Jones Lang LaSalle has appointed Paul Betts to the newly created role of EMEA Head of Logistics and Industrial as it targets strong continued growth within the logistics and industrial real estate sector across the Europe, Middle East and Africa (EMEA) region. Betts will draw on extensive experience of European markets, having established King Sturge’s successful operations across Central and South Eastern Europe, before moving to Paris to lead the King Sturge business in France, prior to the 2011 merger between King Sturge and Jones Lang LaSalle.

Betts takes up his new role with immediate effect and will continue to be based in Paris, reporting to Jones Lang LaSalle’s EMEA Management Board through international director, Richard Batten.

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AXA Real Estate Investment Managers announces that it signed, on behalf of its clients, 19 leases representing a total of 265,000 sq m of space across its logistics portfolio in 2011. This marks a significant increase of over 76% compared to 2010, when 150,000 sq m of space was let across 6 leases.

Of the 19 lettings, 9 representing 145,000 sq m, were new leases, while the remaining 10, accounting for 120,000 sq m of space, comprised lease renewals and extensions. Furthermore, with the delivery of two new warehouses by the end of Q2 2012, located in Madrid and Bristol, AXA Real Estate will grow the logistic assets it manages across Europe to over two million sq m.

During the six past years, AXA Real Estate purchased approximately 1.4 million sq m of warehouse space on behalf of clients in the period up to 2011, of which around 600,000 sq m was developed on a speculative basis. Of the overall logistics portfolio, 1.1 million sq m is located in France, with Italy and Spain the next largest holdings at 250,000 sq m and 223,000 sq m respectively. The remaining portfolio is located across Germany, The Netherlands, Slovakia, the Nordic region and the United Kingdom.

2011 also saw the delivery of several new tenants to the AXA Real Estate French logistics portfolio. The largest new logistics letting of 2011 was to Conforama, the French general retailer in Saint Georges d’Esperanche (Lyon), where 42,000 sq m was let. Other significant lettings in the French logistic portfolio included:

• DISTRIMAG (short lease contract), the international furniture supplier, has taken 47,000 sq m in Fos Distriport Vistalog.

• Geodis, the logistics division of the SNCF group, has taken 38,300 sq m in Fos Distriport Vistalog.

• K&N, the international air filter manufacturer, has taken 41,600 sq m in Combs la Ville in the south of Paris.

• TNT Fashion, a market leading fashion, retail and lifestyle logistics provider, has taken 43,000 in Bergen op Zoom, The Netherlands.

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Allianz Real Estate Germany GmbH has added to its Berlin portfolio. After buying the office and retail block at Friedrichstrasse 200 last summer, it has now signed the purchase contract for Quartier 207, an office, shopping and residential development at Friedrichstrasse 76–78 in central Berlin.

With tenants including luxury Parisian department store Galeries Lafayette, Quartier 207 was sold by a Luxembourg investment company. Allianz Real Estate Germany bought the property on behalf of German Allianz insurance companies. Both parties have agreed not to disclose transaction details.

„This development containing Galeries Lafayette makes an ideal addition to our property portfolio,“ declared Stefan Brendgen, CEO of Allianz Real Estate Germany GmbH. „After buying Friedrichstrasse 200 last year, we've invested in Berlin again – a city which we feel has great potential. With Quartier 207 we've managed to acquire one of the most striking and attractive properties on Friedrichstrasse and as planned have expanded our position in the retail segment.“

Quartier 207 is part of the FriedrichstadtPassagen shopping complex. Designed by internationally renowned architect Jean Nouvel, it was completed in 1996 and contains 35,000 square metres of usable floor space. Office tenants include Berlin Energy Agency as well as medical, real estate, marketing and sales companies.

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According to a study compiled by the real estate consulting company NAI Apollo, the first quarter of 2012 was a very good one on the office leasing market. Compared to the same quarter the previous year, the leasing performance in Frankfurt's office market area (incl. Eschborn and Offenbach Kaiserlei) increased from 85,000 sqm to 129,000 sqm or 52 %. And the start of 2012 also looks very positive in comparison to the previous quarter (+11.5 %) and the average of the previous four quarters (+21 %).

„We have seen the biggest increase in turnover in large offices of more than 10,000 sqm,“ says Radomir Vasilijevic, Head of the Office Leasing department of NAI apollo group. „In just four leases no less than 54,500 sqm were brokered, making this the strongest segment at the start of the year.“ Deserving special mention here are the two leases for the KfW development bank, which made a major contribution to this excellent result with its two leases of around 14,000 sqm in the „IBC“ and 6,500 sqm on Bockenheimer Landstraße. In comparison: in the first quarter of last year, turnover in this segment amounted to only 11,800 sqm.

The second-strongest segment was leases of offices of less than 1,000 sqm. Here around 31,800 sqm were brokered in the first quarter, while offices between 5,000 and 10,000 sqm came in last with a total of 6,500 sqm being leased.

