Firm of the Year
Industrial is the property type of the moment and, in 2018, Global Logistics Partners leveraged its specialty in that market to overtake Blackstone as the top firm in Europe. After a second-place finish last year, it surpassed the industry’s biggest manager with a fundraising flurry. GLP closed on €4 billion for its GLP European Income Partners I and GLP European Development Partners I. It also added €1 billion for its club vehicle, GLP Continental Europe Development Partners I.
Along with its impressive capital-raising efforts, the Singaporean firm also broke ground on the UK’s first triple-story warehouse in London’s Docklands. GLP is one of the newer mangers in the European market, making its entry in late 2017 through the acquisition of Gazeley, an investor, developer and manager of logistics property on the continent. It also launched it first two funds around that time.
It was a competitive field for firm of the year in Europe. Hines drew substantial votes for its acquisition of an Apple headquarters in Paris – along with various other transactions – and Blackstone remained in the mix after privatizing the Spanish company Hispania Activos Inmobiliarios SOCIMI SA.
Industry Figure of the Year
1. Trish Barrigan, Bension Elliot
2. Lars Huber, Hines
3. Wolfgang Eger, Patrizia
Although this award technically only addresses the accomplishments of the past year, for Trish Barrigan this is the culmination of an ascendant 18 months. In May 2017, it was announced that Barrigan would replace Marc Mogull as the managing partner of Benson Elliot, the company they founded together in 2006. Officially, she took the reins of the fund manager on January 1, 2018, making her the first female leader of a pan-European private equity real estate firm.
Less than three months later, under her leadership, Benson Elliot achieved a first close for its Real Estate Partners V fund on €600 million, eventually surpassing its €800 million target for the opportunity fund by €30 million. Before co-founding Benson Elliot, Barrigan spent two years with the Dubai Investment Group, as head of global real estate and then chief strategy officer. Before that, between 1994 and 2004, she was vice-president and head of acquisitions at Goldman Sachs.
Deal of the Year
1. Starwood Capital’s £1.1bn sale of Principal and De Vere hotels
2. Candriam’s purchase of 40% of Tristan Capital Partners
3. AccorHotels €4.4bn sale in AccorInvest
While the long-term ramifications of Brexit remain to be seen, one short-term perk is a rise in tourism fueled by a falling pound. This influx of travelers has helped propel a rising hospitality market in the UK. Starwood Capital, under the leadership of founder and CEO Barry Sternlicht, took advantage of this trend in a major way, exiting a portfolio of high-profile hotels in England and Scotland to the tune of $1.1 billion in one of the most notable transactions of the year.
The Miami-based manager sold 14 well-known assets, including the former Hotel Russell, to Foncière des Régions, a French public real estate holding company. Totaling 2,638 rooms throughout London, Manchester, Edinburgh, Glasgow, Leeds, Oxford and York, Starwood began compiling its Principal Hotel Company portfolio in 2013 and built it up through a string of acquisitions.
Leading up to the sale, the UK had seen 39.7 million visitors in 2017, an increase of 6.2 percent from the previous year, according to Jones Lang LaSalle, a brokerage. Likewise, the market for hotel and leisure properties in the country had risen considerably, to £4.5 billion ($5.8 billion; €5.2 billion) of total transactions. The market was hot, and Starwood capitalized on that better than anyone else.
Institutional Investor of the Year
1. Allianz Real Estate
2. Oxford Properties
Allianz Real Estate’s rise to prominence, with CEO Europe Annette Kroeger at the helm, as one of the top institutional investors in the world has been built on a diversified, global approach, one that includes fund investments and acquisitions in the US, China, India and elsewhere. Nonetheless, Europe remains its bread and butter.
The property investment arm of the German insurance group has 68 percent of its massive portfolio on its home continent. In March, it opened a new office in Vienna to bolster its future pursuits. To earn the title of Europe’s top institutional investor, Allianz made a £350 million ($453 million; €403 million) investment in Chapter, a London-based student housing business, via a joint venture with Greystar Real Estate Partners and PSP Investment Board. It also purchased the Atlas building in Munch for €190 million and teamed up with manager Tishman Speyer and developer Metrovacesa for the development of the 500,000 square-foot Monteburgos office complex.
Second-place Oxford Properties tallied a respectable number of votes after partnering with Delancey to invest £600 million in the UK’s Get Living rental platform. It also sold a €400 million position in a French portfolio to JPMorgan Asset Management and jointly purchased Berlin’s Sony Center with Madison Realty for €1.1 billion.
Capital Raise of the Year
1. Henderson Park Real Estate Fund I
2. GLP Continental Europe Development Partners I
3. Curzon Capital Partners V
The story of Henderson Park is truly one right out of a fairytale. Launched only in 2016 by ex-Mount Kellett executive Nick Weber, the firm rose from infancy to hauling in the largest ever first-time European real estate fund last year, reaching an unprecedented $1.6 billion for its debut value-add and opportunistic fund, Henderson Park Real Estate Fund I, and over $600 million of additional co-invest capital, PERE understands.
