Encouraging thought leadership & business excellence
building the future of New Europe

The Wall of Capital

Insight Summit — CEEQA@Mipim, 11th March 2015

What does it mean for the New Europe property markets?

  • Keynote
    • Matthew Richards, Head of International Capital Group Europe, JLL

      Matthew is an International Director based in London and leads the International Capital Group (ICG) in Europe and the Middle East which focuses on harnessing cross-border capital flows between Europe, the Americas, Asia Pacific, and the Middle East. He has 16 years’ experience in the European investment market and in the last five years has directly advised on the acquisition and disposal of over €6 bn of commercial real estate.

      Matthew started his career in 1998 with JLL in the Investment Department focussing on regional office investment. In 2005 he joined JLL’s Corporate Finance Team and until 2010 he ran the pan-European Corporate Capital Markets team advising corporate occupiers on extracting value from their portfolios. From 2010 to 2011 he was seconded to Lloyds Banking Group and worked with the bank on their distressed property loan portfolio. Since 2011 he has led the International Capital Group in Europe focussing on the import and export of capital to and from the region. In this global role, he has been a key team member on a number of JLL’s most prestigious projects and in the past eighteen months has advised on $11bn of European transactions.

      Matthew received his BA (Hons) Geography from Birmingham University and his MSc Land Management from Reading University. He is a member of the Royal Institution of Chartered Surveyors (MRICS) and the Urban Land Institute (ULI) and is a regular keynote speaker at most recognised real estate events around the globe promoting European real estate markets.

    • Robert Stassen, Head of European Capital Markets Research, JLL

      Robert joined Jones Lang LaSalle in April 2011 as the Head of Capital Markets Research, with overall responsibility for providing research and investment strategy to clients. Working alongside capital markets teams across Europe, he identifies the themes and trends most relevant for investors and is responsible for the communication of these to both an internal and external audience.

      Prior to joining Jones Lang LaSalle, Robert worked for more than 15 years as an equity analyst, most recently for Credit Suisse in London. Previous employers included Deutsche Bank, Bankers Trust and Paribas Capital Markets. Robert holds a Master in Economics from Erasmus University and an MBA from ESADE Business School in Barcelona.

  • Panelists
    • Dieter Knittel, Director Europe, PBB Deutsche Pfandbriefbank

      Dieter Knittel is a Director Europe for pbb Deutsche Pfandbriefbank and is based in Munich, dealing with Key Account Clients active in Europe with main focus on Central and Eastern Europe. Dieter has been active in the CEE market for more than twenty years, including five years based in Warsaw between 1997 and 2002 as Head of Credit and Senior Risk Management

    • Hadley Dean, Chief Executive Officer EMEA, (MRICS) Compass Offices

      Hadley joined Compass Offices in 2015 with a remit to open 80 high specification serviced office centres within Europe, Middle East and Africa during the next 3 years. Prior to joining Compass, Hadley was Managing Partner Eastern Europe for Colliers International, having joined the firm in 2001 as Managing Director for Poland, where he enjoyed considerable success building the business in all areas across the CEE, SEE, Russia and CIS regions.

      During Hadley’s tenure with Colliers International the company was awarded the key industry award, CEEQA, in 2004 and each year from 2009 to 2014. He is a member of Young Presidents Organisation and a Member of RICS.

    • Ian Worboys, Global CEO, P3 Logistic Parks

      Ian has more than 30 years of experience in the real estate sector, specifically in the warehouse and industrial sectors. He began his career at Strutt & Parker in London in 1981 where he spent 16 years, eventually becoming a commercial partner within the firm. He is a former Chairman of the Industrial Agents Society and is a Fellow of the Royal Institution of Chartered Surveyors (FRICS). Ian joined Gazeley Properties in 1997 as Development Director UK before leading them into Europe and later became a Managing Director, responsible for Belgium, France and Spain. During his 10-year tenure at Gazeley, Ian was responsible for UK developments in London and Southern England. In Western Europe, he secured over 850 hectares of development land and successfully developed over 350,000 SQM GLA of warehouse space on behalf of Gazeley.