The top leasing price remained the same as in the previous quarter at € 38.00 /sqm and was a little up on the same quarter the previous year (€ 37.00 /sqm). The average lease found its level between those of the previous quarters at € 21.00 /sqm (Q1/2011: € 21.50 /sqm, Q4 2011: € 19.50 /sqm).

Just as in the previous years, Frankfurt's banking quarter and the Westend district were in the most demand in Q1 2012, and it looks as though this will stay that way.

The vacancy rate is currently 15.9 % (with a total office space of 11.57 million sqm), which means that it has reduced by one percentage point since the previous quarter and by 0.3 percent compared to the start of 2011. Vasilijevic: „The increase in turnover was one factor that led to this. Also, the low level of new office construction and various losses of office space – predominantly due to the changing of office space into residential and hotel space, such as the former administrative court at 44-48 Adalberstr. or the former labour office in Oskar-von-Miller-Straße played a major role.“ Vasilijevic goes on to say: „We expect this reduction in vacancies to continue throughout the rest of the year.“



There are currently new offices just completed or ready for first tenants in Frankfurt am Main in the properties „Dock 2.0“, „Eastgate“, „Hansahöfe“ and in Eschborn in the „Loftwerk“.

„In 2011 leasing activity fell by around 10 % compared to 2010, down to 426,500 sqm. In 2012 it will increase significantly again, even tending towards the 2010 result of 472,000 sqm,“ says Vasilijevic. With regard to lease prices, NAI apollo group expects to see stability to a moderate increase during the year, as there are no signs of changes to the general market conditions.



Image: Nai apollo

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The Benningen am Neckar forwarding company Zörkler Internationale Spedition founded in 1969 is opening a new venue in Murr. This logistics expert specializing in the food industry and active around Europe is buying a 2,300 m² property at 8 Rudolf-Diesel-Straße with a direct connection to the international road network via the A 81 Autobahn „Heilbronn-Stuttgart-Singen“. The property is developed with a 1,000 m² shelved warehouse, for example for packing and commissioning, a 400 m² space refrigerated down to 0 degrees centigrade and 200 m² of office space.

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Behringer Harvard announced its acquisition of Alte JakobstraBe 79-80, a multitenant office property in the central business district of Berlin.

„This property represented an attractive opportunity to provide geographic diversification for the portfolio of Behringer Harvard Opportunity REIT II, Inc. through exposure to the vibrant German economy, the most stable and influential economic power in Europe,“ said Mr. Michael J. O'Hanlon, CEO of the investment programs comprising Behringer Harvard's opportunity platform. „We believe this high-quality, well-located office building is well-positioned to benefit from the employment strength characteristic of the Berlin market.“

The seven-story office building, constructed in 1997, comprises 73,755 rentable square feet that are 87 percent leased to multiple tenants active in public relations, software, accounting and education.

Alte JakobstraBe 79-80 is located in the Mitte district of Berlin, an emerging city center in the historical heart of Berlin that once formed the nucleus of the former East Berlin. In addition to numerous historical sites, the Mitte district features abundant cafes, restaurants, museums, galleries and clubs.

With a population of more than 81 million, Germany is the largest country in the European Union. Home to a highly skilled labor force of more than 41 million, Germany is the continent's largest economy. With an estimated gross domestic product of more than $3 trillion in 2011, Germany is a leading exporter of machinery, vehicles, chemicals and household equipment.

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The Hines European Value Added Fund (HEVAF) sold the Postquartier to the federal state of Baden-Württemberg-Stiftung. Located in Stuttgart's CBD on the corner of Kronenstrasse and Lautenschlagerstrasse, adjacent to Stuttgart's main shopping street, Koenigstrasse, Postquartier is a 301,000-square-foot, 11-story office building that includes 102,000 square feet of retail on the first two floors. Financials on the sale were not disclosed.

Originally constructed in 1927, Postquartier was demolished and rebuilt in the 1980s. HEVAF purchased the former headquarters of Deutsche Post (German postal service) in 2008. Hines Germany then oversaw the property's €100 million refurbishment on behalf of HEVAF, resulting in a modern, high-performance building competing with the best new product in the market. Hines Germany also provided leasing management services for HEVAF. At building completion in 2012, it was fully leased mainly to the Federal State of Baden-Württemberg for their Ministry of Education and Sports, Deutsche Bahn Fernverkehr AG, and high-end retail tenants including: Conrad Electronic; Mammut; The North Face; Rewe; Rossmann; and Sixt.

