AUGUST                        2 011   MID-YEAR REVIEW                                                Mid-Year Review: US, ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
AUGUST 2011                                                                                                               ...
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
Real Capital Analytics - Global Capital Trends Mid-Year Review
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Real Capital Analytics - Global Capital Trends Mid-Year Review

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Compliments of Dan Fasulo, Managing Director for Real Capital Analytics

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Real Capital Analytics - Global Capital Trends Mid-Year Review

  1. 1. AUGUST 2 011 MID-YEAR REVIEW Mid-Year Review: US, Germany, Singapore Lead in Dynamic Marketplace Global transaction volume in the second QUARTERLY TRANSACTION VOLUME quarter totalled $165.3 representing a 36 $140 Billion increase from a year earlier and bringing Americas the total for 2011 at mid-year to approxi- $120 AsiaPac mately $350.0 . e period was marked EMEA by potential national defaults in Europe, $100 natural disasters in Asia Pac and increas- ing worries about a double-dip recession across the globe. erefore, property in- $80 vestment trends are far more dynamic than the headline gures imply. e US mar- $60 kets are roaring back to life this year with property sales soaring 147 year-over-year $40 in Q2. Trading in EMEA was an anemic 10 gain year-over-year in Q2 on $42.5 $20 in transactions, despite robust increases in Germany and Scandinavia. Japan saw volumes fall 42 in Q2 while transactions $0 moderated in China and Hong Kong but 1 2 3 4 1 2 3 4 1 2 3 4 1 2 surged in Singapore and Australia. 08 09 10 11 AUGUST 2011 - REPORT CONTENTS IN THIS ISSUE: • Overview: Investors Stay the Course • EMEA: Investors Focus on Stable Economies . 5-9 H1 volume hits $350 billion. . . . . . . . . . 1-4 Investment Momentum Linked To Risk . . . . 7 Market Table . . . . . . . . . . . . . . . . . . 9 CROSS-BORDER ACQUISITIONS AND DISPOSITIONS IN AUSTRALIA • Asia Pacific: China’s Land Sales Drop as CRE Volume Grows . . . . . . . . . . . . . . . . . 10-14 acq disp net Cross-border Buyers Move Australia . . . . . 12 5,000 Million Market Table . . . . . . . . . . . . . . . . . .14 4,000 • Americas: US Momentum Leads Growth . . 15-19 3,000 Pretend and Extend Withers in Q2 Brazil: A Growing Institutional Market . . . . 17 2,000 Market Table . . . . . . . . . . . . . . . . . .19 1,000 • Changing Landscape for Agents . . . . . . . . . 20 0 • Peak-Era Buyers: Where Are They Now? . . . . 21 (1,000) • Selected Investment Sales Transactions . . . . 22 (2,000) • Notes & Definitions . . . . . . . . . . . . . . . . 23 08 09 10 11©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 1
  2. 2. AUGUST 2011 MID-YEAR REVIEW A verage yields have continued to trend TRANSACTION SUMMARY slightly downward in the Americas Q211 YOY H1’11 YOY and EMEA. In the Americas, the Vol ($B) Chg Vol ($B) Chg wave of capital entering the market this Office $41.2 29% $81.9 36% year is causing downward pressure, but that Retail 32.7 97% 60.6 61% is being partially o set by increased sales of Industrial 11.6 26% 22.3 41% troubled assets in the US. In EMEA, stable All Commercial $85.5 48% $164.8 45% cap rates still re ect strong German and Nordic volume combined with select UK Hotel 8.8 80% 16.7 66% trophy transactions. Higher yields in Asia Apartment 20.4 38% 33.2 37% PROPERTY ACQUISITION YIELDS IN MAJOR GLOBAL MARKETS Pac partly re ect rebounding activity in Land 50.6 14% 134.6 11% Australia, where property o ers among the Total $165.3 36% $349.3 30% NYC/DC highest average cap rates globally, as well as