Hines REIT Sells Brazil Properties
Hines Real Estate Investment Trust recently completed the sales of three Brazilian industrial properties – Distribution Park Araucaria, Distribution Park Elouveira and Distribution Park Vinhedo – to BR Properties SA of Brazil.
Hines REIT acquired these assets in December 2008 for approximately $116.2 million and sold them for $127.9 million, after transaction costs and local taxes. Hines is the sponsor Hines REIT, and is responsible for the acquisition, disposition, management and leasing of the majority of its assets.
“These were great assets that delivered strong returns to the Hines REIT shareholders, and the large movements in the foreign exchange markets presented us with the opportunity to realize an attractive profit in both returns of capital and also currency exchange gains due to the strengthening of the Brazilian Real,” said Charles Hazen, president and CEO of Hines REIT.
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Dunkin' Donuts Breaks Into Russia
MOSCOW – A Dunkin' Donuts franchisee is poised to open the first of up to 20 restaurants this year in the Moscow region, giving the Canton, Mass.-based baked goods chain its inroad to Russia.
Donuts Project LLC will open the first restaurant May 11 along Novy Arbat Street in one of Moscow's historic neighborhoods. "Dunkin' Donuts is one of America's most beloved brands, and we believe the Russian people will embrace this restaurant concept as well," said Konstantin Petrov, founder of Donuts Project.
Dunkin' Donuts has already gained entry to Europe and the Asia-Pacific market. It also has the Ukraine on its "to-go" list. The chain, founded in 1950, now has more than 9,000 locations on four continents.The chain's sister, Baskin-Robbins, is working a plan to open an additional 150 shops in the coming years in Russia and the pre-Soviet republics. At last count, there were nearly 150 Baskin-Robbins locations in Russia.
"Russia is experiencing significant growth, and the pace of everyday life is becoming faster. We believe Dunkin' Donuts will offer Russian consumers a quick, convenient place to stop, throughout their hectic days," said Anthony P. Pavese, COO for Dunkin' Donuts International.
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ITT Relocating R&D in Germany
FRANKFURT, Germany – New York-based ITT Corp. will invest $10 million into a new 27,896-sf research and development facility in Germany. The Motion Technologies center is ticketed to open in November.
Cushman & Wakefield Inc. will oversee the project's environmental sustainability. "This is a major investment. It will provide a significant additional capability that will fuel our new product development plans and ensure continuous product and technology leadership to benefit all our customers, and will boost our ability to serve and grow in the mass transit business," said Salvatore Torrisi, ITT Motion Technologies president.
The Frankfurt center will replace one in Bad Camberg. Torrisi said the relocation decision was based on Frankfurt's accessibility to additional railway product development. ITT also plans to add bus and rail resources to its lineup.
Based in White Plains, ITT also supports R&D centers in Barge, Italy; Oud Beijerland, Holland; Novi, Michigan; Seoul, South Korea; and Tokyo, Japan.
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$10 Million Plan Unveiled for Beachfront Hotel
SCHOELCHER, Martinique – Carlson Hotels Worldwide is planning to undertake a $10 million renovation of a 175-room beachfront hotel on the eastern side of Martinique island as part of its management pact with the owner, Groupe Monplaisir.
Construction will begin in mid-June to convert the former Hotel La Bateliere into a Radisson-flagged resort. The Radisson Hotel & Spa Martinique's work will be done by the end of 2011.The property will be Radisson's fourth in the region.
"We are confident that with the investment and upgrades being made to our property it will make the hotel a favorite for anyone visiting Martinique," Donald Monplaisir said. O-Gossart of Paris will be the interior designer for the conversion.
When the work's done, the hotel will feature two restaurants, three bars, including one on more than 1,400 feet of beachfront land, six banquet rooms with 12,000 sf, spa and fitness center, diving club, beauty salon and six tennis courts. The hotel is located eight miles from the island's international airport.
"This property represents another step forward expanding Radisson as a powerful, consistent first-class brand as part of our Ambition 2015 growth strategy," said Thorsten Kirschke, executive vice president and COO of Minneapolis-based Carlson Hotels, The Americas.
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ProLogis Gets $122 Million Recapitalization
DENVER – ProLogis has secured $122 million of recapitalization funds by reworking two TMK bond secured financings. Two distribution centers in Japan are the collateral.
The 802,000-sf ProLogis Park Ichikawa II is securing a three-year bond and the 803,000-sf ProLogis Parc Maishima III in Osaka is backing a five-year loan. TMK is a tax-favored, special-purpose securitization vehicle that issues corporate bonds secured by real estate assets. In a press release, the Denver-based developer said the funds were used to reduce its global line of credit.
"ProLogis continues to cultivate existing and establish new relationships with Japanese lenders in the TMK market. We like the TMK market because it represents a reliable source of attractively priced debt capital for institutional quality assets," said Phillip D. Joseph Jr., senior vice president and treasurer.
Joseph added the ProLogis buildings' quality, long-term leases and high-credit tenants "represent attractive security to lenders." The assets' tenant roster includes TOMY Co., JR East Logistics and Konoike Transport.
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Interstate Aligns With Jin Jiang
ARLINGTON, Va. – In a joint venture pact that opens the door to China, Interstate Hotels & Resorts has formed Interstate China Hotels & Resorts with Shanghai Jin Jiang International Hotels Co. Ltd. The partners have jump-started talks with prospective clients for the third-party management company.
A search is underway for a CEO to lead the venture, which will have an office in Shanghai. The partners have set up a 50/50 partnership split.
"We will build a similar platform to ones we have successfully established in Moscow, Mexico and, most recently, India," said Thomas F. Hewitt, Interstate's chairman and CEO. "We have already begun putting the infrastructure in place to support our planned growth in China, one of the most dynamic hotel markets in the world."
Through the agreement, the Arlington, Va.-based Interstate has become the first independent hotel management company in China, according to Yu Minliang, chairman of Jin Jiang Hotels. "We believe this will be a milestone in the development of the services sector in Shanghai and China," he said. "We expect the Sino/U.S. collaboration will be mutually beneficial to both parties."
Jin Jiang is developing 546 hotels with nearly 90,000 rooms in China. It maintains corporate offices in Shanghai and Beijing.
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Sbarro's Brazilian Partner
Plans 1,000 Restaurants
MELVILLE, N.Y. – Sbarro is slated to add 1,000 restaurants in Brazil in a 20-year development agreement with GPS Group. The first eatery opens in the coming months in Rio de Janeiro.
The opening of the Brazilian market gives the Melville, N.Y.-based Sbarro a presence in 42 countries. Just recently, Sbarro inked a deal with JCI Inc. to open 1,250 restaurants in Japan.
"We could not ask for a better partner than the team at GPS Group. Their expert knowledge of the Brazilian marketplace is the perfect complement to our proven franchise formula," said Peter Beaudrault, president and CEO of Sbarro.
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Goodman Building 467,891-SF
Distribution Center at Andover
ANDOVER, England – In May, the Goodman Group will jump-start work on a 467,891-sf distribution center at Andover Commercial Park after securing a 20-year prelease for the project from the Co-operative Group.
The distribution center has been designed to achieve a BREEAM rating of "very good." The building will be positioned on the northwestern end of the former 100-acre airfield. The new center opens the door for the tenant to reshape its distribution network in southern England. The Co-operative Group is the UK's fifth largest food retailer since its acquisition of the Somerfield supermarket chain in 2009.
"This significant development is one of the largest pre-let transactions to be announced in the UK over the last 12 months and we are pleased to be undertaking it on behalf of the Co-operative Group," said Greg Goodman, CEO of the international development group.
Andover Commercial Park has been earmarked for distribution, office, hotel and retail development. Goodman will begin marketing the acreage and have shovel-ready dirt ready by the end of this year.
Savills represented Goodman in the lease. Carter Jonas represented Leal & General Property, overseer for Andover Commercial Park, and Thomas Round handled negotiations for the Co-operative Group.
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Wyndham Expanding in China
PARSIPPANY, N.J. – In the coming months, Wyndham Worldwide will open another four hotels in China, adding Chengdu, Suzhou, Kunming and one more for Shanghai. The hotels, now under construction, total 1,426 rooms.
The Parsippany, N.J.-based hotelier recently opened hotels in Shanghai, Changsha and Hangzhou. "The addition of these hotels strengthens our position as the largest U.S.-based hotel company in China," said Eric Danziger, Wyndham's president and CEO.
Three of the four under-construction hotels are Wyndham Grand Plaza branded: 420 rooms in Chengdu, 311 rooms in Suzhou and 374 rooms in Kunming. The hotelier's development roster also includes 321-room Wyndham Shanghai Bund East. All hotels will be managed by the Greater China Hospitality Ltd., led by Wilburt Chang.
Wyndham Hotel Group now operates 207 hotels with 33,336 rooms in primary and secondary cities of China after opening its first hotel, the 588-key Wyndham Xiamen, in 2009. In 2011, the hotelier plans to cut the ribbon on the 337-room Wyndham Baolian Hotel.
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213-Key Le Meridien Changes Hands
CANCUN – River Hospitality Management has completed a note restructuring and transfer of the 213-room Le Meridien Cancun Resort & Spa. Taking the deed to the beachfront property are Sandos Hotels & Resorts and Laurus Corp.
CBRE Hotels' debt and equity finance group advised River Hospitality in the transfer and note restructuring of the 12-year-old hotel and 15,000-sf European-style hotel in Quintana Roo. "Patience and creative thinking by all parties involved allow an equitable outcome to seemingly difficult situations," said Stan Kozlowski, senior vice president of Los Angeles-based CBRE Hotels.
"This transaction included a substantial restructuring of the existing capital stack. In preserving a modified debt structure, the NPV of the asset and ultimate recovery for the various stakeholders is maximized," added Gavin Davis, senior vice president of CBRE Hotels. River Hospitality formerly was American Property Hospitality Management LLC.
Laurus, also based in Los Angeles, specializes in full-service luxury and deluxe hotels and resorts and master plans, mixed-use developments and residential properties in the U.S. and abroad. Sandos Hotels & Resorts of Spain operates four properties in Mexico, including the Sandos Caracol Eco-Resort and Spa. Its resort holdings include the Sandos Papagayo Arena Beach Resort & Spa in the Canary Islands and Sandos Monaco Hotel & Spa in Costa Blanca, Spain.
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ProLogis Leases 168,000 SF in Mexico
REYNOSA, Mexico – Denver-based developer ProLogis has filled 168,000 sf in its industrial parks in Mexico in a triple run of lease signings.
The largest lease was signed by Steelcase Inc., which added 108,000 sf to its distribution center in ProLogis Park Pharr Bridge Building Eight, located near the Reynosa International Airport. Steelcase has been occupying 56,000 sf in the park.
In ProLogis Park Apodaca in Monterrey, MarkIV AIS Mexico has leased 40,000 sf. The new tenant manufactures highly engineered systems and components for the automotive and heavy-duty OEM market, aftermarket and transportation markets.
A manufacturer and distributor of paper products took another 20,000 sf at El Puente Industrial Center in Reynosa. The unidentified company had been leasing 42,000 sf.
"We continue to see signs of stabilization and improvement in the industrial property markets, and have recently experienced increased customer interest," said Silvano Solis, ProLogis' managing director and head of Mexico operations.
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Coming Soon: Avestus Capital Partners
DUBLIN – At month's end, a senior management team from Quinlan Private will launch Avestus Capital Partners. The new firm begins with a portfolio of European real estate assets valued at nearly $11 billion.
Set to launch March 29, the firm will provide real estate investment and asset management services to institutional and private investors, including some now being serviced by Quinlan, according to a press release. The initial portfolio includes assets in 15 countries. Avestus will start its run with 120 professionals with offices in seven cities. The primary focus is the European real estate market.
"The creation of Avestus Capital Partners is a carefully considered response to our assessment of the current and future requirements of our investors and, also, our own desire to extend our leadership team and broaden the ownership base," said Olan Cremin, principal and CEO of the Dublin-based company.
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West Paces Hotel Group Gets Nod
ISLA PALENQUE, Panama – West Paces Hotel Group LLC of Atlanta has secured a management contract for the Resort at Isla Palenque from Amble Resorts.
The Chicago-based owner is developing an environmentally sensitive, 400-acre resort on the Panamanian island. The hotel, planned for a 30-room phase one, is expected to open in late 2012. At build-out, the resort will feature 90 hotel rooms and 200 private homes.
West Paces will manage the hotel, spa, dining, rental program, private in-home services, yacht club, organic farm and nature preserve plus transportation to and from the mainland. "The island itself and our mission for its development are too unique to fit any existing brand," said Benjamin Loomis, founder of the three-year-old Amble Resorts. "Both Amble and West Paces believe that it is best to keep The Resort at Isla Palenque an independent hotel. But the same expertise that West Paces brings to their Capella and Solis brands will be brought to Isla Palenque, ensuring a level of quality that no other resort in Panama can boast. We're pretty excited."
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U.S. REIT Buys Toronto Dundas Square
TORONTO – Entertainment Properties Trust has retired $120 million of senior debt and floated a $100 million first mortgage to acquire the 13-story Toronto Dundas Square in the downtown. The real estate prize was in receivership.
The 13-story retail asset has 330,000-sf of net rentable area, including one of the country's largest grossing theater complexes, and 25,000 sf of digital and static sign space. The tenant roster includes AMC Theaters, Future Shop, Google and Addidas.
"We are very pleased to own such a premiere asset located at one of the busiest intersections in downtown Toronto," said David Brain, president and CEO of the Kansas City, Mo.-based Entertainment Properties Trust, "and we are excited about the added potential for significant growth in signage income."
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Kansas City Southern Takes Over
130-Acre Intermodal in Mexico
TOLUCA, Mexico – Kansas City Southern (KCS), planning to add direct service later this month, has bought the 130-acre Puerta Mexico intermodal facility in Mexico's Central Valley.
Through its KCS rail network, Puerta Mexico serves the industrial centers of Mexico and the U.S., several important seaports and the Toluca-Mexico City industrial corridor. The facility provides intermodal rail and truck services, warehouse storage and has the only inland customs-clearing facility in the state of Mexico. Since 1996, KCS has invested more than $3 billion to expand Mexico's rail infrastructure.
"Puerta Mexico is well-positioned on KCS' International Intermodal Corridor, making it a valuable enhancement for our cross border service offering," said David L. Starling, KCS president and COO.
KCS executive vice president sales and marketing Patrick J. Ottensmeyer pointed out that demand is increasing for "modern, multi-terminals" in the country's industrial heartland. "The strategic location and modern facilities at Puerta Mexico will allow KCS to better serve these growing markets," he added.
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$600 Million Project Under Way
HONG KONG – The Goodman Group is off and running on construction of the world's largest industrial building, a 2.4 million-sf design with a $600 million price tag. The Interlink will deliver in January 2012.
According to Goodman, the landmark project is the first major new warehouse development in nearly one decade in Hong Kong. When completed, it will be the city's fourth largest warehouse.Ground broke yesterday, with more than 1.2 million sf of the industrial space leased to DHL Supply Chain Ltd. and Yusen Air & Sea Services Ltd., both from Hong Kong. In addition, Goodman reported ongoing negotiations for deals for 77 percent of Interlink's gross leasable area. The project is located at the epicenter of the Tsing Yi container port.
"There is significant pent-up demand in Hong Kong for efficient and modern warehousing facilities. The signing of two such prominent and well-respected companies in the logistics industry is testament to this and also the development's scale, excellent location and its innovative and high specification of design," said Greg Goodman, CEO of the New York-based firm.
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Japan Logistics Fund JV Gets
530,000-SF Industrial Seed
NARASHINO CITY, Japan – ProLogis has rolled a 530,000-sf distribution center, valued at $86 million, into a joint venture portfolio, marking the first contribution to the seven-month-old alliance with Japan Logistics Fund Inc. and Mitsui & Co.
The Denver-based developer said in a press release that the contribution of ProLogis Parc Narashino III represented a 5.9 percent cap rate on total costs. ProLogis will continue to manage and lease all properties added to the portfolio under the JV agreement.
ProLogis Parc Narashino III is a five-story building adjacent to the Higashi Kanto and Keiyo expressways. It is situated midway between Narita Airport and downtown Tokyo. Tenants include Yamato Logistics and Sanyo Electric Logistics.
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Accor, Invesco Pen $210 Million Sale
PARIS – Accor has collected $210 million from the sale of five hotels with more than 1,100 rooms in four European countries to Denver-based Invesco Real Estate.
The just-bought properties are the 307-room Novotel Muenchen City in Munich; 149-key Novotel Roma la Rustica and 97-room Mercure Corso Trieste, both in Rome; 175-room Mercure Zabatova, which is under construction in Bratislava; and 384-key Pullman Paris La Defense.
Accor sold the Novotel and Mercure hotels under a leaseback agreement for $100.9 million. The Mercure Zabatova arrangement cost $23.1 million. The leasebacks, with variable rents, came with a 15-year term from Accor.
The Paris hotel, accounting for $109.1 million of the total, will undergo a $13.6 million renovation at the owner's expense. Accor secured a 12-year management pact with six renewal options as part of the sale.
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ProLogis Fills 471,000 SF in UK
LONDON – Denver-based ProLogis has leased 471,000 sf in its UK parks to a pair of tenants, including Oxford University Press.
The Oxford University affiliate has reserved 402,000 sf at ProLogis Park Kettering near junction seven of the A14 motorway. Move-in is planned for early 2011. The 1.7 million-sf park now has four of its five buildings pushing 100 percent occupancy with the new deal, according to ProLogis' press release.
In the second transaction, an international catering company has leased 69,000 sf at ProLogis Park Heathrow, a 295,000-sf development within two miles of Heathrow Airport and a half-mile from the M4 motorway. The deal also nudges occupancy to nearly 100 percent in the three-building park.
"While we are still facing a challenging market environment, these new lease agreements indicate further signs of stabilization and improvement in the UK industrial property market," said Andrew Griffiths, managing director of ProLogis UK.
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Apollo Makes Move in Asia
HONG KONG – Apollo Global Real Estate Management has formed an Asia Pacific division for investments ranging from $100 million to $500 million.
Real estate veteran Grant Kelley has been brought on board to lead the division from its Hong Kong headquarters office. The 20-year veteran founded Holdfast Capital Ltd. after his stint as CEO of Colony Capital Asia. Holdfast's seven-member team will be merged into the newly formed Apollo Global Real Estate Management, Asia Pacific Ltd.
"We are very pleased that Grant and his team will be joining us, to strengthen our presence in the Asia Pacific markets and bolster our investment capabilities in the region on behalf of our clients," said Joe Azrack, managing director and head of New York-based Apollo Global Real Estate Management. "Grant will add a wealth of expertise and proven abilities to our organization."
According to a press release, the initial investment focus will be Australia, Japan and South Korea, eyeing distressed loans and properties, real estate operating companies and REITs. Also on the agenda is a plan to be "a major participant in the creation of real estate investments" throughout Asia, particularly China and India, Apollo said in the release.
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Cassidy Turley Adds London Partner
ST. LOUIS – With more than one month before its new brand launch, Cassidy Turley has signed a memorandum with London-based GVA Grimley to lay the foundation for international reach.
The St. Louis-based Cassidy Turley has assembled brokerage firms in Southern and Northern California, Arizona and New Jersey to build a new brand for the industry. As previously reported, the new flag rises March 1.
"At a time when the industry is looking for fresh solutions we are creating something new and exciting," said Wally Pinkard, chairman of Cassidy Turley. "Our agreement with GVA Grimley further strengthens our international offering for our clients in a rapidly changing market."GVA Grimley is considered one of the UK's leading property consultants, providing a full range of services. It has 12 offices and 890 fee earners.
"We intend to be the international leader in our fields of expertise," said Joseph Stettinius Jr., president of Cassidy Turley. "Our goal is to be recognized as a world class provider of commercial real estate advice, acknowledged for the outstanding quality of our service delivery, led by pre-eminent industry professionals."
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Hyatt Gets Inroad to 2,223-Acre Resort
PENINSULA PAPAGAYO, Costa Rica – Chicago-based Hyatt Hotels Corp. has gotten the first resort location for its Andaz brand and an inroad to Latin America in a just-signed deal with Hotelera Playa Sombrero S.A. The plan is to open a 150-room Andaz Papagayo in 2013.
The deal delivers a Hyatt inroad into a 2,223-acre master-planned resort destination with 15 miles of shoreline on the Gulf of Papagayo, 14 miles of bluff edges and 31 separate beaches of white, coral and black sands. Hyatt's Andaz Papagayo will be built on 28 acres of oceanfront land beside the 180-slip Marina Papagayo with a village of retail and restaurants. The Andaz will be outfitted with two restaurants, beach club, spa and fitness center. Guests also will have access to an 18-hole Arnold Palmer-designed championship golf course.
