Global Viewpoints

Corio pays € 126.5 m for Príncipe Pío shopping centre in Madrid

Edited: Jennifer Brenner
Source: Corio

Corio has acquired 95% of the shares of Príncipe Pío Gestion S.A. (hereafter: ‘PPG’) from Grupo Riofisa S.A. (owned by Inmobiliaria Colonial S.A.) (hereafter: ‘Riofisa’). PPG is the long term leaseholder of the Príncipe Pío shopping centre. The shopping centre has a GLA of 28,680 m² and is connected to the Príncipe Pío railway station and has 900 underground parking places. The centre is located to the west and close to the city centre of Madrid and has 12.5 million visitors per annum.

The total investment amounts to € 126.5 m (including all acquisition costs), and produces a Net Initial Yield of 7.8%. Corio will take over the favourable loans in PPG leaving € 56.5 m to be financed by Corio, resulting in a net return on equity of around 13%. Corio will own 95% of the shares in PPG. The other 5% are held by Administrador de Infraestructuras Ferroviarias (hereafter: ‘ADIF’). ADIF is the Spanish state owned company that manages the railway infrastructure. The freehold to the land and buildings is owned by ADIF, PPG operates the shopping centre on the basis of a lease agreement with ADIF ending in 2050.

Príncipe Pío is a dominant first class shopping centre in Madrid at a very good location to the west and close to the city centre. It is located on top of a very busy train/metro station and a bus interchange which enhances footfall. In addition, it is located close to and with direct access to the ring road as well as important connection roads from the ring to the city centre. Its location and its retail and entertainment mix results in being one of the favourite meeting places for the inhabitants of Madrid (especially the Western part). This is also supported by the fact that it is one of the only shopping centres in Madrid that is open on every Sunday. Around 4.5 million people reside within a 20 minute drive from the shopping centre and around 1 million people reside within a 10 minutes drive. Consequently, Príncipe Pío has a very high footfall of around 12.5 million people per year.

The shopping centre was opened late 2004. It is linked to the 125 year old Príncipe Pío railway station which has been renovated to suit retail. The shopping centre has been developed by Riofisa. The two parts are joined together by a glass and steel covered entrance hall which gives the shopping centre a modern and light look and feel.

The shopping centre operates on three floors (basement, ground floor and first floor) and three underground parking levels. The basement is fully dedicated to fashion and accessories, the ground floor has a mix of tenants (leisure, restaurants, fashion and a supermarket) and the first floor has a food court and a cinema. The anchor tenants are: Opencor supermarket, H&M, Zara, Bershka, Massimo Dutti, Pull & Bear and Mango. Corio will take over the management of the shopping centre in the first half of 2010.

Corio is positive on the long term outlook of the Spanish retail property market. It has therefore been one of Corio’s objectives to strengthen its position and the quality of the portfolio in Spain. The acquisition also strengthens Corio’s position towards tenants because Príncipe Pío is a preferred shopping centre for tenants. With this acquisition, the value of Corio’s portfolio in Spain (based on the 31 March 2009 valuation) is around € 588 m (excluding the minority share of ADIF) and it increases Corio’s share in Spain from 8 to 10%.

EU: Promotions in CBRE’s Capital Markets and Valuation Team

Edited: Jennifer Brenner
Source: CBRE

CB Richard Ellis (CBRE) Hungary announces that Tim O’Sullivan has been appointed Head of Capital Markets and Graham MacMillan has been promoted to Head of Valuation. Both RICS-qualified experts relocated from the UK within the last year to join the Budapest office of CBRE, reinforcing their respective teams’ leading position on the market.

Tim O’Sullivan has been responsible for investment transactions at CB Richard Ellis since joining in 2008. Before joining CBRE, he worked for Cushman & Wakefield Investors in London where he was responsible for acquisitions across all sectors. Before working in London he was with Cushman & Wakefield in Scotland where he worked in both the Business Space Department and Capital Markets Team focusing on office and industrial transactions. During his time in the United Kingdom he acquired a number of buildings in Newcastle, Manchester and Glasgow. He holds a Degree of Business Science in Estate Management from Heriot Watt University in Edinburgh and during his third year at university he undertook a one year exchange program at Curtin University of Technology in Perth, Western Australia. He became a professional member of the Royal Institution of Chartered Surveyors (RICS) in 2005.