HK/Sing *Totals may not sum due to rounding London/Paris the severe slide in activity in traditionally7.5% lower-yielding Japan. had very low cap rates, and without greater economic Pricing trends in the world’s global nan- certainty, investors are hesitant about becoming even7.0% cial capitals provide more insight. Yields in more bullish. In addition, with yields so low in these6.5% these markets were relatively unchanged major markets, secondary cities and other higher yield- in Q2 and have moved little since the be- ing alternatives are more attractive. e surge of cross-6.0% ginning of the year. ese markets already border capital into Australia well illustrates this trend.5.5% QUARTERLY TRANSACTION SUMMARY BY ZONE5.0% OFFICE, RETAIL AND INDUSTRIAL ASIA PAC EMEA AMERICAS4.5% CAP RATES CAP RATES CAP RATES 9.0% 9.0% 9.0%4.0% 8.5% 8.5% 8.5% 8.0% 8.0% 8.0%3.5% 7.5% 7.5% 7.5%3.0% 7.0% 7.0% 7.0% 6.5% 6.5% 6.5% 07 08 09 10 11 6.0% 6.0% 6.0% 5.5% 5.5% 5.5% TRANSACTION $50 Billion 2 3 4 TRANSACTION 3 4 1 2 1 1 2 3 4 1 2 $50 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $50 Billion 2 3 4 TRANSACTION 3 4 1 2 1 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 $40 $40 $40 $30 $30 $30 $20 $20 $20 $10 $10 $10 $0 $0 $0 150% 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 150% 1 2 YOY 4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 150% 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 08 09 10 11 08 09 10 11 08 09 10 11 100% 100% 100% 50% 50% 50% 0% 0% 0% -50% -50% -50% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 2
  3. 3. AUGUST 2011 MID-YEAR REVIEW E ach global zone combated pressures TRANSACTIONS BY COUNTRY from within. Sovereign debt fears ALL PROPERTY TYPES in EMEA’s peripheral countries and Q1’11 Q2’11 H1’11 heavy belt-tightening in the UK restrained Vol YOY Vol YOY Vol YOY growth, but domestic and cross-border Country ($B) Chg ($B) Chg ($B) Chg investors were active in Germany and the 1 China $75.7 8% $41.8 21% $117.6 12% stable Scandinavian economies. While 2 United States 28.8 93% 49.0 147% 77.8 124% Russia struggled, Central VOLUME BY THEATER and Eastern Europe at- 3 United Kingdom 15.3 62% 9.0 -25% 24.3 14% ALL PROPERTY TYPES 4 Germany 9.3 42% 11.2 65% 20.5 54% tracted yield-seeking in- Q211 YOY H1’11 YOY 5 Japan 11.4 18% 3.6 -42% 15.0 -5% Vol ($B) Chg Vol ($B) Chg vestment. In Asia Paci c, 6 Singapore 5.4 237% 6.2 68% 11.5 119%United States $49.0 147% $77.8 124% the retail and industrial 7 Hong Kong 3.5 -29% 6.0 38% 9.5 3%Canada 4.5 8% 7.8 5% sectors were a counter- 8 France 3.9 32% 5.3 -20% 9.1 -4%Latin America 2.1 17% 5.6 95% weight to slow o ce vol- ume and a sharp drop-o 9 Sweden 2.8 23% 5.1 80% 8.0 55%Americas $55.6 115% $91.2 102% in Q2 land sales in China. 10 Canada 3.3 2% 4.5 8% 7.8 5%Western Europe 28.8 27% 52.8 27%United Kingdom 9.0 -25% 24.3 14% In the US, the intense 11 Australia 2.0 -34% 5.6 102% 7.6 32%Eastern Europe 3.1 17% 7.6 17% selective focus on major 12 Brazil 2.9 399% 1.1 -32% 4.0 85%MidEast 0.8 -29% 1.5 -18% assets in major markets 13 Taiwan 1.7 -8% 1.3 -41% 3.0 -26%Africa 0.9 161% 1.1 -8% began to spread out, as 14 South Korea 1.5 71% 1.4 91% 3.0 80%EMEA $42.5 10% $87.4 21% yield-conscious investors 15 Italy 1.6 87% 0.8 -9% 2.5 37%East Asia 50.7 21% 133.3 11% moved into other markets 16 Spain 1.3 -31% 1.1 -29% 2.3 -30%Japan 3.6 -42% 15.0 -5% and embraced garden 17 Netherlands 1.3 19% 1.0 -5% 2.3 7%SE Asia 6.6 41% 13.2 92% apartments. e ow of 18 Russia 0.2 -91% 1.8 85% 2.0 -34%Australia - NZ 5.7 96% 8.1 24% new distress slowed and, 19 Poland 1.4 91% 0.5 -22% 1.8 40%India/Other 0.6 -71% 1.3 -56% with credit easing and 20 Norway 0.4 -33% 1.1 77% 1.5 22%Asia Pacific $67.2 17% $170.8 12% prices rming, lenders 21 India 0.8 -29% 0.6 -71% 1.3 -56% opted more for liquida-Global* $165.3 36% $349.3 30% 22 Finland 0.3 4% 0.8 182% 1.2 91% tions than restructurings *Totals may not sum due to rounding 23 Belgium 0.4 -9% 0.8 105% 1.2 47% of troubled assets. 