Hines Managing Director Alexander Moell stated, „We are very pleased that our vision for Postquartier could be realized successfully with the help of the city of Stuttgart. In addition to having the responsibility to develop a landmark building, we also wanted to create the starting point for upgrading the entire neighborhood.“

Postquartier is the first property in Stuttgart that has earned LEED Gold pre-certification. Hines put great emphasis on energy efficiency during planning and construction including using up-to-date technical equipment and low-emission materials. The sustainability level of Postquartier, after the refurbishment, is equivalent to a newly built property.

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Rockspring Property Investment Managers today announces that it has acquired a 50% stake in a new speculative office development at St Cloud Way, Maidenhead, from RREEF. RREEF will continue to own the remaining 50% of the site, while Rockspring will take the lead in developing the project.

The joint venture plans to implement a significant programme to create a new Headquarters office building consisting of 66,655 sq ft of new Grade A space. Arranged over four floors, the scheme will provide a car parking ratio that is unparalleled anywhere else in the town. With an estimated development cost of £10 million, construction is due to start on site Q3 2012, with completion of the BREEAM ‘Excellent’ office building expected in Q3 2013.

Situated in the centre of Maidenhead, the site benefits from excellent transport links, including the M4, which provides direct access to the M25. The development is also expected to benefit from the favourable supply/demand imbalance that continues to drive the M25 West office market.

The purchase follows a number of recent development acquisitions by Rockspring outside Central London for its clients and funds, including a 66,000 sq ft office scheme in Staines; Kings House and Conquest House in Kingston, where Rockspring secured the largest South East office letting outside Central London last year; a 100,000 sq ft speculative Grade A office development called Velocity in Weybridge which will be delivered to the market in the autumn of 2012; and The Stanza Building in Uxbridge, an 81,000 sq ft Grade A office which will be delivered in Summer 2012.

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Prime country house prices fell 0.5% in the first quarter, moderating from a 1.7% decline in Q4 2011. Prices of super-prime (properties worth £5 million and more) continues to rise, up 2.1% on the quarter, and 2.8% on the year. Prospective buyers are up 32.5% on the year and sales volumes have increased, with a 13% rise in the number of exchanges.

Grainne Gilmore, Head of UK Residential Research, comments: The pace of decline in country house prices eased in the first three months of the year, with the 0.5% quarterly fall marking the most modest drop in a year. But because of a slight rise in prices in the first quarter of last year, the annual comparison is less flattering, showing a 4.1% fall in values.

“Looking across the price spectrum, it can be seen that the emerging trend of outperformance among the most expensive properties has continued. The average value of luxury homes worth £5 million and more climbed by 2.1% in the first three months of the year, and is at the highest level seen since September 2008, when prime prices were just coming off their peak. Interest in top-end properties is strong among overseas buyers, especially for homes worth £10 million or more.

“Initial feedback from agents suggests that the changes to the stamp duty regime have been factored into purchaser’s budgets. Moving to the other end of the price scale, demand in the country market becomes more domestic. The economic turbulence buffeting the country has had an impact, and has taken a particular toll on the market for homes worth £1 million to £2 million, where values fell by1.4% on the quarter.

“The introduction of the 7% stamp duty for purchases of homes worth £2 million or more could re-invigorate this market, especially if homeowners from London decide to move out of the capital to the country where they can get more ‘bang for their buck’. This may further bolster markets in country “hotspots”, especially those relatively close to London, such as Oxford and Basingstoke where average property values continue to hold their own. Prices in the north of England fell by 1.4% between January and March, while prices in central England fell by 1%. The best performing region between January and March was the South West, where average values edged up by 0.4% on the quarter.

Supply and demand also rose and new application rose by nearly a third between January and March compared to the same period last year, and viewings climbed by 25%. New instructions for sales were up 25% and the number of exchanges grew by 13%. Agents report that some local markets have been re-ignited by a new influx of sellers who have set realistic asking prices. Activity is expected to continue to rise in the traditional selling months of April, May and June.”

Rupert Sweeting, Head of Knight Frank’s Country Department, adds: “The pick-up in market activity seen in the first three months of the year has been concentrated in areas close to London. Here, a rise in new supply was more than matched by growing demand. We expect even more activity in the traditional selling of April, May and June.

“Prospective buyers registering rose by nearly a third between January and March compared to the same period last year, and viewings climbed by 25%. New instructions for sales were up 25% and the number of exchanges grew by 13%.

“Agents report that new supply of housing has invigorated some markets, as would-be buyers were growing increasingly frustrated with a limited range of properties for sale, especially those which had been on the market for some time and with price tags that did not match the market reality.

In contrast, some local markets have been re-ignited by a new influx of sellers who have set realistic asking prices. The very best houses still attract competitive bids, and sales for over the asking price can still be found.”

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Development Securities PLC, in joint venture with Canadian real estate investment company, Realstar, today announces the acquisition from NAMA of a vacant East London residential building adjacent to the Olympic Park for £15.7m. Senior bank debt was provided by RBS.