Graham MacMillan, originally from the West Coast of Scotland, has been working at CB Richard Ellis in Budapest for over a year. As Head of Valuation, he prepares single asset, portfolio and development valuations across all market sectors for loan financing, acquisition and internal auditing purposes. Prior to joining CBRE Graham was an Associate Director of Allied Surveyors Scotland based in Glasgow, where he specialised in valuation, acting for a number of private investment companies, individuals and all major lending institutions. He graduated in 2000 with an Honours Degree in Property Management and Development and after passing the Assessment of Professional Competence (APC) gained professional Membership of the Royal Institution of Chartered Surveyors (MRICS) in 2003 as a Chartered Valuation Surveyor.

“We are convinced that with their significant professional experience and property market knowledge, our international Capital Markets and Valuation teams will continue to establish the market leading position of CB Richard Ellis.” – commented Adrienne Konthur, Managing Director of CBRE Hungary. “The promotion of these talented and experienced colleagues is the acknowledgement of their excellent work and reflects our commitment to ensure that our clients always get top quality services from dedicated, highly qualified experts.”

Jones Lang LaSalle Joins BICEP Coalition to Address Global Energy Policy

Edited: Jennifer Brenner
Source: Jones Lang LaSalle

Jones Lang LaSalle, the leading integrated financial and professional services firm specializing in real estate, has signed the Business for Innovative Climate and Energy Policy (BICEP) project developed by Ceres in cooperation with founding members such as Nike, Starbucks and Sun Microsystems.

Jones Lang LaSalle is the first real estate sector firm to sign onto BICEP, described as "a new arena for business involvement in advancing climate and energy policies to counter the far-reaching risks and challenges posed by global climate change." Jones Lang LaSalle is also the sole real estate industry member of Ceres, a national coalition of organizations committed to addressing sustainability challenges.

"In joining BICEP, we at Jones Lang LaSalle are reinforcing our support for collaboration between government policy-makers and business leaders to reduce the environmental impact of business activities on the environment while remaining sensitive to business needs," said Lauralee Martin, Chief Operating and Financial Officer of Jones Lang LaSalle. "We are committed to act responsibly in our operations and to implement innovative energy management and sustainability solutions in the real estate services we deliver to clients."

In April, Jones Lang LaSalle announced its global carbon footprint as well as the total reduction of carbon emissions the firm helped its clients achieve in 2008. The firm reported that in 2008 it was responsible for emitting an estimated 44,000 metric tonnes of CO2 into the atmosphere, equating to 3.2 tonnes per fulltime, non-reimbursable employee. During the same period, the firm helped clients reduce their carbon emissions by nearly 10 times that amount--more than 438,000 tonnes--and generated $95 million in energy savings for them.

Jones Lang LaSalle's Energy and Sustainability Services professionals and management teams eliminated nearly 2.7 trillion British thermal units of energy consumption worldwide. This accomplishment resulted in reduced carbon emissions by an amount equal to the annual emissions of 80,000 cars or 40,000 households. The company also reiterated its support of sustainability in its operations, evidenced by its acquisition of hybrid vehicles for its U.S. maintenance fleet as well as its continued support of ACT: A Cleaner Tomorrow, a firmwide program to educate and engage employees on environmentally conscious actions they can take at work and in their daily lives.

Business for Innovative Climate and Energy Policy (BICEP) was formed by Ceres in 2009 with the goal to work directly with key allies in the business community and with relevant members of Congress to pass meaningful energy and climate change legislation that is consistent with our core principles. BICEP offers a new arena for business involvement in advancing climate and energy policies to counter the far-reaching risks and challenges posed by global climate change. BICEP members believe that climate change will impact all sectors of the economy and that various business perspectives are needed to provide a full spectrum of viewpoints for solving the climate and energy challenges facing America.

Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres directs the $7 trillion Investor Network on Climate Risk.

Paris: Capgemini Signs Datacentre Lease Agreement With Digital Realty Trust

Edited: Jennifer Brenner
Source: Digital Realty Trust

Digital Realty Trust, Inc., the world's largest wholesale datacentre provider, has completed a Turn-Key Datacentre(SM) lease agreement with Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services. Under this agreement, Capgemini will establish a new datacentre in a Digital Realty Trust property in France during the summer to support the growth of its datacentre infrastructure.