"We are very pleased to host this first Andaz resort in Península Papagayo. The addition of this fresh and innovative brand to our community is a great fit with our development vision" said Alan Kelso, CEO of Península Papagayo.
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Sbarro JV Sets 20-Year Plan in Motion
TOKYO – Melville, NY-based Sbarro and JCI Inc. have jump-started a large-scale expansion in a 20-year plan to open 1,250 restaurants in Japan.
The JV's first location opened recently in the AEON Mall in Hinode-Machi in Tokyo. JCI of Japan plans to open two more units in Tokyo before the first quarter ends.
"This agreement is an incredibly exciting moment for Sbarro and a key milestone in our continued international development efforts. In Tokyo, we've seen an immediate and powerful response from consumers who have already very warmly embraced the Sbarro brand," said Peter Beaudrault, president and CEO of Sbarro. The 54-year-old company operates more than 1,000 restaurants in 42 countries.
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Boston Firm Wins Saudi Contract
AL KHOBAR, Saudi Arabia – J/Brice Design International Inc. of Boston has won an interior design contract for 120 luxury villas in an expansion of its relationship with Al-Othman Holding Co.
The Boston-based architectural firm is designing rental units for executives and engineers largely employed by Saudi Aramco. The Al Othman Compound, slated for completion this month, consists of fully furnished two-, three- and four-bedroom units.
In early 2009, J/Brice was awarded the interior design contract for Al-Othman's $300 million Al Khobar Hotel and Office Towers. The residential component will feature upscale amenities, including retail space, theater, restaurants and function space. The project architect is AMO & Partners, an Al Othman affiliate.
"Jeffrey and J/Brice Design was the only firm we even considered for our residential community. We based our decision on our personal knowledge of Jeff's vision, commitment and demonstrated ability to weave together Arabian motifs with an international style that is impressive to both Saudis and guests of the Kingdom," said Al-Othman CEO Mohammed Abdullah Al Othman.
J/Brice also holds the commission for the interior design of the 52,000-sf summer palace on the Red Sea, just outside Jeddah. It also has contracts for properties in Ethiopia, Zanzibar, Libya and Barbados.
"Today the West turns to the Arab world for architectural and design inspiration, not the other way around. Jeff's ability to create spaces that are centered on the experience of the occupants, rather than on the architecture of the building as well as his unique and distinctive personal vision is a great recipe for success in the region," added Walid A. Al Dubaikel, Al-Othman's business development manager.
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$117 Million Deal in Works
TAORMINA, Sicily – In sync with a stock offering, Bermuda-based Orient-Express Hotels Ltd. plans to buy the 83-room Grant Hotel Timeo and 78-key Villa Sant' Andrea for $117 million. The purchase calls for $37 million in cash, a $64 million loan assumption and $7 million of new financing.
The properties are being sold by the Framon Group. The deal is slated to close this month. The takeover plan includes a $16 million allocation for renovations, expected to take three years to complete. "These hotels typify Orient-Express Hotels' core business - established properties with history and personality," said Paul White, president and CEO of Orient-Express. "Currently, they both punch below their weight and because they occupy a premier position in the Sicilian market, we are confident we can make significant improvements in performance."
The hotels share a private beach on the Bay of Mazzaro. The Villa Sant' Andrea was built in 1830 and the Grand Hotel Timeo in 1873. The deal brings the opportunity of development for the buyer. If all goes as planned, the Villa Sant' Andrea could get another 12 suites and a swimming pool. Orient-Express didn't define the size of the expansion for the Grand Hotel Timeo in its press release.
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Sacred Valley Hotel Brings $7 Million
HAMILTON, Bermuda – In a joint venture arrangement, Orient-Express Hotels Ltd. has bought its fifth property in Peru, taking title to an existing hotel in the Sacred Valley of the Incas for $7 million.
The 21-suite hotel, which opened last April, was sold by Industrias Turistica Vagamundso SAC. Orient-Express' joint venture company is Peru OEH SA, which funded the purchase with cash on hand and a $2.5 million loan, according to a press release.
The two-story hotel overlooks the Urubamba River. It is 15 minutes from Ollantaytambo, an important Incan village and fortress situated between Cuzco and Machu Picchu. The hotel has 11 deluxe and 10 junior suites and two villas, each 2,690 sf.
"Expanding the Orient-Express Peruvian experience to the Sacred Valley is a natural as well as a strategic move and enables the company to provide its guests with a luxury itinerary from arrival through to departure," said Paul White, president and CEO of the Bermuda-based chain.
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Development Site Fetches $69 Million
ZENGZHOU, China – Putting up another $69 million, Xinyuan Real Estate Co. Ltd. has added 11 acres to its downtown Zengzhou development site, marking its third land purchase this year in the Henan Province district. The developer expects to start construction in July on the residential build-out.
Xinyuan plans to start presales in October for the high-rise apartments, ranging from 753 sf to 1,291 sf. Units in the immediate neighborhood are selling for $995 per sf to $2,050 per sf.
"We believe this parcel is very well positioned for solid sales and will generate superior profitability. We are continuing to build Xinyuan's presence in Zhengzhou and positioning the company for solid growth through a steady development pipeline in 2010," said Yong Zhang, Xinyuan's chairman and CEO. "Jinshui district is the financial and cultural center of Zhengzhou. The transaction volume of this district accounted for approximately 40% of Zhengzhou's volume in the first eleven months of this year."
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Maggiano's Opens in Saudi Arabia
JEDDAH, Saudi Arabia – Maggiano's Old World charm and Italian fare has gained its first international location, with a longtime franchisee of Brinker International Inc. opening doors in Saudi Arabia.
Jawad Business Group earlier this year opened the first Chili's Grill & Bar in India and has put 10 Chili's into Bahrain for Dallas-based Brinker. Jawad has opened a 278-seat Maggiano's along Al Tahlia Street in Jeddah.
John Reale, Brinker's president of global business development, indicated in a press release that Maggiano's is poised to open additional "opportunities" in the international market for the restaurant chain. "This opening brings us closer to our goal of 500 restaurants outside the United States by 2014," he added.
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UTStarcom Finds $140 Million
Buyer for 2.6 Million-SF Hub
HANGZHOU, China – UTStarcom Inc. will sell a 2.6 million-sf manufacturing operation to Zhongnan Group of Cos. for $140 million. After taxes, the Alameda, Calif.-based seller will have $132 million to put into the bank.
The sale is expected to close before the first quarter draws to a close. The buyer has three days to pay $7.3 million in earnest money to UTStarcom, which plans to lease back part of the building so it can maintain a presence in the province. The manufacturing center includes research and development space and administrative offices.
Jones Lang LaSalle was UTStarcom's adviser for the transaction. Peter Blackmore, CEO and president of UTStarcom, said the company started to "explore opportunities" in June. The sale-leaseback "will significantly improve our financial profile and position UTStarcom for growth in 2010 and beyond," he said in a press release.
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Palace Resorts Will Fly Wyndham Flag
MIAMI – Palace Resorts has gotten a blessing from Wyndham Hotels & Resorts Inc. to rebrand four oceanfront properties in Mexico, with three getting reflagged as a Wyndham Grand Resort.
The franchise pact boosts the Parsippany, N.J.-based Wyndham's footprint to 26 properties in Mexico and the Caribbean. Palace Resorts, headquartered in Miami, will continue to own and operate the beachfront quartet.
The owner's Riviera Maya properties, Xpu-Ha Place and Playacar Palace, will be reflagged as a Wyndham Resort and Wyndham Grand Resort, respectively. The Isla Mujeres Palace on Isla Mujeres and Beach Palace in Cancun also will get grand resort designations.
"By affiliating these four Palace Resorts properties with the Wyndham brand, we will gain exposure to a significant new audience of potential clients through the Wyndham system's multiple distribution channels," said Roberto Chapur, Palace Resorts' president.
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Hyatt Adds Five Hotels in India
MUMBAI, India – Chicago-based Hyatt Hotels Corp. and DB Hospitality Pvt. Ltd. have signed five management pacts in major business centers of India.
Mumbai-based DB Hospitality will develop and own the properties, which are scheduled to start opening in mid-2010 and continue through early 2014. Hyatt will be overseeing the Park Hyatt Mumbai, Grand Hyatt Goa, Grand Hyatt Pune, Hyatt Place Pune and Hyatt Place Mundra. Hyatt has had a presence in India since 1983, with hotel operations currently in Goa, Mumbai, Delhi and Koklata.
The 255-key Park Hyatt Mumbai, slated to open in first quarter 2014, is part of the 125-story India Tower in the city's southern sector. Foster and Partners of London is the project architect.
Opening in third quarter 2010 will be the 314-room Grand Hyatt Goa. It is being built in the Aldeia de Goa, a 140-acre, mixed-use development with a half-mile of beach frontage and views of the Zuari River.
The 325-room Grand Hyatt Pune will open in third quarter 2011. It is part of the Orchid Centre development. In first quarter 2012, the ribbon will be cut on the 130-room Hyatt Place Pune, which will be located within the Rajiv Gandhi Infotech Park at Hinjewadi. Third quarter 2013 will bring the opening of the 150-key Hyatt Place Mundra in the special economic zone at Mundra port.
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Marynarska Point Draws
$102 Million for Skanska
WARSAW – Skanska Property Poland has pocketed $102 million from the sale of Marynarska Point, a pair of class A office buildings totaling 290,626 sf, to Investec GLL Global Special Opportunities Fund FCP. The deal has been eight months in the making.
Colliers International's Neil Gregory-Eaves, director of Central and Eastern Europe, represented Skanska in the sale of the fully leased office building at the corner of Marynarska and Postepu streets in the Mokotow District. German bank Helaba provided senior acquisition financing.
"With the successful sale of Deloitte House in June and now Marynarska Point, we will be increasing our development activities in Poland," said Nicklas Lindberg, president of the Stockholm-based developer.
The tenant roster includes Bank DnB Nord, Generali, AC Nielsen, ILF Consulting Engineers and BZ WBK Bank. The asset boasts two parking garages with 430 spaces in three underground levels and 20 surface spots. Marynarska Point is the country's second building to secure EU GreenBuilding status.
"The sale of Marynarska Point is a milestone investment transaction in Poland as it represents the first major transaction to originate and close since the collapse of Lehman Brothers," said Gregory-Eaves. "Several major assets in Poland are currently in due diligence and we expect transaction activity to accelerate in the coming months and this market will most certainly out-pace the rest of CEE for the near term."
Clifford Chance provided legal services to the seller. Colliers and Clifford Chance comprised the transaction team for Skanska in the $167.8 million sale of Deloitte House to Deka earlier in 2009. Salans provided legal services to the buyer of Marynarska Point.
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$52 Million Buys Downtown Paris Hotel
PARIS – Strategic Hotels & Resorts Inc. plans to sell the 116-key Renaissance Paris Hotel Le Parc Trocadero for $51.5 million to an investment group led by a Westmont Hospitality affiliate.The exchange is slated to close within 45 days.
"The sale, at a property where we were contractually bound by Marriott International to undertake a full renovation, substantially supplements our corporate liquidity, reduces corporate overhead related to our European operations, and is in line with the company's disciplined, strategic disposition strategy," said Laurence Geller, CEO of Chicago-based Strategic Hotels & Resorts.
Strategic Hotels, which rebranded the Paris hotel in April 2008, recently conducted an impairment test of long-lived assets, according to an SEC filing. The Renaissance Paris Hotel Le Parc Trocadero recorded an impairment of $30.8 million in the test.
Westmount, based in Ontario and Houston, is getting a downtown property at 55-57 Raymond Ave. Poincare, situated between the Champs-Elysees and Eiffel Tower. The buyer owns and manages more than 400 hotels on three continents.
According to a press release, the hotel was slated to contribute slightly more than $3 million in EBITDA to Strategic's coffers this year. The cap rate was 4.8 percent on net operating income. When the deal closes, the hotel company will have a 17-property portfolio with 8,002 rooms.
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Whiterock Claims Toronto CBD Building
TORONTO – Putting $16.8 million on the line, Whiterock Real Estate Investment Trust has taken control of a fully leased, 87,105-sf office building in Downtown East.
The seven-story office building at 49 Ontario St. was sold by Craig Smith, president of Ashlar Urban Realty Inc., and broker Fraser McKay. The property included a half-acre parking lot with the potential for a high-density residential development, according to the dealmakers."
The property provides Whiterock an exceptional opportunity. Firstly, its stable tenancy offers the security of consistent cash flows." Smith said. "Secondly, as the city's stock of infill development sites within close vicinity to the core continues to shrink; 49 Ontario Street's development potential makes it an excellent asset in which to benefit from the strong housing demand."
Technicolor Creative Services Canada, a subsidiary of Thompson Multimedia, occupies 90 percent of the office space. It has eight years left on its lease, the broker reported. Two tenants lease the balance of the building.
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AMB Fills 207,200 SF in China
SAN FRANCISCO – AMB Property Corp. has finalized five leases, totaling 207,200 sf, for its 16.2 million-sf Asian portfolio.
The largest lease is 100,100 sf, which was signed by an unidentified automotive distributor. The industrial space is located at AMB Tianjin International Logistics Center.
The second-largest lease is 70,500 sf at AMB Kunshan Bonded Logistics Center in the Kunshan Export Processing Zone. All the San Francisco-based developer is saying is the space will go to a pair of third-party logistics providers.
At AMB Beilun Port, another third-party logistics provider has leased 24,200 sf of distribution space. The building is located in the Ningbo Economic & Technological Development Zone.
In a 12,400-sf lease, a third-party logistics provider is planning to set up shop in AMB Dalian Industrial Logistics Center in the Liaoning Province, which is a key port for three northeast provinces.
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Goodman Starts $430 Million,
24-Story Industrial Project
HONG KONG – The Goodman Group and its Hong Kong logistics fund are jump-starting work on a 2.4 million-sf warehouse and distribution center. The $430 million project, rising 24 stories, will be one of the largest warehouses in the city and the first to rise in nearly one decade.
Interlink will be located at Tsing Yi in the heart of the ports district, strategically positioned to the container ports, Hong Kong International Airport and major highways to mainland China's borders. A 9 percent yield on cost is forecasted by the Sydney-based Goodman Group.
Interlink will deliver by January 2012. If all goes as planned, Interlink will be the first industrial building to achieve sustainable accreditation from the Hong Kong Building Environments Assessment. It also has been designed for LEED certification by the US Green Building Council.
According to a press release, the developer is revving up construction with preleases in hand from two multi-national third-party logistics providers for 50 percent of the project. Goodman partially funded the project with $170 million in three-year notes from four banks.
"Since our entry into the market in 2005, Goodman has established a strong business platform to become Hong Kong's leading asset manager of industrial and warehouse space. The commitment from our customers, investors and lenders now provides us with the opportunity to deliver one of Hong Kong's most modern and efficient warehouse and distribution facilities," said Greg Goodman, company CEO.
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ProLogis Nails Four Leases, 450,000 SF
TOKYO – Denver-based ProLogis has landed four new leases for 450,000 sf of its development portfolio in Japan.
Vantec Corp. made the largest commitment, 269,000 sf of the 1.2 million-sf ProLogis Parc Zama. The distribution center is located 25 miles from downtown Tokyo along Route 246 and the Tomei Expressway.
Signing a 79,000-sf expansion lease was Trancom Co. Ltd., which currently occupies 93,000 sf at ProLogis Park Ichikawa I. Also at ProLogis Park Ichikawa I, a consulting and third-party logistics provider leased 40,000 sf. The 1.3 million-sf distribution center is situated along the Wangan Expressway and Route 357 near Tokyo.
ProLogis, keeping the tenant's identity under wraps, also leased 61,000 sf to a major parcel delivery company for a sorting and distribution hub for mail delivery services. The inbound tenant has leased space in ProLogis Park Iwanuma I in the Sendai market of Japan.
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Kohler Buys Historic Hamilton Hall
ST. ANDREWS, Scotland – Old Course Limited, subsidiary of Wisconsin-based Kohler Co., has acquired the historic Hamilton Hall, a long-dark, 45,000-sf hotel overlooking the world's most famous golf course.
Old Course Limited came out on top in a competitive bidding process conducted by Jones Lang LaSalle and the Bank of Scotland. The property rounds out the buyer's historic holdings in St. Andrews – the Old Course Hotel, Kohler Waters Spa and The Duke's golf course.
"We are excited about the development opportunities for Hamilton Hall, and appreciate both the support and enthusiasm the local community has for the property," Herb Kohler, chairman and CEO, said. "We look forward to gathering input from the townspeople and the Fife Council as to what the name of the building should be along with its future use."
Hamilton Hall opened in 1895 as the Grand Hotel with clear views of the West Sands beach and North Sea, a bid to capitalize on St. Andrews' emergence as a tourist destination for golf and sea bathing. It abuts the 255-year-old Royal & Ancient Golf Club. Although the interior is "little more than rubble," Kohler said "we are honored to own such an iconic building in the home of golf."
The hotel was requisitioned during World War II by the armed forces, ending its reign in the hospitality industry. In 1949, the building was reopened as Hamilton Hall, a residence for the University of St. Andrews. The hall was sold in 2005.Hamilton Hall has been featured in "Chariots of Fire" and part of the backdrop for many televised golf tournaments.Kohler said the next few months will be spent garnering public input to create an economically viable plan for Hamilton Hall's restoration.
"Our priority is to complete the preservation of Hamilton Hall and return it to a viable and prominent position in St Andrews for generations to come," he said. "Our company has long demonstrated the passion and ability it takes to restore historic buildings back to great distinction."
Kohler's hospitality and real estate group's renovations include the American Club in Kohler, Wis., which opened in 1918 as a dormitory for immigrant factory workers and was restored and reopened in 1981 as a resort hotel. It is branded as the Midwest's only AAA Five Diamond Resort Hotel. Other projects are the Riverbend, an estate home built in 1923 for Walter J. Kohler, then governor of Wisconsin and president of Kohler co. The home was restored in 2001 and opened with its 31 rooms and spa as an exclusive private membership club.
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Hard Rock Plants Flag in Punta Cana
PUNTA CANA – Hard Rock International and Miami-based Palace Resorts will begin work in the spring on the re-branding of 121-acre Moon Palace Resort on Macao Beach in the Dominican Republic.
The Orlando, Fla.-based Hard Rock International will marry its signature "Rock Star" suites with the resort's all-inclusive, five-star accommodations, including the use of authentic music memorabilia to top off the unique setting. The 1,800-room resort will be renamed Hard Rock Hotel & Casino Punta Cana as part of the re-branding effort.
"I am confident that Hard Rock Hotel & Casino Punta Cana will have a significant economic impact on our country's growing tourism," said Dominican Republic tourism minister Francisco Javier Garcia.
The retooled resort will feature 48,000 sf of gaming space, making it one of the largest casinos in the Caribbean. The plan calls for 457 slot machines, 40 tables, VIP lounge, race and sports book and traditional Las Vegas-style offerings such as baccarat, black jack, craps and roulette. The resort also will have a 1,200-seat amphitheater, 60,000-sf spa 65,000 sf of indoor and outdoor meeting and event space, three floating wedding pavilions, 11 pools, lazy river, 15,000-sf fitness center, rock-climbing walls and other sports-related amenities. Guests will have access to a Jack Nicklaus-designed, 18-hole golf course set on 155 acres.
"We're eager to bring the Hard Rock Hotel & Casino brand to the Dominican Republic, and we look forward to establishing this property as a premier vacation and gaming destination in the Caribbean," said Hamish Dodds, president and CEO of Hard Rock International. "Our collaboration with Palace Resorts and their track record of creating the best all-inclusive resorts in the Americas, we are confident this project will be a success."
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ProLogis Signs 378,000 SF of Leases
AMSTERDAM – ProLogis' teams have completed five leases, totaling 378,000 sf, in Germany, Italy, France and Poland.
"We are seeing signs of stabilization in the market, and with well-located, high-quality and modern distribution space throughout Europe, ProLogis is positioned well to both capture new business and continue to serve the ongoing needs of our customers," said Philip Dunne, ProLogis president in Europe.
The largest lease fills 104,000 sf in ProLogis Park Neuenstadt Building One in Untere Kochertal, a trade and industrial park in southwestern Germany. The inbound tenant is a German retailer with operations in 25 countries.
Also in Germany, Honold International leased 67,000 sf in ProLogis Park Augsburg Building Two near Munich. The logistics provider has customers in 22 locations in Germany, Romania, Russia, Slovakia and China.
In other deals, Plenty Market took 81,000 sf at ProLogis Park Bologna in Bologna, Italy while a third-party logistics provider the last 68,000 sf in the 624,000-sf ProLogis Park Clesud Building Seven in southern France. Also, Euro Freight Logistics will occupy 58,000 sf in ProLogis Park Sochaczew Building Five near Warsaw.
