COVER NEWS ISSUE 46 NOVEMBER/DECEMBER 2013 FEATURES REFERENCE - EPRA Annual Conference. - Time for focus. - European listed real estate — - Member offers. a bigger splash for your cash. - FTSE EPRA/NAREIT Global - Nordic offices – still shining bright? Real Estate Indices. Blending listed real estate with an unlisted portfolio Alex Moss Where East meets West Guest editor – Mark Cooper EPRA MEMBERS AS OF NOVEMBER 2013 AUSTRALIA • GSW • VastNed • Grainger • Univ. of Western Sydney, • Hamborner • Warehouse de Pauw • Great Portland Estates Property Research Centre • Heitman • Wereldhave • Green Street Advisors • Resolution Capital • IREBS International RE Business • Yardi • Grosvenor Group School • Hammerson AUSTRIA • IVG Immobilien NORWAY • Hansteen Holding • CA Immobilien Anlagen • LEG • Norwegian Property • Henderson Global Investors • Conwert Immobilien Invest • MEAG Real Estate Management • Ignis Asset Management • Immofinanz AG • PATRIZIA Immobilien SINGAPORE • intu • Sparkassen Immobilien • POLIS Immobilien • Keppel Land Limited • Invesco • PricewaterhouseCoopers • National Univ. of Singapore • JPMorgan BELGIUM • Prime Office REIT • JLL • Aedifica • Real Estate Management SOUTH-AFRICA • KPMG • AG Real Estate Institute • Growthpoint Properties • Land Securities • Antwerp Management School • RREEF Investment • Linklaters • Banque De Groof • SEB Asset Management SPAIN • London Metric (formerly London • Befimmo • TAG Immobilien • Fundación ESADE & Stanford) • Cofinimmo • VIB • Inmobiliaria Colonial • Macquarie Real Estate • Leasinvest Real Estate • TESTA Inmuebles & Renta • M&G Investment Management • Retail Estates GREECE • Morgan Stanley • Solvay Business School • Eurobank Properties REIC SWEDEN • Nabarro (Brussels Univ.) • Lamda Development • Aberdeen Property Investors • Nottingham Trent Univ. • National Bank of Greece Holding • Principal Global Investors BRITISH VIRGIN ISLANDS Property Services • Castellum • Quintain Estates & Development • Eastern Property Holdings • Trastor REIC • Fastighets AB Balder • Redefine International • Safestore CANADA HONG KONG SWITZERLAND • SEGRO • Presima • Univ. of Hong Kong • Center for Urban & RE • Shaftesbury Management • Thames River Capital FINLAND ISRAEL • Euro Institute of RE Management • Tristan Capital • Aalto Univ. • Azrieli Group • Mobimo Holdings • UBS • Citycon • Gazit Globe • PSP Swiss Property • Unite Group • KTI Finland • Strategic Capital Management • Univ. of Aberdeen • Sponda ITALY • Swiss Prime Site • Univ. of Cambridge • Beni Stabili • University of Geneva • Univ. of Reading, Centre for FRANCE • Immobiliare Grande RE Research • Affine Distribuzione TURKEY • Workspace Group • ANF Immobilier • Emlak Konut • BNP Paribas LUXEMBOURG • Torunlar REIT USA • Cegereal • GAGFAH • Cohen & Steers Capital • Foncière des Regions • Orco Property Group UAE Management • Gecina • Abu Dhabi Investment Authority • Centre Square • ICADE NETHERLANDS • Duff & Phelps • IEIF • ABN Amro UNITED KINGDOM • European Investors Incorporated • Ivanhoe Cambridge Europe • Amsterdam School of RE • AEW • Fidelity Management & • Klépierre • APG Asset Management • AMP Capital Brookfield Research. • Mazars • ASR • Assura • Forum Partners Investment • Mercialys • Atrium European Real Estate • Aviva Investors Management • Predica • BPF Bouwinvest • Bank of America • Host Hotels • Silic SA • CB Richard Ellis • Barclays Capital • Real Capital Analytics • Société de la Tour Eiffel • CBRE Global Investors • BDO • Real Foundations • Société Foncière Lyonnaise • Clifford Chance • Big Yellow Group • Russell Investment Group • Société Générale • Corio • Blackrock Asset Management • Simon Property • Unibail-Rodamco • Cornerstone Real Estate Advisors • British Land • SNL Financial • Université de Paris-Dauphine • Deloitte Real Estate • Cass Business School • Univ. of Cincinnati • Zueblin • Eurocommercial Properties • Capital & Counties Properties • Ventas • Kempen & Co • CBRE Clarion Securities • Westfield Group GERMANY • LaSalle Investment Management • Cerberus European • Zell-Lurie RE Center at Wharton • Allianz Real Estate • Loyens & Loeff Capital Advisors • Alstria Office REIT • MN Services • Credit Suisse Securities • Deutsche Annington • Nieuwe Steen Investments • Derwent London plc • Deutsche EuroShop • PGGM • Deutsche Bank • Deutsche Wohnen • Redevco Europe Services • EY • DIC Asset • Tilburg Univ. • GIC Real Estate • Fair Value REIT • Univ. of Maastricht • Goldman Sachs International 2.2. _ EPRA EPRA NEWS NEWS / /29 46 / /2008 2013 CONTENTS NEWS ISSUE 46 | NOVEMBER/DECEMBER 2013 GUEST EDITOR Mark Cooper 4 CEO UPDATE 8 FEATURES CREDITS Blending listed real estate with an unlisted real estate portfolio 10 EPRA Annual Conference 16 EU efforts on track 22 European listed real estate — Editor & Production Manager a bigger splash for your cash 24 Dominic Turnbull Guest Editor Germany’s REIT dilemma 28 Mark Cooper Nordic offices — still shining bright? 