news

propertyeu magazine | no. 2 - march 2013 | 11

Russia and Turkey fail to tempt logistics giants

Goodman heads Top Developers ranking

Russia and Turkey may have been grabbing the headlines of late due to strong interest from international retailers, but these mar-kets have yet to appeal to Europe’s leading logistics developers. With assets trading at yields of between 8-8.5%, Russia does not offer any premium at the moment, accord-ing to Christian Jamison, CEO of Delin Capital and a panellist at PropertyEU’s Lo-gistics Investment Briefing hosted by CBRE in London at end-January. ‘You can get the same level as in the UK, although maybe not super prime.’ Nevertheless, the fundamen-

tals are very compelling, he added. ‘It’s just a matter of time before the market is further developed.’ Emmanuel Van der Stichele, director of Goodman’s European Logis-tics Fund (GELF), believes Poland is ‘quite compelling’ at the moment. ‘There’s been a dramatic change in terms of infrastructural development, the number of highways came to 350 km before 2000, in the next couple of years they will reach 3,000 km,’ he said. ‘It’s also becoming clear where the prime and core locations are evolving, in Lodz, Silesia and Gdansk. There has been a shift east-

czech warehouse uk inDusTrial

nBGi, Panattoni in czech venture

cornerstone buys uk industrial assets

Private equity group NBGI and developer Panattoni are to build a warehouse at Pilsen Park West in the Czech Republic.

Business Park

london’s chiswick Park in final phase Blackstone has begun the development of Building 7 at Chiswick Park, the final building on the Park in West London.

Cornerstone Real Estate Advisers has acquired three light industri-al assets in three separate deals totalling £35 mln (€41 mln).

loGisTics invesTmenT

GelF buys €210m of logistics assets Industrial property specialist Goodman’s European logistics fund GELF completed €209 mln of new acquisitions in 2012.

wards as production moved to Poland, and also because disposable income is increas-ing.’ Poland is also benefiting from the Ger-man automotive industry as manufacturers expand their production base in response to demand from China.Josheph Ghazal, head of capital deployment at Prologis Europe, agreed that Poland has ‘tremendous’ growth prospects but warned that major infrastructural investments in the country had led to changing patterns of where the hotspots are. See also Investment Briefing Turkey on page 42

Sydney-listed Goodman Group heads Prop-ertyEU’s ranking of Top Developers for the second year running in terms of projects completed between 2010 and 2012 after seeing the overall figure for completed de-velopments over the three-year period jump almost 50% year-on-year. The Australian logistics company also won the title in 2012 on the basis of completed projects between 2009 and 2011 in excess of 5,000 m2.On a weighted basis, French office developer Bouygues Immobilier heads the PropertyEU ranking of Top Developers this year. The Paris-based company, part of listed French construction giant Bouygues, is focussed primarily on the French office market but is also active in Spain, Portugal, Poland and Belgium. In this year’s weighted ranking Bouygues has ousted retail heavyweights Multi Development and ECE Development which have slipped to second and fourth place respectively. Multi edged ahead of ECE into 3rd place overall for both the weighted ranking and completed projects in square

metres, and first place for the overall retail developers ranking. The biggest change was recorded for ECE Development which headed last year’s ranking on a weighted ba-sis. In fact, the overall weighting of the retail sector slipped in this year’s ranking, both in terms of completed projects and value. The weighted ranking draws on the European average investment volume per m2 for 2012.

Under this calculation, office development rates highest in value terms (3.7x), followed by retail (2.1x) and industrial (0.6x).This is the second year that the PropertyEU ranking of Top Developers in Europe is based on completed projects over a three-year period in terms of both surface area (m2) and value (€). See page 36 for our Special Report and ranking of Top Developers

ToP DeveloPers in €*developer total €

1. Bouygues 1,122,500,0002. Multi Development 1,121,700,0003. Goodman Group 1,072,900,0004. ECE Development 1,028,000,0005. Hochtief Solutions 977,600,0006. OVG 845,400,0007. Unibail-Rodamco 822,800,0008. BNP Paribas Real Estate 826,100,0009. Tesco Kipa A.Ş. 765,000,00010. Raiffeisen Evolution 704,000,000