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Jones Lang LaSalle Team Sees
2010 Openings in Markets
CHICAGO – In an in-depth look at the global markets, Jones Lang LaSalle's research team believes markets that sustained the greatest hit in economic and property fundamentals will have a leading edge on the recovery. And, corporations with financial muscle are leaning toward buying in 2010 instead of leasing.
The team has tagged London, New York, Tokyo and Moscow as the most likely to experience an initial bounce in capital values from their "oversold levels for prime properties." Jones Lang LaSalle's Global Market Perspective reports that cash-rich investors in many countries are now moving from the sidelines. The impact already is being evidenced in parts of Asia and Europe.
During the third quarter, the JLL team found initials yields fell 25 to 90 basis points in London, Shanghai, Hong Kong and Singapore. "The U.S. remains the exception to this picture of slow improvement, as yields merely slowed their increase or stabilized," the team concluded.
The office leasing environment is blighted by negative demand although construction has been kept in check, according to the report. The hardest hit is the U.S., U.K., most of Western Europe, Australia and Japan. "Although the pace of decline is slowing in most global centers, leasing activity has not found a bottom in either pricing or demand," JLL reported.
The office markets in most of Asia and parts of Europe will bottom out by midyear 2010. Most U.S. markets will hit bottom by the end of 2010. Tenants are being advised to act quickly in markets like Hong Kong and Paris, where vacancies are lower and the construction pipeline is limited.
Corporate tenants are starting to make real estate decisions based on reducing long-term occupancy costs and flexibility for the future, according to the report. Corporate outsourcing and the sale of surplus properties are still part of the equation, but stronger firms are poised to take advantage of 2010's opportunities to acquire, expand or upgrade offices. Not only will pricing be attractive, but there will be leverage for economic and non-economic lease provisions
"Those with strong balance sheets also will be able to buy core assets at attractive values," the team said. "By mid-2010, this activity is likely to be a significant driver of a commercial real estate recovery."
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Morgans, Walton Expand JV
RIVIERA MAYA, Mexico – Morgans Hotel Group Co. and Chicago-based Walton Street Capital LLC have inked a management agreement for the 75-key Hotel Las Palapas, a beachfront property at the heart of Playa del Carmen. The deal takes effect Dec. 15.
In a press release, Walton said the plan is to convert the hotel into a Morgans-branded hotel after economic conditions improve to expand their joint venture partnership. The companies are partners in the Sanderson and St. Martins Lane hotels in London. Hotel Las Palapas is located along Playa del Carmen's 5th Avenue, a strip famous for its collection of restaurants, bars and small shops.
"This deal will allow Morgans to generate income immediately while Walton puts together the development to convert the project into a Morgans hotel," said Marc Gordon, president of New York-based Morgans Hotel Group. The pact carries a five-year term and five-year renewal option.
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Hilton's Doubletree Flag
To Fly in Romania
ORADEA, Romania – In its ongoing expansion in Europe, Hilton Worldwide has gained an inroad for its Doubletree brand, signing a management agreement with Calipso S.A. to raise the flag on a new property in September 2010. The McLean, Va.-based Hilton has two other hotels in the Eastern European country.
Oradea's Doubletree by Hilton will feature 147 rooms and meeting facilities for up to 350 people,, a restaurant, bar, thermal spa and swimming pool. The development site is about one kilometer from the city center.
Hilton has opened nine Doubletrees in the UK, Italy and Slovakia since spring 2008. Its other properties in Romania are the Hilton Sibiu and Athenee Palace Hilton in Bucharest.
"The Doubletree by Hilton Oradea will be the flagship of Calipso S.A's hotel portfolio. We believe that this new hotel is an important milestone in the life of Oradea, a city with great potential in a strategic location in Romania," said Dr. Ioan Cuzman, chairman and CEO of Calipso. Fivestar Hospitality was credited with arranging the affiliation and will participate in the development.
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Starwood Hotels Cuts Ribbon
On Middle East's First Aloft
ABU DHABI – Starwood Hotels & Resorts Worldwide Inc. has opened its first Aloft in the Middle East and only the second one outside North America.
The White Plains, NY-based Starwood has nearly 40 Aloft hotels in the US, China and Canada. In 2010, the hotelier intends to open Alofts in Belgium, India and Thailand. In 2011, the Middle East will gain an Aloft in Riyadh.
The 408-room Aloft Abu Dhabi includes the signature Bliss Spa, which was sold earlier this week for $100 million to Bahamas-based ASteiner Leisure Ltd. The hotel is situated at the heart of the Capital Centre district, a micro-city with 23 trophy office towers, luxury hotels, residential units, retail and a marina. The hotel is connected to the Abu Dhabi National Exhibition Centre, the Gulf's largest exhibition hall, just 20 minutes from downtown Abu Dhabi and 15 minutes from the international airport.
"The hotel's strategic location in the hub of the capital city makes a bold statement about how the brand is taking its innovative, fresh perspective on hotels to the most desirable locations around the world," said Brian McGuinness, Starwood's senior vice president and global brand leader.
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Hines Announces Venture with
Abu Dhabi National Property Co.
ABU DHABI – The Abu Dhabi office of Hines, the international real estate firm, along with Abu Dhabi National Property Company PJSC (ADNP), the real estate arm and subsidiary of the National Bank of Abu Dhabi (NBAD), announced at the recent Abu Dhabi Investment Forum in London, the formation of a strategic alliance to become the UAE’s premier commercial and mixed-use property manager for select real estate projects in the Middle East.
Hines/ADNP will bring a world-class property management standard to the region, initially targeting commercial real estate in Abu Dhabi and Dubai to meet the high demand for professional property management in the UAE and other GCC countries. The alliance will deliver a full range of value-creating property management services at the strategic, tactical and operational levels to institutional owners, high-net-worth individuals and banks involved in real estate.
ADNP is one of the primary real estate property management companies in Abu Dhabi, with a current portfolio of over 8,000 units under management. In addition to providing first-class property management services, ADNP undertakes extensive in-house and external real estate valuation and advisory services.
“ADNP is very keen on working in partnership with the best-in-class, and in this regard we are delighted to have Hines, a prestigious name in property management, as a partner in this new initiative," said ADNP General Manager Graham Hallett. “The combination of ADNP’s extensive local market expertise and Hines’s execution and operating track record will undoubtedly result in superior asset performance. Institutional owners are looking for ways to mitigate risk while adding value to their assets, and we intend to provide a menu of effective solutions,” he added.
“The guiding principles of our platform are quality, integrity and sustainability. We want to be the best-in-class ‘one stop shop’ for real estate owners. Better management results in higher tenant satisfaction which directly affects occupancy and long-term asset value,” said Jurgen Herre, managing director of Hines’ MENA Region. "We are proud that we can provide our experience and international track record to the urban fabric and economy of Abu Dhabi, and can contribute to transforming the 2030 plan into reality," he added.
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Ribbon Cut on 225-Acre Fishing Resort
MALLIN GRANDE, Chile – A US-born couple is marking the grand opening of Patagonia Acres Fishing Lodge, a 6,600-sf anchor for a 225-acre fishing resort on the banks of Lago General Carrera, one of South America's largest lakes.
Chris and Martha Harrison have developed a destination resort for sport fishermen. "Five years in the planning, this is a dream come true for me, and it will be for our guests, too," Harrison said.
The Harrisons' resort sports a private golf course, spa, fitness center, horseback riding and guided fishing tours. It also features a lakefront trio of two-bedroom cabins with living and dining rooms. The development also includes 1.2-acre residential lots that are for sale.
"We provide the most complete and comfortable guided fishing excursions and accommodations in South America, Harrison said. The destination is primed for fly and spincast for trout and chum. The resort is 900 miles south of Santiago on the south bank of Lago General Carerra.
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Doubletree Raising Flag in Sardinia
OLBIA, Sardinia – Hilton Worldwide Inc. and PROMA srl have signed a franchise agreement to plant a Doubletree by Hilton on the popular Italian island. The hotel will open later this fall, giving the McLean, Va.-based hotelier its first property in Sardinia.
Hilton has four brands operating in Italy in 16 locations. The Sardinia hotel is the chain's third one in the country in the past 18 months.
Doubletree's Sardinia hotel will have 124 rooms, full-service restaurant and bar, fitness center and outdoor swimming pool. Its business amenity package includes four fully equipped meeting rooms, business center and WiFi access throughout the hotel.
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ProLogis Leases German Distribution
DUSSELDORF, Germany -- ProLogis, a leading global provider of distribution facilities, announced it has leased a total of 227,000 sf to two customers in southwestern Germany at ProLogis Park Neuenstadt.
"In a challenging market environment, we are very pleased to have signed two new leases - both of significant size - in our German development portfolio," said Christian Bischoff, ProLogis managing director of northern Europe. "This distribution park has received significant interest from both new and existing ProLogis customers for its prime location, modern amenities and sustainable features.."
The third-quarter transactions included leases with:
• Panalpina, one of the world's leading providers of forwarding and logistics services, which signed an agreement for 114,000 sf in Building One at ProLogis Park Neuenstadt. Panalpina will use the space to serve its customers' regional and national distribution needs. This is the fourth lease agreement between ProLogis and the customer; Panalpina now occupies ProLogis distribution space in France, Germany and the United States.
• A leading retail company based in Germany, which signed an agreement for 113,000 sf in Building Two at the park. The logistics provider will use the space to support the distribution needs of its customers in southwestern Germany.
ProLogis Park Neuenstadt is located in the trade and industrial park of Unteres Kochertal (GIK), in the city of Neuenstadt
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188,000 SF Filled in Tokyo Region
TOKYO – Caterpillar Logistics Services Inc. and an unidentified supplier of office products have leased 188,000 sf in ProLogis-owned industrial properties on the outskirts of Tokyo.
Caterpillar Logistics took 95,000 sf at ProLogis Parc Narita III. The company is a long-time tenant of the Denver-based developer in the U.S., Europe and Asia, but it's the first time it's taken some of its space in Japan.
The 570,000-sf ProLogis Parc Narita III is located in Shibayama on land abutting the Narita International Airport. The development is roughly 40 miles north of Tokyo.
ProLogis also leased 93,000 sf to the office products supplier, which occupies 1.2 million sf of the developer's space in the U.S., Mexico and Japan. The newest transaction ropes off a spot in the ProLogis Parc Ichikawa I, a five-story, 1.3 million-sf sustainable distribution center.
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Open: 791-Room Grand Hyatt Macau
MACAU – Hyatt Hotels & Resorts has cut the ribbon on the 791-room Grand Hyatt Macau on the Cotai Strip in the new City of Dreams development.
The non-gaming hotel boasts more than 968,000 sf of function space, making it one of the largest venues in Macau. The Grand Tower has 424 rooms and the Grand Club Tower, 367 rooms and suites, including a 2,960-sf chairman's two-bedroom suite with panoramic views of the city. The Grand Club Lounge, exclusive for guests, features a 250-seat restaurant and bar. Other hotel amenities are a library, two boardrooms, a 23,000-sf ballroom with a 2,500-person capacity; 7,500-sf theater, eight meeting rooms with space for 40 to 120 guests, spa and fitness center, two restaurants and a lobby lounge with Egyptian ivory stone staircase and wine and champagne bar.
The hotel is close to Macau International Airport and Macau Ferry Terminal. Services include complimentary shuttle service to landmarks like the historic city center and UNESCO-listed World Heritage site.
"We feel Grand Hyatt Macau reflects the energy and exciting cultural fusion that makes this former Portuguese colony unique, and a dynamic destination for both individual leisure travelers and MICE groups," said Paul Kwok, general manager of Grand Hyatt Macau. "Grand Hyatt Macau is a truly integrated destination and we feel confident that it will be a huge attraction to MICE organizers."
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Glorious Properties' Residences Get
$4,102 Per SF; More Plans in Works
BEIJING – Glorious Property Holdings Ltd. is off to a roaring start on sales of its award-wining Royal Mansion, a European-style residential development abutting Sunny Park and landmarks such as Wukesong Olympic Center and Beijing International Sculpture Park.
In a two-day period, the developer sold 37 units of its first phase, each residence boasting more than 66,736 sf. Units averaged $4,102 per sf, about 70 percent higher than neighboring projects in the West Chang'an Avenue corridor. The highest price per sf was nearly $4,982, according to the developer's press release.Royal Mansion's build-out will total 1.86 billion sf.
"This reinforces our optimism in the high-end residential market in Beijing and gives us full confidence of achieving even better sales performance by the end of this year," said Cheng Li Xiong, CEO of Hong Kong-based Glorious Property Holdings.
Royal Mansion was named in 2008 to the Top 10 Park Area Properties in Beijing and the year before earned accolades from the Science & Technology Commission, China Real Estate and Housing Research Association, Urban Development Committee of China Real Estate Association and China Construction News.
Glorious Property Holdings also reported it will acquire two high-profile development sites in Tianjin via the purchase of a project company, getting the only two residential tracts in the Guan'gang Lake Forest Resort, a lakefront, ecological development master-planned for 12 zones that include tourism, leisure and health rehabilitation. The acquisition will cost $124.3 million or $208 per sf for slightly more than 144 acres.The west plot is close to Dagang's downtown and neighbors Glorious Property's Tianjin Dagang project. The eastern tract is surrounded by the Olympics Park. A highway is in the planning stages to connect the recreational facilities surrounding the lake.
The developer is mapping out a project of low-density, high-end apartments, townhouses and villas. Pre-sales for the first phase will start in 2011. The resort's development will include large ranches, cruise terminal, golf courses and theaters.
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AMB Leases 271,000 SF in Mexico
MONTERREY, Mexico – San Francisco-based AMB Property Corp. has signed industrial leases, totaling 271,000 sf, for industrial properties at AMB Aqua Fria in Monterrey and AMB Los Altos in Guadalajara.
Arauco Distribucion Mexico took 118,000 sf in Aqua Fria's building two and 120,000 sf in Los Altos' building one as part of its expansion strategy in the country. "Partnering with one property owner in multiple locations creates efficiencies and flexibility for our customers," Gene Reilly, AMB's president of the Americas, explained in a press release.
The Agua Fria leasing activity included a 33,000-sf pact with a leading logistics company for the balance of space in building one. AMB reported that Aqua Fria is now 100 percent filled.
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860,000 SF Leased in Mexico
MEXICO CITY – Denver-based ProLogis has signed nearly 860,000 sf of distribution leases to date this quarter, including 660,000 sf in its development pipeline.
The largest signing totaled 450,000 sf by an unidentified, existing customer that supplies consumer electronics, home appliances and mobile communications worldwide. The company, which also leases space in the U.S., Netherlands and Poland, has leased space in ProLogis Park Cedros-Tepotzotlan Building 10. Another existing ProLogis tenant took 148,000 sf in the 448,000-sf ProLogis Park Toluca. Evenflo Mexico added 62,000 sf to a 73,000-sf lease at ProLogis Park Izcalli Building One in Cuautitlan Izcalli. Also, Fisher and Paykel Healthcare took 20,000 sf at Pacifico Industrial Center Building 13 in Tijuana.
"We are very pleased to have leased a significant amount of distribution space during the third quarter in Mexico," said Silvano Solis, ProLogis managing director and head of Mexico operations, citing its ability to meet customers' demands for "modern, efficient and well-located facilities" despite the challenging economic times.
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ProLogis Fills 341,000 SF in France
PARIS – Continuing an overseas leasing rally, Denver-based ProLogis has filled 341,000 sf of distribution space in France, cutting deals with a trio of two existing tenants and one new one.
Geodis, a subsidiary of French railway, SNCF, leased 136,000 sf at ProLogis Park les Portes de Vemars, located about 18 miles north of Paris. The long-time tenant now leases 3.3 million sf of ProLogis-owned distribution space in Europe.
Transport Breger, also a third-party logistics provider, took 67,000 sf at ProLogis Park Rennes in the Zone d'Activities du Haut Montigne, a special business corridor about 22 miles east of Rennes.
The third tenant's identity is couched, with the landlord merely saying it's a leading manufacturer and retailer that took 139,000 sf at ProLogis Park Clesud in southern France. The existing customer now leases 770,000 sf from the developer in France and the U.S.
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FirstService Expands in Europe
LONDON – FirstService Real Estate Advisors is becoming a cornerstone investor in Colliers CRE, marking its first major push into Western Europe. Colliers CRE has 15 offices in the UK, Ireland and Spain.
FirstService, a subsidiary of Seattle-based FirstService Corp., already has operations in Central, Eastern and Southeast Europe, Russia, Latin America and North America. "This investment will greatly enhance our ability to efficiently and effectively service our global clients," said Douglas P. Frye, CEO and president of the global operations for FirstService REA. "Colliers CRE has an operating philosophy very similar to ours and the combination is a perfect fit."
As part of the agreement, FirstService REA will get two seats on Colliers' board and input to its day-to-day operations of the 730-employee company. FirstService REA has been particularly active in the US this year, most recently opening an office to service the Baltimore-Washington, D.C. metro.
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Nipro Leases 250,000 SF
OSAKA, Japan – The 1.4 million-sf ProLogis Parc Osaka II has jumped to 96 percent occupancy with a long-term lease for 250,000 sf by Nipro Corp.
The deal is the first one between the Osaka-based manufacturer and distributor and Denver-based developer. Mike Yamada, ProLogis' president of Japan, credited the eight-story building's location near the Port of Osaka and its modern design as being the dealmakers.
Nipro makes and distributes medical equipment, pharmaceuticals and glass products. The lease, representing an expansion for the local company, will provide space for light assembly and distribution of products to western Japan.
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Strategic Hotels Gets $54 Million
For Four Seasons Mexico City
MEXICO CITY – Strategic Hotels & Resorts Inc. plans to sell the 240-key Four Seasons Mexico City to Meridia Capital for $54 million or $225,000 per room. If all goes as planned, the deal will close in the fourth quarter.
The Chicago-based seller had projected the hotel would account for $3.9 million of its 2009 EBITDA. When the dust settles on the sale, Strategic Hotels & Resorts estimates it will record a $4.5 million gain. "This transaction, in a market with a significant amount of directly competitive new or under-construction supply, demonstrates the value in our unique portfolio of properties in general, and especially so in Mexico City given the impact of the events surrounding the onset of the H1N1 virus," said Laurence Geller, Strategic Hotels' CEO.
The Barcelona-based buyer's new portfolio piece is situated at Paseo de la Reforma 500. Just last month, the private equity group acquired the 20-story, 189-room InterContinental Hotel in Sao Paulo. It was the fifth asset for Meridia Capital Hospitality I and its third hotel in Latin America.
Meridia Capital's first fund had $150 million of equity when it closed in early 2007. The fund now owns properties in Santiago, Chile, Paris, Thailand and Sao Paulo.
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Morgans Hotel Plants Flag in Puerto Rico
PUERTO RICO – Morgans Hotel Group Co. has secured a 10-year management contract for the 78-key San Juan Water and Beach Club Hotel in Isla Verde.
The resort is part of Conde Nast Traveler's Gold List, with a third-place slot as one of the Top 10 of the Caribbean/Atlantic hotels. The owner plans to pursue development rights to convert the resort to a Morgans-branded hotel with a 30,000-sf casino, according to a press release. The ownership group includes Hotel Development Corp., a subsidiary of the Puerto Rico Tourism Co.
Marc Gordon, chief investment officer for the New York City-based Morgans, pointed out that the agreement builds in immediate income "while the owners put together the development to convert the project into a Morgans hotel."
Jaime Lopez-Diaz, executive director of the tourism company, said the addition of Morgans to the island will attract "a more hip, rich and famous crowd." Morgans gets its management keys
Oct. 18.
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Sustainable Space Wins 314,700-SF Nod
BIRMINGHAM, U.K. – Denver-based ProLogis has leased a 314,700-sf distribution center to the Pallet Network (TPN), one of the U.K.'s leading providers of pallet distribution services.
TPN will occupy Building Four at ProLogis Park Midpoint, exiting a 224,000-sf building and a lease that's due to expire in early 2010. "Our existing distribution hub in Rugby has proven to be an excellent site and has served our business very well. Despite the recession, TPN's business has continued to grow and it has become clear we require a larger facility to ensure our expansion plans can be implemented," said Adam Leonard, TPN managing director. He said there were several sites under consideration, but the ProLogis building matched all requirements, including "minimal environmental impact."
ProLogis introduced sustainable features to reduce the building's energy use by 74 percent in comparison to comparably sized existing building. The developer also secured an Energy Performance Certificate Asset Rating of B (27) and is certified BREEAM Excellent.
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Accor Sells 158 Budget Hotels
In France for $402.4 Million
PARIS – Accor has struck a sale-leaseback, with variable terms, of 158 hotelF1 properties in France for $402.4 million. The 12,300-room portfolio is being bought by OPCI, a property investment trust comprised of a consortium of leading French institutional investors.
