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| In November 2007, Derek Quinlan, Founder and Executive Chairman of Irish investment company Quinlan Private, in a personal capacity, together with Propinvest, a leading private property investment company, completed the acquisition of 25 Canada Square in Canary Wharf, London. The transaction is a 50/50joint venture between Derek Quinlan and Propinvest. Consideration for the transaction was £1 billion (about €1.4 billion). The property is a 42 storey landmark tower which is let, in its entirety, to US banking giant Citigroup. Derek Quinlan, a former Irish tax inspector, is Executive Chairman of Quinlan Private, a leading international private equity and real estate group, which he founded in 1989. Quinlan Private currently manages assets in excess of €11.5 billion. |
UK sales of commercial property plunged in the fourth quarter of 2007, hit by both falling prices and the credit crunch.
The value of transactions fell from £15bn in the third quarter to £5.5bn in the fourth, according to data provider Property Data. The dismal figures contrasted sharply with £20.1bn value of deals that were transacted in the last three months of 2006.
The last time quarterly sales dipped below £5.5bn was in 2002, during the traditionally low activity first three months.
According to IPD (Investment Property Databank), a leading index provider for commercial property, prices have fallen by nearly 10% since their peak last summer. IPD says that owners may record losses of at least 11% in 2008, according to prices of derivatives contracts pegged to indexes its maintains.
The fall would be the largest since IPD introduced its annual total-return index in 1981, which combines data for rental incomes and changes to appraisal values. The benchmark index covers £200 billion of investments and excludes debt, which can multiply property gains or losses.
Total returns on the IPD UK Monthly Index fell by a massive 3.6% in November - the fourth consecutive monthly fall. This was the worst monthly total return on record, beating the:
-1.8% recorded in May 1990 by some distance. The year-to-date return stood at -1.8%, indicating a negative total return on the UK Annual Index for the first time since 1992.
Commercial property values fell by a cumulative 7.8% in the year to November, which compares to a cumulative 27% fall between 1989 and 1993. Nonetheless, in sharp contrast to the early 1990s, IPD said that the occupier market remains healthy, with positive rental growth across all sectors.
Co-founding Director and Head of Systems and Information Standards, Ian Cullen said: “The unique coincidence of economic and financial pressures which is driving this unprecedented property market realignment makes it all the more difficult to project our IPD numbers, even into the near future. It would, however, be heroically brave to call the bottom of the market before the turkey has even been stuffed.”
Commercial property agents Jones Lang LaSalle said in November that in the nine months to the end of September 2007, Irish investors put €8.2bn in overseas property compared with an estimated €6.0bn in the same period in 2006.
