Back to the Future

Michael J. Fox driving his DeLorean back and forth in the past and in the future, riding his skateboard, listening to Huey Lewis and the News singing the “Power of Love” was one of my favorite movies. I spent an awful lot of time looking at the VHS video (for those who are younger than 25, VHS tapes were big black boxes with movies of bad quality which you could watch on TV, and TVs at that time were also large boxes with a small screens).

Evolution

Real Estate Investment Trust or REIT, is a global trademark which started in the US in the 1960’s, and is now spread across the globe. When a company define itself as a REIT, it mean that it adhere to a number of simple concept. Its is usually a listed company, its business must be real estate investment it is tax transparent, and it pays most of its profit as dividend. Although the local legislation differs here and there, those are the main characteristic of REIT worldwide.

Flat Lines

The new value of the IPD/alstria DMX index which measures the reversion potential of German office rents shows for the second consecutive year that, on average, there is little reversion to be expected in the German rental market. (Full IPD study and result can be found here).

This does not come as a surprise to me and hopefully will not surprise any of the investors we are used to speak to, as this is one of the base case assumptions we have been working on since inception.

Qui va piano va sano

A few weeks ago, following our annual press conference, we got this interesting question from a real estate equity sales desk: “I have one particular question on current disposal talks. If pricing is not very much of an issue and the buyers are mostly equity buyers and have little constraints regarding the debt financing, what is currently holding up the process?”

Apples and bananas

For real estate listed companies like for other industries, March was the month of FY08 earning season and we did publish our numbers on the 31st of March (a replay of the webcast of alstria result presentation can be found here).

Kill the messenger

Kill the messenger. This is basicly what i thought when i read the news about relaxing fair value accounting rules by FASB in the US. Not looking at the problem is unlikely to make it goes away. And unlikely to help solving it too.

How sexy is Germany?

Some days ago some of the German press echoes a speaker (from the Senior Management of a leading european agent) who said the following about Germany: "For 15 years since reunification, Frankfurt and Munich have seen virtually no rental movement at all Germany is boring and was boring It will never be a sexy market". This comment stroke me as at the time of alstria's IPO, one of the main drawback we had was that alstria's portfolio was not sexy enough for Germany. Leases were too long, not enough vacancy, not enough short term reversion, in a nutshell not enough growth. Reading this new comment it seems that alstria's portfolio had exactly the characteristics of a German portfolio. Boring.

MIPIM 2009 - 20 years of real estate

The MIPIM in Cannes is 20 years old. I was having breakfast this morning with a French friend who was a participant at the first MIPIM back in 1989, and is invited tonight to join the "veteran" dinner that is offered by the MIPIM organizers.

During the years this real estate fair has grown in size, number of participant to a scale where a lot of first year participant felt that it was becoming too big to be really efficient. At breakfast this morning, we both agreed that this year MIPIM may not be the most joyful one, but will clearly be one of the most efficient in years. People who came are here for business. Not for fun.