*WEIGHTED RANKING

ToP DeveloPers in m2 developer total floorspace m2

1. Goodman 1.585.9212. Panattoni Europe 859.2303. Multi Development 517.3004. ProLogis 501.7345. ECE 459.9306. Tesco Kipa A.Ş. 352.7517. Bouygues 326.9008. HOCHTIEF Solutions HTP 282.0509. CTP Invest 272.31410. OVG 262.000

SOURCE: PROPERTYEU

36 | no. 2 - march 2013 | propertyeu magazine

Many developers have fallen by the wayside, but logistics and industrial players are becoMing More doMinant By judi seebus

culling continues

The number of developers that have collapsed since the global property bubble burst in 2007-2008 continues to grow. But some of the survi-

vors are picking up steam, particularly in the logistics and industrial sector. Together they accounted for no less than three of the top five – and four of the top 10 – developers in this year’s edition of the PropertyEU rank-ing of top developers in Europe. Sydney-listed Goodman Group heads the ranking for the second year running in terms of completed projects between 2010 and 2012. In fact, the company saw the overall figure for completed developments over the three-year period jump almost 50% year-on-year to 1,585,900 m2. The Australian logis-tics company also won the title in 2012 on the basis of completed projects between 2009 and 2011.

Newcomer Panattoni Europe came in at second place with 37 completed projects in total. The bulk – or 24 of the total – are located in Poland, four in the Czech Repub-lic and France, and five in Germany. A sizeable number are new Panattoni Parks or extensions including one at the Panattoni Park at Prague airport in the Czech Repub-lic and in the Polish cities of Poznan and Lodz. Roughly half of the developments are built-to-suit projects for clients such as Pilkington and Tesco. Indeed, the Panat-toni development for Tesco in Gliwice, Poland was the biggest project completed over the period at 57,000 m2. Panattoni is not the only developer in the ranking with a strong focus on Poland. Goodman likewise has Po-land as well as Germany on its radar as does Prologis Europe which comes in at fourth place again this year

logisticsGoodman Groupnr. 1 in overall ranking

ceo: Danny Peetersbased: Sydney, Australiacompleted projects: 1,546,773 m2

value: €1,072,909,385

goodman also held onto 1st place overall in terms of square metres

officesBouygues Immobiliernr. 7 in overall ranking

ceo François Bertièrebased: Paris, Francecompleted projects: 272,520 m2

value: €1,122, 522,000

bouygues immobilier also ranks 1st in terms of value in euros

retail

MultiDevelopment nr. 3 in overall ranking

ceo: Heino Vink based: Gouda, The Netherlands

completed projects: 495,200 m2

value: € 1,121,690,000

Multi edged ahead of ece in terms of completed square metres

Top developers 2012 per segMent

ToP DeVeloPerS

0

200

400

600

800

1000 X 1000 M2

CTP INVEST

GOODMAN

PANATTONI

PROLOGIS

HB REAVIS

UK

FRANCE

SPAIN

BELGIUM

NL

SWEDEN

GERMANY

POLAND

CZECH

AUSTRIA

SLOVENIA

SLOVAKIA

HUNGARY

special report

*comPleTeD ProjecTS >5,000 m2 2012-2013

propertyeu magazine | no. 2 - march 2013 | 37

with 501,734 m2 in completed projects. While Prologis held steady at number 4, the total of completed develop-ments is 26% lower than the figure for last year. Pro-logis is also active in the Czech Republic, Slovakia and has a handful of projects in France, Spain and the UK. A newcomer in the top 10 this year is CTP Invest. The Prague-based industrial developer rose three notches from last year’s ranking to end up in ninth position fol-lowing a string of projects completed across the Czech Republic in the past three years. In total, the com-pany completed 27 new business parks or extensions between 2010-2012 primarily in regional cities such as Brno, Pilzen and Ostrava. While the bulk of the devel-opments involved new business parks, four involved an extension. The company, headed by Dutchman Remon Vos, is now gearing up to expand in Poland, Slovakia and Romania.