24 Czech Republic 0.9 279% 0.2 24% 1.2 168% Highlighting the choppy and o en local- 25 Switzerland 0.5 97% 0.6 280% 1.1 162% ized activity across the global markets, many countries saw quarterly volume trends 26 Denmark 0.5 38% 0.6 78% 1.1 56% reverse, in both directions, from Q1 to Q2. 27 South Africa 0.2 -79% 0.8 1362% 1.0 12% Other countries, with the US in the lead, saw 28 Malaysia 0.6 47% 0.3 -58% 0.9 -23% strong positive acceleration in growth in Q2. 29 Israel 0.2 -48% 0.6 -6% 0.8 -22% e US had the highest growth in both 30 Ukraine 0.6 446% 0.1 -80% 0.7 40% Q2 and H1, with its second quarter gain of 31 Chile 0.2 100% 0.6 4453% 0.7 678% 147 outpacing its 124 H1 growth. Ger- 32 Austria 0.6 38% 0.1 -79% 0.7 -19% many and Sweden were the standout gainers 33 Turkey 0.6 30% 0.1 94% 0.7 38% in EMEA as France and the UK lost ground. 34 New Zealand 0.4 -39% 0.1 -10% 0.5 -33% China’s land sales turndown slowed the gi- 35 Hungary 0.4 20% 0.1 27% 0.5 22% ant Asia Pac market to just 12 in H1, one- 36 UAE 0.5 64% 0.0 -95% 0.5 -36% third below its growth for commercial prop- 37 Romania 0.5 207% 0.0 -100% 0.5 59% erty only. Australia’s transaction volume 38 Croatia 0.4 - 0.0 -100% 0.4 283% moved rapidly positive, pushing the country 39 Portugal 0.2 -43% 0.2 -68% 0.4 -57% to a 102 gain. Spectacular Q1 growth in 40 Thailand 0.3 61% 0.1 -61% 0.4 -10% Singapore and Brazil inevitably slowed in All Others 1.4 54% 1.3 69% 2.7 61% Q2, but both countries turned in solid posi- Grand Total $184.0 25% $165.3 36% $349.3 30% tive improvements for H1.©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 3
  4. 4. AUGUST 2011 MID-YEAR REVIEW Global: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC ($M) 2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment BoardBlackstone $9,008 3 DEV Borrett Road Site, Mid-levels Hong Kong, HKG 1,498 113 13,266 Cheung Kong (Holdings) LtdCPP Investment Board 3,689 4 OFF 280 Park Avenue† New York, NY 1,100 1,179 941 SL Green JV VornadoCapital Shopping Ctrs Grp PLC 3,098China Vanke Co Ltd 3,048 5 RET Northland Shopping Centre† Preston East, AUS 998 994 1,004 Canada Pension Plan Investment BoardYunnan Zhonghao Props Co Ltd 2,714 6 DEV Shenzhen 2011-K202-0014 Shenzhen, CHN 991 7,509 132 China Merchants Property Dev Co LtdCA Immo 2,402 7 DEV CITIC City B,C,D blocks (Prt II) Beijing, CHN 929 848 1,095 Financial Street Holding Co LtdTesco Pension Trustees Ltd 2,200 8 OFF Otemachi PAL Bldg Tokyo, JPN 877 301 2,916 Mitsui Fudosan Co Ltd JV Mitsui & CoPoly Real Estate Group 2,128 9 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments GmbhInvesco Real Estate 2,117 10 DEV Changsha 2011-001 Changsha, CHN 855 800 1,068 Wharf HoldingsWheelock & Co 2,105 11 DEV Punggol Central & Punggol Walk Singapore, SGP 799 323 2,475 Frasers Centrepoint Ltd‡Greentown China Hldgs Ltd 2,099 12 DEV Boon Lay Way Singapore, SGP 791 194 4,085 CapitaMalls Asia JV HSBC BankCheung Kong (Holdings) Ltd 2,034 13 OFF Chiswick Park London, GBR 781 1,900 411 BlackstoneCapitaLand Limited 1,929 14 OFF Helmsley Building† New York, NY 763 1,213 629 Invesco Real EstateJP Morgan 1,747 15 OFF Capital Square Singapore, SGP 700 387 1,810 Alpha Investment Partners (AIP)‡China Overseas L & I Ltd 1,650Mitsubishi Estate 1,611 16 OFF The Fifth Square† Beijing, CHN 682 1,009 677 China Minmetals CorporationChina Merchants Group 1,517 17 DEV Nanjing 2011G07 Nanjing, CHN 681 3,667 186 Shimao Property Holdings Ltd‡Arminius Funds Mgmt 1,457 18 DEV Toyosu District Site Tokyo, JPN 680 1,132 601 Tokyo Metropolitan GovernmentDekaBank 1,429 19 OFF The Centre Shanghai, CHN 666 963 692 China Pacific