shares for a reason..........

[stupidboypike] 10/10/2013 11:46

Of course another explanation is that re-financing is proving very difficult hence the drop in ordinaries and people like us are buying the prefs on a wrong assumption. I guess you pays your money and takes your choice. Best regards SBP

[stupidboypike] 10/10/2013 11:36

On the balance of probability, I'm convinced, in for a few more. Best regards SBP

[kenny] 10/10/2013 10:57

I have also topped up today - 10k & 20k both @ 84p - because there are strong signs that a refinancing and rights issue are in the pipeline. These signs are:

- the ordinaries being sold down - 1m sold at 3.5p yesterday - which I interpret as "insiders" either knowing the price or price range at which the rights is going to occur. Or, are selling in advance of subscribing in the rights e.g. do not wish to increase their total monetary investment in IERE.

- combined with, the preference shares are being purchased, again in the last few days, by "insiders" because they know that a refinancing/rights issue is now more certain and would, in effect, secure the redemption value of the preference shares. Evidence for this is the buy orders placed on 7 October, that historically are unusual, together with the 8 October transaction for 49,301 shares at 80p, which with the benefit of hindsight now looks like a purchase. Also we have the market makers moving the price up to 80p-85p today before there were any transactions.

This is not advice to buy because I could be reading the tea leaves incorrectly. Also, the best return will likely only be made if you can afford to hold until redemption at the end of 2016; due to the large spread the market makers maintain. However, there seems to be strong indications that a refinancing combined with a rights issue is nearing fruition and the sort of yield to redemption available on IERP is rare.

[soi] 10/10/2013 10:24

I`ve added a few more, on balance I think the positive outweighs the risk, maybe only just but worth a try for me anyway.

[kenny] 10/10/2013 08:35

Ordinaries down and preferences up today albeit the spread on the pref's at 80p-85p is ridiculous – is something in the pipeline?

Here's the latest update on Project Hampton:

Lloyds nears naming Project Hampton shortlist after 90 NDAs were signed
Posted on October 9, 2013 3:15 pm by James Wallace

Lloyds Banking Group is close to naming the finalists for the €1.5bn Project Hampton, the Continental European property loan portfolio, after receiving at least eight first round bids last Thursday.

CoStar News understands that Lloyds received bids from Blackstone, Apollo Global Management, Macquarie Group, Lone Star, Starwood Capital, Cerberus Capital Management, Marathon, Deutsche Bank and Davidson Kempner, which has financing backing from Bank of America Merrill Lynch.

Project Hampton comprises three sub-loan pools – projects Alpha, Bravo and Charlie – split by geography of underlying real estate.

Project Alpha is the Spanish loan pool, while Project Bravo is the Scandanavian pool and Project Charlie comprises around €1bn of the total unpaid loan balance in German and French secured loans.

Sub-pools were structured to open up a wider universe of bidders for Project Hampton's component parts, while offering bidders the opportunity to bid for some or all of the total loan portfolio.

Around 90 non-disclosure agreements (NDA) were signed which appears to vindicate the wider interest as a result, although Hampton is now expected to trade as a full portfolio.

CoStar News understands a shortlist of four is expected, with the keenest pricing understood to have come from Apollo, Blackstone, Cerberus, Deutsche Bank and Starwood.

Second round bids are due in mid November, before closing in December with the eventual winner.

Project Hampton, which is being sold by Deloitte, is Lloyds' most diverse property loan portfolio yet, with underlying collateral in 11 countries, from 23 borrowers, and a sector concentration in favour of office and industrial.

The largest single loan concentration is in Hampton's largest sub-pool, Project Charlie, which is the €244.7m senior loan securing the Invista European Real Estate Trust (IERET).

The €244.7m senior loan is secured by 36 assets across six countries which were valued at €332.5m by Savills, as at 30 June.

IERET, which is managed by Internos, has been seeking to refinance its outstanding debt, which matures at the end of the year, but admitted in its second-quarter fund fact sheet that "a full refinancing of the company is, however, a complex task and is likely to require more than just debt finance for a successful conclusion.

"There can be no guarantee of success, but the board and investment manager are energetically pursuing a resolution ahead of the maturity of the existing bank facility at the end of the year."