The residential scheme at Wick Lane, Hackney Wick, comprises 112 units over 116,000 sq ft and an additional 12,000 sq ft of retail/employment space. The unoccupied residential apartments will be refurbished and let to create an en bloc rental model.

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The expense of owning and running a house in Scotland has risen to its highest level in over a decade, according to new research by Bank of Scotland. The typical annual cost associated with owning and running a home in Scotland stood at £8,523 in January 2012, the highest average annual total since records began in 2002. Over the past year, the cost of housing has risen by 3.1% (£257) from £8,266 in January 2011; slightly ahead of the 2.7% increase for the UK as a whole. The increase, however, was less than the 3.6% rise in consumer prices over the same period.

The increase in housing costs over the past year largely reflects rising utility bills
In monetary terms, the largest upward pressure on housing costs came from a £238 rise in gas and electricity bills, accounting for 92% of the total rise. The increase in gas and electricity bills was more than nine times the rise in the cost of home and garden tools (+£25), the second biggest contributor to the increase in housing costs. Eight of the 11 housing expense categories tracked have risen in cost over the past year. In contrast, the most significant downward pressure on costs for homeowners came from mortgage payments, which fell by an average of £58.

Scotland sees the third biggest rise in housing costs over the past year
Home running costs have risen across all UK regions in the last 12 months with Scotland recording the third biggest increase (3.1%). Nonetheless, just two parts of the UK - Northern Ireland and Wales - saw costs rise at a faster rate than consumer price inflation (3.6%). Northern Ireland recorded the largest rise (4.6%), followed by Wales (3.9%).Those living in the East Midlands and London saw the smallest increases (both 1.9%).

Cost of Owning and Running a House by UK Region, Jan 2008- Jan 2012
	Jan 2008 £s	Jan 2011 £s	Jan 2012 £s	1 year % change	4 year % change
Northern Ireland	7,316	7,793	7,793	4.6%	6.5%
Wales	7,459	7,603	7,899	3.9%	5.9%
Scotland	8,461	8,266	8,523	3.1%	0.7%
Yorkshire & the Humber	8,033	8,078	8,320	3.0%	3.6%
North East	7,718	7,752	7,983	3.0%	3.4%
West Midlands	8,382	8,354	8,592	2.8%	2.5%
North West	8,564	8,588	8,831	3.1%	3.1%
South West	9,093	9,065	9,310	2.7%	2.4%
East	10,130	10,171	10,171	2.4%	0.4%
South East	10,795	10,511	10,747	2.2%	-0.4%
Greater London	12,135	11,623	11,843	1.9%	-2.4%
East Midlands	8,729	8,717	8,882	1.9%	1.8%
UK	9,406	9,149	9,393	2.7%	-0.1%

Housing costs in Scotland (£8,523) are 9% (£870) lower than the UK average (£9,393). Unsurprisingly, total annual costs of owning and running a home are highest in London, at £11,843. This is 52% (£4,051) higher than in Northern Ireland (£7,793), which has the lowest costs.

Mortgage payments have fallen by nearly a quarter since 2008…
The typical annual mortgage payment in Scotland has fallen by 23% (-£864) over the past four years from £3,775 in January 2008 to £2,910 in January 2012. This decline reflects both the significant fall in mortgage rates and the reduction in house prices over the period.

…Partly offsetting the rising cost of most of the other housing expense categories
The cost of nine of the other 10 housing expenditure categories tracked has risen since 2008. Utility bills recorded the biggest increase (50%), followed by home and garden tools (28%) and home maintenance (20%). Consumer prices, in general, increased by 15% over the period.

Housing costs up 50% over the past decade
Between January 2002 and January 2012, the average annual cost associated with owning and running a home in Scotland rose by 50% (£2,846) from £5,677 to £8,523. This is nearly double the increase in consumer prices over the period (28%).

The rise in the cost of housing since 2002 has been driven by a £1,066 rise in gas and electricity bills, £1,025 increase in mortgage payments (notwithstanding the significant decline since 2008), and a £220 increase in council tax payments. These increases combined accounted for 81% of the total rise in housing costs.

Nitesh Patel, housing economist at Bank of Scotland, commented:
„The typical costs of owning and running a home in Scotland have increased over the past year even though interest rates remain at a historic low. This has happened because the substantial fall in mortgage payments over recent years has been more than offset by increases in most of the other costs associated with home ownership. The prospect of declining consumer price inflation through much of 2012 may help the costs associated with running a home to ease as well, providing some welcome relief to homeowners.“

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Charles Follows, BSc, BSc, MBA, FRICS, previously Senior Director at ING Real Estate Investment Management, has been appointed by IPD and AREF as the first external Chairman of the UK’s IPD Pooled Property Fund Index (PPFI) consultative group.

