The Six-Monthly Henry Stewart Briefing
Raising and Structuring Finance for Property Transactions

What to do (what can be done) in the current market?

 

Chair:

Simon Berrill
Chief Executive
DTZ Corporate Finance

Speakers:

Jonathan Braidley
Real Estate Finance, Structured Finance, Europe
Standard & Poor’s

John Butler
UK Economist
HSBC Investment Bank

Stuart Cruickshank
Director, Real Estate
The Royal Bank of Scotland

Richard Faulkner
Real Estate Tax Group
PricewaterhouseCoopers LLP

Michael Lister
Relationship Director
Bank of Ireland

Timothy Jones
UK & Ireland Origination
Credit Suisse First Boston

William Newsom
Head of Valuations
Savills

Michèle Small
Portfolio Manager,
Property & Tourism Team
European Bank for Reconstruction and Development

Ed Stacey
Managing Director, Derivatives
Eurohypo AG

John Styles
Partner
Knight Frank Investment Management LLP

Richard Thomas
Head of Islamic Financial Services – Islamic Asset Management and alburaq
ABC International Bank plc

Simon Wainwright
Managing Director
J Peiser Wainwright

 

THE ECONOMY – HERE, THE EU, THE USA AND THE WIDER WORLD
• Are interest rates in the UK set to fall further?
• In contrast, how high can US interest rates rise?
• Is the eurozone finally about to emerge from the doldrums?
• What impact does globalisation have on developed economies and global interest rates?
John Butler
UK Economist
HSBC Investment Bank

WHAT FINANCE IS AVAILABLE AND FROM WHERE IN THE MARKET
• Development finance:
- commercial investment
- speculative
• Investment:
- secured funding
- mezzanine funding
• LTVs
• Margins
• Duration (term)
• Amounts
• Up front fees
• Amortisation arrangements
• Exit costs
• Other costs and charges
Michael Lister
Relationship Director
Bank of Ireland

HOW COVENANT OF THE OCCUPIER AND TERMS OF OCCUPATION AFFECT THE FUNDING COST OF COMMERCIAL INVESTMENT
• The market context - debt and equity
• How to define tenant covenant risk
• How long is a long lease? - the impact of changes to lease structures, property yields and funding margins for prime and secondary investment prospects for 2006
John Styles
Partner
Knight Frank Investment Management LLP

TAX PLANNING IN PROPERTY FINANCING NOW
• Securitisation
• Impact of UK-UK Transfer Pricing
• Property derivatives and tax
• SDLT - recent legislative changes and effect on financing structures
• Tax impacts of the introduction of IFRS
• Tax Avoidance Disclosure
Richard Faulkner
Real Estate Tax Group
PricewaterhouseCoopers LLP

FUNDING THE NEW PROPERTY SECTORS
• Opco risk or Propco risk?
• Is the deal really a property deal?
Stuart Cruickshank
Director, Real Estate
The Royal Bank of Scotland

THE SECURITISATION AND CMBS MARKETS
• The development of the CMBS market – what can be learnt from the US?
• How do CMBS loans differ from “balance sheet” facilities?
• The role of loan servicers
• B notes and mezzanine
• Is there a downside?
• Case studies
Timothy Jones
UK & Ireland Origination
Credit Suisse First Boston

FUNDING EASTERN EUROPEAN PROPERTIES
• EBRD Portfolio – trends and objectives
• What direct and indirect financiers offer
• Financing structures
• Real world case studies
Michèle Small
Portfolio Manager, Property & Tourism Team
European Bank for Reconstruction and Development

WHO ARE THE MAIN LENDERS LENDING AND AGAINST WHAT?
• Annual lending increased by 29% last year. Who were the main contributors to this?
• 11 new property lending teams have entered the market over the last year.
Who are they?
• The first half of 2005 has seen as much securitisation as in the whole of 2004. Who are the main conduits lenders?
• Who is prepared to lend secured against development projects?
• How active are the German lenders these days? Likewise, UK lenders, the Americans and other international lenders?
William Newsom names the players active, and those less active, in the commercial property lending market.
William Newsom
Head of Valuations
Savills

OPPORTUNITIES IN PROPERTY DERIVATIVES
• Why is a market developing?
• What types of derivatives are there?
• Some possible applications
• What's been done so far
• Future developments
Ed Stacey
Managing Director, Derivatives
Eurohypo AG

OFFSHORE FUNDING OPTIONS
• Borrowing from a non-UK lender
• Tax deductibility of debt financing and other secondary investor issues
• European tax directives and impact of withholding taxes
• Fund structuring and changing holding regimes
Richard Faulkner
Real Estate Tax Group
PricewaterhouseCoopers LLP

HOW AND WHAT RATING AGENCIES ARE DOING IS AFFECTING THE MARKET/ WILL AFFECT THE MARKET
• What is a rating?
• The role of the rating agencies in property finance
• How the rating agencies go about their role
• Implications for terms agreed in the transactions and funding markets
Jonathan Braidley
Real Estate Finance, Structured Finance, Europe
Standard & Poor’s

JOINT VENTURE FUNDING
• Reconciling the objectives of the parties and dealing with conflicts of interest
• Legal structures - what are the latest and most popular vehicles?
• The International Dimension - dealing with the added complications
• Minimising tax take
• What fee levels are appropriate for the sponsor - maintaining the balance between incentivisation and overpayment
• Why joint venture?
Simon Wainwright
Managing Director
J Peiser Wainwright

THE NEW ISLAMIC PROPERTY FUNDING SECTOR – WHAT ARE THE OPPORTUNITIES?
• Sources of Islamic funding and intermediaries
• Istisna, Murabaha, Musharika
• Real Estate Funds
• Sectoral penetration
- stabilised
- development and construction
Richard Thomas
Head of Islamic Financial Services – Islamic Asset Management and alburaq
ABC International Bank plc