32 Article Credits Dr Wilhelm Breuer Tim Kesseler Returning to the core 38 Barney Coleman Patrick Laureys Lars Flåøyen Alex Moss Taking a leap forward Matthew Fletcher Elias Oikarinen Fraser Hughes Kiran Raichura EPRA Annual Report survey 2012/13 42 Martin Hoesli Henrik Saxborn EPRA Annual Report results 44 Please send your comments and suggestions to: [email protected] Are public and private real estate Design & LayOut returns and risks the same? 46 Fuse Consulting Limited London Time for focus 50 [email protected] Printers REFERENCE PAGES PCM Ltd Members offers. 52 FTSE EPRA/NAREIT global Real Estate indices. 54 EPRA Head Office UK Office EPRA Hong Kong Ltd Square de Meeus 23, Berkeley Square House, Suite 2207-09, Tower II, 9th Floor, Berkeley Square, Lippo Centre, B-1000 Brussels, London, 89 Queensway, Belgium W1J 6BD, Admiralty, Hong Kong T +32 (0)2739 1010 United Kingdom T +852 2530 8170 www.epra.com T +44 (0)7973 109117 www.epra.com/china EPRA NEWS / 46 / 2013 3. GUEST EDITOR SOLD WHERE EAST MEETS WEST? There is no harder question to answer than: “What is the Asian property market like at the moment?” This region is the most heterogeneous of the three main global real estate area, which adds to its attractions and means you can’t get away with generalisations. But Europe, keep asking and watching. 4. EPRA NEWS / 45 / 2013 GUEST EDITOR Mark Cooper At the moment however, the big story coming out of China is the cash coming out of China and heading for real estate all over the world. Japan, Asia’s richest and most eco- In fact, even without rental trend. How long this will last is nomically sluggish nation, has been growth, Japan looks good to inves- uncertain, but with very little supply stealing the headlines from China tors. Tokyo office yields tend to be in either sector, rents will probably recently, as Prime Minister Shinzo between 4% and 5%, but finance rise as soon as they hit a level that Abe’s plans to stimulate growth can be had for an all-in cost of 1%, tenants can bear. The investment have met with a level of success and making the most attractive spread in market remains incredibly com- support unheard of in recent times. the region. petitive: most of the major assets are held by mighty developers such as Real estate, especially the J-REIT Up down under Sun Hung Kai, Swire Properties and sector has benefitted enormously. Australia also offers and attractive Hongkong Land and smaller B-Grade Transaction volumes are expected spread between property yields and assets are fought over by developers, to double this year from 2012 and finance costs, as significant buying property investors, owner-occupiers J-REITs have taken the lion’s share in the past 12-18 months has not and high net worth buyers. of them – nearly 70% in the third driven significant yield compres- quarter! Cap rates have compressed sion. The main reason for this is Singapore definitely seems to be sharply in the past 12 months and the weakness of the tenant market. on the brink of an office rental up- foreign investors from within and Australian offices for example offer swing after a turgid couple of years without the region are keen to buy. tempting yields of 6%-plus, but ten- in which supply has been nibbled ant incentives eat away at the gross away, although opinion is divided A few people in the market are figures and headline rents have on how strong rental growth will be making the argument that Japan’s been falling in some markets. in 2014. Pricing is already keen: local real estate market was in fact com- investors and REITs can get financ- ing into an upswing even before Some brokers reckon that ing as cheaply as in Japan and they ‘Abenomics’ took hold. However, the rental market is poised for a are already taking a punt on the next that is hard to swallow when – for turnaround, after a flat Q3 for their rental cycle. example – office rents have barely leasing businesses. If they are cor- started to bottom out even now. rect, then buying by both domestic Indonesia and the Philippines However, the mood is positive and and foreign investors could intensify remain markets where the volume if Abe can deliver structural reforms further next year. of chatter far outweighs the volume alongside his monetary and fiscal of deals. Both have favourable boosts, Japanese firms will start ex- Hong Kong boasts office and re- economic and demographic pictures panding again and rental growth will tail rents amongst the highest in the but both are very hard for property back up the recent buying activity. world, but both are on a downward investors to deal with at the bricks EPRA NEWS / 46