Accor signed a 12-year agreement, with six renewal options, and retained management rights for the budget segment portfolio. The terms call for variable rents based on an average 20 percent of revenue, with no guaranteed minimum. Based on 2008 revenue, Accor's annual rent would have been $31.5 million. Through the sale, Accor will reduce its net debt by $277.3 million and the balance added to its cash reserves.
The hotelF1 was introduced to the market in 1984 as Formule 1 and renamed in 2007. Its average room rate is $48.44. About 100 hotels in the portfolio have been renovated since the end of last year.
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JHM Interstate Lands
Its First Hotel in India
Jaipur, India – JHM Interstate Hotels India has won its first management contract in India, getting rights to the 115-room Four Points by Sheraton Jaipur. The contract goes into effect in October.
The hotel is the first in the country to be developed by UK-based Duet India Hotels Ltd. and only the second to raise the Four Points flag in India.Interstate Hotels & Resorts and JHM Hotels Inc. of Greenville, S.C., have an equity interest in Duet. Under the agreement, the joint venture partners have first dibs on management for all Duet-developed or acquired hotels in India.
Jaipur, capital of Rajasthan, is part of India's Golden Triangle, which includes Agra, home of the Taj Mahal. In June, a new international airport opened in the capitol city."India remains one of the world's fastest growing economies, with projected growth of 5 to 6 percent this year despite the global economic downturn," said Thomas F. Hewitt, chairman and CEO of the Arlington, Va.-based Interstate Hotels & Resorts.
The four-story hotel is situated in the new City Square near the city's commercial hub, City Palace, Amber Fort, Hawa Mahal and other popular tourist attractions. It's also within walking distance of high-end retail, restaurants and entertainment venues, including cinemas.The hotel features a full-service restaurant, high-speed Internet, health club and spa plus 2,500 sf of flexible meeting space.
"This is the first of more than 20 projects Duet India Hotels intends to develop throughout India over the next few years, which represents a significant and reliable pipeline of management contracts for us," said Leslie Ng, Interstate's chief investment officer. "Duet is targeting secondary and tertiary cities, areas where we believe the need for hotel rooms is most acute."
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Hyatt At Helm of Cockleshell Bay Resort
ST. KITTS – St. Michael's Foundation Ltd. and Hyatt Hotels & Resorts have penned an agreement to develop a five-star resort in the Caribbean.
The Cockleshell Bay resort will be anchored by a Park Hyatt St. Kitts resort, full-service spa and hillside estates. A 160-berth marina to accommodate sailing vessels up to 200 feet and dock master's building with store are part of the plan as is a Monte Carlo-style casino. Based in Gulfe Juan, France, Camper & Nicholsons International, the world's oldest leisure marine company, will manage the marina for the development team. Cotton and Co. in South Florida will handle sales and marketing of the new resort and Estates at Cockleshell Bay.
"St. Kitts is like no other island in the Caribbean – it is a tropical paradise," said Chris Kanhai, CEO of St. Michael's Foundation. "Our relationship with Hyatt Hotels & Resorts is very special – our mutual commitment to excellence is solid and I know we're leading a new era of tourism in St. Kitts that will benefit guests, residents and the region in many ways."
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ProLogis Fills Another 156,000 SF
TOKYO – Ajinomoto Logistics Corp. has opened the door for expansion, leasing 156,000 sf of distribution space in two parks in the portfolio of Denver-based ProLogis.
The logistics company has signed a 67,000-sf lease at ProLogis Parc Osaka II and 89,000-sf pact for ProLogis Parc Iwanuma I. The new tenant is a subsidiary of Ajinomoto Co. Inc., a leading company internationally for the development and distribution of food and beverage products.
The Osaka building is eight stories, totaling 1.4 million sf. The second location is part of the 436,000-sf Iwanuma I, which was completed in October 2008.
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China Holdings Planning
Vegas-Style Resort City
BEIJING – China Holdings Inc. plans to develop "China Vegas – A New World Resort City" in Inner Mongolia. The build-out is expected to take 10 years.
China Holdings, as master developer and planner, controls 197,864 acres in Inner Mongolia. It has roped off a 24,710-acre block for the first stage of development. The developer estimates the resort city will have a population of one million, with the framework to one day accommodate five million residents.
The massive project will include transportation networks in a high-density plan with provisions for open spaces, retail, hotel, office, entertainment and industrial development. The developer has allotted 4,942 acres for an entertainment district and 1,235 acres for a resort center. The first phase will include commercial buildings, office buildings, residential units, shopping centers, casinos, golf courses, horse-racing track and sundry recreation and entertainment facilities.
China Holdings envisions five-star hotels, themed casinos, pedestrian skyways, boutiques and restaurants. Also planned is a Broadway-style musical theater, Las Vegas-style floor shows, traditional Chinese theater, international and Chinese movie premieres. The sports component will have a golf academy, golf courses surrounded by villas, soccer field and stadium, exhibition hall, stadiums capable of supporting Olympic events, tennis courts, equestrian center, car and motorcycle race tracks.
In its press release, China Holdings said the development will have "a cosmopolitan flavor" embedded with Chinese architectural landmarks and taking cues from architecture in cities like Las Vegas, Paris, London, Rome, Venice, Vancouver, Tokyo, New York and Hong Kong. The development land is near a brand-new airport and served by high-speed rail and freeways. The infrastructure work was completed at the end of 2008.
"As we are creating a world event, a world resort city in China which will grow into billions & billions revenues city in the next 10 to 20 years as magnificent opportunities and contribution to The City, The People, China & China Economy, and to The World & The World Economy," said Julianna Lu, founder and chair of China Holdings.
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Fund Sells Last Asset for $28 Million
FRANKFURT – GI Partners, with headquarters in the U.S. and London, has banked $28 million for a 310,000-sf data center, the last of 25 technology buildings in the portfolio of its first fund. The buyer is Equinix (Holding) BV, a wholly owned subsidiary of Foster City, Calif.-based Equinix Inc.
GI Partners bought Frankfurt Data Center in June 2004. In a press release, the Menlo Park, Calif.-based seller said Fund I sales have realized more than $ 1 billion in cash proceeds from the portfolio disposition, seeded by a $280 million initial equity investment. GI Partners calculates the fund provided a 60 percent gross internal rate of return.
According to GI Partners, 21 assets in the portfolio were contributed to the formation of Digital Realty Trust. The portfolio once included Sunset Gower Studios in Hollywood, Calif., and Yates Group, a pub operator in the U.K. With Fund I now closed, the focus is on GI Partners Fund III, which has secured $2 billion of equity commitments from institutional private equity and real estate investors. As recently reported, the fund invested into a $116 million joint venture with California-based Macerich in its Flatiron Crossing Mall in Broomfield, Colo.
"We are off to a great start in Fund III, with approximately 20% of the committed capital already invested and have a strong pipeline of opportunities," said Rick Magnuson, executive managing director of GI Partners.
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Summa Adds 178,000 SF
GUADALAJARA, Mexico – In an expansion move, Summa Co. will set up a new food distribution location in 178,000 sf of AMB Los Industrial Park, developed by San Francisco-based AMB Property Corp.
"AMB Los Altos Building 2's modern configuration is operationally efficient, and the facility is within a fully enclosed, access-controlled environment which is important to our business in Mexico," said Carlos Ortega, Summa Co.'s operations director.
The AMB development is located in the El Salto industrial submarket of Guadalajara, with easy freeway access to connect to the downtown and international airport. AMB Los Altos totals more than 1.6 million sf, of which 1.2 million is now leased.
"Guadalajara's diverse industrial base and population density makes this a dynamic market and lends strength to the area," said Luis Gutierrez, AMB's managing director in Mexico. AMB has 2.9 million sf in Guadalajara, which is 98 percent leased. The developer's Mexico portfolio totals 9.8 million sf.
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Hines Project Lands First LEED
Industrial Designation in Mexico
SAN LUIS POTOSÍ, MEXICO – The San Luis Potosí office of Hines announced that its newly developed industrial building, EcoLogistics 1, has achieved certification under the U.S. Green Building Council’s LEED rating system for core & shell projects. The 258,800-sf property is the first industrial project and only the third project in the country to earn the LEED designation.
Located in Parque Logístico in the industrial zone of San Luis Potosí, EcoLogistics 1 presents geographic efficiencies for light manufacturing and logistics companies operating in Mexico. The building was developed, is owned, managed and leased by Hines.
Parque Logístico, developed by Hines/Grupo Valoran in 2006, is an industrial and logistics park located on Eje 140 adjacent to the country’s most important highway, Highway 57 (the NAFTA Highway) and the principle north-south railway connecting the U.S. with Mexico. The park has intermodal container terminals that allow cargo to be easily transfered from trains to trucks.
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700-Unit Project Brewing for Haifong
BANGKOK – Preuska Real Estate Public Co. Ltd. has put a plan in motion to develop 700 residential units in Haifong, the third largest seaport city in Vietnam. It will be the company's first project in the country.
Preuska president and CEO Thongma Vijitpongpun has signed a memorandum of understanding to joint venture partner on the project with Do Huu Ha, president of Hoang Huy Services Investment Joint Stock Co. In a press release, Preuska's executives said they will control 85 percent of the new company, Preuska Vietnam LLC, which has a registered capitalization of $10 million.
"We decided to expand our investment portfolios to Vietnam because it is a populous nation with a very high demand for residential property," Thongma said. "Haifong is also home to a number of industrial facilities responsible for producing various kinds of machinery, and the city has maintained a relatively fast economic growth rate."
Prasert Taedullayasatit, Preuska's director and chief operation officer, said the first project will take up about 57 acres. The developer is targeting middle-income buyers.
Permits are pending. If all approvals are secured, construction could start by year's end on the townhouses and four-story condominium buildings.
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Logistics Firm Leases 154,000 SF
PRAGUE – Geis Logistics has leased 154,000 sf of new distribution space at ProLogis Park Ostrava, a two-building development of 710,00 sf just 12 miles from Ostrava International Airport.
The new tenant has leased part of building two from the Denver-based developer. "The Moravian region of the Czech Republic is an important location for the Geis Group," said Dr. Johannes Sollner, managing director for Geis Holding. "Our new state-of-the-art facility in ProLogis Park Ostrava will serve both as a central warehouse for our operations in the Czech Republic and Slovakia, and a gateway into the Eastern European markets."
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ProLogis Fills 382,000 SF in UK
BIRMINGHAM, England – In an expansion of their relationship, ProLogis and Marks & Spencer, a leading UK retailer, have signed a 382,000-sf lease for ProLogis Park Stoke.
"ProLogis' flexibility has resulted in the smooth and swift completion of this third-quarter transaction and has provided Marks & Spencer with a new building that provides additional distribution space in Stoke-on-Trent," said Jonathan Buck, UK first vice president of development for Denver-based ProLogis. The distribution park is located along Campbell Road, about one hour from downtown Birmingham.
In Bradford, ProLogis is building a one million-sf distribution center for the retailer. Occupancy is slated for late 2010.
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Carl's Jr. Planting Flag in China
SHANGHAI, China – Kicking off an eight-year plan, CKE Restaurants Inc., parent of the xxx-unit Carl's Jr., has opened the first of more than 100 restaurant sites proposed for Shanghai, Beijing and Tianjin plus the provinces of Zhejiang and Jiangsu.
Star Food F&B Management Co. Ltd. will operate the Carl's Jr. sites in China. Star Food is a Singapore-based joint venture between BreadTalk Group Ltd. and Aspac F&B International Pte. Ltd., also the Carl's Jr. franchisee in Singapore and Malaysia.
The Carpinteria, Calif.-based CKE's executive team said China holds the potential for more than 1,000 restaurants over time. The restaurateur has 332 restaurants globally, including its Hardee's brand, but expects to hit 665 within five years.
"This is a very exciting development for our company since China represents a tremendous growth opportunity," said E. Michael Murphy, president of CKE Restaurants.
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ProLogis' Development Drive
In Asia Nabs 616,000-SF BTS
OSAKA, Japan – Denver-based ProLogis and joint venture partner, Shimizu Corp., will build a 616,000-sf distribution center for Senko Co. Ltd., earmarking five acres in its existing land bank for the existing tenant's expansion.
"ProLogis' land bank in Japan includes sites in the country's most strategic distribution locations," said Mike Yamada, president for ProLogis in Japan. "The implementation of this project also enables us to monetize our land bank with reduced risk, which is directly in line with our new approach to development."
ProLogis' executives have laid out a plan to keep the development wheels moving with joint venture partners at its side. As part of the Senko agreement, ProLogis will earn a construction management fee. Its JV agreement allows the developer to continue to own and manage the finished product, receiving asset and property management fees in addition to its share of the annual rent.
Work begins this month on the five-story ProLogis Parc Maishima IV. Completion is penciled for summer 2010, delivering a new distribution hub for the tenant. The development site is four miles from the Port of Osaka, less than six miles from the city's central business district and 17 miles from the Kansai International Airport.
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AMB Fills 65,000 SF in Paris
PARIS – Lincoln Electric has signed a 65,000-sf lease at AMB Port of Rouen, taking an under-construction 275,000-sf distribution center to 100 percent occupancy for San Francisco-based AMB Property Corp.
The building will deliver in one month. Earlier in its construction, AMB roped off 210,000 sf for Schenker France and Necotrans."The geographic position of the Port of Rouen, between Paris and Le Havre, makes it extremely important to our global customer base - the leaders in distribution, logistics and retail," said Francois Rispe, AMB's vice president and general manager in France.
Michael Jany, Lincoln Electric's operations director, credited the nod to the building's proximity to the firm's French headquarters. He classified the building as "an ideal fit" for Lincoln Electric's strategy to grow market share in the region.
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China Housing Steps Up Work
On 1,015 Residential Units
XI'AN, China – China Housing & Land Development Inc. has drawn $17.5 million from a $147 million credit line with China Construction Bank to advance work on JunJing II, taking its total to date to $30.5 million for the 1,015-unit residential project.
The developer began work in the second quarter on the 1.2 million-sf JunJing II. Delivery is penciled for second quarter 2011."As we generate future cash from unit sales of the JunJing II Phase 2 project, we will apply the proceeds to pay down our credit line and keep our debt/equity ratio at a healthy level," said Pingji Lu, China Housing's chairman.
Lu labeled the project's timing as being "well-timed" since there has been an uptick in housing demand in the Xi'an region. "We are uniquely positioned in the Xi'an market and this project is a higher end project that can result in higher selling prices compared with some of our other completed real estate projects," he added.
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ProLogis Forges Development Alliance
DENVER – ProLogis has inked a development alliance with Japan Logistics Fund Inc. and Mitsui & Co. Group to firm up a plan put into action in November 2008, opening the door of its Japan portfolio to joint venture partners.
Denver-based ProLogis will retain some of its Japan assets on its balance sheet while moving others into the joint venture arrangement. The move is designed to reduce risk while continuing to advance development plans with strategic partners, according to the firm's press release.
ProLogis will continue to manage and lease the entire portfolio, collecting fees related to the services. The developer and Japan Logistics Fund are still working out the details for the co-owned portfolio, but the formal agreement will include additional investment opportunities
ProLogis said there is no exclusivity clause, allowing talks to proceed for a separate development agreement with Mitsui & Co., which also holds controlling interest in the asset management company of Japan Logistics Fund. Meanwhile, ProLogis is free to continue its ongoing capital campaigns with other third-party sources.
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ProLogis Starts 503,000-SF
Project With Buyer in Hand
NEWHOUSE, Scotland – ProLogis, gaining more momentum from its client base, this fall will start work on a 503,000-sf distribution center for a leading UK retailer, which now occupies more than 300,000 sf at ProLogis Park Coventry in the West Midlands, UK.
At completion, ProLogis will sell the 32-acre project to Canada Life Ltd., a wholly owned subsidiary of Great-West Lifeco. "Canada Life is pleased to commit to the purchase of this distribution facility," said Michael White, investment director at Canada Life, citing ProLogis' development track record. "As such, we have been committed to this project early on and look forward to adding this facility to our growing portfolio upon its completion next summer."
The distribution center will be situated next to junction six of the M8 motorway, Scotland's primary east-west route connecting the capital city of Edinburgh to the city of Glasgow. The building has been designed with green features, including rainwater harvesting and a sustainable urban development drainage system. Denver-based ProLogis is promoting the deal as the largest ground-up build-to-suit agreement signed in the UK in more than 10 months, but is keeping the retailer's identity under wraps.
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Pelli Clarke Pelli Gets $67 Million HQ Project
HO CHI MINH CITY – Pelli Clarke Pelli Architects will design the Ho Chi Minh City headquarters of Vietcombank. The preliminary cost is $67 million.
The New Haven, Conn.-based architectural firm is tasked with creating a 35-story, class A office building laced with office space, retail, restaurants and parking. It is the firm's first project in the country. Vietcombank, also called the Bank for Foreign Trade of Vietnam, is the country's flagship banking institution.
"The site is one of the most prominent in Ho Chi Minh City, with views to the Saigon River and overlooking an important city square," said Fred Clarke, senior principal of Pelli Clarke Pelli Architects. The tower will sit on the west bank of the Saigon River, facing Me Linh Square. When it's completed, it will be the tallest building on the square.
If all goes as planned, construction will start in 2010 and wrap up in 2012. The project is being touted as "a symbol of the growth and development" of the city and the bank. The headquarters development is being led by Vietcombank-Bonday-Benthanh Joint Venture Co. Ltd.; Bonday Investments Ltd. of Hong Kong; and Benthanh Tourist Service Co.
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Distressed Sales Jump Worldwide
HONG KONG – The Royal Chartered Institution of Surveyors has confirmed a spike in distressed sales worldwide in recent months. Executives from 27 countries were polled, with the results showing a 75 percent increase in distressed sales.
The new survey shows South Africa had the biggest spike, with the U.S., New Zealand and Malaysia right behind. As the market is well aware, there's also been an increase in specialty funds that have seizing the opportunities of the times.
"One obvious reason for current interest must undoubtedly be the scale of property price declines which have occurred in some of these markets since the onset of the credit crunch drawing bargain hunters in," RICS concluded in its press release. "Furthermore property yields, compared to other asset classes, are starting to offer value in some markets when compared to historical averages which may start to attract the interest of long term equity players such as life and pension funds."
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Forest City Wins San Juan Project
PUERTO RICO – With more than 30 proposals on the table, the Puerto Rico Department of Economic Development and Commerce and the Puerto Rico Tourism Co. have selected Forest City Enterprises Inc. as its program manager for a 100-acre redevelopment of San Juan's waterfront district.
Cleveland-based Forest City will develop the roadmap for a 21-block development of residential, hospitality, office and retail space, including parking, public green space and a marina. The development, with two miles of waterfront, sits east of the historic Old San Juan district on the San Antonio Channel.
"This is precisely the type of project - including elements of urban infill, revitalization and waterfront redevelopment - that Forest City has experience with and does well," said Charles A. Ratner, Forest City president and CEO. ""We are honored to be selected and extremely excited to provide our full array of development management services for the redevelopment of San Juan's waterfront." The definitive agreement is expected to be signed within the next several weeks.
The Forest City team included San Juan-based PG Engineering Solutions and Strategic Advisory Group of Atlanta. Forest City and the economic development department will create a full development advisory team in the future.
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Developer Begins $120 Million Grand Quarter
BATAM, Indonesia – Ground has broken on the $120 million Grand Quarter, a "green" mix of residential, retail and entertainment space on 39.5 acres in Batam Centre.
PT Grand Uway Development is the developer, with PT Pratama Widya as the general contractor. The foundation work for the $50 million phase one will take nearly five months to complete. The Grand Quarter Condotel is an 11-story design with 280 rooms and a helipad. It will neighbor a waterpark and a convention center with capacity for 3,000 people. The first phase includes a 17-story apartment building, sports mall and lifestyle center.As the island's largest development, Grand Quarter's first phase will take two years to complete, with the second phase rolling out over the next five years, according to the developer's Web site. A shopping mall, lifestyle area and office block make up phase two.
Totonafo Lase, chief operation officer Grand Quarter, describes Batam as a cross-cultural hub brimming with economic potential, citing its Free TradeZone status as added incentive. In a press release, the developer reported investment in Batam tourism is nearly 16 percent or $800 million, all from private capital sources. The city has been designated as a "meeting, incentive, convention and exhibition area" by the Republic of Indonesia's department of culture and tourism.
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Brinker Sets Sights on Russian Federation
MOSCOW – Dallas-based Brinker International Inc. has struck a development agreement with Trio's Group Ltd. to open 25 Chili's Grill & Bar locations in the Russian Federation. The developer has until June 2017 to open the restaurants.
Trio's Group is planning to cut the ribbon on its first restaurant in November 2010 in Moscow. The development partner is a privately held company headquartered in Geneva that was formed exclusively to build and expand the Chili's brand in Russia."We're proud to team up with Trio's Group to extend our international presence into one of the world's largest consumer markets," said John Reale, president of global business development for Brinker International. "Russia offers vast potential for the Chili's brand."
