Market Data
International Beat
Scotland’s Big Deal
LaSalle Investment Management Kapitalanlagegesellschaft mbH
recently purchased two retail properties in Scotland for a total of £58.6
million or more than $91 million. What do they have in common? Long-term
leases. One store, in Glasgow’s Style Mile district, is occupied by Nike, which
has a 15-year lease with an initial rent of £1.3 million. The other property,
an eight-story mixed-use building in Edinburgh, has two tenants — New Look, a
British fashion chain, and a Premier Inn Hotel — with 19-year-plus leases. The
purchases reflect a net yield of 5.0 percent and 5.5 percent, respectively. The
investment fund is targeting well-located office and retail properties with
stable leases in Germany, France, and the U.K.
“Global multinational corporations are taking a longer view
in terms of the office footprints in many of the growing emerging markets,
signing longer-term leases and willing to accept higher premium pricing for
prime space in the downtown markets.”
—CBRE Prime Office Occupancy Costs
Markets to Watch
Despite Europe’s economic woes, global investors continued
to target select markets in the second quarter, according to Jones Lang
LaSalle. Cross-border buyers and sellers were involved in 75 percent of 2Q12
transactions in the U.K. and France, nearly 70 percent in Russia, and more than
50 percent in Germany, all exceeding the 40 percent global average. London saw
the most activity, including two portfolio sales — office and specialty —
totaling nearly $2 billion. Overall, Europe saw an increase in inter-regional
deals in 1H12, compared with a marked slowdown in cross-border investment in
the Americas and Asia Pacific regions.
Guangzhou, China, also experienced an
investment influx in 2Q12, making its first appearance on JLL’s top 10 “Most
Active Cities” list, placing No. 6 after ranking 127th and 221st in 2Q11 and
1Q12, respectively. The city received a boost from major office and retail
deals, including the $1.4 billion sale of the Guangzhou International Finance
Centre and the $316 million sale of the Rock Square shopping center.