When the Canadian conglomerate Horsham Corporation merged with North American property company Trizec on November 1, the new company, Trizec Hahn Corporation, became the second-largest real estate company in North America, with property assets of $3.5bn.
Horsham Corporation already owned 48% of Trizec, a stake which it acquired in 1994 when Trizec was on the verge of bankruptcy. The decision to buy into Trizec was part of a strategic move by Horsham away from minerals and mining, and into property.
The full merger completes that strategy, as Horsham had already made a commitment to sell its 46% interest in Clarke USA, the petroleum company. Trizec Hahn will, however, retain its 15.7% shareholding in Barrick Gold Corporation. The property operation plans to focus on emerging markets in Asia, South America and Europe, in addition to strengthening its extensive North American interests.
Trizec Hahn Corporation has total assets of $6bn, including $600m cash and $1bn of assets that could be redeployed for real estate. Its property portfolio contains 70 retail and office buildings in Canada and the US, comprising 4.6m m2. The core of the US holdings is the original Trizec regional shopping mall portfolio, concentrated in California. This was acquired when Trizec bought out Californian developer Ernie Hahn in the 1980s.
With a market capitalisation of $2.3bn, and quotations in New York, Toronto and Montreal, Trizec Hahn is headquartered in Toronto. The personality behind the empire is the low-profile Hungarian émigré Peter Munk, who founded Barrick Gold in the 1980s and built it into the third-largest gold mining venture in the world.
Munk’s origins have led him back to central Europe, although those close to him insist that this is not for sentimental reasons, but as part of a strategy to build a worldwide property company that will specialise in developing in emerging markets.
Trizec Hahn Europe is based in Berlin, the site of its first project, the 240ha Brandenburg Park business and distribution development. Formerly Horsham Properties, Trizec Hahn Europe had property assets at the time of the merger of a modest (by comparison with the group) DM 150m.
The company is planning a retail outlet centre at Ludwigsfelde near Berlin, and has entered a joint venture with Hungarian developer Polus Investments.
Trizec Hahn Europe is headed by managing director Philip Jones. His strategy is to target new markets, rather than mature locations. “Trizec Hahn Europe is the platform for central Europe,” says Jones. “The opportunities for us in west Germany and western Europe are relatively limited.”
The best way to enter emerging markets is via joint ventures, believes Jones. The Hungarian venture, TriGranite Development Corporation, is an important step in achieving this. Polus Investments, controlled by Hungarian businessman Sandor Demjan, has opened two significant developments in Budapest this year: the Bank Center office building and Polus Center shopping scheme.
The 56,000 m2 Polus Center was 100% let at the opening last month. The three anchor tenants are Tesco Hypermarket, Office Plus and La Standa.
Although Trizec Hahn does not own a stake in either the Bank Center or Polus Center (although Peter Munk invested personally in latter), Trizec Hahn Europe will manage both properties.
The company’s most recent venture is the opening of a Prague office ahead of the announcement of a number of projects in the Czech capital.
Trizec Hahn Europe
Kurfurstendamm 31
10719 Berlin
tel +49 30 885 9010
fax +49 30 885 4773
