Great investment opportunities are coming

"To be"asset manager"in real estate in times of crisis is not all rest", launches Christopher Linney, Director of real estate investment at Henderson Global Investors (HGI). Used for ten years to purchase and dispose of assets with significant gains, investment fund managers and institutional investors are forced to adapt to the abrupt downturn of the market of stone. The crisis has frozen transactions. Buyers and potential sellers take a wait position on the business climate. According to real estate agents, the volume of the funds invested in real estate business in France in 2008 were divided by two from 2007. The overcautiousness of banks and their reluctance to lend, the decline in prices and the lack of visibility of the market were correct major real estate operations planned white via complex financial packages. Indeed, "this is not the right time to sell, because prices are low," said a Manager. This degradation of the environment has changed the hierarchy of trades of "asset management" in real estate. For the record, this profession has in a decade, structured in two main specialities. The investor called also "fund manager" or "investment manager" was responsible for creating the dominant real estate investment fund and raised money from investors. The Manager. Three years ago, the first profile was more popular than the latter, because very profitable. "In a real estate market in full expansion, should respond to the appétences of investors", says François Grandvoinnet, General Director of asset management of AEW Europe. This was the era of infernal rotations of portfolios. But the crisis did fade the star of the investor for the benefit of his colleague: the "asset manager". Or movements in their heritage, professionals must now manage the parks. Holders of real estate portfolios for their own account (property, mutual insurance companies, banks) or for third parties (funds, managers of SCPI) are now seeking to optimize their management. "When the market was rising, records are managed easily." "Now we take initiatives and anticipate", should be Christophe Linney.

For all major donors, the main objective is to "ensure the cash flow." "In the current context, we seek an improvement of the profitability of each of our properties," confirms Silvio Estienne, CEO of ING Real Estate Investment Management France. The focus is more on the performance of assets with the aim to boost the performance and the secure. This concern is all the more important that many agree that in 2009 "the risk real estate will be rental". To contain, the actors are organized. They choient more than ever their tenants in place so that they do move at the end of lease.

Limit the vacancy

In a depressed environment, reduction of operating costs became a priority. Second post expense after salaries, real estate business is scrutinized and sometimes returned in issue. Upon renewal of their lease, companies not hesitate to request a rent reduction. "It solutions." If needed, we propose flanking measures to keep our tenants. "The goal is to reduce the vacancy rate", argues a professional.

Recently Catalyst Capital has agreed to modify the lease due to a "tenant in surloyer" and in return for a commitment of fifteen-year lease, he reduced the rental value. "At the time of resale, the long-term lease will be an asset", said Fabrice de Thehôtel, Director of Catalyst Capital France. Another example: AEW Europe has agreed to support the rehabilitation of the elevators in the building of one of its clients (which was not included in the lease agreement) for a renewal of the lease for the same price and on a firm period. Recently, "applications of tenants are especially more numerous and more complex." "Managed on a case by case, these situations mobilize more time and also more people", recognizes François Pochard.

Variable geometry management

Average decline of 5 in 2008, rents should in 2009 retreat from 5 to 10. In an announced decline in performance, the upgrading of the building becomes necessary. "More that ever, the relationship with the"property management", in charge of the technical and daily building management, is important," said Fabrice of Thehôtel. To improve the comfort of a building, donors are launching renovations in public and privative. They modernize or changing equipment and, if necessary, carry out pardons to scale. "This period is conducive to start such projects, as in nine-month construction costs fell by about 10," notes Jean-Christophe Ginet, Director of property management in SGAM AI. Some do not hesitate to choose a commercial repositioning of their premises. Thus, all of offices square Feydeau, located near the place of the stock market in Paris (2nd District) and managed by UFG REM will be a significant restructuring. "Finally, we designed a renovation program important without to position our product on the high-end niche of buildings because they are too expensive and too many in this district." "However, we will propose completely re-engineered local to the current design, with rents in the low range of the market", said Gilles Chamignon, Director of the management of the UFG corporate real estate fund.

Other operators, owners of shops and shopping centres, enter into negotiations with municipalities to launch urban development projects in the medium or long term aimed, inter alia, to extend commercial surfaces. Today, "everything must be implemented to maximize rent for each asset, while minimizing its vacancy rate", summarizes Jean-Chistophe Ginet.

If a more active management is on the front of the stage, it remains variable geometry. His style first will depend on the class of assets held. Donors do not in the same way of their office buildings, residential, warehouse logistics, local business, shopping centres or their walls of hotels. Then, the strategies differ according to the calendar of the placement. Deemed to achieve a "father" management, insurance companies and the SCPI retain goods between ten and twenty years. "Since 2000, we have built a real estate diversification strategy capable of generating the least amount of tactical changes in market", says Jean-Louis Charles, financing and investment in Groupama branch.

The conservation of the property over a long period can be programmed work, select tenants and profitable. "Over long periods of detention, it is brought to work three or four times in the same building to adapt it to the new regulations." "It is also a way of valuing the heritage of our customers and be able to offer attractive premises and the taste of the day in a fluctuating market," says Gilles Chamignon. A lesser degree and over a shorter period, real estate funds are the same management measures to restore the performance of their assets. This period "hollow" is used to prepare goods "for resale at the time when the market will leave."

Down since this fall, transactions could lead in the second part of the year. With equity investors expect an arrival on the market of property owners who will need cash. "Great investment opportunities are coming." "Will need to enter them, this pole investments must be kept" anticipates François Pochard.