LSH Ski Challenge Business Forum
The Lambert Smith Hampton Ski Challenge Business Forum 2010 invited industry leaders, including Valad and Helical Bar, to share their thoughts and forecasts on the year ahead. Here's what they said:
Jack Pitman, Investment Director, Helical Bar Plc
"The year ahead is quite difficult to predict. The second half of 2009 was a surprise to everyone. We expected to see banks selling properties and even distressed debt portfolios. We also expected that those with substantial cash deposits would have the market to themselves. This hasn’t happened.
"What we’re actually seeing is that those with cash are struggling to invest it while those with existing portfolios, appropriately written down, are enjoying rising values again and are reluctant to sell.
"Everyone is asking the questions, ‘Are rising prices going to continue, and if so, shall we join the party?’, ‘Will we see a double-dip?’. These questions are difficult to answer. Prices may have got ahead of themselves. Helical Bar will be cautious and selective in their purchases. We want properties where we can really add value and we’re confident that we’ll find them."
Martyn McCarthy, CEO Valad Europe, Valad Property Group
"The next 12 months are going to be an optimistic period for our industry generally, both equity and debt sides. The last 18 months have been pretty torrid but we are seeing change.
"We can expect to see some trends in terms of new funds. Many banks have a number of loans, sometimes going into the hundreds, and may have had borrowers who probably weren’t very good in the asset management space. Some borrowers are not performing at the moment so banks are looking for other asset management partners to inject new capital. They also need them to do the actual asset management work and manage the tenancy side as the banks essentially own these properties.
"Over a zero to six month period we may see new models of incentivised asset management. Anyone who has got a platform, skills and are able to do the good reporting that banks are after will do quite well. These companies will get base fee, incentive fees, and promote at back end for making more money than the portfolio is worth today."
Ezra Nahome, CEO and Head of Capital Markets, Lambert Smith Hampton
"On the whole, there is an upbeat feel in the industry today; this is balanced with a sensible amount of caution. There are still considerable risks in the market, with occupational demand weak and rental values still falling, but we are seeing improvements in yields. While this may be more of a market correction rather than the first steps towards recovery, it is nonetheless bringing the market back to some level of normality.
"We saw 2009 capital markets volume remain fairly static compared to 2008. Interestingly, the make-up of business transacted between the two years has been very different. 2008 had a slow finish compared to a busy start, whereas 2009 started slowly but ended with a flurry of deals in Q4.
"The first half of 2010 will see continued activity in capital markets with high demand for prime and well secured stock. But there is a risk of the market stalling after the election as a ‘new’ sense of reality sets in."
View coverage of the Business Forum, courtesy of Estates Gazette
Please click here to see LSH's UK Investment Transactions Quarterly Bulletin - Q4 2009
Please click here to visit LSH's new investment opportunities website
2 Mar 2010
For information about the services covered in this news story please contact Ezra Nahome
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