"We are delighted to be working with Capgemini on this important datacentre project for its global IT strategy. Our Turn-Key Datacentre(SM) is an ideal solution for corporate customers such as Capgemini, allowing them to focus on deploying their IT systems in a timely, cost effective manner with a datacentre infrastructure partner they can rely on for the long term," said Bernard Geoghegan, Senior Vice President, International Operations of Digital Realty Trust.

Over the past two years Capgemini has put much effort into upgrading its hosting offering in order to provide its clients with maximum resilience and security levels, optimisation of energy costs, together with a high level quality of services. Capgemini chose Digital Realty Trust because it specialises in datacentre facilities, has international operations, and is financially sound. "By leasing space in its facility, we are able to move forward immediately with our datacentre plans without the significant capital investment ordinarily associated with large hosting projects," said Olivier Herrmann, Capgemini's Deputy Chief Operations Officer, Outsourcing Services. "We also chose Digital Realty Trust because of the company's proven track record of supplying reliable solutions to the world's leading companies."

Digital Realty Trust Turn-Key Datacentre(SM) facilities provide state-of-the-art environments for supporting mission critical infrastructure, with advanced cooling, power, redundancy, and sustainability features to ensure that critical applications are available while optimising energy efficiency. Digital Realty Trust's Turn-Key Datacentres(SM) are scalable from hundreds of kilowatts of IT Load to megawatts of IT load and are located in markets throughout North America and Europe. Each Turn-Key Datacentre(SM) facility is physically secure and features a state-of-the-art power and cooling architecture that has been optimised for green operation. Every Turn-Key Datacentre(SM) is built using the company's proprietary POD Architecture(SM) and uses metered power to ensure that clients pay only for the power that they use.

Behringer Harvard Asset Achieves LEED EB O&M Gold Certification

Edited: Jennifer Brenner
Source: Behringer Harvard

Behringer Harvard announced today that Bank of America Plaza, an asset in the portfolio of Behringer Harvard REIT I, Inc., has been awarded LEED(R) Existing Buildings: Operations and Maintenance Gold Certification by the U.S. Green Building Council (USGBC). This certification was awarded by the LEED Green Building Rating System(TM), which is the national benchmark for the design, construction and operation of high-performance green buildings.

LEED certification of Bank of America Plaza was based on a number of green design features and operational best practices that positively impact the property itself and the broader community. The sustainability programs successfully implemented at Bank of America Plaza demonstrate how a building constructed 35 years ago can profitably achieve energy and resource efficiency that compares favorably with newer construction. These programs included:

• The establishment of sustainability policies and a bimonthly review of progress in meeting goals.
  
• A comprehensive energy audit that identified ways to reduce base building utility consumption and lower the building's operating expenses, saving 1.1 million kilowatt hours of energy annually and reducing annual carbon dioxide emissions by 825 tons.
  
  
• Plumbing retrofits which are resulting in a savings of 1.5 million gallons of potable water annually.
  
• Green cleaning and recycling programs that are improving indoor environmental quality and diverting waste from landfills.

Behringer Harvard invested $70,000 in efficiency upgrades to equipment, operations and employee practices. These improvements are expected to generate approximately $200,000 in annual savings, and are expected to pay for themselves in approximately four months.

"Bank of America Plaza is the first Behringer Harvard property to achieve the rare and prestigious honor of LEED(R) EB O&M Gold Certification," said Robert Aisner, president of Behringer Harvard. "We're pleased to congratulate our property management team for reaching this significant milestone."

Behringer Harvard has an ongoing commitment to sustainable practices and the company continues to expand its green building initiatives. Another Behringer Harvard property, Westway One in Houston, Texas, has earned LEED Silver Core and Shell Certification; in addition, Eldridge III, a newly constructed Houston office property, was designed with the goal of achieving the same certification. Twenty-eight properties owned by Behringer Harvard's investment programs have earned the ENERGY STAR label for prudent energy management strategies.