Follows’ brings nearly 40 years of commercial property sector experience to the role. After qualifying, he set up a research department at Cushman and Wakefield (formerly Healey & Baker) in the 1970s. Subsequently, he held a number of research and fund management appointments before being appointed as Director of Investment Research at CB Richard Ellis (formerly CB Hiller Parker) in the mid 90’s.

“I’ve undertaken property research and fund management in both good and bad times,” said Follows, “and this is currently my fourth major property downturn, as I qualified during the tail end of the secondary banking crisis in the early 1970’s. Whilst each property cycle has differences, this long experience helps me to assess and evaluate current conditions, and the key difference in the current downturn is the wealth of information available to analyse it. In all sectors of the UK property market we need to use that to the best of our ability. The UK is one of the most transparent and accountable property markets in the world, and that needs to continue.”

From 2003 – 2006 Follows was director of Research at the IPF, before moving on to ING Real Estate Investment Management, which he left in 2011.

In March 2012 Follows joined Kames Capital as Head of Property Research. He is also an associate Tutor of the College of Estate Management and a visiting lecturer at Cass Business School.

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The Carlyle Group today announces the launch of its new London focused student accommodation brand, Pure Student Living. In joint venture with Generation Estates, Carlyle will be developing a number of centrally located, high quality, but competitively priced residential halls, in order to address the under-served London market, where there is a significant imbalance between supply and demand. Following today’s launch, rooms are now available in the venture’s first scheme, Pure Highbury in North London.

Pure Highbury, which is due to open in August this year, is a centrally located 400-bed private residential hall, located just two minutes walk from Finsbury Park underground station and within 20 minutes of 18 London universities. Pure offers students the choice of either study-bed or studio type rooms and uses a simple all-inclusive pricing structure which provides competitive, value for money packages that include 10Mb internet provision, all utility bills, a 24-hour gym and fitness centre and contents insurance, as well as 24-hour security and dedicated maintenance and housekeeping teams run by a residence manager, all for between £215 and £255 per week.

In addition to Pure Highbury, Pure Student Living has three further residences which are due to be delivered during 2013 and 2014, adding c1,800 beds to London’s private student housing market. These will be Pure Hammersmith, located at the former Hammersmith Palais concert venue, Pure Bankside, on Ewer Street in Southwark, and Pure City, on Goswell Road in Islington.

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CBRE appoints Jonathan Eastwood as a Senior Director in the Central London Agency team. Eastwood returns to CBRE from retail specialist Capital Retail where he spent five years as the Partner in charge of Central London Agency. He brings to the role extensive retail experience, including project work for Land Securities on the site assembly of the VTI2 scheme and strategic retail planning on behalf of Ballymore following the successful refurbishment of Old Spitalfields Market.

Further retail experience includes estate work for Derwent London’s Baker & George Estate, and more recently Milligan Retail at Camden Lock Market. Eastwood’s client portfolio also includes Deutsche Bank, Royal London, Prupim, as well as several independent fashion occupiers.

Eastwood will continue to work on major Central London High Street projects, including the leasing of 527 Oxford Street – a prime 15,000 square foot retail unit - on behalf Korine.

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Panattoni Europe has completed an investment for the logistics company Nagel Group. The new 12,000-square-metre facility is the first building at the distribution centre Panattoni Park Święcice II.

The developer has completed construction works on the storage facility. The 12,000-square-metre investment, which can be extended up to 15,000 sqm, was built at a new complex, Panattoni Park Święcice II, and will serve as a modern distribution centre. Nagel Group also leases a facility at Panattoni Park Gliwice I (11,300 sqm) and another one at Panattoni Park Gdańsk (3,500 sqm). In total, the logistics operator leases nearly 27,000 sqm of the developer's modern warehouse space.

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Nordic Real Estate Partners has appointed Marcus Lorendal as CFO and he will commence his new role in June 2012. Marcus will assume the overall responsibility for the finance and back-office functions.

Marcus Lorendal joins from a role as Vice President Finance, EMEA/Asia Pacific at Arthrocare, a Nasdaq listed medical device company, which he has held for the last three years. From 2001 to 2009 Marcus Lorendal was working at GE in Sweden, UK and USA where he held a variety of financial leadership roles including CFO for GE Capital Solutions Nordic and Business Development Manager Europe. Prior to GE Marcus Lorendal worked six years at PricewaterhouseCoopers of which he was based at their London office for three years.

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DTZ will develop the commercial concept and delivery mechanisms for the future KYIV-CITY International Business District. The project will take place on one of 5 sites selected by the city, ranging from 100 ha to 240 ha. On 20 March 2012, DTZ with its extensive international experience in urban development won the competitive tender by the Communal Enterprise ‘Kyivsystemomanagement’ of Kyiv City Hall (Kyiv City State Administration) to provide services for this project.