Insurance (Group) Co LtdFar East Organization 1,423 20 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGR 21 OFF Market Square East & West Washington, DC 615 680 905 Wells Real Estate Funds, Inc 22 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny Capital TOP 20 SELLERS # 23 DEV CITIC City B,C,D blocks Beijing, CHN 607 848 716 Financial Street Holding Co Ltd Vol 24 DEV Yiwu 2011017 Yiwu, CHN 594 883 672 Guangsha Construction ($M) 25 IND Interlink† Hong Kong, HKG 589 2,400 245 Canada Pension Plan Investment BoardCentro Properties Group $8,102Urban Redevelopment Authority 3,356Housing & Dev Board 2,821 TOP 15 PORTFOLIO SALESVolksbank AG 2,426 Price SF(K)/ PPSF/ Type Transaction Location BuyerTesco plc 2,223 ($M) Units PPU (K)Beacon Capital Partners 2,215 1 RET Centro United States Portfolio Multiple, USA $9,150 99,051 $92 BlackstoneGoldman Sachs 1,868 2 RET Tesco RET Portfolio 11 Multiple, GBR 2,200 3,500 629 Tesco Pension Trustees LimitedDeutsche Bank 1,782 3 MIX Europolis MIX Eastern Euro Ptfl 11 Europe 2,009 13,011 154 CA Immobilien Anlagen AGCITIC Group 1,780 4 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds ManagementBroadway Partners 1,715 5 IND Bracor IND Portfolio 11 Multiple, BRA 1,322 10,764 123 ProsperitasGE Capital 1,653 6 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital ManagementAberdeen Property Investors 1,541 7 OFF Kokusai Shin-Akasaka Towers Tokyo, JPN 1,066 863 1,236 Mitsubishi Estate Company, LimitedEurocastle 1,544 8 DEV Greentown China Hldgs Govt Land Ptfl Taizhou, CHN 1,011 7,386 137 Greentown China Holdings LimitedBracor Invtos Imobiliarios 1,297 9 DEV Kunming Guandu KC2010-76 Kunming, CHN 987 22,158 45 Yunnan Zhonghao Properties Co LtdMorgan Stanley 1,336 10 APT Dombron Intressenter Ptfl† Multiple, SWE 948 8,281 115 AMF FastigheterEquity Residential 1,345 11 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property DevelopmentLone Star Partners 1,230Unibail-Rodamco 1,242 12 OFF Mapletree Com Trust Ptfl 2011 Singapore, SGP 625 733 853 Mapletree Commercial TrustCarlyle Group 1,097 13 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufic AboukhaterLehman Brothers Hldgs Inc 1,108 14 MIX Capital and Counties Mix Ptfl Multiple, CA 600 2,106 253 Equity One‡ 15 IND World Market Center Ptfl* Las Vegas, NV 600 4,832 124 Bain Capital‡ # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 4
  5. 5. AUGUST 2011 MID-YEAR REVIEW EMEA: Quarter in Review Summary F ollowing six consecutive quarters of QUARTERLY TRANSACTION VOLUME strong year-over-year gains, EMEA BY PROPERTY TYPE $70 Billion transaction volumes stalled in Q2. Commercial e slowdown, to $42.5 of signi cant $60 Apartment property sales, was at against a year ear- Hotel lier and re ects widening divergence in in- $50 Land vestor outlook across core and peripheral European markets. Pricing was also gener- $40 ally at in Q2 across EMEA and yields on acquisitions have changed little since the $30 beginning of the year. $20 Among property types, retail was the big- gest gainer in H1’11 with volume up 41 $10 boosted by billion-dollar transactions such as Tra ord Centre in Manchester, Centr0 in $0 Oberhausen and a TRANSACTION SUMMARY 1 2 3 4 1 2 3 4 1 2 3 4 1 2 major Tesco portfo- 08 09 10 11 Q211 YOY H1’11 YOY lio in the UK. e of- Vol ($B) Chg Vol ($B) Chg ce and hotel sectors PERCENT CHANGE IN TRANSACTION VOLUMEOffice $18.0 40% $33.7 31% (H1’10 VS H1’11) also recorded healthy <-50% - 50–0% 0–20% 20–50% 50–100% >100%Retail 12.1 26% 29.2 41% gains in transaction DECREASE INCREASEIndustrial 2.8 -35% 7.1 -1%All Commercial 32.9 23% 70.0 31% volume while indus-Hotel 2.6 47% 5.6 39% trial and apartment FIN NORApartment 5.3 -33% 8.1 -25% volume fell .Land 1.8 -20% 3.7 -11% Germany and the SWE DNKTotal $42.5 10% $87.4 21% Nordic countries