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Merger to create largest listed RE group in CEE; NY developer plans Tel Aviv IPO

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Real Estate News & Analysis: May Edition


Merger to create largest listed RE group in CEE; NY developer plans Tel Aviv IPO

* New Europe Property Investments plc and Rockcastle Global Real Estate agreed to merge and establish the largest listed real estate company in the Central and Eastern European region. The companies will merge into NEPI Rockcastle PLC through an effective share swap ratio of 4.5 existing Rockcastle shares for every 1 existing NEPI share.

The companies also hope the move will bring them "a substantially enlarged market capitalization," along with a merger of their complementary portfolios. As of Dec. 14, New Europe Property and Rockcastle's market capitalization amounted to approximately 49.0 billion South African rand and 32.3 billion rand, respectively.

* Wharton Properties is attempting to go public in Israel for the second time after suspending a similar plan in 2015, as it looks to raise US$100 million in an IPO of securities, CoStar Group reported.

* Cushman & Wakefield said in a report quoted by Property Investor Europe that retail outlets in Europe no longer constitute a niche market. Sales turnover in the sector increased 8% a year over the past three years, the report said.

The realtor added that the growth in income in the European retail sector stood out as one rarely observed in other sectors.

Germany

* DIC Asset AG signed an agreement for a €960 million seven-year refinanced loan facility for its commercial portfolio, with funds to be channeled toward early repayment of existing financial arrangements it holds with several banks for its commercial portfolio.

The refinancing will also give the company a lower interest rate of approximately 1.7% on bank loans for its commercial properties, which will bring about anticipated annual interest expense savings of up to €20 million.

* Vonovia SE is piloting an affordable housing program in Bochum. The first development in the program has been completed and contains 14 senior- and family-friendly apartments, according to a release.

UK

* McAlpine is set to take the top spot with its bid for the construction of Google's £600 million, 650,000-square-foot headquarters at King's Cross Goods Yard in London, Construction Enquirer reported, citing an unnamed source. Other bidders for the project include Mace, Multiplex and Lendlease Corp. Ltd.

* The Portsmouth City Council granted Canada Life a 41-year leasehold for the Wightlink Ferry Terminal under a £73 million income strip lease deal, Property Week reported.

* Crosslane Group's Crosslane Student Developments received conditional planning consent for a 256-bed student accommodation property at 91-95 Commercial Rd. in Portsmouth, CoStar U.K. reported. The redevelopment of Stanhope House is expected to cost about £32 million and be completed in time for the 2019-2020 academic year.

France

* Gecina said that it agreed to lease 16,000 square meters of space at the Sky 56 building in Lyon Part-Dieu to the Orange Group. The tower, set to be completed in the second half of 2018, is nearly 80% pre-let, according to a release.

Switzerland

* Swiss Prime Site AG, through Zurich Airport AG, signed a rental agreement with department store Jelmoli – The House of Brands. The company said that Jelmoli will open three stores at Zurich Airport in phases, beginning 2019.

* Fastighets Balder AB received a Baa3 investment grade rating from Moody's, along with a stable outlook. The Baa3 long-term issuer rating is reflective of Balder's stable residential rental income focus in Sweden and Finland, as well as its commercial assets in key Swedish cities.

Bosnia

* Bosnia's office for expatriate affairs said that more than 300 foreigners will be expelled from the country, as they were found to have evaded taxes after they acquired investment properties, Reuters reported. Most of the foreigners are from the Gulf region, according to the news outlet.

This decision comes after officials investigated nearly 700 foreign-owned firms and 16 tourist resorts, finding that around 500 of these firms were shell companies registered at falsified addresses with no staff.

Other Real Estate news

* Gafisa SA canceled its plan to launch an IPO in Brazil for its low-cost home builder unit due to an unfavorable market environment. Instead, the company agreed to sell an up to 30% stake in the unit to Jaguar Growth Asset Management LLC for 8.13 Brazilian reais, subject to certain conditions.

* Fitch Ratings said that the anticipated 1.2% growth in Brazil's 2017 gross domestic product will provide positive momentum for its commercial real estate market. The market, however, will continue to face volatility in rental income and its industrial sectors are expected to experience a supply glut.

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The Daily Dose Europe, Real Estate edition, is updated as of 6:30 a.m. London time. Some links require a subscription. Articles and links are correct as of publication time.