      Ian briefly joined Parkridge Holdings in 2006 and left when it was sold to ProLogis, then joining Panattoni as Managing Director Western Europe in 2007 where he was responsible for development, including warehouse and out-of-town retail space. He also served on the Panattoni European Management Board.

      In 2009 Ian left Panattoni to become the Chief Executive Officer of Pinnacle s.r.o. (now P3). Mr Worboys was educated at Whitgift School in Croydon, England and at Bristol Polytechnic (now University of the West of England) in Bristol, England where he completed a Diploma in Valuation and Estate Management.

    • Kate Allen, Property Correspondent, FINANCIAL TIMES

      Kate is the FT’s property correspondent. She covers commercial and residential real estate in the UK and continental Europe, and international investment trends. She joined the FT in 2012 as a statistics journalist, covering global economic and financial data. She was previously the editor of Social Housing magazine, which focuses on financial and business trends in Britain’s affordable housing sector.

    • Otis Spencer, President, Peakside Polonia Management

      Otis was hired in September 2013 as the President of the Board of PPM. He is responsible for the asset management for Polonia I and Polonia II, the origination and execution of new business in Poland, as well as the managerial oversight of Peakside’s office in Warsaw. He has over 20 years of experience in the real estate industry and has executed transactions and functioned as a fiduciary in North America, Europe and Asia. He was until recently the Co-Head/Managing Director of KSP Real Estate Investment Management. From 2005 to 2012, Mr. Spencer was active as Managing Director/Co-Head Europe and member of the Investment Committee with Heitman. During this time he directed the Portfolio Management for Heitman’s European Private Equity group and was the Portfolio Manager for Heitman European Property Partners IV. In addition to his portfolio management responsibilities, Mr. Spencer was active in originating transactions and capital raising efforts as well as contributing to the strategic development of Heitman’s European platform.

      Prior to Heitman, Otis worked for ABP Investments (“ABP”) in the Netherlands where he was a Senior Portfolio Manager. In this capacity, he was responsible for sourcing, structuring and managing non-listed real estate investments on behalf of ABP’s European and Asia Pacific Strategic Funds. During his time at ABP, Mr. Spencer identified and completed ABP’s first real estate private equity investments in Central Europe and Asia. Otis graduated from the University of California Berkeley with a master’s degree in business administration with a concentration in finance and real estate. He also has master’s degree in real estate designation from the Universiteit van Amsterdam. Mr. Spencer holds a dual citizenship from the Netherlands and the United States, and is based in Warsaw, Poland.

    • Pawel Debowski, Partner, Chairman Real Estate Europe, Dentons

      Pawel is a partner at global law firm Dentons and Chairman of the European Real Estate Group of more than 250 lawyers across twelve countries. He is one of the most widely recognized and respected real estate M&A and investment professionals in Poland and Central and Eastern Europe.

      Pawel acts as legal counsel to numerous institutional clients, including investors, developers, lenders, construction companies and occupiers. He has unique expertise in the office, retail and hotel sectors. In professional practice for over twenty years, Pawel was involved in structuring real estate investments in Poland back in the early days of the free market economy.
      His outstanding and sustained contribution to the CEE real estate sector has resulted over the years in multiple recognitions as the leader in this field. Chambers Europe legal directory rates him as a Band Star. It lauds Pawel as “a brand of his own”. He is singled out as “one of the icons of the market,” and “a very technical, robust lawyer,” whose “reputation speaks for itself.”

      Pawel is repeatedly recommended as a leader in the field of real estate law by both Polish publications (namely Forbes and Rzeczpospolita) as well as international legal directories and guides (such as The Legal 500, Best Lawyers, European Legal Experts or Who’s Who Legal). In 2013, for the second time, he was named Professional of the Year at the CEE Quality Awards organized by Imagine Live Media in cooperation with the Financial Times.

    • Robert Martin, Principal, Head of Central Europe, Europa Capital

      Robert is a co-founder and principal at Europa Capital. He started his real estate career in 1991 at Herring Baker Harris in London, specializing in office and industrial property. He then moved to St Quintin, where he worked in the logistics and distribution sector in South East England. In 1998, having completed an MBA at Cape Town University, Robert joined Beckwith Property Fund Management (the fore-runner to Europa Capital), working on investment in Central Europe and the UK.

