Moor Park Capital Partners

Spire Healthcare is the second largest private hospital with 38 hospitals across the UK. The consortium of investors from Malaysia and the US, and of course Moor Park, expressed their long term confidence in Spire. Jagdeep Kapoor (top left), Partner at Moor Park Capital, had this to say about the deal:

“This was a complex transaction that is typical of the type of bespoke investment that Moor Park Capital originates, structures and executes on a non discretionary basis for its pool of investors – long term sale and leaseback transaction let to a single tenant with multiple assets that are mission critical to their business.”

Rob Roger, Chief Executive Officer of Spire Healthcare added; “We are pleased to have completed this transaction, the entire proceeds of which will be used to pay down debt and support the continued development of our business.” He went on to suggest the completion of such a deal during such trying times is, in fact, a testament in a way to his company’s value.

Those interested in more information may contact the respective companies via:

For information about the investor consortium
Redleaf Polhill:
Emma Kane/Henry Columbine
mpc@redleafpolhill.com
+44-(0)20-7566-6700
or
For information from Spire Healthcare
Maitland:
Tom Buchanan
tbuchanan@maitland.co.uk

Even given the positives of investment potential for the Chinese, there are certain hurdles that any investor moving money out of China to overcome. Those hurdled, China or any investing interest might needs to look at property markets in places like Cyprus, and London, both offering stable deals, but Cyprus in particular  offering the added bonus of EU citizenship once you property ownership exceeds 300,000 Euros.

How to Break Into This Market

There are a number of different aspects that must be taken into consideration when trading anything into China. Here are a few things that must be strongly considered, and acted on:

One – Partnering up with established brokers and investors to get them to promote your properties. They will already have a database of potential investors, and a marketing plan in place. As long as you have something good to offer, they are likely to be interested in helping you get it in front of the right people. You can get acquainted with potential partners and brokers through agencies that help to introduce outside businesses into the Chinese market place.

Two – SEO and Internet Marketing is so very important to help build your company brand up to make sure that established brokers want to do business with you. It will also enable investors to have heard of you, and maybe even come to you directly, increasing your profit margin by avoiding a third party commission. Baidu is the main search engine for China, and there are various social media platforms to take advantage of, Sina Weibo being the largest. You must make sure that you employ a professional who understands the Chinese internet marketing world to make sure that you are advertising in the right places and maximising your online exposure. This is a huge part of making a positive impact in the Chinese market place, as just like in many other countries the internet plays a huge part in the consumers shopping, and information retrieving habits. Good Search Engine optimisation is as important here as in any other country. Any website will need to be built with the Chinese investor in mind, as well as in Mandarin. A specific site will have to be designed and created for the Chinese consumer. Your marketing agency should be able to take care of this for you.

Three - Make sure that your investment opportunities clearly depict what is expected and offered. Chinese consumers like to know what they are buying, or in this case investing in, in detail. They are analytical customers and clients, in general of course, and want to make sure that they have all the information available before making a decision. It is also a good idea to add plenty of added incentives, as I mentioned EU citizenship for a 300,000 Euro or above property in Cyprus, to make the investor feel they are getting more for their money. Chinese investors like to think they are getting the best product, service and value for their money. You do not have to offer citizenship to a country of course, but look at what the value of the investment is to your company, and make sure that an “extra” of value can be added to the deal in conjunction with that investment value. A free pen for $500,000 worth of business is not generous enough, and is likely to be seen as insulting.

Four - Make sure that there is support to handle queries and reservations within your organisation. They can be based at your company residence, or in a China office. They will need to be a Chinese speaking member of staff, working to Chinese times. Good customer care is incredibly important to Chinese investors, as it is to Chinese consumers of any product.

Getting  Involved

The potential for property investors within China is huge, and that market is only going to get bigger as more of the population find themselves with money that they want to invest. Saving and prudence are very common traits within Chinese culture, so secure property investment deals that offer a solid return are going to always be a big attraction. It is worth establishing your property business in China now, even if that is just through a well marketed, Chinese optimised website, testing the water, before your competition gets the chance to strike first. Be the first into new emerging markets.

Image credit: Discerning investor – courtesy © Elwynn &  Fotolia.

In UK developer news, a new venture by Sir Stuart Lipton (at left) and his brother architect Lord Richard Rogers is in the offing. Lipton leaves Chelsfield Partners LLP  to pursue the new venture, but will continue to be involved at the company he and partner Elliott Bernerd launched.