Brinker International has 203 locations in 29 countries and two territories outside the U.S. Its goal by 2014 is to have 500 restaurants outside the U.S.
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AMB Fills 102,000 SF in Madrid
MADRID – AMB Property Corp. has completed a pair of leases to fill 102,000 sf in AMB Barajas Logistics Park beside Madrid's Barajas International Airport.
Switzerland-based Panalpina Group is taking 59,000 sf in an expansion of its Madrid operations. Newrest, a catering company with an in-flight division, has reserved 43,000 sf for the operations headquarters in Spain and Portugal as well as its primary warehouse and food preparation hub.
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226,042-SF Mall Marks Lease-Up
TAIYUAN, China – China Growth Development Inc. has reached 100 percent occupancy in its 226,042-sf, five-story Xicheng Shopping Mall's phase two.
"The tenants normally pay in advance for up to a 10 year lease period, and this is a significant factor in reducing China Growth Development Inc.'s exposure to fluctuations in the commercial real estate market," Sam Liu, COO of China Growth Development, said in a press release. The lease-up deal added $1.9 million to the till in annual gross revenue.
China Growth Development owns six malls in Shanxi Province. In the next three years, it plans to acquire two more centers and exercise development rights in its portfolio.
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CBRE: Global Markets Show
Signs of Stabilization, Upticks
LOS ANGELES – CB Richard Ellis, digging deep into the global recession, confirms the freefall has ended and stabilization for many nations is at hand. In the U.S., the road back will take longer than initially projected.
CBRE's new report – "Back from the Brink…But What Next?" – uncovers some positive developments, all outside the U.S. bounds, despite ongoing indicators of weak market conditions. "From a regional or country-by-country economic viewpoint, conditions vary widely," wrote Dr. Raymond Torto, CBRE's chief global economist. "Debate is raging over the shape of recovery and whether we will ever see a return to earlier healthy – or whether there has been some permanent structural damage that will result in what some call a new normal."
Canada's Central Bank already has declared its recession is over. Investment sales in Asia are picking up, including residential. In the Pacific region, 18 months of market turmoil appears over as indicators improve and bolster consumer and business confidence after reaching their lowest points in nearly 20 years. London too has experienced an uptick in investment activity although its office leasing has yet to gain traction. In Europe, the Middle East and Africa, investment sales also are inching up and is expected to continue north in fourth quarter. The U.S., though, is a far different story, with no signs of recovery on the immediate horizon, researchers concluded.
"It is obvious that countries most burdened with weak credit institutions are in for a longer recovery period than others. While the severe recession of the last year was synchronized across the globe, the recoveries will widely vary, determined mostly by the strength of a country's banking system," Torto forewarned.
Like others in the industry, CBRE eyed the impact on property values. Researchers found prices plummeted 35 percent to 50 percent from the peak levels of 2007-08. The rate of decline varied with product type, location and asset quality. "In many markets, this process of value adjustment is far from complete," Torto said.
Global trade and manufacturing reflect the severity of the setbacks, with record-setting lows taking place on both fronts for the past year. Manufacturing is predicted to fall 10 percent this year while global trade is down by one third in a year-over-year comparison.
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$72 Million Buy, Redo in Works
LONDON – TJAC International has secured $72 million to buy and renovate two multifamily properties in the Bloomsbury area of central London.
Holliday Fenoglio Fowler L.P.'s Anthony Cutone, a director in Boston, placed the loan with CTL Capital LLC. Andrew Mann, a managing partner with Boston-based Triad Group, represented TJAC International, a residential and retail development group.
TJAC's new properties are the 53-unit Byron Court, a five-story building at 24-36 Mecklenburgh Square, and 74-76 Guilford St., which will be retrofitted with 19 residential flats. The assets are located close to two London Underground stations and a number of hospitals and academic institutions.
The Triad Group was founded in 1985 by the late Richard Sternberg, who built the company into a retail real estate powerhouse in the U.S. Now led by Michael Sternberg and Mann, Triad's 2009 focus is on building an international presence as a full-service real estate firm.
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Recession Wreaking Havoc
On Caribbean Hotel Market
ATLANTA – PKF Hospitality Research, revising its outlook for the Caribbean, predicts that 51 hotel projects will be sidelined this year due to the capital markets and the downward pressure on sector fundamentals.
PKF's revised Caribbean Trends shows that the region's profits plummeted 16 percent in 2008. "Even though Caribbean hotel managers were able to cut expenses by 1.1 percent in 2008, it was still not enough to offset the 4.5 percent decrease in total revenue," said Scott Smith, MAI, senior vice president of Atlanta-based PKF Consulting.
"Given the poor market conditions observed this year, further profit deterioration is expected in 2009," PKF noted in a press release. Hotel operators, though, have implemented strategies such as incentive packages and specific geographical marketing to help drive business.
According to PKF, utility and insurance costs rose 9.1 percent and 6.3 percent, respectively, to come out nearly as much as the culprit as the recession, which has stalled projects or stopped construction. PKF cited Lodging Econometrics, which reported 105 projects with 22,136 rooms were underway. Of those, 54 are coming out of the ground and the remaining projects are expected to be delay until the capital markets free up hospitality financing.
PKF's team explained many Caribbean mixed-use projects historically have relied on deposits received from the pre-sale of residential units to help finance construction of the lodging component. "Deposits from residential buyers are no longer sufficient enough to cover the financing of hotels. This business model is no longer viable," Smith said.
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ProLogis Funds Repackage
Nearly $396 Million of Debt
DENVER – In an ongoing debt repackaging, ProLogis has secured more than $395.85 million for its European funds from two German banks, Munich-based Deutsche Pfandbriefbank AG, formerly Hypo Real Estate.
The 23-property portfolio of ProLogis European Properties Fund II is collateralizing more than $217.6 in two loans. The largest financing is a $155.47 million agreement that was sealed at a 55 percent loan to value, fixed-rate interest of 4.44 percent and July 2012 maturity. The smaller loan carries a 66 percent LTV, 4.45 percent fixed-rate interest and June 2013 maturity.
Denver-based ProLogis also won a $178.1 million financing, with 24 properties in Central Europe underwriting the agreement. The loan is a three-year extension of a secured bank loan set to expire in March 2010, according to ProLogis' press release. The new debt has a fixed-rate interest of 5.24 percent and an initial LTV of 55 percent. In structuring the new deal, ProLogis cut $35.3 million from ProLogis European Properties Fund's total debt.
"These secured financings continue the positive momentum achieved in addressing our property fund financing requirements," said William E. Sullivan, ProLogis CFO. "We are pleased to expand our relationship with Deutsche Pfandbriefbank and to add a new lender to our sources of debt financing."
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Starwood Debuts St. Regis Mexico City
MEXICO CITY – Starwood Hotels & Resorts Worldwide Inc. has swung open doors on the 189-key St. Regis Mexico City along the exclusive Paseo de la Reforma.
Owned by Grupo 818, the hotel is the brand's first downtown hotel in the region, with a development site overlooking the Plaza of Diana and close to the city's financial district and landmark Historic Center. Nearby are the Anthropology Museum, Museo Frida Kahlo, Museum of Modern Art-Mexico City and Rufino Tamayo Museum.
The hotel was designed by renowned architect Cesar Pelli and the Yabu Pushelberg architectural firm. Amenities include a signature Remede Spa and three signature restaurants."“The opening of the St. Regis Mexico City not only launches our most exclusive brand in Mexico City, but also reaffirms our deep commitment to the country with which we have both a long history, as well as strong future growth plans," said Osvaldo Librizzi, president of Starwood Hotels & Resorts Latin America.
The White Plains, N.Y.-based hotelier's new gem stands 492 feet, with floor-to-ceiling glass panes and materials crafted by traditional Mexican artists. The hotel boasts more than 12,211 sf of indoor meeting and event space: a 9,000-sf Astor Ballroom, 2,600-sf Diamond Ballroom and four breakout rooms.
The hotelier is focusing on strengthening its Latin America footprint, with the St. Regis Mexico City becoming its second in the country. It also is developing the St. Regis Kanai in the Mayan Riviera and St. Regis Buenos Aires in Argentina.
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Japanet Leases 327,000 SF for Consolidation
NAGOYA – Japanet Takata, one of Japan's largest direct marketing and TV shopping companies, has leased more than 327,000 sf at the AMB Kasugai Distribution Center to set the stage for a consolidation of two locations in the region.
Michael A. Evans, AMB's managing director in Asia for San Francisco-based AMB Property Corp., credited the win to the "strategic location and highly functional facility." The 986,000-sf, multi-story industrial building is located in the Akechi-Kasugai industrial area of Nagoya. According to the developer, it was the first logistics facility to earn certification by the Comprehensive Assessment System for Building Environmental Efficiency for sustainable design.The consolidation will allow the logistics provider to handle more than double its current sales volume, said Akira Takata, Japanet Takata's president.
"This transaction is a prime example of the continued need for quality distribution and logistics facilities supporting Japan's ongoing reconfiguration to a modern supply chain," Evans added. More 10.5 million sf of AMB's 16.2 million-sf portfolio in Asia is located in Japan.
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40 Million-SF Government
Portfolio in CBRE's Hands
TORONTO – In a resounding win for CBRE Richard Ellis Group Inc., Ontario Realty Corp. (ORC) has picked CBRE Canada to provide management, consulting and lease administration services for the 40 million-sf portfolio of Ontario's provincial government.
The outsourcing agreement was the source of a fierce competition among brokerage firms. "We are grateful for the confidence and trust that have been conferred upon us by ORC," said Stefan Ciotlos, president of CB Richard Ellis Canada.
Among CBRE's duties is to implement sustainability programs aimed at LEED certification of properties. Greg Dadd, COO of Toronto-based ORC, said the single-service provider agreement "will allow us to take our property and land management to the next level of service performance that is on par with the best in the business." CBRE Canada's duties also include property and facilities management, project management and transaction management.
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RICS: Sharpest Decline
In Rents in Five Years
NEW YORK – The Royal Institution of Chartered Surveyors has clocked the sharpest decline in commercial rents worldwide in five years. Singapore, Ukraine, Spain and Ireland felt the greatest pain during the second quarter.
"Rental declines will weigh on property pricing across many developed economies into 2010 reflecting both rising availability and weaker labor markets," RICS chief economist Simon Rubinsohn in the RICS Global Commercial Property Survey. "The dearth in global finance continues to impede investment activity with transactions in decline across more than 80 percent of countries surveyed."
Tenant demand is still falling in the US, but the pace of decline is slowing. Regardless of country, RICS' 419 executives in the poll predicted the decline will continue for some time to come.
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SWA Group Tops Peers
For Premier Assignment
MONTERREY, Mexico – As the winner of an international competition, San Francisco-based SWA Group will be providing master planning and landscape architecture for the 247-acre campus of the University of Monterrey.
SWA's charge includes the first phase of site design for the $34.5 million, 94,000-sf Art and Design School, now being designed by Pritzker Prize winner, Tadao Ando. SWA's mission will focus on sustainability issues such as increasing the campus' accessibility for pedestrians, bicycles and transit services and reducing vehicular traffic. SWA's planning also will focus on low-maintenance landscaping, site-design strategies for student-faculty collaboration and use of indigenous plant materials.
"The landscape architecture and site design effort for UDEM is both a challenge and an honor that we are thrilled to be undertaking," said Rene Bihan, the San Francisco-based managing principal overseeing the SWA design team. "We will be working with the architect and the university to provide a proper landscape backdrop to what is considered one of the most significant architectural buildings in all of Latin America, while also helping the university move its campus to a higher level of sustainability."
The architecture, planning and urban design firm has completed related projects in the region, including Las Ventanas in Cabo San Lucas. Other accolades include the Fort Worth Museum of Modern Art, California Academy of Sciences in San Francisco, Stanford University, Soka University and Tokyo University of Foreign Studies.
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Cedar Fair To Net $50 Million
From Canadian Land Sale
TORONTO –Cedar Fair Entertainment Co. will net $50 million from the sale of 87 acres of surplus developable land adjacent to Canada's Wonderland on the outskirts of Toronto. The sale to Vaughan Health Campus of Care is slated to close in the third quarter.
The Sandusky, Ohio-based seller said the plan is to use all net gain to lower its debt. "The sale of this land is another step in our commitment to reduce our debt and strengthen our financial position for the long term," said Dick Kinzel, Cedar Fair's chairman, president and CEO.The company used the press release to update shareholders and analysts about declining revenue, which was off 12 percent or $62.3 million as of last Sunday since last year at this time. Cedar Fair pegged preliminary revenue at $452.6 million. Park visits were down 11 percent, factoring out to 1.2 million fewer visits in the past year. Out-of-park revenues, including resort hotels, were slid from $56.2 million to $50 million since July 2008.
"The decrease in attendance and revenues is due in part to fewer operating days year to date, and the closing of Star Trek: The Experience in Las Vegas in late 2008, as well as unusually poor weather conditions at several of our parks during the months of May and June and softness in the regional economies in which we operate," Kinzel said. "We anticipated this would be a challenging year for our operations when compared with our record-breaking results in 2008." He said there were 39 fewer operating days from January to June this year, but the loss will be offset in the last half of this year by adding 70 days to its operating season.
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ProLogis, Kirin Plan 382,000-SF Project
EBINA, Japan – ProLogis will jump-start work this month on a 382,000-sf build-to-suit distribution center for Kirin Logistics Co. Ltd., one of Japan's largest third-party providers for the beverage and food industries.
ProLogis has penciled a spring 2010 completion for the 10-acre project. As part of the agreement, the Denver-based developer will earn construction management and property management fees for Kirin's new building.
Kirin signed its first lease four years ago with ProLogis, taking 539,000 sf near Osaka. "Kirin has been in need of quality distribution space near its beverage factory for years, but until now it had not been able to find the right location or facility," said Mike Yamada, ProLogis' president in Japan.
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Team in Place for 400-Acre Resort Plan
PANAMA – Chicago-based Amble Resorts, hoping to break ground in 2010, has assembled an all-star cast of professionals for its new eco development, the Resort at Isla Palenque.
At completion, the Panama resort will feature a 90-room boutique hotel, 200 homes, restaurants, spa, discovery center, gift shop, observation tower, infinity pool and event space set on 400 acres with 95 percent of the land mass to be preserved in its natural state. "While we will manage the overall development process, it's critical to the project's success for us to work closely with highly regarded, internationally savvy architects, market analysts, and other consultants," explained Amble Resorts' founder and president Ben Loomis.
Amble Resorts has added RCLCO as its real estate advisory firm; Design Workshop for land planning and landscape architecture; 4240 Architecture Inc. for site-specific details; East Bay Group for all coastal, civil and utility engineering; Mallol I Mallol, one of Panama's largest architectural firms; Morgan and Morgan as legal counsel; and Panama Environmental Services.
Amble Resorts plans to start with a 30-key boutique hotel of semi-detached cabanas and 30 single-family homes on two-acre tracts. At completion, the resort will include a small organic farm, recreational structures, suspended canopy walks, marina and more than 10 miles of trails.
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200,000 SF Roped Off in Japan
TOKYO – SEI Logistics Network Co. Ltd. And Kawataki Co. Ltd. are taking 134,000 sf and 66,000 sf, respectively in the ProLogis Parc Zama I, a 1.2 million-sf building that delivered late last month.
SEI Logistics is one of Japan's largest providers. Kawataki is a leading household goods company. Denver-based ProLogis credits the park's location and expressway links to Tokyo, Nagoya and Osaka as chief dealmakers in addition to its state-of-the-art seismic isolation structure and photovoltaic array. Also in ProLogis Parc Zama I is Arata Co., Ltd., a wholesale distributor and third-party logistics provider, which leases 190,000 sf.
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Hilton Hotels Gaining More Doubletree Sites
LONDON – In a double play, Hilton Hotels Corp. has signed franchise agreements for Doubletree properties in Bristol and Milton Keynes. The hotelier's goal is to have 10 Doubletree-flagged hotels in the portfolio by year's end.
"These two signings will bring the number of UK Doubletree properties to seven," said Patrick Fitzgibbon, senior vice president of development for Hilton Hotels-Europe and Africa. The Doubletree by Hilton Bristol South will open by year's end, a 72-room conversion of the Cadbury House Hotel and Country Club, owned by Sanguine Hospitality, which is marking its second rebranding with Hilton. The owner unveiled a Doubletree conversion in Chester last March.
The second pact calls for Hotel MK to build a 127-key hotel near the home stadium of MK Dons Football Club. The project will be the first Doubletree hotel to be integrated into a sports complex, according to the Washington, DC-based hotelier's press release. The design will feature several rooms on the pitch side that can double as executive suites during major events. The hotel also will open before 2009 ends.
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Amsterdam Facility to be Built for LG Electronics Sub
AMSTERDAM-- ProLogis will develop a new, 554,000-sf (51,500-square-meter) distribution facility in The Netherlands for Hi-Logistics, a wholly owned logistics subsidiary of LG Electronics.
"Since October of 2008, we've taken some major steps to reduce the overall level of risk in our business," said Walter Rakowich, ProLogis chief executive officer. "A part of this process has been to redefine how we approach new development - focusing more on development management opportunities and build-to-suit transactions utilizing our land bank, and when possible, investing our capital alongside that of our partners and customers."
ProLogis will build the facility on a 20-acre (eight-hectare) parcel of land it currently owns in the city of Oosterhout, one of the main logistics hubs in The Netherlands. Upon completion of the facility, the project will be contributed to ProLogis European Property Fund II, thereby generating proceeds and reducing risk to the company.
Hi-Logistics will use the space to distribute LG products regionally throughout Northern Europe. While this is Hi-Logistics' first lease agreement with ProLogis, LG Electronics is one of ProLogis' largest customers and currently occupies a total of approximately 2.6 million square feet (243,300 square meters) of distribution space with the company across the United States and Europe.
Construction on the facility will commence in July 2009, and is expected to be completed in the spring of 2010. ProLogis has additional land at the site with the ability to support another 431,000 sf (40,000 square meters) of future distribution space.
With a 7.1-million-sf (660,800-square-meter) portfolio, ProLogis is one of the largest providers of distribution space in The Netherlands. Other customers in the region include DHL, UPS, Antalis and Geodis.
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ProLogis Deals Lock Up 405,000 SF
MEXICO CITY – With manufacturing starting to shift to Mexico from China, Denver-based ProLogis has leased 405,000 sf of distribution space to two new tenants.
Autotek Magna, an international automotive parts supplier, took 172,000 sf in building one at ProLogis Park Izcalli in Cuautitlan Izcalli, about 20 miles north of Mexico City. According to a press release, the company will use the space to stamp and assemble parts for Ford Motor Co.'s Fiesta plus distribute to its nearby manufacturing plant.
In Juarez, MCS Industries, a manufacturer of picture frames and wall decor, leased 233,000 sf at Centro Industrial Juarez building 11. The park is positioned close to Juarez International Airport, Mexico's Interstate 45, El Paso's Border Highway and U.S. Interstate 10.
"We are continuing to see production lines move south of the Mexico/United States border in an effort to reduce costs and tap a highly skilled labor force," said Silvano Solis, ProLogis managing director and head of Mexico operations. ProLogis' Mexico portfolio spans 19.1 million sf in 12 markets.
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AMB Fills 440,000 SF in Germany
HAMBURG – In a round of new deals, San Francisco-based AMB Property Corp. has filled a 328,000-sf industrial building in a renewal and expansion of BSN medical GmbH, a leading global medical device company.
The new terms kicked in at the beginning of this month. The tenant renewed 210,000 sf and took the balance of the AMB Hausbruch Industrial Center in Hamburg. Mo Barzegar, AMB's managing director in Europe, said the building was bought to be razed and the site rebuilt with a modern distribution center, but instead ended up expanding the 10-year customer to meet its immediate needs.
"We are extremely pleased that AMB was able to offer us long-term accommodation for our production center at this strategic location, which is close to our Global R&D facility and BSN's head office, ensuring both close communication and a strong talent base," said Dr. Claus-Hermann Wiegel, managing director of BSN medical. The industrial park is located about one mile from the Altenwerder Terminals of the Port of Hamburg and five miles from Hamburg city center.
AMB also leased 112,000 sf to a cargo transportation company at its AMB Altenwerder Distribution Center 1 near Hamburg's container terminal Altenwerder, rail spurs and the A7, providing multimodal access to customers.
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Port Olpenitz JV Marches
Forward on Resort Plan
KAPPELN, Germany – Dallas-based American Realty Investors Inc., Port Olpenitz GmbH and HarmInvest GmbH have unveiled the first residential model for their 425-acre Port Olpenitz resort in northeastern Schleswig-Holstein.
The acreage, once the Olpenitz naval base, sits between the mouth of the River Schlei and the Baltic Sea. At build-out, Port Olpenitz will have 1,000 vacation homes, 400-room hotel with marina, 2,500 docks and an 18-hole golf course in a bustling port village setting with additional mixed uses. The JV has unveiled a two-story model, totaling 1,300 sf, in a two-bedroom, two-bath floor plan with sauna.