RUS*Totals may not sum due to rounding have emerged as fa- IRL NLD CAN GBR POL voured investment targets in the current BEL DEU CZE market and all posted robust gains in trans- FRA SVK AUT HUN UKR CHE action activity in each quarter this year. ITA HRV ROU SRB is helped o set signi cant Q2’11 MCO MNE BGR USA declines in the UK and France of 25 and PRT ESP GRC TUR 20 , respectively, in addition to continued weak performance in the peripheral mar- ISR kets such as Greece, Portugal, Spain and MEX Ireland. Investors are ocking to Germany QAT and Scandinavia which currently o er the SAU ARE highest risk adjusted yields (see page 7). Germany’s Q2’11 growth of 65 was well ahead of its H1’11 gain of 54 (and the UK’s 14 ) as domestic and cross-border demand broadened. Sweden, the hottest Nordic market, saw growth of 55 for H1’11. With the strong exception of Russia’s PER 34 decline, Eastern European activ- BRA ity remained stable, with core properties in key markets attracting increased attention from yield-seeking investors. In the Middle East, both Israel and the United Arab Emir- CHL ates saw a steep fallo in activity in H1. ZAF ARG©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 5
  6. 6. AUGUST 2011 MID-YEAR REVIEW A mong markets, positive growth RECENTLY BUILT OR RENOVATED has slowed but been maintained in OFFICE BUILDING SALES IN Q2 London and Paris indicating the Price PPSF/ Built/ Property City Cap Rate investment trends in secondary markets ($M) PPU ($K) Renov in the UK and France continue to under- Selmer Building Oslo $166.7 1,006 4.5% 2008 perform. However, ve German metros Origami Paris 124.0 2,421 4.7% r2010 now occupy the top markets list, with all showing positive investment growth. Guimarts Brussels 46.7 620 5.4% r2010 Cap rates on commercial properties in DB Twin Towers Frankfurt 857.4 1,062 5.5% r2010 Western Europe and the UK are closely aligned averaging between 6.6 and 1 Finsbury Circus London 236.5 1,183 5.5% r2009 6.7 . Average cap rates in Eastern Europe record a decline in Q2, but are skewed by a higher quality of properties trading as ovated o ce buildings in select European markets investors seek to minimize risk. Recent illustrate the premium prices commanded by the prices and cap rates for new or newly ren- highest quality properties. QUARTERLY TRANSACTION SUMMARY BY THEATER OFFICE, RETAIL AND INDUSTRIAL UNITED KINGDOM WESTERN EUROPE EASTERN EUROPE CAP RATES* CAP RATES* CAP RATES* 9.0% 9.0% 9.0% 8.5% 8.5% 8.5% 8.0% 8.0% 8.0% 7.5% 7.5% 7.5% 7.0% 7.0% 7.0% 6.5% 6.5% 6.5% 6.0% 6.0% 6.0% 5.5% 5.5% 5.5% TRANSACTION TRANSACTION TRANSACTION $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 08 09 10 11 08 09 10 11 08 09 10 11 $30 $30 $30 $25 $25 $25 $20 $20 $20 $15 $15 $15 $10 $10 $10 $5 $5 $5 $0 $0 $0 1 2 YOY4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 1 2 YOY4CHANGE IN TRANS3VOL 1 2 3 1 2 3 4 1 2 4 1 2 YOY4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 150% 150% 150% 08 09 10 11 08 09 10 11 08 09 10 11 100% 100% 100% 50% 50% 50% 0% 0% 0% -50% -50% -50% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 *Two quarter rolling average©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 6
  7. 7. AUGUST 2011 MID-YEAR REVIEW Europe: Investment Momentum Linked To Risk L ooking at investment volume increases action volume growth both on a six-month and across European markets and comparing quarterly basis. ey include a higher propor- spreads between cap rates and relevant tion of non-eurozone countries with more stable government bonds, it is clear that the momen- economic conditions. Countries plotted in the tum of real estate investment in Europe is ow- lower le quadrant, notably Spain and Portugal, ing towards the highest relative yields in the are experiencing negative transaction momen- safest