China Architectural Engineering Announces New Contract to Build Resort Near Shanghai

Edited: Jennifer Brenner
Source: China Architectural Engineering

China Architectural Engineering, Inc.(CAE), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, recently announced that it has entered into a new agreement with Shanghai Nine Dragon Co., Ltd. to undertake the major projects located in the Nine Dragon Resort, Zhejiang, including a seven star hotel, a marine park and luxurious villas. The total project value is expected to exceed $500 million. The projects are expected to commence in the second half of 2009 and be completed within three years.

In addition to taking on this new project, CAE’s work on the Dubai Metro System is expected to be completed in the third quarter as well as the projects in US and Doha, which will be completed within this year. CAE expects the project completions to provide more resources to build the aforesaid new projects. Meanwhile, due to the global financial crisis and other various factors, the company cannot utilize sufficient resources to continue the Singapore project. Given the uncertain global economic outlook and the limited company resources, CAE has decided to give up the project and reallocate resources towards other projects.

China Architectural Engineering Chairman and CEO Ken Yi Luo commented, “Our latest project update shows the effects of an uncertain global economic outlook. The termination of our Singapore project is a disappointment, of course, but it is also noteworthy that we continue to gain new business in our core domestic market of China. Here, our track record and extensive network of contacts in the public and private sectors are enabling us to take advantage of the Chinese government’s aggressive stimulus spending. In the future, we will gradually develop some good business that will produce steady revenues for the company to offset the impacts from the volatile construction industry.”

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed over one-hundred large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia’s major cities. CAE has also expanded beyond China into some of the growing construction markets in the world, such as Middle East, Central Asia and Eastern Europe.

IHG Signs Two New Holiday Inn Properties in Central America

Edited: Jennifer Brenner
Source: InterContinental Hotels Group

Furthering its reach into Central America, IHG (InterContinental Hotels Group), the world's largest hotel group by number of rooms, announced plans to develop two new Holiday Inn hotels in Central America, the first two of seven agreed-upon properties that will be built in the region through a development agreement with the Hotel Division of San Salvador-based Grupo AGRISAL.

The first two properties to be developed include a six-story full-service Holiday Inn in San Jose, Costa Rica and a 13-story Holiday Inn Express in San Salvador, El Salvador. These will be IHG’s second and third properties with Grupo AGRISAL’s Hotel Division, which also owns the Holiday Inn San Salvador.

“We are proud to be broadening our presence in Central America, especially with Grupo AGRISAL, in which we have a solid relationship that began in 2006,” says Alvaro Diago, Area President, IHG Latin America. “We are excited to announce these two new hotels and look forward to the next five that follow.”

The Holiday Inn Escazú San Jose in Costa Rica will be located in the exclusive district of Escazú in San José. The 163-room Holiday Inn will be part of the Riverwalk Business & Plaza Shopping Mall development which includes a variety of stores and boutiques as well as an office building. The property will be in close proximity to the city’s CIMA Hospital and Medical Center, a convenient location for the medical tourism sector, and thirty minutes from San José’s International Airport. It is scheduled to open in the third quarter 2010.

The Holiday Inn Express Zona Rosa San Salvador in El Salvador will be located in the trendiest district of San Salvador known as Zona Rosa, surrounded by restaurants, bars, shops and offices. The 151-room Holiday Inn Express will be part of a new commercial development consisting of two office towers and a shopping mall. It is slated to open in the second semester 2011.

The agreement with the Hotel Division of Grupo AGRISAL is for the development of a total of seven IHG-branded hotels in Central America within a five year period under a license agreement with a company in the InterContinental Hotels Group.

“We are thrilled to be entering into these two new franchise agreements with IHG,” says Eduardo Quiñónez, Executive Director, the Hotel Division of Grupo AGRISAL. “We value and trust IHG, as it is one of the largest and most global hotel companies in the world, and we look forward to developing other properties with them.”

The new signings come on the heels of several recent Holiday Inn signings for IHG, including agreements with five different developers for a Holiday Inn hotel and four Holiday Inn Express properties in Brazil, as well as the extension of the franchise agreement with Santiago, Chile-based Talbot, S.A., for seven existing Holiday Inn Express hotels in Chile and Argentina and one Holiday Inn located at Santiago’s International Airport, Chile.