Prime Income Asset Management LLC, parent of American Realty Investors, and its partners are seeking zoning changes after working out mutual concessions with several environmental associations, according to a press release about the development. The changes call for the construction of 300 additional homes between the harbor and newly designed golf course and placing harbor-fronting vacation homes 500 to 1,500 feet from the shore in order to maintain the land reserve.
"Port Olpenitz is a unique example of how the interests of the developer and the interests of the environmentalists can both be met when we work together to find common ground. Our resort will provide exclusive one of a kind vacation homes, and at the same time preserve and protect the surrounding environment," explained Jaksa Harm, managing partner at Port Olpenitz GmbH.
The newly created reserve will provide unobstructed ocean views to Denmark and complete privacy on the northern boundary. "We have always aimed to preserve the environmental beauty of the area and the agreed conditions between our company and the environmentalists will benefit everyone," said Gene E. Phillips, adviser to Dallas-based Prime Income Asset Management.
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CBRE Lands Nissan Account
LONDON – Nissan Europe S.A.S. has awarded its first contract for transactional and consulting support in its European region, signing on with CB Richard Ellis Group Inc. to expand a business relationship that began in July 2007 in North America.
CBRE will act as Nissan's strategic property adviser. "The appointment of CBRE is an important step in the development of our integrated global business support infrastructure," said Mark Steele, Nissan's general manager in Europe. He cited the demands of operational efficiencies in today's business climate as the trigger for the outsourcing decision.
"Current market conditions represent a significant opportunity for occupiers to reduce their exposure to real estate risk and cost through leveraging a unique set of property market dynamics," said Matthew Pullen, head of CBRE's global corporate services for the EMEA region. "Property markets globally continue to favor the occupier with falling rents and increased vacancy in many markets."
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ProLogis, DHL Complete
264,200 SF of Leases
AMSTERDAM – ProLogis and its largest customer in the world, Deustche Post DHL, have finalized a trio of leases totaling 264,200 sf in Europe.
The two new deals and one renewal push DHL to 11.7 million sf of ProLogis space. The European footprint spans 8.5 million sf in 56 distribution centers in 10 countries.
"In this highly competitive environment the ability to deliver compelling real estate solutions is becoming increasingly important," said Paul Graham, development director for DHL Supply Chain EMEA. "ProLogis has become a development partner of choice for DHL Supply Chain by combining the benefits of international market coverage with local knowledge and expertise."
DHL signed a 67,800-sf lease at ProLogis Park Wroclaw III near Wroclaw, Poland. The four-building, 1.4 million-sf park is located close to the A4 motorway and adjacent to the Wroclaw-Strachowice International Airport.
At ProLogis Park Jonkoping, DHL added 148,000 sf to its 310,000-sf lease in Jankoping, a major distribution hub in Sweden. The third signing was a 48,400-sf renewal at ProLogis Park Sochaczew near Warsaw. The logistics provider took the balance of the 172,000-sf building that it occupies in the 1.1 million-sf park.
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FIRST Tower Sets New
Heights for Green Feats
PARIS – The 50-story FIRST building, bearing a 2011 completion date, will be the city's tallest office tower and most environmentally friendly.
Designed for 5,700 employees, the 780-foot tower is being co-developed by AXA France Assurance and Boston-based Beacon Capital Partners in the La Defense district. The slender, helical-shaped tower of 2.7 million sf will be the largest HQE-certified (high environmental quality) tower in France. The environmental goals are creating a building that uses 75 percent less energy than the 10 percent smaller AXA tower, which is being partially demolished for the project, and 85 percent lower carbon dioxide emissions. Among the energy-saving features is a "double skin" exterior to significantly impact heating and cooling requirements.
"Environmental sustainability is a critical component of Beacon's strategy. The lessons we have learned from the development of FIRST have broad application across our portfolio," said Fred Seigel, Beacon's president and COO. "We are proud to have invested in this magnificent building."
According to Internet research, AXA sold its tower to Beacon in July 2007, triggering the plan for a full overhaul with Beacon as the owner. In yesterday's press release, the partners said they will jointly own the renovated structure, which will be 258 feet higher than AXA tower.
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Caribbean Resort Gets Radisson Flag
GRAND BAHAMA ISLAND – Radisson Hotels & Resorts has raised its flag on the 740-key landmark Our Lucaya Resort, a four-diamond oceanfront property.
The Radisson Our Lucaya Resort is the hotelier's third property in the Caribbean. The landmark asset is owned by Hutchison Lucaya Ltd., a subsidiary of Hutchison Whampoa Ltd. of Hong Kong. Harbour Plaza Hotel Management Ltd. manages the holding.
"The strength of the Radisson brand in the Caribbean and globally will be key elements in building our future business success," said Veronica Clarke, Radisson Our Lucaya Resort's manager.
The resort is located 55 miles off the Florida coast on a 7.5-acre white sand beach. The amenities include Reef Golf Course and Lucayan Country Club, 18-hole, par-72 courses designed by renowned golf architects Robert Trent Jones Jr. and Dick Wilson, respectively. Other resort features are a Las Vegas-style casino, four swimming pools, 25,000-sf spa and fitness center and 90,000 sf of meeting space, 40,000-sf convention center and nine restaurants.
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WGL Takes 134,000 SF From ProLogis
WEILERSWIST, Germany – West German Beverage Logistics has grabbed 134,000 sf in a one-year lease for new distribution space at ProLogis Park Weilerswist.
"ProLogis responded to our need for distribution space in short order, enabling us to meet the immediate request of an important customer and thereby expand our own operations," said Markus Rutters, WGL's CEO. "We appreciate ProLogis' attentiveness and expertise as they led us to a quick and effective lease agreement."
The three-building ProLogis Park Weilerswist, totaling 435,000 sf, is located off the A61/E31 Expressway near Cologne. Denver-based ProLogis touts itself as Germany's largest industrial owner with a 14.8 million-sf portfolio.
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Deloitte House Trades for $164.6 Million
WARSAW – Touted as this year's largest sale in Central and Eastern Europe, the fully leased, 226,042-sf Deloitte House has brought $164.6 million. The brand-new class A office building, which opened this month, is situated at the heart of Warsaw's central business district.
Colliers International represented Stockholm-based Skanska, the world's fifth largest construction company, on the landmark sale to a fund managed by Deka Immobilien, a German-based international investment management firm. Clifford Chance was legal adviser to the seller. Colliers will remain as property manager for the building, occupied solely by Deloitte.
"Deloitte House is a best-in-class product in the European Union's best performing economy," said John Banka, a director of Colliers International in Poland, who arranged the transaction together with colleague Neil Gregory-Eaves, a director of Colliers International in Central and Eastern Europe (CEE).
"With known Skanska quality, an excellent CBD location and Deloitte as an anchor tenant, the new owner is well-positioned for long-term success," Gregory-Eaves said, adding there has been heightened interest from German institutional and private capital investors, representing both debt and equity. "Vendors needing to raise capital in Poland are also benefiting from a return of refinancing avenues which are an attractive alternative to the very opportunistic bids of recent months."
Deloitte House has been under contract to Deka since September 2008. Originally called Atrium City, the building was renamed Deloitte House when the firm signed on as the anchor tenant, taking 157,153 sf.
According to Real Capital Analytics, the Deloitte House sale is the fifth largest office transaction in Europe, Middle East and Africa to date this year, the largest transaction in Poland and one of the top 12 office trades worldwide.
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ProLogis, Acer OK 215,000-SF Lease
WARSAW – Computer maker Acer Group has leased 215,000 sf in ProLogis Park Wroclaw III in southwestern Poland, signaling the start of a new business relationship for the Denver-based developer.
Acer plans to create an international distribution center in the 1.45 million-sf industrial park, a mix of four class A buildings. The center will service Europe, the Middle East and Africa, creating 200 jobs when the supply line comes on line.
"This new facility will give us the scale needed to cover our operations throughout the entire EMEA region," said Mario Fazio, director of customer service for Acer Group of Hsichih, Taiwan. "Our commitment to this location is a clear sign of the detailed attention we put into widening our services within fast-developing Eastern European markets."
ProLogis Park Wroclaw III's other tenants are Curylo Asterix, DHL, Emperia Holding, Intercars, Jees Polska, Pol Mat, Selena, Sonoco Poland and Uldo.
"Locating in southwestern Poland gives Acer the advantage of a central position with excellent access to international highways and airports," said Ben Bannatyne, ProLogis managing director in Central and Eastern Europe. "ProLogis Park Wroclaw III is especially well-positioned, making it an attractive location for regional and international distribution operations."
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Hotelier's Financial Arm
Nabs $15.8 Billion Loan
HONG KONG – HSH Financial Services Ltd., a wholly owned subsidiary of Hongkong and Shanghai Hotels Ltd., has secured a $15.8 billion loan with a group of seven international banks.
The loan matures in 2013. HSH set out to raise $12.9 billion from the market, but opted for more with each mandated lead arranger getting a $22.5 million stake, according to a press release. The banks are Australia and New Zealand Banking Group Ltd., Bank of China (Hong Kong) Ltd., Bank of Tokyo-Mitsubishi UFJ, Ltd., Calyon, HSBC, Industrial and Commercial Bank of China (Asia) Ltd. and Standard Chartered Bank (Hong Kong) Ltd. According to HSH, the plan changed due to demand from banks with funds to place.
HSH said the capital will be used to pay down debt and general corporate purposes. "This is the first time for several years that HSH has come to market in Hong Kong, and our financing has met with a very strong response from the bank market," said Neil Galloway, HSH's CFO. He added that all objectives were met, including "stretching" its maturities.
The parent company, incorporated in 1866, is a holding company whose subsidiaries own and manage prestigious hotel, commercial and residential properties in Asia and the U.S. Its portfolio includes the Peninsula brand, which has hotels in Hong Kong, New York, Chicago, Beverly Hills, Calif., Tokyo, Bangkok, Beijing, Manila and Shanghai. The list of landmark properties also includes Quail Lodge Resort and Golf Club in Carmel, Calif.
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Net Entertainment Moving HQ
STOCKHOLM – Net Entertainment, signing a seven-year lease, has taken nearly 26,910 sf of headquarters office space in Fabege's Oxen Mindre.
Net Entertainment will move into the class A office at Luntmakargatan 18 in October. "The main reason we chose Fabege as landlord is that they were very attentive to and quick to respond to the requirements we had for our new premises," Bertil Jungmar, CFO of Net Entertainment, said. "We need bigger premises in which to grow and an environment that stimulates creativity, communication, efficiency and flexibility." The company will relocate from 11356 Birger Jarlsg.
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ProLogis' Overseas Drive Continues
DUSSELDORF, Germany – In yet another lease overseas, Denver-based ProLogis has filled 162,000 sf with third-party logistics' provider, Simon Hegele, in its Munich park.
The inbound tenant also leases 52,000 sf at ProLogis Park Frankfurt in central Germany. The four-building ProLogis Park Munich, totaling one million sf, is situated along the A92 highway, between the downtown and Munich International Airport. The park's tenants include Hellmann Worldwide Logistics, Dachser and DSV.
"We are very pleased to have signed this new lease agreement with long-time customer Simon Hegele," said Christian Bischoff, regional director for ProLogis in northern Europe. "ProLogis remains focused on leasing its pipeline of new and existing properties."
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Creative Kingdom Eyeing
175-Acre Mixed-Use Plan
CHIANG MAI, THAILAND – Los Angeles-based Creative Kingdom Inc. has unveiled plans for a 175-acre mixed-use development, with a CNX Movie World Studios as the anchor.
The company's plan calls for residential neighborhoods surrounded by entertainment and cultural venues and world-class restaurants. "The new CNX Movie World Studios will serve as the hub for Asia's booming film industry and become one of the premier destinations for the world's movie makers," said Eduardo Robles, CEO of Creative Kingdom. "In addition, the integrated nature of the facilities will be unrivaled in providing its residents, from those looking for a vacation or second home to those seeking an unmatched luxury lifestyle, with the perfect mix of entertainment, culture and life balance.”
The neighborhoods are envisioned to be "fully independent," each with its own infrastructure, stores, libraries, schools, medical facilities, parks and entertainment and cultural venues. The development will have nine themed areas. The drawing board includes corporate office buildings, eyed by the developer as headquarters locations or regional bureaus.
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Ricoh, ProLogis Ink
114,000-SF Lease
NAGOYA, Japan – Ricoh Logistics System Co. Ltd. and ProLogis have sealed their fifth deal, with the latest signing being 114,000 sf for ProLogis Parc Kitanagoya. The new deal is Ricoh's first deal in Asia with the Denver-based developer.
Ricoh leases more than 860,000 sf in ProLogis developments on three continents.The inbound tenant is a third-party logistics provider and subsidiary of Tokyo-based Ricoh Co. Ltd. The ProLogis lease is for an under-construction four-story, multi-tenant building with 460,000 sf. It is penciled for completion in July.
"We have seen steady interest in our properties throughout Japan and consider the fact that we have filled approximately a quarter of this facility before its completion this summer to be a barometer of the market's relative health," said Mike Yamada, president of Japan for ProLogis.
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MGM Grand Will Anchor
1,500-Acre MXD in Egypt
CAIRO – MGM Mirage and New Giza for Real Estate Development will build a mixed-use community near the base of the famous pyramids, with a 555-room MGM Grand as the anchor.
New Giza is providing all equity funding for the project, slated to open in 2013. Las Vegas-based MGM Mirage will provide management and brand fees through MGM Mirage Hospitality.
The 1,500-acre development site is 40 minutes from the airport on the outskirts of Cairo. An electric train will connect the community to the under-construction Egyptian antiquities museum.
"The New Giza community presents an opportunity for us to be part of an extraordinary new master-planned development near Egypt's famed pyramids," said Gamal Aziz, president and CEO of MGM Mirage Hospitality. "Together with this spectacular location, this new resort will quickly become a tourism and conference destination that is both in high demand and fully reflective of the MGM Grand brand."
In a press release, the developers said the New Giza development will raise the bar for luxurious, master-planned communities in Egypt. In addition to 2,500 villas and townhouses, the development will have three resort hotels, restaurants, shopping malls, an all-inclusive sporting facility and golf course designed by Thomson Perrett & Lobb. The community's master plan calls for nine neighborhoods surrounded by parks and lakes.
"We are delighted to have the MGM Grand anchor our hotel and hospitality sector in New Giza," said Mahmoud El Gammal, CEO of New Giza for Real Estate Development. "MGM's reputation for quality living, dining, entertainment, spa and nightlife offerings will provide the amenities, excitement and energy that reflect the lifestyle of this unique development."
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China Housing & Land
Starts $7 Billion Project
XI'AN, China – China Housing & Land Development Inc. has jump-started work on a 6.6 million-sf residential development on 79 acres of the 468.6-acre Baqiao project zone.
The developer has penciled September for pre-sales of residential units that will come on line in four phases with the last wave coming on line in 2014. The development has been dubbed Puhua, an upper middle-income development with 1.5 percent of the build-out earmarked for commercial uses.
China Housing & Land Development will break ground on multifamily units in the second quarter, with the units delivering in third quarter 2011. Single-family units will begin to rise in third quarter 2010 and come on line in third quarter 2012. The third phase starts in third quarter 2011, with work wrapping up in third quarter 2013. The final phase is all commercial, 162,000 sm2. Work starts in third quarter 2012 and will be done in 2014. The first and third phases each have 5,000 sm2 of commercial space.
"The local government and other high profile developers are investing heavily in this area on large scale infrastructure and city development projects, which could bode well for real estate demand in the central Xi'an region," said Pingji Lu, chairman of China Housing. He reported that sales volume in the region have been climbing since March.
The Xi'an government has designated the Baqiao District as a major resettlement zone, where it is expected that 900,000 middle- to upper-income residents will live in the coming years. The government is investing $7 billion into infrastructure for the district, including construction of an expressway and subway to connect the development to downtown Xi'an.
The 79-acre site is located on the western bank of the Ba River, opposite China's largest wetland park. The 3,300-acre park will host the 2011 International Horticultural Exposition in 2011. About 49 acres of the development site will be built out with housing and the balance is dedicated to riverfront walks, green space, sports park and infrastructure. The Washington, D.C.-based Leo A. Daly was hired in October 2008 to plan and design the 79-acre development.
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Zoetry Resorts Expanding
In Dominican Republic
DOMINICAN REPUBLIC – Philadelphia-based Zoerty Wellness & Spa Resorts is readying two beachfront resorts as its inroad into the Dominican Republic.
Opening in the fall is Zoetry Agua Punta Cana, a 53-suite sanctuary on 10 acres on the easternmost coast. The resort has 200 yards of private beach, a tony Phytomer Spa, gourmet restaurants, premium wine cellar, tennis courts, golf course and meeting facilities. The resort made the Conde Nast Traveler's Hot Caribbean Hotels List in 2008.
In December, Zoetry Casa del Mar Los Cabos will be reintroduced to the market. The 32-suite, hacienda-style resort has a front-row beach seat on the Sea of Cortez. Its amenity package includes the championship Cabo Real Golf Course, Suenos del Mar Spa, tennis courts and gourmet dining experiences. It has made Conde Nast's "world's best golf resorts" list.
“Through expansion of the Zoëtry brand, we intend to raise the bar for luxury experiential vacations in Mexico and the Caribbean," said Alex Z Zozaya, president and CEO of Zoetry's parent, AMResorts.
And coming in late 2010 is the Zoetry Pearl Sands Cap Cana, a luxury lifestyle resort in Punta Cana. The brand's launch was the Zoetry Paraiso de la Bonita, a flagship resort along Mexico's Riviera Maya.
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Tokyo Bumps London as World's
Most Expensive Office Market
TOKYO – CB Richard Ellis Group Inc., taking the world's pulse for commercial real estate, has found Tokyo's Inner Central District has replaced London's West End as the world's most expensive office market.
London was bumped to the second slot, with Moscow in third place and followed by Hong Kong's CBD and Tokyo's Outer Central District. The global research group tracks office occupancy costs in 170 cities worldwide.
As would be expected, the world's financial centers have been hard hit by declining demand and falling rents. The research team said occupancy costs fell by 20 percent or more in the past year in the major cities and 2.8 percent for the 170 cities as a whole. Singapore experienced the largest year-over-year decrease in occupancy costs, down 34 percent.
Charlotte, N.C., Marseille, France and Perth, Australia bucked the trend and showed increases in occupancy costs in the past year. The credit went to exceptional local market conditions, such as the completion of a top quality new building in a market where none was available previously, or simply that occupancy costs remain above the level of a year ago despite the fact that they are now falling," according to CBRE's new report.
"The most expensive office markets, as measured in dollars, are considerably less expensive than a year ago and occupiers are now in a strong position to procure prime space at attractive costs," said Dr. Raymond Torto, CBRE's global chief economist. "For instance, a year ago office space in London's West end was nearly $300 per sf while today that space goes for $172 per sf."
Occupancy costs are $183 per sf in Tokyo's Inner Central while Hong Kong's CBD was $150 per sf. Second-place Moscow's costs are $170 per sf.
No city in the Americas made CBRE's Top 10 list for occupancy costs. Mumbai took sixth place with $131.04 per sf in occupancy costs, with Dubai in seventh place at $122.52 per sf followed by Paris with $114.89 per sf, London City, $013.50 per sf; and Dublin, $93.56 per sf.
In the Americas, New York's Midtown remains king of the hill with occupancy costs of $68 per sf, a drop of 32 percent from last year. In comparison to the other 169 surveyed cities, New York's Midtown was 21 on the list. Sao Paulo, ranked 33 globally, posted $57 per sf.
Of the world's most expensive Top 50 cities, New York's downtown fell 44th with $52.92 per sf and Los Angeles was right behind at $52.83 per sf. Washington, D.C., took the 47th spot with $51.77 per sf.
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RICS Delivers Verdict From Q1 Global Survey
HONG KONG – Cash-rich investors worldwide are bargain shopping for discounted commercial assets amid falling rents in 90 percent of the countries surveyed by the Royal Institution of Chartered Surveyors (RICS).
But, the race to latch onto a deal could slow as tenant demand tapers and economies continue to struggle, RICS concluded. "Landlords may be forced to offer more incentives to retain existing tenants," the team said in its disclosure from a first-quarter survey.
Brazil, Saudi Arabia and parts of Africa are the only regions yet to experience falling rents. In Russia, researchers found 97 percent of the surveyed market reported a decline. Rental expectations are weakest in Singapore, Hong Kong and Ireland. It's also looks gloomy for European countries like Hungary, Romania and the Ukraine.