Internos added in the statement: "Negotiations are advancing with a number of potential providers of both senior and mezzanine debt."

Also in Hampton is the €138.6m senior loan to European Real Estate Investment Trust (EREIT), managed by Schroders.

EREIT was valued at €224.4m at the end of June

The Lloyds senior loan, which currently carries a margin of 275bps over three-month Euribor, matures in January.
Loans managed by Valad are also in the Project Bravo sub-pool.

All parties declined to comment.
=======================================

Looks like the pref's are going to prove as secure as I thought they would be when I invested here. Even at 85p the pref's are cheap considering the coupon and fairly short - 30.12.2016 - redemption date. Getting quite exciting because I have a big holding here - but I guess I have to "stay calm and carry on" until we get official word on what is going on behind the scenes.

As always, do your own research and do not invest based solely upon what you read on a bulletin board!!!

[kenny] 07/10/2013 15:04

Bear in mind langbarb that I am speculating about the possible reason for the volume based on the limited information available to a retail investor - and I could be wrong. You may wish to await a move that confirms; either later today or in the next few days.

[langbarb] 07/10/2013 14:50

thanks for that Kenny, I was just asking as I was thinking of adding

[kenny] 07/10/2013 14:42

Upto 14.23pm, the non AT trades are sells but they are being matched by buy orders on the orderbook - the AT trades. This is the first day for a long time that the orderbook has buy orders posted - other than those at silly prices.

In summary, someone is happy to take on a fair number of shares at 80p - there are still buy orders at 80p - I placed a "test" sell of 10k and online was offered 80p. Price now up to 80p-82p as I type - which I take as a clear sign something is up!!

[langbarb] 07/10/2013 14:23

Kenny how do you know these are buys? I can only see 4 clips of 5k shares each at 80p, one for 10k shs at 80p and an early one of 25k shs at 82p. I would have thought they were all sell other than the 25k at 82p?

[kenny] 07/10/2013 13:59

Buyers coming in strong for IERP today.

I suspect they know something about either a refinancing or the result of 1st round bids for Project Hampton. As usual, we retail investors will be the last one's to find out any news.

It's disgusting that they can get away with acting on inside information albeit a small consolation is that it is a sign that there may be some good news in the pipeline for we IERP holders.

[kenny] 02/10/2013 10:52

Some more evidence of French commercial property stabilising:



French higher-risk property segments starts to thaw - La Française

01 October 2013, 09:42 PM

Interest in higher risk French real estate investments has revived since the start of the year, says asset management group La Française AM. US opportunistic fund managers in particular are eyeing French non-core properties.
"Something is going on in the property investment market. Since early 2013, several major deals have gone down that aim to create value and not just obtain secure rental income, which could be a sign of a thaw in the risky assets segment," La Française said in a study. Risk aversion has dominated market thinking since 2008, with investors focusing heavily on core assets, but in the first eight months of this year deals involving rental risk and renovations have started to return to the Ile-de-France office market.
German fund manager Deka recently paid Canadian fund group Ivanhoé Cambridge €283m for the 28,000 sq.m. head office of nuclear energy group Areva, even though Areva is vacating the building. But La Française says this offers an opportunity. "The investor is expecting the vacancy but also foresees pocketing a capital gain when the building is subsequently rented," it said. Similarly, US group Tishman Speyer bought the Tour Pacific building in La Défense for €214m despite the need for major work and the fact it has been partially vacated. "Amid a rental market in La Défense with many spaces available second hand and rising vacancy rates, the investor is expecting to reposition the asset and cash in on the gain. Such a deal was unthinkable just a few months back," said La Française.
Meanwhile, several further deals are in the pipeline by opportunity-seeking firms, particularly from the US, as they seek to capitalise on funding troubles of some owners. The shift has been the result of more favourable financing conditions, expectations of a shortage of quality new offices in the medium term, a growing belief that the worst of the recession is over - combined with a record wave of capital raising by US opportunistic fund managers, La Française said. But this does not mean funds will be diverted from core markets. "The lion's share of property investors remain risk averse and are keeping their chips on safe assets." But the two strategies are seen as complementary, with core buyers ensuring the liquidity of repositioned assets while value added investors work to revitalise the property market. pie