The week in global real estate - 17 November 2020

The week in global real estate  17 November 2020

A weekly update of the biggest real estate news from around the globe.

Institutional investors

  • Great Portland Estates, a UK based investor, has reported a £175M drop in valuations over its portfolio due to the pandemic. The portfolio is down 6.6% between March and September, with retail property values falling 18% and office 2.4%. More info here.
  • Land Securities Group, a UK based REIT, has reported a £945M devaluation of its portfolio largely due to loss of rent from retail properties. The value of retail properties was down 17% in London and 20% in regional centres. More info here.

Office

  • Brookfield Properties has topped out their A-Grade office tower development at 405 Bourke Street, Melbourne. The 66,000 sqm tower is fully leased to the National Australia Bank. The tower has 2,200 sqm floor plates and is targeting a minimum 5-star NABERS rating. More info here.
  • Derwent Properties, a London based landlord, will build a 27,000 sqm office block on Baker Street despite concerns for the post-pandemic office market. Construction is expected to be completed in 2025. More info here.
  • The Wall Street Journal has reported a total of more than 14,500,000 sqm of sublease office space in the US. This is a record for recent times and represents 1.7% of all office space in the US. More info here. 
  • Kushner Companies are nearing a deal to sell an 80,000 sqm office tower in Chicago for $188M. The sale would incur a loss relative to the original $276M purchase price from the original sale and leaseback deal with AT&T 13 years ago. More info here.

Industrial

  • Centuria has reported that premium returns for data centres (due to their unique asset class) have effectively disappeared in Australia. They recently acquired Telstra’s 3.2 ha data centre precinct in Melbourne at a 4.2% yield. More info here.
  • Charter Hall and global pension fund PGGM have secured a new industrial asset in Melbourne for $86M. Their joint portfolio currently has seven assets totalling $300M. They are aiming to grow this to $800M. More info here.
  • Starbucks has renewed the lease for its 63,000 sqm logistics facility in Nashville, Tennessee. The company has been the sole occupant of the property since 2013. More info here.
  • Amazon is opening a third fulfilment centre in Mississippi. The 65,000 sqm facility is expected to complete in August 2021. More info here.
  • Blackstone has purchased a 70% stake in R&F Group's Guangzhou industrial park in China for $1.1B. The park has more than 1,200,000 sqm of space. More info here.

Retail

  • Two US mall owners, CBL Properties and Pennsylvania REIT, have filed for bankruptcy after attempts to restructure debt have failed. Many lenders have extended loans to avoid taking over struggling properties. More info here.

Hotel and tourism

  • TFE Hotels has opened its ultra-green 220-room Adina Apartment Hotel Melbourne Southbank. The 10-storey cross-laminated timber extension was made atop an existing concrete structure. More info here.
  • The Mondrian hotel brand will be entering the Australian market in a dual-tower development on the Gold Coast beachfront. A 208-room hotel will be built alongside an 89-unit apartment complex. More info here.

Housing

  • IKEA has worked with a tiny house builder to release a 17 sqm tiny house with the ability to live off-grid. The home has solar panels and a compostable toilet, alongside its fitout of IKEA products. More info here.
  • MaxCap has provided non-bank lending for a $250M residential development in suburban Melbourne. The 6-level, 240-apartment development will be built in an ‘S’ shape to shield apartments from one another. More info here.
  • Planning permission has been gain for a build-to-rent scheme overlooking Canary Wharf in East London. Trocoll House will have 92 one-bedroom and 106 two-bedroom apartments with communal areas and co-working spaces. More info here.

Government

  • This year's decline in real estate transactions in New York has resulted in a $1.4B loss in taxes. Real estate is the largest source of tax revenue for the city, generating 53% of revenue last year. The drop represents a 39% decrease in total tax revenue. More info here.

Related Experts

Chris Farhi

Director | Strategic Advisory

Auckland CBD

Chris is a Director within the Strategic Advisory team. The team helps you with your big property decisions and complex transactions.

Chris' advisory work focuses on:

  • Decision making processes (eg property strategy, business cases, feasibilities, etc)
  • Tenant representation for large lease transactions (office,  industrial and specialist-use)
  • Multi-site networks (eg consolidation strategies, optimisation, etc)

Chris’ background in brief:

  • Property strategy advisor for some of New Zealand’s most successful private sector, public sector and non-for-profit organisations.
  • Tenant representative (tenant-paid lease negotiator) for organisations ranging from small-to-medium enterprises through to major listed companies and government agencies.
  • Specialist skills in commercial leasing, financial analysis and market research.
  • Part-time lecturer at the University of Auckland Business School and commercial leasing trainer for the Royal Institution of Chartered Surveyors.

Chris’ qualifications include Honours degrees in both Civil Engineering and Property from the University of Auckland, and a Master of Philosophy from the University of Cambridge, UK. He is a Chartered Member of the Royal Institution of Chartered Surveyors.

Outside of work, Chris is a combat engineer in the NZ Army Reserve and a keen baker.

View expert

William Silk

Analyst | Stategic Advisory

Auckland CBD

William joined the Strategic Advisory team as an Analyst  in the Auckland CBD office in 2019, after completing studies at The University of Auckland. 

Specialising in reseasrch, reporting and analysis to support strategic commercial proprety decision making. 

View expert