According to the news from PropertyWeek, Lipton’s new development endeavor will work on large scale projects in London, the company will also raise capital for said projects. The dynamic brother pair worked on the Broadgate complex in London back in the 80′s, one of the biggest such developments of the time. According to the reports, it appears Lipton sees a new era of design coming, he told the Times:

“…consumers don’t want plain glass boxes for offices. It is in the tough times like this that the property market gets innovative. We have to think about new ways of doing things, and large and complicated projects are our bag.”

Silvertown conceptualization – courtesy Chelsfield & e-architect

Lipton, seen as an innovative visionary by most, was at the center of some controversy where his former dealings with Commission for Architecture and the Built Environment (Cabe) came into question. Lipton resigned as chairman, but not without some pain and agony. Despite any negatives though, all Lipton’s peers admire his creativity and resilience. Back in March of 2012, his efforts at the Silvertown (above) project near the airport drew accolades.

Set to attract the likes of Apple and Microsoft the  The 50,000-square-foot glassy pavilions there are all that’s fashionable for business folk. As for Lipton’s and Lord Rogers’ next creative play, is “the sky is the limit cliche?

Photo credits: Sir Stuart Lipton – courtesy University of Bath.

Deloitte spokespersons also suggest their predictions may be seen as overly optimistic, but Anthony Duggan, partner and head of research at the firm, went on to clarify saying;

“We saw large downwards shifts in pricing during 2012 particularly for secondary stock. It appears these values are now getting close to a ‘mark to market’ level where investors begin to see some value and are willing to transact.”

Duggan went on to point out shortages in the Grade A quality stock, pricing barriers of ‘prime’ stock and ensuing entry levels, and an emergence of investment opportunity – widening of the UK investment market. The bottom line for the real estate economy in the UK, being similar to that in the US and EU – investor confidence will be key to any recovery. Given this bottoming out aspect, it seems fairly clear Deloitte’s predication make some sense.

For more information the reader should consult the original Deloitte release here, or contact:

Sue Gibson, Deloitte LLP, +44 (0) 20 7303 3156, or email her at: sugibson@djdeloitte.co.uk

It may take a flying Snowman and Snow Dog to save the UK economy

The average cost of a home slipped 0.1 per cent to £162,262 (HK$2.05 million), the lender said yesterday. From a year earlier, values fell 1 per cent. Robert Gardner, Chief Economist at Nationwide, offered this via their press:

“The outlook remains uncertain. With the economic recovery expected to remain fairly weak, the housing market is likely to be characterized by low levels of activity again in 2013, with prices remaining flat or modestly lower.”

Tight credit and low productivity as reported by the Bank of England (PDF), factor into a Britain recovery stagnated. Even the relative lack of supply of homes has not propped up prices well enough to conceal what experts suggest is a much bigger underlying problem. The report goes on to reveal 11 of 13 regions in the UK seeing price falls in 2012, with Northern Ireland leading all declining markets.

The real worry where UK productivity is concerned is that the crisis, and ensuing ongoing low productivity numbers, may be indicative of an economy damaged to the point where supply cannot support growth. In such scenarios, inflation stands to further stifle any hope of complete recovery.

In the chart below from VOX, it’s clear that while the US and Spain show a typical recovery attitude where productivity after a recession is concerned, Britain and some others seem to flatline.

Courtesy VOX

Photo credit: Snowman & Snow Dog banner – courtesy Nationwide Building Society Facebook.

A new Hammerson development – retail space

The CEO of Hammerson, David Atkins, elaborated on the move further:

“Following our investments in Value Retail, Victoria Quarter and the Whitgift Centre, this acquisition is another demonstration of Hammerson deploying capital into one of our three defined areas of retail focus. There is continued strong consumer demand for the ease and convenience of retail parks, and that consumer demand is being reflected in the increasing requirements of a range of fashion and catering retailers for space in retail parks. This portfolio acquisition on attractive terms enhances our income profile and will be actively managed to grow rents and capitalise on development opportunities, maximising returns for shareholders.

These moves by Hammerson appear to be part of a bigger trend in UK real estate to move investments into a more targeted space. Regional shopping and office space in and around London, being two areas Hammerson and others seem focused on. The so called Junction Fund is made up of shopping parks in Bristol, Glasgow, and Telford as well as retail giants like H&M, Gap and a few others.

The acquisition also speaks of undeveloped land as part of the deal, specifically the Oldbury Shopping Park Development. There, Hammerson has bought into roughly 16 acres of potential across the way from Oldbury town centre. That move along spell a ray of hope for industries tied to real estate development, namely the jobs sector.

For more information on this recent Hammerson investment, please visit the link provided or check out the firm’s Facebook profile for images.