markets. tum. e UK on a half-year basis escapes e upper right quadrant of the momentum this grouping, but its lower Q2’11 volume graph highlights the focus of capital on Ger- re ects a weakening market. Among the outli- many and Sweden in response to the attractive ers, Ireland saw already low volume falter in cap rate spread over government bonds through Q2’11, while Russia’s good Q2 re ects a major Q2’11. Like Germany and the Nordics, the other luxury Moscow hotel acquired by Kazakhstan countries in this quadrant display strong trans- backed private equity. CAP RATE SPREADS INVESTMENT MOMENTUM BY COUNTRY ALL PROPERTY TYPES TO SOVEREIGN BONDS Cap Rate Govt Bond Spread Switzerland 0 100 200 300 400 Finland 100%Sweden 80% Turkey Belgium Sweden Denmark 60%Germany Russia Norway 40% Q2’11 vs Q2’10 % Chg Germany UK 20% Czech Republic Hungary 0% Netherlands France Italy France -20% Poland Italy -40% Spain United Kingdom Ireland -60% Ukraine Portugal Spain Austria -80% Romania Croatia *Greece 0% 2% 4% 6% 8% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% H1’11 vs H1’10 % Chg *No significant transactions recorded for Greece over the last 12 months. Based on percent change in Euros ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 7
  8. 8. AUGUST 2011 MID-YEAR REVIEW EMEA: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC (CSC) ($M) 2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment BoardCapital Shopping Ctrs Grp PLC $2,498 3 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments GmbhCA Immo 2,402 4 OFF Chiswick Park London, GBR 781 1,900 411 BlackstoneTesco Pension Trustees Limited 2,200CPP Investment Board 1,913 5 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGRArminius Funds Management 1,457 6 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny CapitalCerberus Capital Management 1,215 7 RET Boulevard Berlin Berlin, DEU 533 753 707 Corio NVDekaBank 1,179 8 OFF Rolls Building London, GBR 492 262 1,880 Legal & General PropertyDeutsche Bank 1,160 9 OFF MidCity Place† London, GBR 468 352 1,329 Oxford Properties GroupAMF 948 10 OFF Aviva Tower London, GBR 439 315 1,393 Kuok Khoon Hong & Martua SitorusAEW Capital Management 788 11 OFF River Court London, GBR 437 425 1,029 Chinese Estates GroupInvesco Real Estate 786 12 OFF 10 Aldermanbury London, GBR 434 312 1,393 JP MorganBlackstone 781 13 OFF River Ouest Bezons, FRA 400 689 581 ING RE Invt Mgmt France OBO Predica SA‡Signa Holding 721 14 OFF 20 Gresham St London, GBR 374 237 1,580 AXA RE Investments Managers (REIM)Corio NV 716 15 OFF Park House London, GBR 366 310 1,180 Qatar National BankAmdec Property Development 686First Atlantic Real Estate SGR 652 16 HTL Paris Marriott Champs-Elysees Paris, FRA 362 192 1,887 Abu Dhabi Investment AuthorityPrudential PLC 640 17 RET Spitalerstrasse 22-26† Hamburg, DEU 361 55 6,560 Signa HoldingLegal & General Property 631 18 HTL Le Meridien Montparnasse Paris, FRA 350 953 367 Unibail-RodamcoReal I.S. AG 612 19 OFF Belgrave House† London, GBR 347 280 1,239 TIAA-CREF (fund)Verny Capital 609 20 RET Jubilee & West End Houses London, GBR 342 121 2,834 Pontegadea Inversiones SL 21 RET Schloss Arkaden Braunschweig, DEU 335 597 561 Deka Immobilien Investment GmbH 22 OFF Defense Plaza Puteaux, FRA 325 335 969 Northwood Investors LLC TOP 20 SELLERS # 23 RET Eden Shopping Centre† High Wycombe, GBR 313 850 368 Aldersgate Investments Vol 24 RET Marmara Park† Istanbul, TUR 302 1,076 281 DWS Investments Gmbh ($M) 25 RET Wankdorf Shopping Centre Bern, CHE 300 678 442 UBS JV Swissreal Investments LtdPeel Group $2,498Volksbank AG 2,426Tesco plc 2,223 TOP 15 PORTFOLIO SALESStadium Group 1,913 Price SF(K)/ PPSF/ Type Transaction Location BuyerDeutsche Bank 1,782 ($M) Units PPU (K)Aberdeen Property Investors 1,541 1 RET Tesco RET