KYIV-CITY International Business District is planned to be the country’s largest inner-city office-led mixed-use development, ultimately occupying an area of more than 100 hectares within Kyiv’s core urban area. All five land plots allow for viable mixed-use development, are well-serviced by public transport and located in immediate proximity to densely populated residential areas. Three of five land plots benefit from river frontage.

The project will be anchored by the office component, bringing together workplace and qualitative residential uses, hotel, conference facilities, retail and leisure facilities, sports and healthcare amenities, and an education component. Over the coming years, the chosen site will be converted into a new urban centre with improved standards of working and living, devoted to international business, knowledge development and innovations.

In December 2011, five potential sites were identified by Kyiv City Hall (Kyiv City State Administration) potentially suitable for KYIV-CITY development, i.e. Dniprovska Naberezhna (140 ha), Osokorky-Pivnichni (150 ha), Odessa Square (240 ha), Nizhnya Telychka (160 ha) and Vyrlytsya Lake (100 ha).

Realization of the KYIV-CITY International Business District was defined as the highest priority project of all the projects that were presented on 29 March 2012 at the Kyiv Investment Forum, which was initiated by Kyiv City Hall (Kyiv City State Administration). The project is planned within the strategic initiative „City Centre Nearby“ of Kyiv Development Strategy by 2025, which provides for polycentric development of Kyiv and creation of a modern business area outside the historic centre, i.e. in proximity to residential neighborhoods.

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Immofinanz Group and the Russian Sberbank have concluded a long-term financing agreement with a volume of up to USD 715 million. This ten-year loan will be used by the project development company, above all to repay the development financing provided by the parent company for the Golden Babylon Rostokino shopping center.

“The conclusion of this financing arrangement marks our second success in Russia in only a few days: at the end of March we reached an agreement with our joint venture partner Patero for the full takeover of the most profitable shopping center in our portfolio and shortly afterwards we finalised the refinancing. The funds released by this loan will be used to continue our growth course and to realise new development projects, especially in the East European markets where double-digit yields can be generated“, commented Eduard Zehetner, Chairman of the Executive Board of Immofinanz Group.

The Golden Babylon Rostokino shopping center in Moscow was developed as a joint venture with Patero, a local firm, and opened in November 2009. An agreement to acquire the remaining 50% of the Golden Babylon Rostokino from the co-owner Patero was signed on 21 March 2012.

The Golden Babylon Rostokino shopping center is located in Sviblovo, a densely populated district in Moscow. With 168,000 sqm of rentable space and 241,000 sqm of total space, it is not only a flagship for the Moscow retail sector but also one of the largest shopping centers in Continental Europe. Over 500 shops are situated on two floors, and 7,500 parking spaces are available for customers. The balanced tenant mix covers well-known local and international retail chains, including Media Markt, H&M, Inditex (Zara, Zara Home, Bershka, etc.), a Castorama building materials outlet, the Finnish department store Stockmann and the Russian food hypermarket O’key. This extensive offering is complimented by a cinema with 14 theaters and numerous gastronomy facilities. The shopping center currently has an occupancy rate of roughly 95%.

The transfer of the remaining shares in Golden Babylon Rostokino is contingent upon the fulfillment of several conditions precedent, including the approval of the Russian antitrust authorities.

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Crocus Group signed an agreement with Cushman & Wakefield as retail leasing agent for its two shopping and entertaining center developments: “Vegas Crocus City” and “Vegas Kuntzevo”.

Vegas Crocus City is being built in the area of satellite-city “Crocus City” on Moscow MKAD adjacent to Maykinino underground station. The development will be connected with the existing Crocus-EXPO, luxury shopping center Crocus City Mall and a future planed multifunctional residential complex (237,000 sq.m) with the largest HolidayInn Hotel in Europe (81,080 sq.m/1000 rooms) and 9 levels of parking for 11,000 cars.

The project with a GBA of 283,000 sqm and a GLA of 100,000 sqm is planned to be open by the end of 2013. The concept of themed zones similar to that was successfully used in the first Vegas, will be applied here including Times Square, Rockefeller Center, Fashion Avenue themes. The tenant mix will include multi-level shops of international brands, electronic goods, entertainment zones with unique concepts for children, a cinema, fashion gallery, numerous restaurants and food court and parking for 2,800 cars.

Vegas Kuntzevo will be built on 56th km of MKAD, between Mozyaskoe and Rublevo-Uspenskoe shosse. The total area will be 231,000 sq.m with a GLA of 113,000 sq.m. The same unique concept of themed zones will be used with the major focus on a large entertainment area with entertainment park X-Venture (3,000 sq.m) that will consist of a velodrom and high rock climbing wall, ice skating rink with aquariums and multiplex cinema. The project is planned to be open at the beginning of 2014.