"Despite the rental gloom the rapid re-pricing in some markets may be encouraging investor interest. Trading activities have nearly stopped for the period under review and the situation is even worse for the luxury property market," said Albert So, chairman of RICS Hong Kong, "but we are expecting the market to go up again by the fourth quarter of 2009."
In Shanghai, investment activities are practically at a standstill. In Beijing, investors reportedly are taking a "wait and see attitude" about acquisitions, but inquiries are increasing, especially for premium office and retail properties, the RICS team said about the findings from 427 respondents to its quarterly survey.
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ProLogis Fills Last Spot in Heathrow Building
BIRMINGHAM, England – City Link has leased 75,000 sf of distribution space near Heathrow International Airport, bumping a recently finished, 294,000-sf building to 100 percent occupancy in ProLogis Park Heathrow.
The inbound tenant is the UK's parcel delivery service and a subsidiary of Rentokil Initial. In signing the deal, City Link will be consolidating and expanding in a move from two nearby distribution centers. The one-roof shop will be City Link's primary distribution point in West London.
"City Link had several facilities from which to choose in the Heathrow area and had been searching for some time," said Andrew Griffiths, managing director for Denver-based ProLogis in the UK. ProLogis will fit-out the building per the customer's requirements for enhanced heating, lighting and security measures.
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Le Meridien Grows Asia Pacific Portfolio
BANGKOK – Starwood Hotels & Resorts Worldwide Inc. has opened three hotel and resort properties, all carrying the Le Meridien flag, in its continued expansion in Asia Pacific.
Eva Ziegler, global brand leader for Le Meridien, said the openings represent a "milestone" in the brand's transformation into a lifestyle brand. Ribbon-cuttings were held at Le Meridien Bangkok, Le Meridien Chiang Mai and Le Meridien Chiang Rai.
"Chiang Mai and Chiang Rai are both well known for their beautiful landscape and rich cultural offerings while Bangkok is the cosmopolitan capital of Thailand and is an exciting, sophisticated and energetic destination for leisure, business and meetings," said Miguel Ko, president of White Plains, N.Y.-based Starwood Hotels & Resorts' Asia Pacific division.
Le Meridien Bangkok is a 24-story tower with 282 rooms in the heart of the capital city. The amenity package includes signature restaurants and a bar, a spa with seven circular treatment rooms, and more than 300 square meters of meeting space.
Le Meridien Chiang Rai is a hillside resort tucked between two 100-year-old rain trees in a region known for its Buddhist shrines and ruins of ancient settlements. Owned by the Rain Tree Hotel Co. Ltd., the 159-key resort sits close to the Chiang Rai International Airport and town center. Its amenity package includes the Pavarti Spa and three world-class restaurants.
The 384-room Le Meridien Chiang Mai overlooks the Doj Suthep Mountain in downtown Chiang Mai. It boasts two world-class restaurants, health club and multi-sensory spa plus 1,900 square meters of event space.
Le Meridien has 26 hotels in Asia Pacific. In the next six years, it plans to open three more hotels in China, two in India and one in Taiwan.
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Deka Immobilien's $263 Million
Offer Wins Vancouver Gem
VANCOUVER – In an unsolicited offer, German investment company Deka Immobilien Investment GmbH has wrestled the deed to the 583,000-sf Bentall V from SITQ, paying $263 million for the bragging rights to one of Canada's premier office towers.
Thomas Schmengler, managing director of Deka Immobilien GmbH, said the acquisition stacks up to an investment "in an attractive and sound location with good growth prospects." The buyer had hired Tony Quattrin and Jim Szabo, executive vice presidents of CB Richard Ellis' national investment team, to acquire an A class office building in Downtown Vancouver – putting the 33-story crown jewel at 550 Burrard St. on the table in an unsolicited offer to SITQ, a real estate subsidiary of the Caisse de dépôt et placement du Québec.
Schmengler said the acquisition stabilizes the fund's portfolio occupancy, pushing it to 98 percent. It also bumps the fund's investment allocation in North America to 20 percent from 12.6 percent.
SITQ developed Bentall V in 2007 as part of a two-phase development in the downtown. Bentall LP has managed the property since its completion and will continue under the new owner.
"The continued foreign demand for top quality assets in Canada's leading business centres combined with the limited offerings in the market during the first half of 2009 created the opportunity to execute this successful unsolicited transaction," said Yves-André Godon, managing director of Canada SITQ.
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Al Fajer Eyes Phase Two Start
For Jumeirah Business Center
DUBAI – Al Fajer Properties has pumped another $74.6 million into the second phase of the $490 million Jumeirah Business Center. The second phase consists of four commercial towers, totaling 1.6 million sf of office and 66,000 sf of retail space.
“Our continued investment within Dubai is a strong indication of our belief in the sustainability of the city and the country as a whole and that capital is starting to flow back into the economy once again," said Sheikh Maktoum bin Hasher, president of the development. Work is slated to wrap up at year's end on the five-building first phase of Jumeirah Lakes Towers.
Al Fajer Properties' total development effort will result in 3.6 million sf of office space and 150,000 sf of retail in nine towers, all designed to meet green building codes. The development group, set up in November 2004, is using the Jumeirah Lake Towers Community as its flagship project.
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ProLogis Fills 127,000 SF in Germany
DUSSELDORF, Germany – The Denver-based developer has leased 78,000 sf to a Volkswagen subsidiary and 49,000 sf to KfH Logistics at separate distribution developments in northern Germany.
Volkswagen Original Spare Parts Logistics will move into newly completed space at ProLogis Park Cologne Eifeltor. The park is on the outskirts of the city and close to the Cologne-Bonn International Airport.
KfH Logistics has roped off space in ProLogis Park Alzenau, which is now fully leased to its parent, KfH, a dialysis and kidney transplant services provider. The warehouse space will be used to store and distribute medical products and medicine to a network of more than 200 healthcare centers in northern Germany.
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Shangri-La Villingili Opening in July
MALDIVES – The first luxury resort south of the Equator in the Maldives will open in late July, adding 142 villas to the Addu Atoll coastline.
The Shangri-La Villingili Resort & Spa is the centerpiece for an island with six kilometers of coastline and three natural fresh-water lagoons. The villas will be a minimum of 1,431 sf. There are two presidential villas with 10,301 sf, one of which has been built over water and features a private pool.
The resort features 16 luxury tree-house villas, a first for the Maldives, perched on stilts offering a special three-meter high perspective of the island through tropical foliage. The tree-house villas are 2,346 sf, each with a private infinity pool.
The resort's signature spa, CHI, will be set in a separate village, featuring individual treatment rooms, ocean views and gardens. The resort's also been laid out with a varied mix of bars and restaurants.
At the heart of the island is a 322,918-sf Village Centre, comprised of an eco-centre with water sports like surfing, scuba diving and snorkeling. Boutiques, other entertainment space, salon and medical facility have been incorporated into the development by Hong Kong-based Shangri-La Hotels & Resorts.
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Hilton Returns to Panama,
Stakes 1,033-Key Claim
PANAMA CITY, Panama – McLean, Va.-based Hilton Hotels Corp. has sealed four multi-year management agreements to mark its return to Panama.
Two pacts are development deals for a Hilton and Embassy Suites by Hilton, a franchise agreement for the conversion to a Doubletree by Hilton and another franchise pact for a newly built Hilton Garden Inn. Each one marks a first for the brand in the country.
“These newest additions reinforce our commitment to add a number of properties to our Central America portfolio and to have a presence in one of the region’s fastest growing destinations," said Daniel Hughes, senior vice president of operations for Hilton in the Caribbean, Mexico and Latin America. “We are truly excited about these developments in Panama City and being back in such a great city."
Star Bay Group Inc., led by F&F Properties, has started work on the 351-room Hilton Panama. The hotel will open in 2011 in Panama City's financial district. The 27-story hotel is part of a 68-story mixed-use complex with 650,000 sf of office space and Las Vegas-style casino.
Sabadell Investment Inc. will begin work this year on a 306-key Embassy Suites, also in the city's financial district. The 21-story hotel is slated to open in October 2011, part of a 71-story office building.
Blue Star Hospitality is pacing a 213-room hotel through an extensive renovation to re-flag it as a Doubletree. The eight-story hotel is located in the business district at the intersection of Via Espana and Avenida Frederico Body. Work is to be done by spring 2010.
Hilton's fourth pact was inked with Metroplitan Hotels SA for the 163-key Hilton Garden Inn Panama. "Owners and developers understand the value of our brands and we are very optimistic about our growth opportunities in the region,” said Ted Middleton, senior vice president of development for the Americas.
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Chili's Opens Doors in India
BANGALORE – Dallas-based Brinker International Inc., with is eyes set on international terrain, has opened its first Chili's Grill & Bar in India. The country's flagship location is the chain's 200th restaurant outside the U.S.
With locations in 28 countries and two territories, Brinker International's plan is to have 500 restaurants by 2014 on international soils. The chain is building a portfolio of franchisees for Chili's, Maggiano's and On The Border Mexican Grill & Cantina. "Our plan is aggressive, about 50 restaurants a year, and we see a world of opportunity out there for us," said John Reale, president of global business development for Brinker International.
The 126-seat Bangalore Chili's, located along Airport Road, was developed by the Jawad Business Group, which has rights to a 15-restaurant franchise pact with a five-year development window. Jawad is a long-time partner of Brinker International, having opened a Chili's in Bahrain and a Maggiano's in Saudi Arabia. Reale pointed out that Jawad's new opening "underscores their desire to grow with not just one, but all three Brinker brands."
The Bangalore Chili's menu matches the region, a researched mix of Indian ingredients and local cuisine preferences. More than 80 percent of the menu items can be vegetarian prepared.
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ExxonMobil Begins Work on $70M Tech Center
SHANGHAI – Houston-based ExxonMobil Chemical Co. has jump-started work on a $70 million technology center in the Shanghai Zizhu Science-based Industrial Park.
Slated to deliver in 2010, the 290,625-sf building marks a milestone for ExxonMobil's business plan for China. "It also signifies our long-term commitment to China and the region," said Steve Pryor, president of ExxonMobil Chemical Co.
The building will be constructed and operated by ExxonMobil Asia Pacific Research & Development Co. Ltd. It will house laboratories and product demonstration facilities. The initial workforce is projected at 200.
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City of Dreams Gears Up for Opening
COTAI, Macau – Doors will swing open June 1 on the City of Dreams, a development by New York-based Melco Crown Entertainment Ltd.
The gaming development consists of three world-class hotels, a shopping district that surrounds the casino floors and links the hotel towers and a theatre."The opening of City of Dreams represents a culmination of nearly five years of planning and development," said Lawrence Ho, co-chairman and CEO of Melco. "As our flagship property, it represents a major step forward in Macau's transformation as the region's premiere leisure, entertainment, and gaming destination."
Nearly 7,000 jobs will be created by the City of Dreams, according to Melco. The 420,000-sf casino will have 520 table games and 1,350 gaming machines. Crown Towers will feature 300 guest rooms, including 33 high-roller villas, and there are another 300 rooms in the Hard Rock Hotel and 800 in the Grand Hyatt Macau. The asset also will have 20 restaurants and bars. Still on the drawing board is a luxury condo-hotel with 800 units, which is subject to legal and regulatory approvals.
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Marriott Updates European Traction
LONDON – Marriott International Inc. has unveiled its seventh lodging brand for Europe for a global pipeline with 770 hotels and more than 115,000 rooms.
Among the hotelier's highlights is the designation of 484-room Grosvenor House in London's Park Lane as the flagship for the JW Marriott Hotel brand; a Residence Inn by Marriott for Munich, which will open in 2011; UK openings of Marriott hotels at Gatwick Airport and Twickenham, home of English rugby; and construction updates for the 116-room Lingfield Park Marriott and 245-key London St. Pancras, both penciled for 2010 openings. According to the hotelier, 60 percent of the global pipeline is under construction or conversion. This year, more than 30,000 rooms will be opened, generating about 30,000 jobs worldwide, the firm's founder said in a press release.
The Residence Inn by Marriott brand, targeting extended stay travelers, will be introduced in 2011 in European urban locations. The hotelier has been studying the markets for two years to prepare for the launch.
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Tesla Establishes Beachhead in London
LONDON – Tesla Motors will open the first of three regional sales and service centers in Europe, choosing London's Knightsbridge district for its European launch.
The San Carlos, Calif.-based auto manufacturer has taken space at 49-51 Cheval Place, formerly the Seagrave Supercar Club. The location is within walking distance of the fabled Harrods department store and close to Heathrow Airport.According to a press release, Tesla also has scouts out in Munich and Monaco for showroom space. Tesla's cars will begin arriving to European customers in late June.
"We expect that Tesla sales will eventually be split evenly between the US and Europe," said Elon Musk, Tesla CEO, chairman and product architect. "Opening three Tesla stores in Europe this year is a critical part of that plan."
Greater London has been designated as a key customer market and premier showcase for the manufacturer. Its Model S, slated for production in 2011, will be among the world's first mass-produced, highway-capable electric-volt vehicles. The car is being designed to hold five adults and two children.
In the press release, London's mayor, Boris Johnson, was touted as a fan of Tesla's Roadster, promoting a plan to build 25,000 charging stations in the capital. Electric-volt vehicles also are being eyed as a cornerstone of Prime Minister Gordon Brown's economic recovery plan. Tesla buyers in the U.S. qualify for a $7,500 federal tax credit. European buyers also are eligible for tax incentives.
Tesla opened its first U.S. showrooms in summer 2008 in Los Angeles and Menlo Park, Calif. Chicago gets its showroom in the spring. The manufacturer is finalizing deals for sites in Manhattan, Miami and Seattle and has scouts working in Washington, D.C.
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AMB Project Earns Japan's Top Green Honor
NAGOYA – Japan's sustainable building certification organization has awarded its highest ranking to the 986,000-sf AMB Kasugai Distribution Center in the Akechi-Kasugai industrial area of Nagoya.
Boston-based AMB Property Corp. won the honor from the Comprehensive Assessment System for Building Environmental Efficiency {CASBEE). It is the first logistics facility to receive CASBEE's top honor, according to Michael Evans, AMB's managing director in Asia. "This development demonstrates AMB's commitment to sustainability in Japan and is expected to advance our leasing efforts," he said,
The distribution center is a high-density, vertical design with protected forested areas and buildings systems aimed at lower energy use and operating costs. AMB has more than 10.5 million sf of built and under-development properties in Japan.
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ProLogis Fills 358,000 SF in Japan
TOKYO – Denver-based ProLogis has completed a trio of leases, totaling 358,000 sf, with third-party logistics providers in Japan.
The new tenants include Sanyo Electric Logistics Co. Ltd, which reserved 151,000 sf in ProLogis Parc Narashino III, a 459,000-sf industrial structure with five floors and now boasting 100 percent occupancy.
ProLogis also struck a deal with Itani Transportation Industry Co. Ltd., for 115,000 sf at ProLogis Parc Osaka II at the Port of Osaka. Itani took space in an eight-story, 1.8 million-sf structure.
The developer's third lease fills 92,000 sf in Narita Park, which is situated about 40 miles northeast of Tokyo. The tenant's identity is being withheld, but ProLogis has said it's a third-party logistics provider from Japan.
Mike Yamada, president of ProLogis' operations in Japan, said the leases reflect a consolidation trend by companies to "make their supply chains more efficient."
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$400M Project Breaks Ground
BAOJI, China – Shiming U.S. Inc., a Chinese-based consumer electronics manufacturer, has jump-started work with the government on a $400 million technology complex.
Shiming is developing the campus on 200,000 square meters of land in Baoji. The campus will be used to develop 3G cell phone hardware and accessories for the Chinese government's initiative to take 3G nationwide. In the next year, China expects to switch its current 600 million cell phone users to 3G technology. In addition, the campus will have manufacturing space for emerging technologies, including solar fuel cells, silicon chips and heavy equipment for oil field exploration and oilfield services.
China is building a 3G network and supply chain from the ground up. "Shiming believes it has significant and lasting advantage over established international 3G suppliers and domestic Chinese 3G start-ups due to this government policy, the manufacturer said in today's press release about the groundbreaking.
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JLL's Global Perspective Probes
Strain on Commercial Market
By Connie Gore
DALLAS – Can this week's debt cap bounce buoy enough confidence to right the ship worldwide? As the answer unfolds, most indicators for the health of global commercial market activity are still pointing down, but there are early signs that the pace has slowed.
Kenneth Rudy, president and COO of the corporate capital markets group for Chicago-based Jones Lang LaSalle, says the slight gains could be indications that stimulus packages, at least U.S. actions, could be "barely starting to take root or the perception they are taking root." Confidence, pricing of risk and property valuations are chief on all analysts' minds, he adds.
In a new report, JLL's researchers believe there is another 20 percent drop in values still to come. Rudy cautions, though, that the overall valuation adjustment for the recession isn't as devastating as it appears when put into perspective with the triple digit run-ups from this decade's early years.
Starting this year, at least $250 billion of commercial debt mortgages will come due, creating a closely watched "mark-to-market" situation. The industry is keenly aware refinances will hinge on basic fundamentals of real estate for assets and the strength of the markets in which they're located. Rudy says lenders and borrowers alike are "standing down" right now on workouts because of the impact to balance sheets. "There's a little bit of a game of chicken going on between lenders and borrowers," he says. "For borrowers with the best track records, not too aggressive in their underwriting and the ability to put more equity into the project, then the lender might roll the loan over and renew it."
Rudy explains loans with struggling community regional banks create a different dilemma because even a performing owner could end up in foreclosure when the loan comes due because the take-back and subsequent sale effectively could be a tool to strengthen the lender's balance sheet.
"The middle ground, where we believe debt and equity rest, will occur in the next 12 to 18 months," Rudy says. "We're all looking for fundamentals to stabilize and the pricing of the equity. We're forming a new based where people have confidence."
JLL's March Global Market Perspective forewarns there could be a "deluge of supply" in some markets as more real estate comes to market due to the de-leveraging of financial institutions and space needs change for corporations. And with that comes the issue of the bid-ask spread, a delta that remains an ongoing issue for the times at hand.
The Composite Leading Indicators from the Organisation for Economic Co-operation and Development in London show the "outlook deteriorating for the seven major economies and many non-member economies." The glimmer of hope is there are early signs that the pace of decline is slowing, researchers say. On the dark side of the research lies the valuation adjustment. Experts have been confronted with so few completed transactions that they're certain the bottom has yet to be reached.
"The global property markets remain frozen because of uncertainty as economies convulse and governments grapple with questions about the scale of stimulus packages, the impact of quantitative easing and the creation of more effective, supra-national regulation of the financial sector," conclude the JLL experts. "Going forward, investors likely will emphasize covenant strength, local market conditions and a deeper understanding of the outlook for specific industry sectors."
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Starwood Unveils More Hotels for China
SHANGHAI – Starwood Hotels & Resorts Worldwide Inc. has added five hotels to its 47-property portfolio in China. The White Plains, NY-based hotel company plans to double its footprint in the country by 2011.
The additions will be St. Regis resorts in Sanya and Chengdu, Sheraton hotels in Jiangyin and Dalian and a Sheraton resort in Huizhou, Guangdong. In addition, Starwood's team is on track to open more than 10 hotels in China this year. In 2008, Starwood opened eight hotels in China.
"China is home to the largest number of our hotels outside of North America, and more importantly, it comprises the largest portion of our pipeline outside of the United States," said Frits Van Paasschen, the hotel company's president and CEO. "As a point of perspective, within two years we expect to have a presence in Shanghai that rivals our existing footprint in New York City, where we have a strong representation of more than a dozen hotels and growing."
In Sanya, Starwood and Yalong Development Co. Ltd. have inked a development deal for a 402-room St. Regis. It is expected to open in 2011, delivering a design boasting 22,000 sf of meeting space and five restaurants.
The 268-room St. Regis Chengdu, slated to open in 2014, will be developed by Chinese Estates Holdings Ltd., Evergo Enterprises Co. Ltd. and Starwood. It will be located in the CBD of one of the most important economic centers in southwestern China.
Starwood and Huangjia Hotel Co. Ltd. will develop a 296-room Sheraton in Jiangyin's CBD. The hotel, penciled for a 2011 opening, is part of a mixed-use complex that includes a convention center.
Marked for a 2012 opening, the 637-room Sheraton Dalian Xinghai Hotel will be owned by Dalian Air-Way Real Estate Development Co. Ltd. It will be situated in Xinghai Square, East Asia's largest square and also be part of a mixed-use complex.
The Sheraton Bailuhu Resort will be a 438-roomm design with two presidential villas. Set to open in 2012, it is being developed with Huizhou Bailuhu Tour Enterprise Development Co. Ltd., a subsidiary of Agile Property Holdings Ltd.
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Leasing, Sales Down Worldwide
By Connie Gore
DALLAS - Regardless of the global positioning, commercial real estate will struggle this year despite efforts by governments worldwide to provide stimulus packages and restructure financial systems.