Portfolio 11 Multiple, GBR $2,200 $3,500 $629 Tesco Pension Trustees LimitedEurocastle 1,544 2 MIX Europolis MIX Eastern Euro Ptfl 11 Multiple, Europe 2,009 13,011 154 CA Immobilien Anlagen AGUnibail-Rodamco 1,242 3 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds ManagementBeacon Capital Partners 1,043 4 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital ManagementFourth Swedish Natl Pension Fund 948 5 APT Dombron Intressenter ptfl† Sweden other 948 8,281 115 AMF FastigheterMorgan Stanley 922 6 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property DevelopmentPirelli & C. Real Estate SpA 804 7 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufic AboukhaterECE Projektmanagement 817 8 MIX NR Nordic & Russia Props Ltd Mix Ptfl 11 Multiple, Europe 542 8,872 61 Kungsleden ABSchroders plc 781 9 APT Genesis Housing APT Ptfl 11† London, GBR 464 1,630 284 Grainger plcStanhope Plc 781 10 MIX ECE MIX portfolio 2011† Hamburg, DEU 435 665 655 Real I.S. AGKuwait Investment Authority 741 11 RET Rubin Moscow RET Ptfl 2011 Moscow, RUS 428 1,017 421 Yuri and Alexei HotinHighstreet Holding 760GE Capital 734 12 IND VGP IND Portfolio 11† Prague, CZE 414 4,629 89 AEW Europe JV Tristan Capital PartnersHermes 678 13 RET Unibail RET Portfolio 11 Multiple, SWE 379 1,002 379 Grosvenor‡Investitori Associati 652 14 RET Karstadt Highstreet Ptfl 2011 Multiple, DEU 370 524 706 Quantum Immobilien AG 15 RET Highstreet Karstadt Ptfl Munich, DEU 361 570 632 Signa Holding‡ # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 8
  9. 9. AUGUST 2011 MID-YEAR REVIEW EMEA: Transactions by Market in H1’11 APARTMENT INDUSTRIAL OFFICE RETAIL HOTEL LAND SITE GRAND TOTAL* YOY CHANGE Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol Props Austria Austria, all $72 2 $72 2 $258 3 $316 5 $717 12 -19% -45% Belgium Belgium, all 21 1 92 3 914 20 58 3 88 2 1,173 29 47% 16% Bulgaria Bulgaria, all 62 3 62 3 -52% -25% Czech Republic Czech Republic, all 414 7 445 8 304 5 1,163 20 168% 25% Copenhagen 43 3 45 2 318 8 347 6 72 1 825 20 81% 100% Denmark Denmark other 18 1 65 4 151 2 9 1 243 8 7% 100% Baltic States Baltic States 25 1 299 7 17 1 341 9 994% 350% Helsinki 60 4 28 2 552 10 152 3 792 19 226% 58% Finland Finland other 29 3 84 5 85 9 86 11 101 3 384 31 3% 107% Paris 183 4 237 7 4,699 83 378 42 1,080 41 6,578 177 41% 51% France France other 286 8 282 28 519 17 1,260 23 196 5 2,543 81 -47% -49% Berlin-Brandenburg 989 39 27 1 1,813 36 886 12 152 3 200 4 4,068 95 53% -13% Hamburg 341 24 216 8 1,413 24 1,056 6 52 2 125 4 3,203 68 309% 209% Munich 286 18 178 3 321 9 501 8 36 3 119 5 1,441 46 10% 59% Frankfurt/Rhine-Main 79 4 80 1 1,294 8 298 8 221 5 297 6 2,269 32 175% -14% Germany Stuttgart 11 1 38 2 106 4 142 4 21 1 100 1 420 13 23% -7% Rhine-Ruhr 345 27 48 3 704 14 2,348 27 27 1 204 7 3,676 79 12% -66% Saxon Triangle 227 103 55 1 45 3 413 7 22 1 13 1 775 116 11% 625% Germany other 564 216 49 2 315 11 3,293 138 228 5 207 8 4,657 380 37% 222% Greece Greece, all -100% -100% Hungary Hungary, all 128 2 169 3 100 1 69 1 35 2 501 9 22% 125% Ireland Ireland,all 346 4 346 4 111% -43% Rome 263 6 66 1 96 1 425 8 -46% 0% Europe Italy Italy other 13 1 900 17 1,029 7 87 2 2,029 27 102% 4% Netherlands Netherlands, all 274 29 434 19 1,035 32 483 16 41 2 30 2 2,297 100 7% -3% Norway Norway, all 28 2 121 6 950 14 403 6 10 1 1,512 29 22% 0%EMEA Poland Poland, all 220 8 897 11 543 6 42 2 113 5 1,815 32 40% 28% Portugal Portugal, all 40 3 55 3 59 1 70 3 150 4 373 14 -57% -60% Romania Romania, all 46 1 201 3 18 2 195 2 459 8 59% -27% Moscow 165 2 331 3 628 3 639 2 1,763 10 -20% -58% Russia Russia other 20 1 52 2 18 1 150 2 21 1 261 7 -69% -91% Madrid 28 1 21 1 170 3 325 237 189 5 37 1 770 248 -40% 700% Spain Spain other 183 8 187 4 570 248 443 10 187 5 1,569 275 -24% -40% Stockholm 