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MVRDV, the city of Almere and RVOB, the Governmental Real Estate Development Agency, have presented the development strategy for Almere Oosterwold, the eastern part of Dutch new town Almere. The development strategy titled: “Estate for Initiatives” is a revolution in Dutch urban planning as it steps away from governmental dictate and invites organic urban growth in which initiatives are stimulated and inhabitants can create their own neighbourhoods including public green, urban agriculture and roads. In the area with a total surface of 43 km² at least 15.000 homes can be realised in a participatory adaptable urban planning scheme which relies totally on private initiatives. Completion is according to this open process an unknown date.

he Netherlands are traditionally a country in which urban planning has reached a point where one could state that it gets too perfect and hence predictable. New Town Almere- entirely built on reclaimed land - is one of these overly perfect places and has decided years ago to allow construction of individually designed homes in a number of neighbourhoods. The experiment was a large success. Now the city of Almere and MVRDV take the next step. The urban planning itself will be an open process in which individual initiatives can thrive.

The extensive farmland in the east of the booming new town offers space for both individual and collective initiatives in a green rural surrounding. Almere Oosterwold is expected to develop over a longer period into a differentiated landscape in which nature and living, working and leisure will be combined in a low density – as a balance act against the more urban west of the city. 50% of the site will be designated for urban farming, this specialised food production for the city is expected to improve Almere’s sustainable profile and maintain the agricultural character of the area.

The strategy allows individual dreams to be realised under the following condition: one can develop a plot but also has to realise all necessary components such as a piece of the road, energy, sanitation, rubbish collection, public green and urban farming. This can be done as an individual or shared with a collective. To maintain the rural character the overall programming is kept at 18% construction, 8% roads, 13 % public green, 2% water and 59% urban agriculture.

This leaves space for golf course villages, plantations, autarkic villas, villages of collective groups etc. MVRDV developed the strategy as part of the Almere 2030 Structure Vision in which the city is growing with 100.000 inhabitants and 60.000 work places. Oosterwold allows a mixed use development with a new role for the government: from directive towards facilitating.

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AFI Europe Romania has signed leasing contracts for 70% of the total commercial area of AFI Palace Ploiesti shopping mall, 18 months before the grand opening. Among the new tenants already signed are important local and international retail brands such as Cora, Flanco, H&M, Reserved, New Look, Arsis Vodafone, Sensiblu, Samsonite, Maxbet, Musette, Splendor, McDonalds and Pizza Dominium.

AFI Palace Ploiesti will be anchored by Cora, one of the most successful hypermarkets chains in Romania, with a total leased area of 13,000 m². Among the leading fashion brands in AFI Palace Ploiesti is H&M, the well-known Swedish retailer which is going to open a 1,600 m² surface store on the ground and 1st floor of the mall. H&M thus continues the excellent collaboration started with AFI Europe one year ago with the opening of its first local unit in AFI Palace Cotroceni from Bucharest.

Flanco store will be located on the ground floor of AFI Palace Ploiesti and will have a 1,200 m² leased area, while Reserved and New Look stores are located on the first floor and will measure around 500 m², each. AFI Place Ploiesti will be a fashion dedicated mall combined with unique entertainment where the customers will receive the most enjoyable shopping experience.

McDonald’s, the most important restaurant network in Romania, is the first of the partner restaurants to have signed for the opening of its third restaurant in Ploiesti within the AFI Palace Ploiesti.

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Beni Stabili SpA Siiq announces the signing of the binding termsheet of the mortgage loan worth €308m for the early repayment of 2012 expiries. The re-financing will be provided by a pool of seven banks (four Italian banks and three foreign banks); it will have a three-year maturity with a spread set at 345 basis points. The drawdown is scheduled on next April 24th, said the company.

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Two opposing economic trends will dominate the European logistics market in 2012: strong economic growth in the CEE and Nordic regions and a slowdown in activity in the rest of Europe, according to the latest ‘Property Times - European Logistics’ report, released today by DTZ. The events of the second half of 2011 have heavily impacted global economic prospects. As a consequence, logistics and industrial companies in the majority of Europe will seek to reduce costs through portfolio optimisation and relocation to more efficient space when break clauses permit.

Despite the negative economic outlook, the second half of 2011 witnessed a strong level of take-up with 8 million sq m registered in five of the leading European markets, up from 7.6 million sq m during the first half of the year. On an annual basis, logistics take-up in the UK, Germany, France, CEE and the Benelux reached 15.6 million sq m in 2011 compared to 11 million sq m of take-up in 2010.The biggest increase was registered in the Benelux, with a 90% increase in take up. France and Germany posted the second and third highest increase (respectively 48% and 42% y-o-y).Take-up in the UK and CEE region saw an increase of 15% and 16% respectively. Retailers continued to expand their supply chain in the CEE whilst UK manufacturers have become prominent in the market.