Mixed retail bag This year’s ranking of retail developers – which will be covered in greater depth in the April edition of Proper-tyEU – presents a mixed picture. While Multi Develop-ment and ECE Development still rank prominently over-all in terms of completed m2 and value, they both saw the

total volume of their completed projects shrink signifi-cantly compared to last year’s ranking. In fact, the fig-ures represent a drop of virtually 50% for both compared to 2012. This compares to a 50% increase in completed projects for Goodman. The days of shiny new mega malls appear to be over, certainly in Western Europe, but increasingly in Eastern Europe and even Turkey. Excep-tions remain, but caution will remain a watchword for developers as the changes ushered in by the e-commerce revolution still have to play out. By contrast, the growing need for retailers to engage in multi-channelling is fuel-

Logistics developers move eastward

Poland is ‘compelling’ for logistics developers aside from germany, poland is the most ‘compelling’ market at the moment for logistics developers, according to emmanuel Van der stichele, fund director of goodman’s european logistics fund (gelF). the country has witnessed ‘a dramatic change’ in terms of infrastructural development and prime and core locations are now evolving in lodz, silesia and gdansk as production shifts eastwards. poland is also benefiting from the german automotive industry where manufacturers are expanding their production base in response to demand from china.

Top 5 logistics developers developer logistics/industrial floor space m2*

1 goodman 1,547,000

2 panattoni europe 859,000

3 prologis 502,000

4 ctp invest 216,000

5 Hb reavis 58,000

illuSTrATioN: ProPerTyeu

38 | no. 2 - march 2013 | propertyeu magazine

ling a need for large and smaller distribution centres, which in turn is boosting logistics specialists. While CEE, particularly Poland, has become the favour-ite playground for most of the industrial and logistics developers highlighted in this year’s ranking, Russia and Turkey remain off-limits. Both are large emerging markets with huge growth potential in terms of demo-graphics, but both Goodman and Prologis remain wary, it emerged at the PropertyEU Logistics Investment Briefing in late January. With assets trading at yields of 8-8.5%, Russia does not offer any premium at the mo-ment, Delin Capital’s CEO Christian Jamison pointed out during a panel discussion. ‘You can get the same level as in the UK, although maybe not super prime.’ Nevertheless, there are examples of companies that are quite successful in the Russian market, he said, pointing to Raven Russia and AIG Lincoln. ‘The fundamentals are so compelling, it’s just a matter of time before the market is further developed.’

Winners and losers Not surprisingly, there are few true newcomers in this year’s edition of the PropertyEU ranking of Top Devel-opers, but plenty of names are missing compared to our inaugural overview of the sector in 2008. ING Real Estate – one of the top players during the boom years which figured at number 2 in our 2008 ranking – just barely scrapes into the top 50 this time around. ING Real Estate is by no means the only victim of the global financial crisis. Amsterdam-based Redevco, one of the largest private equity players in Europe, has also radically scaled back its ambitions as a retail developer in emerging markets such as Turkey, albeit for different reasons. While ING Group was forced to dismantle its entire real estate group following a government bailout in 2008 due to losses at its American unit at the peak of the sub-prime crisis, Redevco is retreating to what the company owners view as safe-haven markets: the UK, Benelux and Germany. Last year, Redevco sold its Turk-ish retail projects to US private equity giant Blackstone. And after quitting Italy, Redevco is also pulling out of Po-land and the Nordics. Redevco is controlled by the Bren-ninkmeijer family, owners of department store chain C&A, through their investment vehicle Cofra Holding.MAB is another big Dutch heavyweight that has tum-bled out of the top 5. The development unit – part of Dutch cooperative bank Rabo – has plunged from 5th place last year to number 29 this year. The list does not end there. In fact, the recent nationalisation of Dutch bank SNS Reaal is connected to a massive overdose of project developments during the boom years at SNS Property Finance. The bank’s near-collapse follows the failure of a string of Dutch developers including TCN