Just two months after the firm launched, it received $500 million in seed capital from sponsors Stone Point Capital, sovereign wealth fund Kuwait Investment Authority and New York and Kuwait-based investment manager Wafra Investment Advisory Group.
Henderson Park’s $950 million fundraising goal was already ambitious, but thanks to a “buy rating” by six major consultants and Weber’s decades of experience in European real estate investment that target was blown out of the water. PERE understands the firm has been forced to turn away investors. Over 50 percent of that $1.6 billion capital raise has already been committed to transactions representing a total deal value of almost $5 billion, and the firm has already closed on 14 landmark acquisitions in gateway and capital cities across Europe.
Capital Advisory Firm of the Year
2. M3 Capital Partners
3. Hodes Weill
Led by James Jacobs, the real estate team within Private Capital Advisory at Lazard claimed the crown for Europe’s capital advisory firm for the seventh year in a row. The same relationship that helped secure its first-place rank for 2017 proved more successful than many would have thought possible, with Henderson Park hitting its hard cap of $1.6 billion for its maiden fund. Overall, the real estate team at Lazard has aided various firms, many of which are considered emerging managers, in raising over $2.5 billion of equity last year.
Aside from Henderson Park, Lazard were also involved during 2018, among other assignments, in advising London-based firm Baumont in raising its debut fund within nine months of launching, surpassing its €250 million target to reach €300 million; Paloma Capital raise an £80 million ($104 million; €92 million) first close on their second UK fund, which was already 50 percent of its initial target; and on establishing a £600 million UK-focused PRS (private rented sector) co-investment platform with Delancey and Oxford Properties, christened DOOR, which has already invested in several rental property portfolios such as the Get Living venture in London.
Firm of the Year: UK
2. Brookfield Asset Management
3. TH Real Estate
For the first time in two years, Blackstone retook its crown for the UK. The comeback was well-earned: after completing its controlling-stake acquisition in The Office Group, the New York-based firm secured an additional 12 leases in the UK and in Germany, increasing the leasing space to 1.7 million square feet. It also sold multiple London office buildings for over £2.6 billion ($3.4 billion; €3 billion), PERE understands, including Devonshire Square, 20 Old Bailey and The Adelphi, offloading 77 percent of the firm’s pre-Brexit London Commercial Office portfolio.
But what everyone was talking about last year was the firms’ acquisition of Network Rail’s commercial real estate portfolio alongside Telereal Trillium. The portfolio consists of around 5,200 rental properties across England and Wales, comprising logistics, retail, food and beverage, and leisure spaces, the majority of which are converted railway arches.
A £1.46 billion transaction, Blackstone intends to be in this partnership for the long term, focusing primarily on leasing to SMEs, investing in the currently unused arches and hopefully reducing the need for taxpayer funding for the UK’s railway upgrade plan. In all, Blackstone has much to be proud of in the UK market this past year.
Firm of the Year: Germany
1. Starwood Capital
2. Brookfield Asset Management
3. Corestate Capital
The Greenwich-based fund manager has been distinctly active in Germany this past year, supplanting 2017 winner Ares Management as the new firm of the year for the country. Given that Starwood was last year’s global firm of the year, however, this should come as no surprise. In 2018, the firm launched a global core-plus business to complement its long-running opportunistic funds, intending to diversify its investments across the G7 countries; and in Germany it is starting off with a bang.
The purchase of Fifty Avon Office, the multi-tenant Class A office building located in central Frankfurt, was perhaps the most eye-catching deal of the firm’s many capital outlays, but not its largest. Starwood also managed to secure a majority interest in 940 residential, retail and office units located in and around Frankfurt from a distressed seller in another off-market transaction, totalling 780,000 square feet of leasable space. PERE understands that the purchase price of €179.1 million was about a 32 percent discount to replacement cost. These and other transactions brought Starwood Capital’s total capital outlay in Germany to $549 million in equity.
Firm of the Year: France
1. Henderson Park
3. Invesco Real Estate
Investors are unlikely to forget the explosive debut of Henderson Park onto the European real estate investing scene. Though only two years old, the firm is understood to have raised $2.2 billion of capital across its debut fund and co-invest capital. In fact, the London-based firm’s team added seven professionals in 2018 and has focused primarily on off-market transactions.
One of the firm’s first transactions was the Le Méridien Etoile hotel in Paris, a €365 million deal that PERE understands returned €23 million by the end of 2018. The firm continued to bet big on the French hotel market when it completed its €550 million acquisition of the 428-room Westin Paris-Vendôme in October, one of the largest single-asset European hotel transactions in recent history. It has also laid out renovation plans for the Westin that will bring this iconic transaction to €800 million altogether.
With its investments in the French hotel industry already at over $1.5 billion, it is hardly a shock that the brand-new firm unseated last year’s winner LaSalle Investment Management.
