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UK real estate sector in limbo; Blackstone seeks to grow Finnish footprint


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UK real estate sector in limbo; Blackstone seeks to grow Finnish footprint

Looming uncertainty

The shock result of the U.K.'s June 8 general election, which saw the governing Conservative Party lose its parliamentary majority, unnerved the country's real estate sector. Industry figures are bracing for a prolonged period of uncertainty, with some hoping the new government will take a different stance to negotiations with the EU.

According to a Property Week report, top real estate companies are urging the new government to make radical changes to rules governing the build-to-rent sector, offsite construction and space standards.

Blackstone affiliates set sights on Finland

* A corporation owned by funds advised by Blackstone Group LP affiliates is set to launch a voluntary recommended public tender offer to acquire all issued and outstanding shares in Sponda Plc in a deal totaling roughly €1.76 billion.

Polar Bidco Sarl will make an offer at a 28.1% premium to the three-month volume-weighted average price of Sponda shares on Nasdaq Helsinki Ltd. up to and including June 2. The tender offer has the unanimous and unconditional support of Sponda's board of directors.

Since 2015, Blackstone has bought €4 billion worth of properties in the Nordic region, of which more than a quarter are in Finland.

Big-ticket deals

* C C Land Holdings Ltd. landed £644.1 million in funding from a trio of banks for its £1.15 billion purchase of The Leadenhall Building in London, CoStar U.K. reported. Bank of China (Hong Kong), HSBC and ING are providing the sum in what is said to be the U.K.'s largest real estate financing deal yet, PW reported.

* In Dublin, a portfolio of four private-rented sector schemes is up for sale with a €425 million price tag, reflecting a net income yield of approximately 4.6%, PW reported. Marlet Property Group and M&G Investments are selling the Dublin Living portfolio on a forward-funding basis. The portfolio comprises Mount Argus, St. Clare's, Carriglea and a development on Cabra Road.

* Allianz Real Estate paid roughly €175 million to buy an office complex in the Charlottenburg area of Berlin from Patron Capital Partners and Suprema, Europe Real Estate reported. The EightFloors property, which is 83% leased, offers 40,000 square meters of office space.

* Workspace Group Plc is reportedly under offer to buy the long leasehold interest in the Salisbury House asset at 28-31 Finsbury Circus in London for £158 million, reflecting a net initial yield of just over 6%. The company confirmed in a release that it is in talks for the purchase.

According to a CoStar U.K. report, Workspace beat interested parties, including AEW, QSuper and a Middle Eastern investor, for the nine-story, 244,478-square-foot asset.

* Hemfosa Fastigheter AB agreed to buy 10 properties in Halmstad, Sweden, for 1.07 billion Swedish kronor. The 57,800-square-meter portfolio, which is mostly made up of office properties, is being sold by Fem Hjärtan Holding AB.

* Beni Stabili SpA SIIQ signed a sale-leaseback deal worth €117.7 million to buy a 17-asset portfolio of core banking offices in Milan from Italian retail bank Credito Valtellinese SpA. The portfolio includes Piazza San Fedele 4 and Milan Corso Magenta.

Minting money

* Blackstone Group's European property fund closed at €7.8 billion, Reuters reported, citing a source with knowledge of the matter. The fund will target commercial properties across the continent, with buying power of around €24 billion.

* At the first close of its second hotel real estate fund, INTERNOS Global Investors garnered €133 million worth of equity from seven German institutional investors.

The Hotel Real Estate Fund II, which focuses on city-center business hotels across Europe, is aiming for a loan-to-value ratio of 50%, intended to pave the way for over €260 million in hotel acquisitions.

Strategic moves

* Technopolis Plc laid out a revised strategy for 2017 to 2020, including an accelerated organic expansion of its campuses, co-working network and value-creating acquisitions in the Nordic-Baltic Sea region. It is poised to invest €200 million to €250 million in development projects until 2020, and €30 million in its co-working portfolio over the next five years.

* Johannesburg- and Bermuda-listed Stenprop Ltd. is exploring a conversion into a real estate investment trust and a float on the London Stock Exchange, according to a Business Day report. The company is also considering changing its reported currency to sterling from euro.

Additionally, the company is acquiring a portfolio of 25 multilet industrial properties and its management business, C2 Capital Ltd. Both businesses are valued at £130.5 million.

* Emaar Properties PJSC is eyeing a November listing of its United Arab Emirates real estate development business with a share offering on the Dubai Financial Market, Reuters reported, citing Emaar Chairman Mohamed Alabbar.

Under the plans, the company will offer up to 30% of its real estate business and distribute the funds as dividends to its shareholders, including the Dubai government.

* Real I.S. established an office and retail property fund with a target size of at least €1 billion, Property Investor Europe reported. The Germany-focused Real I.S. Themenfonds Deutschland II will invest in office and retail properties, as well as residential, hotel and logistics assets.

Featured this week on S&P Global Market Intelligence

SNL Extra: Sovereign investment in real estate picks up pace: Sovereign wealth funds, state pension funds and central banks are increasing their allocations to real estate, driven by attractive returns and an abundant supply of investment opportunities, a report by Invesco found.

Amisha Mehta contributed to this report.