British expats see investment opportunity in UK real estate © fazon - Fotolia.com

According to a report in the Telegraph, property prices in London have increased by 7% during the last 12 months, and are expected to rise even further, something that has led to an increase in the number of expats coming back into the property market. Many live in countries where the exchange rate works in their favor, and so they see buying property as a less volatile investment than the stock markets.

Knight Frank, who holds exhibitions of UK property in Shanghai, Hong Kong, Singapore and Kuala Lumpur, points out that anyone working in Singapore and buying property in London effectively receives a 20% discount due to the current weakness of the pound.

Expats also have another advantage over international investors, as they are likely to have much better local knowledge, and are much more able to know the best areas in which to invest and which to avoid. Brits living abroad can also benefit from the fact that many UK property developers give incentives to international investors which often aren’t available to UK buyers. These include such things as property price discounts and rental guarantees.

Finally, British expats can also take advantage of the fact that anyone who is non-resident in the UK for at least five years is no longer liable for capital gains tax, and most gains do not need to be reported to HMRC from the second tax year of departure onwards.

60 Threadneedle Street, London - a choice Hammerson property

A report from Reuters Hammerson’s first half situation is revealed showing the firms pre-tax profit at 192.5 million pounds. According to the news, this is an drop, year-to-year, of some 42.6 percent.  Chief Executive David Atkins commented in a statement (Reported by Tom Bill) :

 ”Our regionally dominant shopping centres and convenient retail parks are trading ahead of national benchmarks and continue to attract successful retailers. Despite a challenging retail backdrop in both our markets, we have seen little impact from the recent rise in UK retail administrations.”

This news comes on the heels of  Hammerson’s head of London Group, Martin Jepson, having stepped down. Peter Cole, Executive Director and Chief Investment Officer there, has assumed Jepson’s spot during the interim, but the message here seems pretty clear. Any company climbing out of the recession last year, only to dump half the ROI for investors, is going to lose someone. The chart below from Hammerson shows the tale of the tape.

The return on equity at Hammerson so far this year - courtesy Hammerson report half year

Hammerson’s CEO David Atkins approved the sale of over 500 million pounds worth of Hammerson properties to shuffle debt and fund further acquisition last year. Simon Packard of Bloomberg reported on Hammerson’s over 370 million in mall acquisitions, as well as the company’s intended building developments. So, on the face of this news, it looks like forward momentum will have to suffice in place of real profit for Britain’s third biggest real estate investment house – and their investors, or course.

Last month Hammerson shareholders dumped over 85 million shares of the company’s stock, a bad day that sent the sector into a mini-free fall for a spell.  Let’s face it, when Cadillac Fairview (Hammerson’s biggest single investors)  lost their confidence… It remains to be seen if Atkins can bail out what appears to be a listing real estate investment ship. In fairness, Atkins and Hammerson are not alone out to sea. Aflac lost over half its forward momentum and profits, Japan’s Nomura is sliding downhill faster than even Hammerson (PDF), and the US debt crisis looms far larger than shopping center investment woes.

We will follow Hammerson via alert to keep you abreast of news from them. More on Nomura and other key segment investors later on this week.

For those interested in Hammerson’s half year numbers, that report is here in PDF form.

It does not take a property expert or economist to figure out how much trouble the world real estate situation is. At least “in trouble” where the small investor is concerned. A cursory look into Google News can provide all the data anyone needs actually. Looking at selected countries around the globe, it’s quite clear property values are still headed nowhere but down in many markets.

The southern slope of Karavanke - courtesy Viviun

Slovenia is one of the emerging EU countries that has shown the most promise in many sectors, real estate being one. However, Q2 indexes show even Slovenia has its price problems.  Apartments prices in Ljubljana, and other Slovenian areas fell by as much as 1.8% Slonep, a web portal that tracts housing prices there. Housing starts and other construction oriented property business there has also slumped by as much as 30 percent, year on year. And other former “boom” markets in Europe are fairing no better. The image of a farm for sale amid the Julian Alps in Slovenia is a good indicator of value. €700,000 euro for such a paradise is peanuts.

Bulgaria is one country that has seen a recent “Bull” market where property sales is concerned. Property prices in the country’s capital of Sophia dropped by over 10 percent since last year at the same time, according to The Sophia Echo.  The Black Sea city of Varna, a seaside jewel not so many investors have ever heard of, saw similar declines in property prices over the same perood. And, the Winter resorts in Bulgaria, despite their popularity, are making out no better. The image below is of a seaside apartment at the all new Varna South Bay Beach Residence. For as little as €91 245 euros, a beach dream will come true for many.

