International property magnate Gerald Hines shared some of the secrets of his success during the closing session of this year’s BPF conference.
The man renowned for developing towers around the world highlighted the trends his company is monitoring. “American pension funds have become more active and directly involved with developers eliminating asset managers and advisers. They are involved in joint ventures with high degrees of discretion. That can catch on over here.”
He went on to warn that landlords face increasing yields on their buildings. “We love your long, upward only rental contracts that deliver consistency”, he said. “On the continent, of course we want as long a lease as possible but the market is pushing them down. We are already feeling that in the UK and you will have a more volatile market here than ever before. It’s a higher risk so yields will be driven up.”
In the light of today’s expected cut in US interest rates amid fears of a recession, Hines added: “Today the property market in the US is much healthier than at the last crisis. The debt levels are approximately 40-50% in Reit portfolios. The banks have restricted speculative development having learned from the last cycle.”
He also praised London Mayor Ken Livingstone for attempting to make London “a better place to live”. However, he expressed doubts about suggestions made yesterday by Livingstone’s business advisor Judith Mayhew that the City will see clusters of towers appearing.
EGi News 31/01/01