771 45 288 22 716 17 696 7 118 2 182 2 2,769 95 20% 16% Sweden Sweden other 1,963 134 1,042 69 1,504 119 581 26 47 5 62 3 5,198 356 82% 88% Switzerland Switzerland, all 189 3 483 5 326 2 94 2 1,092 12 162% 20% Turkey Turkey, all 13 1 132 3 462 2 39 2 24 1 670 9 38% -25% London Metro 958 17 227 16 9,434 108 1,338 21 291 13 196 5 12,444 180 19% -8% Manchester Metro 39 2 89 4 2,572 4 245 4 2,945 14 263% -46% United Kingdom Scotland 166 4 60 3 364 10 16 1 606 18 -50% -67% UK other 125 4 1,205 53 1,458 48 5,159 93 319 9 87 4 8,353 211 -7% -56% Ukraine Ukraine all 499 1 25 1 200 3 724 5 40% -38% Europe other Europe 112 3 295 1 102 2 14 1 523 7 52% -36% Total $7,763 694 $7,043 303 $33,270 681 $28,517 1,016 $5,459 143 $2,723 79 $84,775 2,916 22% 2% Israel Israel, all 306 2 62 3 177 3 256 5 801 13 -22% -32% Dubai 483 6 483 6 -36% -67% UAE UAE, all 165 2 165 2 - - Mid-East other Saudi Arabia, all 67 1 67 1 -16% 0% Mid-East Total $306 2 $62 3 $177 3 $972 14 $1,516 22 -18% -42% Africa Africa, all 89 1 319 3 546 6 98 3 20 1 1,071 14 -6% 0% Africa Total $89 1 $319 3 $546 6 $98 3 $20 1 $1,071 14 -6% 0% ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater.9
  10. 10. AUGUST 2011 MID-YEAR REVIEW Asia Pacific: Quarter in Review Summary S ales of signi cant properties in QUARTERLY TRANSACTION VOLUME Asia Paci c totaled $67.2 in Q2’11, $120 Billion BY PROPERTY TYPE bringing the total for the rst half Commercial of 2011 to $170.8 . While the region con- Apartment $100 tinues to show solid, steady growth in Hotel commercial property investment, some Land signi cant changes were noted in Q2 as $80 investment surged in Australia and plum- meted in Japan. Hong Kong recovered $60 from a relatively poor Q1 with a stronger Q2 to be at at the mid-year point while $40 Singapore’s 119 increase in transactions in H1 topped every major economy glob- $20 ally except the US. Also noteworthy, cross-border inves- $0 tors were part of the surge in transactions in Australia and 1 2 3 4 1 2 3 4 1 2 3 4 1 2 TRANSACTION SUMMARY Singapore, and the 08 09 10 11 Q211 YOY H1’11 YOY buyers included a PERCENT CHANGE IN TRANSACTION VOLUME Vol ($B) Chg Vol ($B) Chg healthy mix of Eu- (H1’10 VS H1’11) FIN Office $8.5 -8% NOR $22.2 14% ropean and North <-50% - 50–0% 0–20% 20–50% 50–100% >100% Retail 5.1 75% 9.8 15% American invest- DECREASE INCREASE SWE Industrial 2.9 71% 4.9 52% DNK RUS ment rms which All Commercial 16.5 19% 36.9 18% NLD have been relatively Hotel IRL1.6GBR 13% 2.5 -11% DEU POL quiet since 2007. Apartment 2.0 46% CZE 4.0 BEL 25% Land 47.2 SVK UKR South Korea also FRA 15% AUT 127.4 HUN 11% Total $67.2 CHE 17% ITA $170.8 ROU 12% HRV posted strong results SRB *Totals may not sum due to rounding MCO MNE BGR in each quarter this PRT ESP GRC TUR year and its 80 in- KOR crease in H1 was the second highest in Asia. JPN CHN e only countries in Asia Paci c where in- ISR vestment momentum appears waning and volume fell in both quarters this year were QAT ARE TWN SAU India, Taiwan and New Zealand. IND HKG Across Asia Paci c, growth accelerated THA in the second quarter in every property VNM type save o ce, which is largely due to curtailed investment in Japan. In China, MYS sales of o ce and retail properties nearly SGP doubled in H1’11 while sales of develop-BRA able land moderated in Q2 as China’s long-running e orts to calm exuber- ant sales appear to be bearing fruit. In addition, transactions in China’s over- heated primary markets dropped as ac- AUS tivity moved to secondary and tertiary ZAF cities. Land rights in China accounted for $38.7 in Q2, up slightly on a year-over- year basis, but half of levels recorded in the two most recent quarters. ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 10

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