An example of what is possible on the Black Sea - courtesy Dream Bulgaria

The larger economies have been hit even harder it seems. The UK, the Russian Federation,   Singapore, Saudi Arabia, even China indexes show many challenges going forward into 2012 and beyond. As for the US. Well, the same old confusion exists as to whether the market is up or down. Depending on whom you read or listen to, real estate in America could be about to skyrocket – or sink like the Titanic. Just how anyone could predict positive home sales with so many unemployed – this seems like folly. And the same hold true worldwide. If China has every manufacturing job known to man, and still people cannot afford homes. You see the trend.

Finally, as anyone could predict, investment in certain assets has increased globally. Put very bluntly, investors with resources are snapping up a disproportionate number of bargains worldwide.  As prices continue to fall, some institutions make out like bandits in bolstering their portfolios. Investment is the only thing skyrocketing actually. And we are not  talking about the guy next door investing either. At the same time John Doe cannot afford to visit Walmart (or Lidl in Germany) big time investors are cashing in on acquisitions. Jones Lang LaSalle’s 2Q Profit Gains 38%, CIC reports $51.5b net profit, everyone from Forbes to the street corner peddler knows money is flowing like water for I bankers and speculators.

The already rich win during the worst recession in history

Just what all this means for the every day Joe is not touched upon by so many. Looking at the how legendary investor George Soros has backed out of what many would call “reasonable scrutiny” where his massive hedge fund would come under the looking glass next year – Soros closed the fund to outside investors – a degree of Machiavellian plot seems to surface. A conspiratorial theorist would just say “Big Brother” has decided to take over what’s left of society’s portion. The filthy rich are buying premium properties as if their lives depended upon real estate. A good example, Hamburg, Germany property sales, shows those “with” money, know what’s safe and what is not.

“One man’s loss is another man’s gain,” or so the saying goes.  The chart above from Marketing Charts shows that Americans are not only being outdone by the upper 1 percent, but what’s more disturbing is, they are totally unaware of the metric. More later.

The Golden Wastercastle and other Hamburg property is at a premium - courtesy Kliefi

Colin Dyer CEO Jones Lang LaSalle

According to a report (PDF) by global property advisors Jones Lang LaSalle, Europe, the Middle East, and Africa recorded the highest overall volume in FDI of over $136 billion. Furthermore, Europe’s largest markets of the UK, Germany, and France made up about half that region’s volumes, but indicators show too that investors seem primed to reach out into other regions in Europe as well now. One reason for this is the limited entry for core real estate products in Europe’s traditional sectors – this is pushing in vestment monies farther East and South.

Arthur de Haast, Head of the firm’s International Capital Group had this to say about the prospects for this year:

“Barring further sovereign debt crises or financial shocks, the momentum of 2010 is expected to continue over the next 12 months and we predict global volumes for 2011 should increase by 20 to 25%.”

As an indication of the firm’s reach, and to spotlight regions where drastically increasing FDI may occur, this report (PDF) on Warsaw, Poland reveals the depth of the recovery there. The chart below illustrates the 50 percent rise in investment over the last year too. Price increases for properties, along with other factors, appear to this writer to offset the negatives of budget imbalances in Poland.

The Warsaw investment curve - courtesy Jones Lang LaSalle

Still more research shows clearly that some of the Eastern European countries have substantial growth since 2009. Turkey is maybe the best example of the a market where those placing their investment dollars seem likely to do so. The Euro zone of Turkey in particular has seen good GDP and other numbers across the spectrum from office space rental to consumer confidence, and in particular household spending.

Clearly Turkish citizens are showing far greater confidence in their own situation and the economy as a whole. The chart below shows the steady rise in GDP since the worldwide economic calamity hit. What’s more, Turkey’s budget deficit numbers go down in direct correlation to the positive rise elsewhere.

Turkey's consisten rise in GDP - Courtesy Jones Lang LaSalle

While news in the United States still hovers like a harbinger over the real estate industry, it is evident other regions have somehow emerged on a clear path toward not only solvency, but in some cases record breaking growth. As investment monies are freed up, entire economies can benefit from an influx of investment.

Jobs are created, public confidence is reinstalled, and an overall atmosphere of “building” replaces the trough of uncertainty some countries are still locked into. It seems sound advice for citizens and investors to watch these emerging regions for clues as to opportunity and ways out of this economic debacle. Maybe it’s time to look to the East?

Warsaw's Zlota 44 luxury apartments - courtesy e-architect