Monthly Archives: February 2010

Gijs Klomp (ING REIM) expands role to Hungary

Gijs Klomp, already in charge of asset management for ING REIM in Romania, has now taken the reins in Hungary as well. He replaces Peter Horvath, who is leaving the company “to pursue other opportunities.” Klomp has been with ING since 2002. ING REIM will run the two companies in a single management center.

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Media allegations surface about Stadium City in Warsaw

For weeks now, a special parliamentary commission has been probing alleged shenanigans in the process of writing a new gambling law  in Poland. This has morphed into a sideshow discussion about why the Ministry of Sport blocked a commercial development next to the National Stadium in Warsaw. There are allegations that a former minister of sport might be mixed up in the proceedings.

It was expected that along with the National Stadium, Poland’s windowshop venue for Euro 2012, a profit making mixed-use complex would be built next door so that public money wouldn’t have to be used to maintain the stadium.

With less than two years before the Euro 2012, however, Stadium City is nothing more than a design and some nice pictures. It’s looking increasingly likely that the National Stadium will not only be costly to build, but it will cost extra millions to maintain after the lights dim on Euro 2012.

Greece and CEE

The now popular economist Nouriel Roubini has a view on the scope for contagion spreading from Greece to CEE. This topic was always going to come up, so it would be absurd to pretend it’s not an issue. The bad news is that (no kidding) there could be some contagion. The good news is that analysts seem to be treating CEE as a collection of individual countries, rather than a single, backwards bloc. Risks are higher in some countries than others. Note, in the abstract below, which countries don’t make the watch-closely list.

Eastern Europe will likely feel reverberations from Greece’s fiscal woes, Mary Stokes and Jelena Vukotic assert in a post on the RGE Analysts’ EconoMonitor. While the possibility of contagion via trade and FDI channels is limited, transmission via the financial channel is a real risk in Bulgaria, Romania and Serbia, given the strong presence of Greek banks in these markets. Any direct spillover effects will likely be limited to these South East European economies, but the potential for indirect effects must also be taken into account. On the positive side, Greece’s fiscal crisis highlights the comparatively better fiscal positions of EU newcomers in Eastern Europe. Nevertheless, troubles in the eurozone periphery could further curtail global risk appetite and delay euro adoption, which could weigh on emerging European assets going forward.

If you want full analysis, you have to follow the link (above) and pay Roubini for it.

Construction restarts on New Karolina

Hot on the heels of financing being put in place for Multi Development’s New Karolina scheme in Ostrava, the company has restarted construction on the huge scheme. Work ground to a halt in the aftermath of the financial crisis in late 2008, despite what’s said to be substantial, and real preleasing activity. 57,000 sqm of retail, 23,000 sqm of office and a couple hundred flats are all included in the first phase.

US commercial real estate lending picking up

Sixteen banks (with assets totalling $7.62bn) have gone bust in the US this year, and in seven cases, what drove them under was exposure to commercial real estate. And yet, US banks are getting back into the CRE game. CoStar provides a detailed look at the trend.

Total renewals of existing commercial real estate accounts increased 57% from November to December of last year, according to numbers released this week by the U.S. Department of Treasury. Treasury completes a monthly tally of lending activity of the nation’s 20 largest bank, which control 57% of all U.S. banking assets.  While seasonality contributed to the increase — as year-end is an active time for renewals — new lending also more doubled in December from the previous month. Total new commercial real estate commitments increased 157%. That was the first increase in four months.

The cost of keeping existing loans on bank books is significant. At least if you’re looking to do new business with a bank.

Approaching maturities will continue to share the stage in 2010, with more than 67% of life company respondents acknowledging 40% to 60% of their portfolios will be allocated to the refinancing of maturing loans.

While liquidity within the capital markets is expected to turn from a trickle to a slow-but-steady flow in 2010, borrowers can expect the same tightened underwriting standards they experienced from life company lenders in 2009.  Loan to value ratios in 2010 will fall predominantly in the 50% to 70% range, according to more than 74% of life company respondents, and that number is expected to remain steady in 2011. As for new conventional commercial real estate loans in 2010, 59% say most loan terms will range five years or greater, with an additional 28% indicating a preference for three to five year terms.

Gant gets debut permit in Warsaw

Listed residential development company, Wrocław-based Gant, has received its first construction permit in Poland for a project in Warsaw. Called “Kaskada na Woli”,  its first phase will consist of 280 flats and is set to begin this spring at Sokołowska street in the Wola district.

The entire development could to as many as 750 flats plus more than 8,000 sqm of services areas. Gant says it’s secured financing for the project, with a PLN150m loan from Raiffeisen Bank and further PLN48m from February issue of stock.

Knauf signs up at Jupiter in Prague

Knauf Insulation has signed up for 425 sqm of space in Jupiter, the first phase of Quinlan Private Golub’s Prague 5 office scheme, Explora Business Centre. The deal finds occupancy at Jupiter 90%. Other tenants include Citibank Europe, DHL Express CZ, General Electric International and Honda. The building offers 21,100 sqm of leasable space, including 2,650 sqm of retail.