Top 10 investors in logistics, 2011
Investors	Nat.	Invest. volume	Country targeted
Blackstone	International	559	UK
Goodman	Australia	300	Spain, GE, BE
EPISO - AEW	European	300	CZR
Moorfield	UK	223	UK
Carval	International	214	France
GLL	US	207	Spain, France
CA Immo	Austria	190	CEE
Segro	UK	184	UK
WP Carey	US	146	Netherlands
Great Portland	UK	136	UK

Rob Hall, Head of DTZ CEMEA Logistics, comments: “Occupier focus is on prime buildings in the best locations, and the number of built-to-suit transactions increased in H2 2011. Despite this, developers remain reluctant to build on a speculative basis as high finance costs and void risks persist. However, the slowdown in new construction, excluding the built-to-suits, has helped the market to recalibrate. Ouranalysis of 2011 reveals that rents remained stable in 19 out of the 20 European markets covered. Looking forward to the end of 2012, we expect prime logistics rents to grow by a modest 0.8%.”

Industrial production growth seen across Europe in 2011 (2.8% on average) is expected to be followed by a decline of 0.4% in 2012, in line with the wider economy. The biggest change is expected in Germany, with growth in production declining from 8.1% in 2011 to 0.8% in 2012.
Magali Marton, Head of DTZ CEMEA Research, said:“Retail sales growth remained negative during 2011, registering a 0.2% decline across the European Union. The data behind this average revealsEurope is polarised between the CEE and Baltic sub-region, posting growth above 3% and the southern region - including Portugal, Italy, Greece and Spain - where the decline has ranged from -1.1% to -8.8%. We have however, recently witnessed business growth linked to e-retailing which has generated new orders in the UK, France and more recently Germany, where Amazon signed the four biggest transactions of 2011.”

The logistics investment market has continued to recover with €10.4bn invested in 2011, up from €8.6bn in 2010. The UK market registered the highest investment volumes in Europe at €4 billion, representing 39% of European deals in 2011. The German investment market was less buoyant during H2 2011 with volumes close to €600m, lower than the €800m registered in H1. The Nordics has maintained high transaction volumes, posting one of the highest levels of investment activity in 2011 – close to €1.9bn.

Magali Marton continued: “On a relative basis, the industrial sector has outperformed over the year with 23% growth during 2011, whilst the property market as a whole has only registered a modest 6% increase over the same period.”

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Overall commercial property investment volumes in Central and Eastrn Europe (CEE) amounted to €900 million during the first quarter (Q1) of 2012. This is the lowest volume achieved since Q3 2009. The main reasons for these lower volumes relate to less financing being available and narrowing investor requirements. Again most transaction activity happened in Poland. One notable exception to this was the sale of City Business Centre in Timisoara to New Europe Property Investment (NEPI), representing the first significant regional office transaction in Romania since the market started recovering from the trough reached during 2009. Another interesting transaction was the closing of a ProLogis portfolio acquired by HinesGlobal REIT including Polish assets.

Continuing pressure on real estate finance has resulted in a significantly changed spectrum of activ real estate financiers across CEE. Most active financiers are focused on Central Europe with Poland and the Czech Republic clearly outstanding. Still, even here bank requirements regarding margins and ratios combined with a general risk averse outlook are restricting deal flow to the prime end of the market. Standing investments are clearly favored with development financing increasingly challenging to obtain, a factor which is already significantly affecting the development pipeline across CEE. Deal flow in Slovakia and especially in Hungary is expected to be mostly dependent on existing client relations as well as equity buyers moving into these markets where interesting capital growth potential is offered. Unless new types of financiers come forward a significant increase of liquidity is not expected soon and these markets will remain dependent on one-off transactions.

Property deal flow in Slovakia, and especially in Hungary, is expected to be mostly dependent on existing client relations as well as equity buyers moving into these markets where interesting capital growth potential is offered. Unless new types of financiers come forward a significant increase of liquidity is not expected soon and these markets will remain dependent on one-off property transactions.

Patrick O’Gorman, Director of CEE Capital Markets, CBRE, commented:
“Narrowing investor requirements due to an increased search for security is increasingly resulting in to a mismatch. Therefore the scope of active property investors in CEE is increasingly shifting towards the high end of the market where large “trophy-like” assets are sought after. As witnessed during 2011, this causes large fluctuations in deal flow in the region and therefore Q1 2012 may seem to be a bit on the low end of the spectrum. Based on the pipeline of transactions pending especially in Poland and the Czech Republic we expect deal flow to increase from Q1 levels, however, the availability of financing is going to play an important role in this.”

CBRE’s Investor Intention Survey 2012 confirms this sentiment. CEE was confirmed as being one of the top three most interesting European locations for investment during 2012 based on a survey done around 340 investors and asset managers. Prime yields have remained stable in most capital cities in the region. Beyond prime some softening of yields is starting to become visible in the office segment based on the reasons described above.

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