COVER NEWS ISSUE 45 AUGUST 2013 FEATURES REFERENCE - EPRA Annual Conference - Member offers - The French REIT is not a - FTSE EPRA/NAREIT Global tax loophole Real Estate Indices - Making the data count Europe is not dead Guest Editor — Dr Ian Shepherdson Tracking EU regulatory activity Crossrail & Grand Paris – two of Europe’s largest infrastructure projects EPRA MEMBERS AS OF AUGUST 2013 AUSTRALIA • Fair Value REIT NORWAY • JPMorgan • Univ. of Western Sydney, • GSW • Norwegian Property • Jefferies Property Research Centre • Hamborner • JLL • Heitman SINGAPORE • KPMG AUSTRIA • IREBS International RE Business • Keppel Land Limited • Land Securities • CA Immobilien Anlagen School • National Univ. of Singapore • Linklaters • Conwert Immobilien Invest • IVG Immobilien • London Metric • Immofinanz AG • LEG SOUTH-AFRICA • Macquarie Real Estate • Sparkassen Immobilien • MEAG Real Estate Management • Growthpoint Properties • M&G Investment Management • PATRIZIA Immobilien • Morgan Stanley BELGIUM • POLIS Immobilien SPAIN • Nabarro • Aedifica • PricewaterhouseCoopers • Fundación ESADE • Nottingham Trent Univ. • Antwerp Management School • Prime Office REIT • Inmobiliaria Colonial • Principal Global Investors • Banque De Groof • Real Estate Management • Neinver • Quintain Estates & Development • Befimmo Institute • TESTA Inmuebles & Renta • Redefine International • Cofinimmo • RREEF Investment • Safestore • Leasinvest Real Estate • SEB Asset Management SWEDEN • SEGRO • Retail Estates • TAG Immobilien • Aberdeen Property Investors • Shaftesbury • Solvay Business School • VIB Holding • Standard Life Investments (Brussels Univ.) • Castellum • Thames River Capital GREECE • Fastighets AB Balder • Tristan Capital BRITISH VIRGIN ISLANDS • Eurobank Properties REIC • UBS • Eastern Property Holdings • Lamda Development SWITZERLAND • Unite Group • National Bank of Greece • Center for Urban & RE • Univ. of Aberdeen CANADA Property Services Management • Univ. of Cambridge • Presima • Trastor REIC • Euro Institute of RE Management • Univ. of Reading, Centre for • Mobimo Holdings RE Research CYPRUS HONG KONG • PSP Swiss Property • Workspace Group • 01 Properties • Univ. of Hong Kong • Strategic Capital Management • Swiss Prime Site USA CZECH REP ISREAL • University of Geneva • Cohen & Steers Capital • PointPark Properties • Azrieli Group Management • Gazit Globe TURKEY • Duff & Phelps FINLAND • Emlak Konut • European Investors Incorporated • Aalto Univ. ITALY • Torunlar REIT • Fidelity Management & • Citycon • Beni Stabili Research. • KTI Finland • Immobiliare Grande UAE • Forum Partners Investment • Sponda Distribuzione • Abu Dhabi Investment Authority Management • Host Hotels FRANCE LUXEMBOURG UNITED KINGDOM • MIT Center for Real Estate • Affine • Atrium European Real Estate • AEW • Real Capital Analytics • Altarea • GAGFAH • AMP Capital Brookfield • Real Foundations • ANF Immobilier • Assura • Russell Investment Group • BNP Paribas NETHERLANDS • Aviva Investors • Simon Property • Cegereal • ABN Amro • Bank of America • SNL Financial • EUROSIC • Amsterdam School of RE • Barclays Capital • The Tuckerman Group • Foncière des Regions • APG Asset Management • BDO • Univ. of Cincinnati • Gecina • ASR • Big Yellow Group • Urdang • ICADE • BPF Bouwinvest • Blackrock Asset Management • Ventas • IEIF • CB Richard Ellis • British Land • Westfield Group • Ivanhoe Cambridge Europe • CBRE Global Investors • Cass Business School • Zell-Lurie RE Center at Wharton • Klépierre • Clifford Chance • Capital & Counties Properties • Mazars • Corio • CBRE Clarion Securities • Mercialys • Cornerstone Real Estate Advisors • Cerberus European • Orco Property Group • Deloitte Real Estate Capital Advisors • Predica • Eurocommercial Properties • Credit Suisse Securities • Silic SA • Houthoff Buruma • Derwent London plc • Société de la Tour Eiffel • Kempen & Co • Deutsche Bank • Société Foncière Lyonnaise • LaSalle Investment Management • Ernst & Young • Société Générale • Loyens & Loeff • GIC Real Estate • Unibail-Rodamco • MN Services • Goldman Sachs International • Université de Paris-Dauphine • Nieuwe Steen Investments • Grainger • Zueblin • PGGM • Great Portland Estates • Redevco Europe Services • Green Street Advisors GERMANY • Tilburg Univ. • Grosvenor Group • Allianz Real Estate • Univ. of Maastricht • Hammerson • Alstria Office REIT • VastNed • Hansteen Holding • Deutsche Annington • Warehouse de Pauw • Henderson Global Investors • Deutsche EuroShop • Wereldhave • Ignis Asset Management • Deutsche Wohnen • Yardi • intu • DIC Asset • Invesco 2.2. _ EPRA EPRA NEWS NEWS / /29 45 / /2008 2013 CONtentS NEWS ISSUE 45 | JULY 2013 GUEST EDITOR Dr Ian Shepherdson 4 CEO UPDATE 6 Features CREDITS A gathering of minds 10 From East to West — attracting capital 12 