      As one of the five founding partners of Europa Capital in 1999, he focused primarily on investment in Germany, Austria and the countries of Central Europe, where he has now been active for seventeen years. Robert has been actively involved in the establishment and acquisition strategies of Europa Funds I, II, III & IV and the Europa Emerging Europe Fund.

    • Robert Stassen, Head of European Capital Markets Research, JLL

      Robert joined Jones Lang LaSalle in April 2011 as the Head of Capital Markets Research, with overall responsibility for providing research and investment strategy to clients. Working alongside capital markets teams across Europe, he identifies the themes and trends most relevant for investors and is responsible for the communication of these to both an internal and external audience.

      Prior to joining Jones Lang LaSalle, Robert worked for more than 15 years as an equity analyst, most recently for Credit Suisse in London. Previous employers included Deutsche Bank, Bankers Trust and Paribas Capital Markets. Robert holds a Master in Economics from Erasmus University and an MBA from ESADE Business School in Barcelona.

Immediately following the New Europe Breakfast reception, an audience of 150 gathered to hear a keynote presentation by the JLL European Capital Markets team leaders Matthew Richards and Robert Stassen and a panel discussion involving some of the New Europe property sector’s most successful investors, developers, financiers and consultants, on how a recent huge increase in international real estate investment into Europe is impacting on the CEE markets.

The presentation highlighted how a ‘wall of capital’ is being driven primarily by a recent rebalancing and reallocation of a significant portion of pension fund capital from US and Asian markets out of fixed income and equities into alternative asset classes, including commercial real estate, due in part to the availability of big data on real estate markets and the greater transparency and fiduciary reportability that provides. Capital from insurance companies and endowment funds has also joined the fray, where in 2007 insurance companies were net sellers of real estate, now they’re net buyers. And it’s likely to increase.

The same big data effect, in stimulating a diversification away from concentration on a few key traditional investment city locations and towards developing markets as well as new segments like healthcare, is seeing an equal proportion of investment from outside Europe — around 40% of all investment in 2014 — coming into the CEE markets, primarily through private equity funds and capital partnering, looking for outsized returns partly to justify the cost of overseas investment as well as to rebalance their portfolio risk. Additionally, the effect of this flow of international capital is likely to stimulate further German investment, already the region’s largest internal European investor, into the core Central Europe markets.

With Europe also benefiting from the attractions of a broadly diversified market place, a low interest rate environment, a weak euro and potential stimulation of occupier demand by Quantitative Easing, coupled with the radical effects of e-retailing on demand for distribution facilities, the segments of regional city BPO faclities and distribution hubs appear to be the natural outlets for this wall of money. In addition the CEE markets offer growth driven in large part by infrastructure improvements as well as general convergence, coupled with locally experienced partners as well as improving legal framework and transparency driving cross border and local liquidity — in some eyes becoming almost as core as Germany.

Against a backdrop of investing in growth and narrowing of multi-juristictional challenges in the region, cross-border portfolios supported by corss-border finance has proven to be the way in for scale transactions in industrial but also other segments. While over-supply in areas like regional retail and the Warsaw Office market are sowing some risk into the region, partly through urban planning short-comings, this could be mitigated by a slowing of the property cycle with the new money looking more for inflation protected income in ‘evergreen’ situations rather than fixed term, fast turnover capital gains, creating the space for defending lease terminations and investing in improved perforamnce asssets over time. And while the attractions of the region might be tempered by some degree of political risk there is no firm evidence yet of the Russian situtuation having much impact on investor sentiment in the region.

Listen to the full audio file:

The insight summit builds on CEEQA’s previous work on regional capital flows and investment trends in European and New Europe commercial real estate as well as the unparalleled market impact of its Insight Summit series over the past decade.

CEEQA@Mipim is organised in partnership with Mipim as the focal point for the CEE and SEE property markets at the largest annual global real estate fair. CEEQA is the leading regional market insight platform and main annual industry awards for commercial real estate across 18 countries in New Europe.

Both events were free access for Mapic registered delegates.

 
 

Cee Markets:

Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Ukraine

See Markets:

Albania, Bosnia & Hercegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Romania, Serbia, Slovenia

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