[global affairs]
Moving Into Uncharted Territory
[September/October 2007]
In the wake of its January 2007 accession to the European Union, Romania, with its strong potential and steady GDP growth, has become an attractive target for outside investment. As a result, the Eastern and Central European arm of GE Real Estate announced in late June a joint venture with Helios Phoenix to launch a $240 million project for the development of warehousing distribution centers throughout Romania. The plan initiates seven Class A logistics warehouses, totaling 315,000 square meters of distribution space in Romania’s largest cities, including Bucharest, Timisoara, Constanta, Brasov and Cluj.
“These developments will be the first portfolio of logistics warehouses in Romania, a market which is currently undersupplied,” says Karim Habra, managing director of GE Real Estate Central and Eastern Europe. “The recent EU accession is expected to further enhance Romania’s GDP growth and consumer and industrial demand, which in turn will lead to greater demand for warehouse space.”
Chief Charls
The European Public Real Estate Association named Philip Charls its new chief executive officer. Charls, who previously served as general manager of the Dutch Chamber of Commerce for Belgium and Luxembourg, will succeed Nick Van Ommen, EPRA’s CEO since 2000.
“I’m extremely pleased to be succeeding Nick, who built EPRA’s member base to where it is today and established EPRA as a successful benchmark for European organizations,” Charls says, who will take office Oct. 1. “I hope to further build and facilitate relationships with our members as well as NAREIT in order to carefully expand our base in the global economic climate.”
Van Ommen expressed his support for Charls. “I think he’s the right candidate to bring EPRA to the next level. After my seven years as CEO, we welcome his fresh thinking.”
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AMB's World Market
AMB Properties Corporation (NYSE: AMB) opened a Euro-denominated, open-end commingled fund, AMB Europe Fund I, that will focus on investments in industrial real estate throughout Europe. The $350 million initial equity investment was supplied by 20 global sources, representing some of Europe's largest pension funds and insurance companies. AMB, the fund's manager, committed 20 percent.
The fund has a gross asset value of approximately $719 million as of June 30, with a growth potential of approximately $2 billion over the next three years. The fund will target properties in global distribution centers near high-volume airports, seaports and highways in Belgium, France, Germany, Italy, the Netherlands, Spain and the U.K. as well as developing areas in Central and Eastern Europe.
"Our private capital franchise allows us to address a real need in the institutional community, while enabling us to finance our growth in a capital efficient and profitable manner. This business boosts our return on invested capital and through asset management fees and promotes, it provides us with an important source of income.
"We entered Europe in 2002 and built our business there from the ground up by hiring local real estate professionals to acquire, develop and manage our portfolio," says Alison Hill, senior vice president, private capital at AMB. "The business had reached a scale that allowed us to launch this fund. This is our tenth active fund and the second open-end fund since we introduced this structure to the REIT industry in 2004."
AMB has plans to create similar co-investment vehicles in Canada for its non-Japan Asian investments.
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