Top 25 office developers

Methodologythe propertyeu ranking of top developers 2013 is based on projects of more than 5,000 m2 completed between 2010 and 2012. the weighted rank-ing is based on the european average investment volume per m2 across different asset classes for 2012. under this calculation, office development rates highest in value terms (3.7x), followed by retail (2.1x) and industrial (0.6x). the ranking is based on propertyeu’s annual survey and desk re-search and focuses on companies with activities in at least one country out-side their home market. this year’s ranking is also based on responses from members of the international council of shopping centers europe.

developer office floor space m2

1 bouygues immobilier 273,000

2 Hochtief solutions 241,000

3 oVg 222,000

4 bnp paribas real estate 218,000

5 raiffeisen evolution 172,000

6 skanska 167,000

7 Hines europe 154,000

8 sistema Hals 110,000

9 ghelamco poland 100,000

10 gecina 98,000

11 aFi development 90,000

12 unibail-rodamco 89,000

13 land securities 60,000

14 Hb reavis 58,000

15 ctp invest 56,000

16 delta development group 45,000

17 strabag real estate 42,000

18 ncc 40,000

19 goodman group 39,000

20 ece development 39,000

21 Mab development 34,000

22 Futureal 24,000

23 Multi development 22,000

24 tesco Kipa a.Ş. 15,000

25 steen & ström 10,000

ToP DeVeloPerS

special report

propertyeu magazine | no. 2 - march 2013 | 39

Bouygues Immobilierranking in m2 : 7 ranking in €: 1 volume: 327,000 m2 value €1,122,500,000

bouygues immobilier is the development arm of french listed construction group bou-ygues. the parent company is active in 20 countries, but bou-ygues immobilier focusses pri-marily on france with a handful of projects in spain, portugal, poland and belgium. the com-pany is committed to building sustainable communities and resi-dential, commercial and business park projects. pictured here is the cristalia office building in Madrid which it completed in 2011.

Hochtief Solutionsranking in m2 : 8 ranking in €: 5 volume: 282,000 m2 value €977,585,000

hochtief solutions is the development arm of german listed con-struction group hochtief. it specialises in offices, apartments and owner-occupied homes as well commercial developments includ-

ing homes for the elderly, shop-ping centres or complete urban districts. pictured here is the refurbished Maxcologne of-fice scheme in cologne that it completed last year for owner warburg-henderson.

OVGranking in m2 : 10 ranking in €: 6 volume: 262,000 m2 value €845,400,000

the 69,000 m2 Maastoren on the river Maas (or Meuse) in rot-terdam is the largest and highest build-ing ovg has developed to date. the rotterdam-based developer headed by coen van oostrom is one of the most successful developers to have emerged from the netherlands in recent years. af-ter building a portfolio of green buildings in its home market, ovg has exported its concept to neighbouring germany and completed two office schemes last year in frankfurt – pollux and triton.

Bouygues dominates office league

which came in at number 22 in the PropertyEU ranking just five years ago. SNS also gorged itself on project de-velopments in foreign markets including Spain and the US. In fact, the biggest headaches in the SNS Property Finance dossier are its foreign development projects (see also article on page 64).

russians lose tHeir roarRussian developers have also gone very quiet after ar-riving en masse amid much fanfare at the Mipim fair in Cannes in 2007. Mirax Group is a case in point. Owned by Russian billionaire Sergei Polonsky, the company was forced to abandon its megalomaniac developments in Moscow and St Petersburg including its Rotating Tower project, originally envisaged as the highest sky-scraper in Europe. The developer collapsed in 2011 after defaulting on $442 mln of debt and is now under in-vestigation by the Russian authorities following allega-tions of theft, according to newswire Bloomberg. Prop-ertyEU’s 2008 ranking contained no less than eight

Russian developers, most of them unranked but with pipelines totalling several million square metres. Most of them like Mirax, but also RBI, RGI and LSR were forced to leave their grand plans on the drawing board, but a number of survivors have stayed the course. Sis-tema Hals is a case in point. Although it accounts for only two completed projects in the period under review in this year’s ranking (2010-2012), it has maintained its place at number 16 – exactly the same position it held in the 2008 ranking. Another stalwart – Hamburg-based ECE – has delayed projects in Russia, but is now teaming up with Renaissance Development as leasing agent on a 60,000 m2 mall in Yaroslavl. Vienna-listed Raffeisen Evolution is also a survivor. The developer is active in its home country Austria as well as Russia, Ukraine, Poland and Hungary. In Kiev, it completed an office complex in excess of 100,000 m2 last year and now its biggest project under development is a mixed-use scheme in Bucharest of almost 250,000 m2 which is due to be opened in 2017.

