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GCC cash in on US distressed
Institutions shift from hedge funds to property
A US fund targeting distressed
property in American cities has raised
The property sector is expected to be
almost half of its $100 million expendi-
the main beneficiary of an institutional
ture from Gulf investors. Around 45% of investor shift away from hedge funds.
the money spent by US-based property
A survey of pension allocations
firm Tate Capital Real Estate Solutions
by international financial services
on acquiring discounted apartment
buildings originates from the Gulf, ac-
consultancy bfinance showed 27% of
cording to LRIM Investment Manage-
funds plan to increase their property
ment, a private equity research firm in
allocation in the next six months as
Dubai. The company’s chief execu- they diversify into riskier asset classes
tive, Mark Desario, told The National
rather than fixed-income investments.
newspaper that most of the money
Funds were particularly committed to
came from wealthy individuals, family
diversifying across different countries,
businesses or financial institutions.
PEOPLE “They are people who are familiar with
the research found.
the US marketplace. Many may have
“The tumultuous events of the
schooled there,” he said. “All are looking past year have prompted investors to Investors to pile in | Over a quarter of funds plan to increase their property allocations
for reasonable annualised returns, even
reassess their portfolios and take stock
if it’s over a period of time.”
of their investments in hedge funds from fixed-income.” and 8% from Italy.
Swiss firm buys German flats
and fixed-income,” the report said. A cross-section of pension funds “Pension funds remain more
Swiss-based private equity real estate
were surveyed in November and committed than ever to diversifying
firm Corestate Capital is buying 4,700
Geographic diversity December 2009, 60% of which were across both asset classes and
apartments in western Germany. The “A dizzying rally in government bonds, from Europe with the remainder geography,” said the report. “The perils
firm said the portfolio consisted of
historically low yields and a winding from North America. Of the European of geographic concentration have
more than 300,000-square-metres of
down of quantitative easing measures respondents, 45% were from the UK, been particularly painful for Irish and
residential property. The properties
seem to have convinced investors that 34% from Scandinavia, 13% from UK pension funds with historically high
include €150 million of debt financing
and the firm intends to implement a
the time may be on hand to move away Germany/Netherlands/Switzerland domestic equity holdings.”
capital investment programme. The
transaction remains subject to con-
sents from existing financing parties,
“We now have around 130 investors
which must be obtained by the end
Holiday home
with 20 more in the pipeline, up from
of February. Mark Dunstan, managing
around 60 or 70 last year,” Hideaways
director of current owner BGP Invest-
ment, told Private Equity Real Estate
Club head of marketing Jemma Lester
News that this was the first transaction
fund reports
told OPP. While she admitted the
in its strategy to dispose of non-core recession had affected the number of
property in Germany.
new members, she said there had been
BUSINESS investor surge
a pickup at the end of 2009 with 15
Kuwait lender banks on US
members joining in December alone.
Kuwait’s biggest Islamic lender, Kuwait
Finance House (KFH), has signed a $242
The Hideaways Club, which claims
million real estate deal in Chicago. KFH
to be Europe’s largest holiday home New properties
owns 95% of the project, while the investment fund, is to expand its “We’re always looking for new Asset growth
Hideaways Club buys a
rest is owned by Prism Company. Since
portfolio after a rise in new members. properties,” she added. “We maintain a new property for every six investors
August last year, KFH has been in a
The fund has just announced a ratio of six members to each property
partnership with US apartment build-
partnership with Banyan Tree Private and investment regulations mean The reciprocal agreement with
ing owner UDR to buy high income
property in the US. “KFH will focus on
Collection to provide its members with we always have to stay ahead of Banyan Tree follows a similar
income producing assets with attrac-
access to the Asian hotel and resort the number of new members.” New partnership, announced last week,
tive yields and guaranteed occupancy developer’s destination club properties, property selection is carried out by the between The Hideaways Club and North
levels,” the lender said in a statement.
which it hopes will encourage even fund’s management team led by CEO America’s largest holiday home fund,
The company is seeking investments of
more investors to join. Stephen Wise. Equity Estates.
up to $450 million in major US cities.
The Church of England has been forced to write off Hungary’s top court has scrapped a new housing Mortgage lending in Hong Kong fell for the sixth
a £40 million investment in a New York apartment tax as unconstitutional. Proceeds from the tax were consecutive month in December, as government
complex it made just before the property crash. The expected to be relatively small but the government measures to cool surging home prices led to a market
consortium that bought the property was unable to hoped the measure would help keep the budget slowdown. The value of loans approved during the
make a multi-million dollar loan repayment and has deficit in check. The court said the decision was due month fell 6.2% to HK$24.2 billion ($3.41 billion)
handed the complex over to its creditors. to the way the market value was calculated. according to the Hong Kong Monetary Authority.
FEB10_OPP_MAG.indd 18 28/01/2010 15:19
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