Firm of the Year: Nordics
1. Starwood Capital
Starwood Capital’s foray into the Scandinavian real estate market is beginning to bear fruit. It was no small feat to take this title from long-standing local champion NREP, but that is just a testament to how much effort the Greenwich-based fund manager has put into its investments and relationships in the region. Starwood was one of the first non-local investors to pursue this domestic investor-dominated market; back in 2015, the firm’s Starwood Global Opportunity Fund X acquired two property companies in Sweden and Norway for a combined $1.4 billion.
Of the 106 original properties bought then, 51 were sold in September to Hemfosa, a Stockholm Stock Exchange-listed company, for approximately $400 million, and the largest remaining asset, Oslo office building Helsfyr, was sold in October for NKr1.2 billion ($145 million; €120 million). These and other sales from this portfolio netted Starwood $780 million in gross proceeds.
These impressive exits should not be taken as a sign of withdrawal from the region. On the contrary, Starwood has been making opportunistic acquisitions including a waterfront site near the heart of Stockholm’s central business district, which it plans to develop into residential and commercial real estate.
Firm of the Year: Spain
2. CBRE GIP
3. Savills Investment Management
The New York-based private equity real estate firm has been present in Spain since 2003, but two deals last year made headlines worldwide. The firm completed its controlling stake acquisition of Banco Popular’s non-core real estate portfolio just weeks after Banco had been bought by banking group Santander. With the real estate portfolio valued at circa €10 billion, this stands as the largest real estate acquisition in Spain to date.
The second deal to seal Blackstone’s claim to the Spain title was the take-private of the €2.8 billion REIT Hispania, the largest real estate take private in the country. Hispania’s portfolio boasts about €2 billion of hotels all around Spain, many with enviable beachfront locations, €600 million of offices and €220 million of multifamily assets in Madrid and Barcelona.
The Hispania deal now makes Blackstone the largest hotel owner on the Iberian Peninsula, with 63 hotels comprising about 18,000 keys. With Spain as the second most-visited country globally now, the firm is planning to invest significant capital in the hotels.
Firm of the Year: Italy
2. Partners Group
In general, Italy’s real estate investment sector enjoyed a quiet 2018. Several firms, such as Savills Investment Management and AEW, mentioned that they were looking at the country for investments, but it was Blackstone that put its money where its mouth was in the clearest way.
Over the past few years, Blackstone has been racking up leased space in its grade A office portfolio in Milan, and last year increased that further. The firm has also been busy with comprehensive refurbishment programs, the most eye-catching of which was the iconic turn-of-the-century Palazzo Delle Poste building on Piazza Cordusio in Milan, where Starbucks opened its first store in Italy and its first roastery in Europe in September. At the end of the year, several other deals were also in the works, including buying a 35 percent stake in the real estate fund management company and long-time collaborator Kryalos SGR, which has €5.5 billion assets under management in Italian real estate; and talks of selling its retail portfolio to Singapore-listed Sasseur Group, a deal possibly valued at €800 million, a good sign of Blackstone’s continued activity in the country.
Law Firm of the Year: Fund Formation
1. Greenberg Traurig
2. Kirkland & Ellis
3. Clifford Chance
Greenberg Traurig’s London-based team specializes in the formation of value-add and opportunistic real estate funds. The firm works in tandem with the tax team on both fund establishment and sub-structuring.
During 2018, Greenberg Traurig represented top-tier firms such as Europa Capital, Heitman and Patrizia in the creation of their funds. The law firm also aided London-based Valor Real Estate Partners in launching Valor Industrial Partners 2, the firm’s second value-add logistics fund in partnership with AIG Global Real Estate.
Greenberg Traurig also represented CBRE Global Investment Partners in restructuring its $2 billion global open-ended real estate fund. In this, the firm took into consideration changes in US FIRPTA laws and Australian-managed investment trust laws. It also restructured M3 Capital’s first German real estate mezzanine debt fund, converting it from a closed commingled fund to a long-life evergreen fund.
Law Firm of the Year: Transactions
1. Paul Hastings
2. Kirkland & Ellis
3. Herbert Smith Freehills
With a flurry of hotel sector transactions, Paul Hastings has dethroned powerhouse Clifford Chance to regain the top spot in this category for the first time since 2015. After a runner-up finish in 2016, the law firm surged to the front of the pack after advising hospitality giant Starwood Capital on a pair of major transactions. Paul Hastings helped the mega-manager sell a portfolio of 14 Principal- and De Vere-branded UK hotels then advised it on the acquisition of a 30 percent stake in Yotel, an affordable hotel operator, for $200 million.
The firm advised Invesco Real Estate on two portfolio purchases totaling 3,200 rooms throughout Germany and the Netherlands for a combined €687 million. It also represented LRC UK as it acquired a hotel portfolio from Lone Star for £656 million ($856 million; €745 million) and played a lead advisory role in several other hotel deals throughout Western Europe. Along with its hospitality work, the fund also advised on several significant office transactions, including Global Asset Capital’s purchase of the Nike headquarters in Hilversum, Netherlands.