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Essential IR Insights Newsletter - February 2023

London popular with Hong Kongers; Gecina/Eurosic merger forges ahead

S&P Global Market Intelligence offers our top picks of European real estate news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

No stopping Hong Kongers from London buys

* An unnamed private Hong Kong investor has scooped up an office building in London for £285 million, less than a month after Lee Kum Kee Group, an investor also based in Hong Kong, signed a deal to pay £1.28 billion for the Walkie-Talkie tower in the U.K. capital, Property Week reported.

The price paid by the private investor, which made its debut investment in the U.K. property market, was more than the £272 million asking price from Legal & General Group Plc for the building at 70 Gracechurch St. and reflected a 4.2% net initial yield.

Thumbs up

* French antitrust authorities gave the go-ahead to Gecina to acquire its peer Eurosic. The acquisition of 85.3% of Eurosic's share capital is projected to be completed by August-end, after which Gecina will submit a public takeover offer for the remaining securities that it does not own.

The takeover will make Gecina the fourth-largest real estate group in Europe.

* British Land Co. Plc's base prospectus for a £1.0 billion euro medium-term note program landed approval from the U.K. Listing Authority. The company is seeking an admission of the notes to the U.K. Listing Authority's official list and to trading on the London Stock Exchange's regulated market.

Big-buck deals

* AEW Capital Management LP teamed up with Thor Equities to buy the 100 New Oxford St. mixed-use property in London's West End from Tishman Speyer for £180 million. The asset, which spans 106,404 square feet, offers six prime retail units and two restaurants covering 18,507 square feet on the ground floor, as well as six upper floors of grade A office space across 87,897 square feet.

* Abu Dhabi Investment Authority is selling the €700 million Ecowest office scheme in Paris to AGC Equity Partners, Property Investor Europe reported, citing Bloomberg News, which spoke to three sources with knowledge on the matter.

The sovereign wealth fund acquired the 58,000-square-meter building for €477 million in February 2015, marking the fund's first investment in a French asset in the construction phase. The tower constructed by BNP Paribas Real Estate has L'Oréal as one of its tenants.

* LondonMetric Property Plc snapped up 14 urban and regional logistics warehouses in the U.K. for £116.6 million from Cabot Properties. The deal represents a day-one yield on cost of 6.1% and a 6.6% reversionary yield.

The portfolio comprises 1.3 million square feet of warehouse space, with more than half of it in the South East and the Midlands.

The numbers game

* Funds from operations I at LEG Immobilien AG for the first half totaled €148.8 million, an 8.1% increase from €137.6 million in the previous year.

For the six months ended June 30, FFO I per share came in at €2.36, up 7.8% year over year.

Looking ahead, LEG Immobilien raised its FFO forecasts for both 2017 and 2018.

* Deutsche Wohnen SE reported an 11% rise in first-half FFO I, which rose to €220.8 million from €198.7 million in the 2016 first half. The company affirmed its forecast of hitting FFO I of €425 million.

* Net profit at Emaar Malls PJSC reached 1.02 billion United Arab Emirates dirhams in the first half, a 3% rise from 987 million dirhams in the prior-year period.

Money talks

* Gecina closed its roughly €1.0 billion capital raise through a rights issue with preferential subscription rights by issuing 9,062,091 new shares priced at €110.5 apiece.

Subscription orders in the issue totaled about €2.7 billion, reflecting a subscription rate of approximately 267%.

* German asset manager KanAm established a fund to invest in office, retail, hotel and residential assets in southern Germany's Munich-Stuttgart-Frankfurt triangle, Property Investor Europe reported.

The fund, Fokus Süddeutschland, has been set up for institutional investors with a target volume of €500 million and has secured acquisitions in Frankfurt and Stuttgart.

* Intermediate Capital Group Plc's specialist real estate asset management unit, ICG-Longbow, announced the final close of its ICG-Longbow Senior Debt Programme Vintage III fund with a total of £370 million in capital commitments, Property Week reported.

The fund will continue its senior debt strategy, launched in 2014, which gives its investors access to a defensive U.K. commercial property debt portfolio.

Crossing over to the gift of the Nile

* Saudi Arabia's Prince Alwaleed bin Talal is poised to pour about US$800 million into the Four Seasons resort in Sharm el-Sheikh, Egypt, Reuters reported, citing a statement by Sahar Nasr, Egypt's investment minister. The prince is looking to expand the resort by teaming up with Talaat Moustafa Holding Group, and open two new hotels in the country as well.

Featured during the week on S&P Global Market Intelligence

Gecina CEO stamps authority, puts FdP saga to bed with delivery of Eurosic deal: Méka Brunel has taken less than seven months to undo the damage of Gecina's failed bid for Foncière de Paris, and aided the company's full recovery from the global financial crisis in the process.

Joyce Guevarra contributed to this report.