CEO Conference 17 IPE Awards 18 Outreach update 20 Editor & Production Manager Dominic Turnbull More appetite at the table 24 Guest Editor Judi Seebus EPRA Annual Conference 28 Article Credits EPRA Annual Conference Programme 32 Barney Coleman Colin Lizieri Reporting back — EPRA CFO Summit 34 Christophe Kullmann David Ling The French REIT is not a tax loophole 38 Estienne de Klerk Fraser Hughes Graeme Newell New South African REIT creates tax certainty Dr Ian Shepherdson for further growth 40 Maikel Speelman Matt Fletcher EPRA Annual Report Awards 2012/13 44 Please send your comments and suggestions to: International leadership in corporate responsibiliy [email protected] by European property companies 47 Design & LayOut Making the data count 52 Fuse Consulting Limited London [email protected] REFERENCE PAGES Printers Members offers. 56 PCM Ltd FTSE EPRA/NAREIT global Real Estate indices. 58 EPRA Square de Meeus 23, B-1000 Brussels +32 (0) 2739 1010 EPRA NEWS / 45 / 2013 3. GUEST EDITOR EUROPE IS NOT DEAD – BUT YOU STILL HavE TO BE VERY CAREFUL A casual observer, taking a bird’s-eye On the face of it, then, there are few the bond markets of the most fragile view of the global economy over the grounds for optimism. Below the countries — who would want to be surface, however, the story is a bit caught short on the day the ECB past year, might be tempted to think that different. Progress has been made goes long? — so their borrowing costs nothing much has changed, or even that in fixing some of the key underlying began to fall sharply. things have deteriorated. After all, the problems in the global economy, though some countries in Europe, Thus far, the mere threat of being economy of the Eurozone shrank by 1.1% notably Italy and France, have not devoured by the ECB has kept the in the year to the first quarter of this year, even begun to get to grips with their markets at bay. Behind this firewall, compared to a 0.1% contraction over the dreadful lack of competitiveness Spain has made great strides in and face very difficult times ahead. correcting the labour cost overshoot previous year. Growth in the US slowed which, along with its massive hous- to 1.8% from 2.4%, and China’s pace of Still, the risk of a catastrophic ing market bust, lies at the heart of expansion dipped to 7.7% from 8.1%. near-term break-up of the euro its problems. When countries in a has gone, buying time for the most single currency zone can’t keep pace troubled economies in the Zone with the cost control of the anchor to address their structural issues. country — Germany — they become Everything changed in August last less competitive, so their trade bal- year, when the European Central ances deteriorate. Bank offered to buy the bonds of Eurozone economies in trouble, in Lost exports depress growth and return for countries agreeing to a cost jobs, which means lower tax programme of fiscal adjustment. revenues and higher government At a stroke, the ECB made it much spending to ameliorate the effects of more risky for hedge funds to attack unemployment, so the budget deficit 4. EPRA NEWS / 45 / 2013 GUEST EDITOR Dr Ian Shepherdson Ian will give a fuller view at the EPRA Annual Conference rises. Eventually, markets decide the see the end of that constraint, more situation is becoming intractable, or less. so they demand ever-higher interest rates on government bonds. Once American businesses are no rates reach levels which are patently longer suffering under the same impossible to afford, the market credit environment as their Euro- seizes up and the textbooks say the pean counterparts. Bank lending to only option is a bail-out or departure businesses has now recovered all from the currency zone. But by the ground lost in the wake of the threatening the markets with the financial crash, and small compa- power of their infinitely-expandable nies have cheered up a bit in recent balance sheet, the ECB has effec- months. The US still accounts for a Europe is about to enjoy some sort tively created a third option, time fifth of global GDP, so a robust re- of great renaissance. That seems still to adjust. covery there next year, which would some way off. But as the bifurcation likely strengthen the dollar as well of economies continues, demand for This will not be an easy road. as increase demand for imports, prime sites, both retail and commer- Europe’s banks’ balance sheets are would be a clear positive for Europe. cial, in prime cities, remains strong. still contracting, squeezing the small Even outside those cities, opportuni- and medium-sized business sectors The weakness of European ties to take advantage of gaps in the very hard. As they account for about banks is not mirrored in the capital market or weak competition arise in half of GDP,