40 | no. 2 - march 2013 | propertyeu magazine

Goodman Groupranking in m2 : 1 ranking in value (€): 3 volume: 1,547,000 m2 value €1,121,700,000

sydney-listed goodman group tops this year’s ranking for the second year running following an aggressive expansion strat-egy on the european continent. each of the top three project completions in the review pe-riod were for amazon’s europe-an business. in total, goodman has built more than 330,000 m2 of warehouse space for the online retail giant in the german towns of Koblenz, pforzheim and graben (pictured here).

Panattoni Europeranking in m2 : 2 ranking in value (€): 14 volume: 859,000 m2 value: €515,500,000

panattoni europe is an affili-ate of panattoni development company, a leading develop-ersin the us. since entering europe, the amsterdam-based european unit has developed over 2.1 million m2 of space, primarily for industrial purpos-es. the bulk of recently com-

pleted projects are located in poland. panattoni has also delivered built-to-suit schemes for tesco including this complex in gliwice in poland.

Prologis Europeranking in m2 : 4 ranking in value (€): 24 volume: 502,000 m2 value €301,000,000

prologis europe is headquartered in amsterdam and has a pan-european presence. Most projects completed in the period under review are located in germany, france and the uK. the bulk were small to medium-sized, with the notable exception of this ware-

house in Zaragoza of over 80,000 m2. prologis has a very large scheme of over 90,000 m2 in the pipeline in Kilsby in the uK. prologis was steady at 4th position in the overall ranking based on completed projects, but the figure for 2010-2012 – 502,000 m2 – is significantly lower than the 679,000 m2 recorded last year for the three-year pe-riod 2009-2011.

CTP Investranking in m2 : 9 ranking in value (€): 21 volume: 272,000 m2

value: €338,200,000

ctp invest is a business park developer with a focus on the czech republic. the company is headed by dutchman remon vos and has plans to expand in poland, romania and slovakia. in the past three years, it completed 22 greenfield developments. the biggest was this new park in brno with a surface area of 43,500 m2. the company has plans for further growth in the region, in particular slovakia, poland and possibly romania.

HB Reavisranking in m2 : 17 ranking in value (€): 17 volume: 186,000 m2

value €213,300,000

hb reavis is ranked 17th both in terms of m2 and value, but this is based on office and retail developments as well. the total volume of the two logistics devel-opments delivered by the prague-based cee specialist in 2010-12 came to 58,000 m2 with a value of €34,590,000, ranking it fifth in the logistics ranking.

Logistics developers dominate completed projectsthe 2012 top developers ranking features three logistics players in the top 5 and four in the top 10 in terms of completed projects in m2 between 2010-2012

aMazon, graben

tesco, gliWice

brno

zaragoza

air cargo terMinal, ostraVa

ToP DeVeloPerS

special report

propertyeu magazine | no. 2 - march 2013 | 41

Top European developers 2012

Top European developers (completed projects 2010 - 2012)