CB Richard Ellis' global research team, led by Dr. Raymond Torto, has issued a new report assessing the damage to date and the pitfalls for 2009. Leasing and sales activity will remain depressed in most, if not all, cities with global clout."No part of the world has escaped the spreading crisis, but each region suffers varying degrees of market angst," the CBRE team wrote in Global ViewPoints. "Some stand in relatively good positions while others face severe problems."
Asia and North America suffered the most significant declines, particularly in the office sector. The Asian market "has now entered into a broad-based downward cycle," the team found, citing rising vacancy in 14 of 17 markets, of which five are in the double digits with Beijing's 21.9 percent leading the pack.
The U.S. encountered vacancy spikes in 36 of 57 markets amid signs of increased distress. America's office vacancy climbed by 40 basis points in fourth quarter 2008, forcing this year to start at a 14 percent rate. Downtown vacancy rates climbed to 10.2 percent, up 50 basis points just in the last quarter of 2008. Research showed 50 point jumps in the financial hubs like Boston, New York, Miami and Dallas. Overall, U.S. office absorption slid 4.8 million sf, of which 2.4 million sf was in New York. "This in itself was not a significant decline, but with office absorption's propensity to trail employment growth, we would expect coming quarters to be worse," the CBRE team concluded.
In Canada, the national office vacancy rate rose to 6.7 percent, up 0.4 percent from 2008's third quarter. Meanwhile, the team found other market fundamentals showing signs of weakness as well, leading to the conclusion that new supply will turn the tide in tenants' favor in most markets.
In markets in Europe, Middle East and Africa, office leasing is weak, vacancies are rising and rents are declining. Paris, Frankfurt and Madrid saw "considerable reductions" in leasing activity while London's market had a one-time boost from a mega-transaction, but it too is moving in the direction of the rest of the world.
The team said Australia and New Zealand came through 2008 on positive notes, but neither will escape an impact from the global downturn. Both are facing increases in office sublease space and declining face rents.
Latin America is weathering the global meltdown better than other countries, with the emergence of a middle class helping to soften the impact from the market malaise worldwide. "Vacancy levels remain near all-time lows at the moment, and the sublease rate has yet to rise," wrote the research team, which included Nick Axford, Andrew Ness, Kevin Stanley and Raymond Wong.
Some countries' commercial markets will struggle more than others, but the report confirms that all will struggle. In turn, transaction volumes will remain depressed as they were in 2008 when deals were down 60 percent globally and yields were rising across the board.
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Belize
Green Light Equity Partners, LLC bought 14 acres of resort land in Belize. The property is located at Calabash Caye, Turneffe Island. The seller was Rusty Johnson. The buyer was represented in the sale by H. Frank Stanley of Cushman & Wakefield's Houston office.
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Abu Dhabi
Hill Internationalhas been awarded a contract by Sorouh Real Estate PJSC, one of Abu Dhabi’s leading real estate companies, to provide project management services for six buildings that will be constructed at the Shams Abu Dhabi development. The four-year contract has a value to Hill of $35.0 million.
Construction of the six mixed-use towers is expected to cost approximately $1.6 billion and be completed by May 2012. The six towers, called Gateway Towers, will have a total built-up area of 11.8 million sf. In addition to these projects, Hill is providing overall program management services to Sorouh during design and construction of the entire Shams Abu Dhabi development which includes residential, office, hotel, retail, entertainment and parking facilities, including Sky Tower, a 74-story residential and commercial skyscraper, which will be the tallest building in Abu Dhabi upon its completion. In addition, Hill is providing project management services for Tameer Towers, a mixed-use waterfront development located within Shams Abu Dhabi.
“Sorouh is proud to partner with companies that adhere to our own commitment to professionalism, international best practices, and creativity. Hill International reflects these innovative and dynamic attributes and I look forward to working closely with our partners on this exciting development,” said Mounir D. Haidar, Chief Executive Officer of Sorouh.
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Hines in Brazil
SÃO PAULO, BRAZIL – The São Paulo office of Hines, the international real estate firm, announced today the implementation of a nationwide investment program to acquire or develop strategically located logistics parks on major highway intersections in various Brazilian cities to serve the needs of logistics and transportation clients. Currently, the firm has five logistics parks underway or completed in Louveira, Araucaria, Rio, Embu and Manaus. Hines plans to develop an additional 14 parks over the course of the next three years.
Hines also announced that it has broken ground on Louveira Swans Industrial Park and Cajamar Distribution Park, two speculative modular warehousing projects in Louveira, a suburb of São Paulo.
The one-story, 1,048,243-sf Louveira Swans Industrial Park, which is situated on a 2,378,824-sf site, will be an expansion of the existing Louveira Distribution Park. The project will be constructed in three phases and is slated for completion in December 2009.
Cajamar Distribution Park will contain 1,188,852 square feet in one level. The property is situated on a 3,415,012-sf site strategically located on the Anhanguera Highway, near the São Paulo Ring Road, a highway system that surrounds the city’s perimeter. The project will be constructed in two phases and has a December 2009 completion date.
Funding for the projects will be provided by Hines and the California Public Employees’ Retirement System (CalPERS), through their Hines CalPERS Brazil Fund II (HCB II). The HCB II Fund is an investment vehicle organized by Hines and to invest primarily in Brazil’s office, industrial and residential markets, with the option of extending its reach to Argentina and Chile.
Situs Opens in Berlin
BERLIN – Officials of The Situs Companies have announced the global commercial real estate advisory firm has expanded its geographic reach and range of service offerings in Europe with the recent opening of its Berlin office.
In addition to the firm’s established array of due diligence and loan underwriting services, which Situs has heretofore offered through its London office, the firm will now deliver real estate-related financial services to institutional investors, hedge funds, private-equity groups and high-net-worth individuals looking to expand or modify their commercial real estate investments across Europe.
Situs will also now offer surveillance reporting and other asset management services to existing holders of commercial real estate properties or portfolios, who may wish to reassess their investment positions as market conditions continue to evolve.
While these service offerings may be relatively new to the European real estate community, the firm has previous experience successfully implementing such services in the United States. It will leverage this experience with established European real estate professionals, whose diverse backgrounds include real estate finance, banking, accounting, valuation, brokerage and many others. According to Situs CEO Ralph Howard, the European markets are now ripe for such service offerings.
“As real estate markets across Europe continue to grow and develop, the need for increased asset management, financial services and greater transparency will become more and more apparent,” he said. “Situs is uniquely positioned to meet this need in a number of ways,” he added.
Privately held, The Situs Companies (www.situscompanies.com) employs more than 300 real estate professionals throughout the U.S., Europe and Asia to deliver commercial real estate services and business solutions to leading investment banks, institutional investors, private owners and various other commercial real estate debt and equity participants. In Europe, Situs has completed real estate and financial due diligence assignments in Germany, the United Kingdom, France, Spain, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Poland, the Czech Republic, Finland and Sweden. The company also completed projects in Dubai, Qatar, India, China, Korea, Mexico, Panama and the United States.
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Brits Buying Vacation Homes in U.S.
British citizens are invading the American real estate market, buying vacation homes that offer excellent value to foreign buyers with British pounds in their wallets.
The international buyer is snatching up a second home in the U.S. primarily for vacation purposes, although making a sound real estate investment is also important, according the National Association of Realtors’ 2007 Profile of International Home Buying Activity.
With the British pound now worth around $2, the realty bargains available to people from the United Kingdom are quite attractive, said Elisabeth Miller-Fox, president of PrivateCommunities.com, a Vero Beach, Fla-based firm.
“The influx of British buyers has been significant. In their eyes, real estate in the U.S. is an incredible deal,” Miller-Fox said. “Interestingly, the British press has been picking up on the story and momentum is building.”
A recent news article in the British “Sunday Express” newspaper said: “For home hungry Brits looking for that dream pad across the pond, now is the time to buy.” The article is one of several such stories in the British media recently.
“The British news reports pour fuel on the fire of this buying trend,” Miller-Fox said.
European buyers accounted for 33 percent of the foreign buying activity in the U.S. over the last year, more than any other continent, according to the National Association of Realtors’ research.
Florida is the top spot for the British buyers. Nearly half of the buyers from the United Kingdom purchased homes in Florida – more than any other state, the NAR survey said. Florida’s sunny weather and the direct flights from the United Kingdom to Orlando and Miami seem to be the key reasons for its dominance.
Many of the foreign buyers have been selecting homes in gated communities, said Miller-Fox of PrivateCommunities.com. “Purchasing a second home in a gated community makes sense for overseas buyers. It allows them to relax, knowing that the security and maintenance is being taken care of.”
One of the popular real estate web sites, PrivateCommunities.com provides information on gated communities, golf course properties, destination clubs, new urbanism communities and listings of luxury golf homes for sale. The Vero Beach, Fla. firm was founded in 1996.
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Paris Purchase
The London office of Hines, the international real estate firm, announced today that the Hines Pan-European Core Fund (HECF) has acquired from Tishman Speyer, Eurosquare 1, an office building in St. Ouen, Paris, located on the northern part of the Paris ring road. The building is fully leased to a wholly owned subsidiary of Gaz de France until 2013.
Completed in 2003, Eurosquare 1 comprises 165,920 sf of office space distributed over seven floors above grade. It is located on Boulevard Victor Hugo, the main artery of the growing business district of St. Ouen, which is also home to large operations of L’Oréal, Danone, Nokia, Sony, BNP Parisbas, etc.
HECF is a Euro-denominated, Luxembourg-regulated Fonds de Commun de Placement (FCP) managed by Hines, with the objective to acquire a geographically diverse portfolio of core buildings with commercial uses across Europe.
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Warehouse Deal in Brazil
The Rio de Janeiro office of Hines, the international real estate firm, announced today the acquisition of Cargo Center Dutra II (CCDII), a four-building distribution facility within a 30-acre logistics park in suburban Rio de Janeiro, minutes from Rio’s International Airport and in close proximity to the city’s main arterial highways including Linha Vermelha, Avenida Brasil and Avenida Washington Luiz.
The property was purchased from Parso Participações Societárias Ltda., an entity affiliated with GB Armazens Gerais, a local industrial developer that also developed the property, by a joint venture between Hines CalPERS Brazil II (HCB II) fund and Hines Real Estate Investment Trust, Inc. (Hines REIT). Hines represented HCB II and Hines REIT in the transaction. Hines is the sponsor of Hines REIT, and is responsible for the management and leasing of its assets.
Designed by architect Gilberto Buffara, CCDII is comprised of four distinctive buildings totaling 693,000 rentable sf. The buildings were completed between 2001 and 2007 and have separate and secured entrances.
CCDII is 97 percent leased to multinational tenants including DHL and Unilever, as well as leading Brazilian logistics providers. It is considered a prime multi-tenant logistics facility in Rio de Janeiro due to its excellent location, above-market construction standard and efficient floor layouts.
“This acquisition marks the first Hines REIT acquisition outside of North America,” said Hines REIT President Charles Hazen. “We are bullish on Brazil, which is the 9th largest economy in the world and is expected to experience significant growth as its middle class continues to expand.”
Hines REIT is a Houston-based public real estate investment trust sponsored by Hines. Hines REIT commenced operations in November 2004 and primarily invests in institutional-quality office properties located in the United States.
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Hines Acquires Building in Brazil
The São Paulo office of Hines, the international real estate firm, announced that it has acquired the BankBoston building located in the Marginal Pinheiros submarket of São Paulo, Brazil. The property was purchased on behalf of the Hines Calpers Brazil II (HCB II) fund from Banco Itaú, which recently acquired BankBoston’s banking operations in Brazil. The asset was sold vacant, and Hines Brazil has already initiated leasing efforts.
Designed by the renowned architectural firm Skidmore, Owings & Merrill LLP and Brazilian architect Julio Neves, and completed in 2002, the 29-story, 409,000-square-foot (38,000-square-meter) building is largely considered an architectural landmark in São Paulo and also throughout Latin America. Its striking architectural elements include the use of curved glass around its landscaped garden, and a bold façade which features granite, modern glazing and stainless steel.
Hines entered the Brazilian real estate market in 1998. Since then the firm has developed more than 11 million square feet (1,086,000 square meters) of premier office, industrial and residential space in the country, and currently manages 9.5 million square feet (885,000 square meters) there. Hines has operations in six markets throughout Brazil, including São Paulo, Louveira and Embú (suburban São Paulo), Rio de Janeiro, Curitiba and Campinas.
The HCB II Fund is an investment vehicle organized by Hines and the California Public Employees’ Retirement System (CalPERS) to invest primarily in Brazil’s office, industrial and residential markets, with the option of extending its reach to Argentina and Chile.
CalPERS is the nation’s largest public pension fund with assets totaling $249 billion, of which $19 billion is invested in real estate. The System provides retirement and health benefits to more than one million state and public employees and their families. For further information on CalPERS, please visit the System’s Web site at www.calpers.ca.gov.
Hines is a privately owned real estate firm involved in real estate investment, development and property management worldwide. The Hines portfolio of projects underway, completed, acquired and managed for third parties includes more than 950 properties representing approximately 380 million square feet of office, residential, mixed-use, industrial, hotel, medical, retail and sports facilities, as well as large, master-planned communities and land developments. With offices in 67 U.S. cities and 15 foreign countries, and controlled assets valued at approximately $16 billion, Hines is one of the largest real estate organizations in the world........................................................................................
Hines Acquires Chichester House in London
Hines' London office announced that it acquired Chichester House in London from Bishopswood Properties. Bishopswood Properties is a subsidiary of GE Real Estate . The property was purchased by Hines European Development Fund II (HEDF II), a Delaware Limited Partnership.
The eight-story, 70,000 sf office and retail building is located London’s High Holborn neighborhood, as well as in close proximity to tourist attractions including Covent Garden and the British Museum.
Hines UK Director Andrew Reynolds said, “This acquisition secures our commitment to acquire high potential investments in a strongly competitive London marketplace. We now look forward to working with our retained advisers to create a high-quality commercial development to fulfill the demand for high-end office space.”
Bishopswood Properties was advised in the sale by Orchard Street Management and Jones Lang LaSalle.
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Hines Sells Paris Property
Hines announced that it has sold InPost, located at 66-70 Avenue Charles de Gaulle in Neuilly-sur-Seine, Paris, to ING Real Estate Investment Management. ING is an international real estate company active in investment management, development and finance.
The six-story, 54,876-sqft office building is located on Avenue Charles de Gaulle, the major axis running from the Arc de Triomphe to the La Défense business district, where Hines developed the EDF Tower.
Hines has been retained by the new owner to continue in its role as development manager on the building’s renovation.
“I am delighted with this operation which, once it has been renovated, will provide an outstanding office building in Neuilly, reflecting Paris’ economic vitality,” said Olivier de Dampierre, president of Hines France.
The law firm of Lacourte Balas & Associés represented Hines in the transaction. ING as advised by the law firm of Leboeuf, Lamb, Greene & MacRae.
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Hines Acquires Gartmore House
LONDON- The London office of Hines announced the purchase of Gartmore House from private investors. The five-story, 93,708-sf office building is located above London’s Fenchurch Street mainline rail station, which is one of the city’s busiest commuter stations.
The project is now the fifth asset purchased within 12 months by Hines European Value Added Fund (HEVAF) and is fully leased to Gartmore Investment Management Plc, a global investment organization, until 2012.
Hines UK Director Andrew Reynolds said, “Gartmore House is located in a thriving business district within the City of London where demand for quality office space is increasing. We are keen to work with Gartmore to ensure its future requirements are met.”
“This acquisition signals our continued commitment to building the Hines name in Europe as a world-class investment manager,” said Hines Executive Vice President Michael Topham. “Having initiated and managed 21 funds worldwide since 1991, we continue to seek out top opportunities for our European fund initiatives targeting development, value added and core strategies.”
Hines entered the European market in Berlin in 1991. Since then, the firm has developed projects in: Barcelona, Berlin, Düsseldorf, Frankfurt, London, Madrid, Marbella, Moscow, Munich, Milan, Paris Prague, and Warsaw. The firm’s European portfolio consists of 40 projects totaling more than 12.1 million sf (1.1 million square meters).
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Singapore Investment Group
Buys Munich Building from Hines
MUNICH -- Hines has sold its 38-story Uptown München Tower, the tallest building in Bavaria. The buyer, GIC Real Estate, is the realty investment arm of the government of Singapore.
GIC Real Estate Pte Ltd (“GIC RE”) through its affiliates has acquired two newly completed prime office properties, 50 Georg-Brauchle-Ring (Uptown München Tower) and 56/58 Georg-Brauchle-Ring (campus building), in Munich, from Hines for over Euro 300 million.
The two separate office buildings are part of the Uptown München office campus that was developed by Hines and completed in 2005. The five-building campus encompasses the tower plus four smaller campus buildings. Uptown München is located in the Olympic Park office area, a major, growing sub-market of Munich close to the historic city center, with good access to transportation links and amenities. The 38-story Uptown München Tower is a landmark building, and is the tallest and one of the most attractive office buildings in the Bavarian capital. It is completely leased to O2 Germany, a leading telephone operator, for a fixed 15-year term. The campus building is fully leased to Adobe Systems, two local companies and Hines.
With the acquisition of the Uptown München Tower and the last of the four Uptown München campus buildings, GIC RE is now the biggest investor in Uptown München. In February 2005, the AMB Generali Group acquired a campus building; three months later, the Zurich-based Foundation for International Real Estate Investments (AFIAA) bought another campus building; and in October 2005, Düsseldorf-based financial services provider Signa Property Funds purchased the third campus building. The entire Uptown München office campus is now fully leased and has been sold within a year of its completion.
"Our decision in 2001 to establish ourselves in Munich by developing Uptown München has been affirmed," says Alexander Möll, the Hines project manager who was responsible for the sales negotiations with GIC RE. "Despite the sometimes difficult market situation for commercial property over the last few years, it has become evident that top-quality buildings are justified and can be successfully marketed."
Dr. Seek Ngee Huat, President of GIC RE said, “We are pleased to acquire these two office buildings in the successful Uptown München project developed by Hines. These Class A properties are well-located, have been leased long-term to strong credit tenants and provide a stable rental income. This investment is in line with our investment objectives and a fitting addition to our core global office portfolio, which also includes other prime office properties such as 30 Gresham Street in London, Shiodome City Center in Tokyo, Franklin Center in Chicago, Chifley Tower in Sydney and Seoul Finance Centre in Seoul. They are also well positioned to benefit from the anticipated recovery of Munich’s office market, which is currently at a low point in the rental cycle. In light of improving prospects in the German markets, we will continue to look for investments in quality assets across the property sectors.”
Following the sale of Uptown München, Hines will remain active in the Munich market. Karl Franz Wambach, managing director of Hines Germany said, "Uptown München is one of the most outstanding projects that we have realized in Germany to date. Particularly in the wake of the lively debate about highrises in 2004, Uptown München has gained landmark status in the city. Now our work can continue elsewhere. Since the start of this year, we are developing Karolinen Karree at Karlstraße 10 on behalf of AMB Generali Immobilien GmbH. Hines is confident that Munich is one of the most attractive investment locations in Germany."
Hines was advised on the transaction by Munich-based realty firm Colliers Property Partners Immobilien-Kontor Schauer & Schöll, who stated that this was the largest single asset deal that has ever been signed in Munich.
Hines was formed by Gerald D. Hines in 1957 as a privately-owned project development and real estate investment company based in Houston, Texas. With around 3,000 employees worldwide, more than 22 million square meters of floorspace in projects developed, and almost four million square meters of acquired real estate, Hines is among the leading international real estate firms.
Since the 1990s, Hines has developed major projects in Germany - Berlin (Pariser Platz 3, Rosmarin Karree, Hofgarten am Gendarmenmarkt), Frankfurt (Main Tower), and Dusseldorf (Benrather Karree). Uptown München was completed in 2005. Currently, Hines is developing a site at the famous Alexanderplatz in Berlin and is also acting as project developer for the Berlin MEAG project Friedrichstraße/Unter den Linden since fall 2005 and for the Karolinen Karree in Munich's Karlstraße since early 2006. Besides project development, Hines is successfully expanding its fund business in Europe.
GIC Real Estate (“GIC RE”) is the real estate investment arm of the Government of Singapore Investment Corporation (“GIC”), which manages the foreign reserves of Singapore. GIC RE’s mandate is to invest in real estate-related assets outside of Singapore, covering all property sectors (including office, retail, industrial, hotel or residential assets) and product types, ranging from direct building acquisitions, property investment funds to strategic stakes in listed property companies, joint ventures and real estate debt. GIC RE’s large, diversified portfolio comprises over 150 assets in more than 30 countries. They are one of the biggest institutional investors in Asia and currently rank amongst the world’s top 10 global real estate investment firms.
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Recent Stories Hines Aquires Chichester House in London Hines Acquires Gartemore House Singapore Investment Group Buys Munich Building from Hines
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