ranK s

deVeloper total Floor- oFFice retail industrial/ nr total total ranKing

t

space M2 logistics projects pipeline(M2) inVestMent1 (€) 2012

1 = Goodman Group 1,586,000 39,000 - 1,547,000 50 4,282,000 1,072.900,000 1 2 s Panattoni europ e 859,000 - - 859,000 35 24,000 515.500,000 0 3 t multi Development 517,000 22,000 495,000 - 15 1,507,000 1,121,700,000 2 4 = Prologis europe 502,000 - 0 502,000 22 227,000 301,000,000 4 5 t ece Development 460,000 39,000 421,000 - 10 571,000 1,028,000,000 3 6 l Tesco Kipa 353,000 15,000 338,000 - 8 n.a. 765,000,000 0 7 s Bouygues 327,000 273,000 54,000 - 13 n.a. 1,122.500,000 24 8 s unibail-rodamco 325,000 89,000 235,000 - 13 1,394,000 822,800,000 18 9 t Hochtief Solutions HTP 282,000 241,000 41,000 - 15 773,000 977,600,000 8 10 s cTP invest 272,000 56,000 - 216,000 18 n.a. 338,100,000 12 11 s oVG 262,000 222,000 - 40,000 9 745,000 845,400,000 15 12 s BNP Paribas real estate 228,000 218,000 10,000 - 10 1,255,000 826,100,000 13 13 s mcArthurGlen 208,000 - 208,000 - 8 n.a. 437,200,000 35 14 l eurofund inv. Zaragoza Sl2 206,000 - 206,000 - 1 711,000 432,600,000 0 15 s raiffeisen evolution 204,000 172,000 32,000 - 5 303,000 704,000,000 19 16 l Sistema Hals 190,000 110,000 80,000 - 2 n.a. 575,000,000 0 17 s HB reavis 186,000 58,000 70,000 58,000 8 2,157,000 394,400,000 26 18 s Skanska 167,000 167,000 - 0 9 333,000 618,300,000 29 19 t Hines 154,000 154,000 - 0 4 66,000 570,300,000 11 20 t Altarea-cogedim 139,000 - 139,000 - 5 296,000 292,300,000 10 21 s Ncc 131,000 40,000 65,000 26,000 10 42,000 300,600,000 38 22 t Futureal 130,000 24,000 106,000 - 5 299,000 312,000,000 21 23 t land Securities 117,000 60,000 57,000 - 2 808,000 341,700,000 16 24 l Arricano 112,000 - 112,000 - 3 177,000 235,200,000 0 25 t TK Development 109,000 3,000 106,000 - 7 627,000 233,900,000 23 26 s Ghelamco Poland 100,000 100,000 - 0 5 336,000 370,000,000 36 27 l Gecina 98,000 98,000 - 0 7 100,000 363,800,000 0 28 t Plaza centers 95,000 - 95,000 - 4 1,590,000 199,500,000 25 29 t mAB Development 92,000 34,000 58,000 - 8 840,000 249,500,000 5 30 t AFi Development 90,000 90,000 - 0 3 106,000 334,000,000 17 31 t immofinanz 83,000 - 83,000 - 2 109,000 173,800,000 9 32 t Sonae Sierra 82,000 - 82,000 - 2 385,000 173,000,000 28 33 l Steen & Ström 80,000 10,000 70,000 - 1 78,000 184,000,000 0 34 l Delta Dev. Group 78,000 45000 21,000 12,000 10 578,000 219,700,000 0 35 s Klépierre 78,000 8,000 70,000 - 4 n.a. 177,900,000 39 36 l Prime Development 72,000 - 72,000 - 2 140,000 150,200,000 0 37 t redevco 66,000 - 66,000 - 6 n.a. 138,600,000 22 38 t Neinver 61,000 - 61,000 - 4 181,000 127,000,000 33 39 t TriGranit Dev. corporation 59,000 - 59,000 - 1 1,446,000 123,300,000 14 40 l Strabag re B86+B43 50,000 42,000 8,000 - 4 332,000 174,200,000 0 41 l PointPark Properties 49,000 4,000 - 45,000 2 n.a. 40,600,000 0 42 l eria / Pramerica 50/50 48,000 - 48,000 - 1 n.a. 100,800,000 43 l Acteeum 27,000 - 27,000 - 1 n.a. 57,100,000 44 l metro Gayrimenkul yatırım 21,000 - 21,000 - 1 n.a. 44,400,000 45 l corio 17,000 - 17,000 - 4 n.a. 36,500,000

1 weiGHTeD rANKiNG (See meTHoDoloGy oN PAGe 38) 2 A joiNT VeNTure BeTweeN BriTiSH lAND AND orioN cAPiTAl mANAGerS