Eurozone Debt Concerns Dragging on Europe's Office Rents, First Rate Softening Since 2009

London, UK

According to Jones Lang LaSalle European Office Index, Europe is now recording slight reductions in office rents for the first time since Q4 2009. Prime office rents fell by 0.3% in Q1 2012.

The net reduction masked both rises and falls across several prime office rental markets. Falls were recorded in Brussels (-5.0%), Madrid (-1.9%), Barcelona (-1.4%) and Paris (-1.2%) whilst rental increases were recorded in Luxembourg (+5.3%), Stockholm (+2.4%) and Hamburg (+2.1%).

Stable rental markets to continue

In the wake of the adjusted economic outlook for the region as a whole, growth forecasts for 2012 have been revised downwards. Markets with more robust economic conditions such as the UK and Germany are likely to perform well, while struggling economies such as Greece, Portugal, Spain and Italy will see on-going strains in occupational markets and rents. The Jones Lang LaSalle office clock shows the spread between markets across the region, with the first market (Amsterdam) reaching 12 o'clock, indicating its next move will be rental reductions, whereas 14 markets still remain at or before 6 o'clock, indicating that rents still bottom out or stabilize.

Steady leasing volumes but 2012 to be down on 2011

Office occupiers are expected to remain cautious in the short term and current expectations are for leasing volumes over 2012 to be slightly lower then 2011 - but in line with long term averages. Take-up in Q1 2012 totaled 2.3 million sq m, 15% below Q1 2011 with leasing volumes in Germany decreasing from the high levels of last year and an 18% reduction in Paris.

Absorption down 16% on Q1 2011

Annual net absorption, representing the change in occupied stock, totaled 3.1 million sq m which is 16% lower than in Q1 2011. Levels in Western Europe increased driven by strong performance in the German markets whereas absorption slowed in the CEE region.

Media Giant Viacom Renews 1.4 Million Foot Headquarters Lease in Manhattan with SL Green's 1515 Broadway Building

Manhattan-based SL Green Realty Corp announced this week that Viacom has renewed its commitment at 1515 Broadway by extending and expanding the company's occupancy at the iconic Times Square tower through 2031. Viacom's future expansion is expected to cover the balance of the building's office space after 2020.  One of the world's leading media companies, Viacom is synonymous with Times Square resulting from its longstanding presence and highly visible broadcast studio overlooking the bow-tie of the square.

The transaction announced today is believed to be the largest-ever New York City office lease other than a few sale-leaseback arrangements.

This record breaking lease follows right on the heels of a recently closed $775 million first mortgage refinancing by Bank of China.  The financing is for a term of seven years and replaces the previous $447 million financing.  Excess proceeds will be used to fund this transaction and for general corporate purposes.

Marc Holliday

Marc Holliday, Chief Executive Officer of SL Green, stated, "Times Square is one of the world's best-known locations, which makes it the perfect home for a high-profile company such as Viacom.  The company has been a corporate anchor in Times Square for over 20 years and the extraordinary building branding opportunity provided in this lease will allow Viacom to increase its corporate visibility to millions of New York City visitors at the 'Crossroads of the World' for years to come. The transaction reaffirms the desirability for trophy assets located in the prime areas of midtown Manhattan."

Philippe Dauman, President and Chief Executive Officer of Viacom, said, "New York City is the undisputed media capital of the world, and a vibrant source of inspiration for Viacom's innovative and creative employees.  We have had a great partnership with SL Green and have been proud to help lead the revitalization of the Times Square neighborhood for two decades.  We could not be more pleased to extend our commitment to New York City and Times Square well into the future."

Andrew Mathias

Commenting on the debt refinancing for the building, Andrew Mathias, President of SL Green said, "This loan, the terms of which were committed to prior to the completion of our lease agreement with Viacom, demonstrates the strength of the relationship we have developed with Bank of China.  We appreciate the Bank's confidence in us and our portfolio and we look forward to continuing to expand this key relationship."

Acquired by SL Green in the first major real estate transaction the midst of the market downturn in 2002, the building has gone through a complete make-over which has included the full re-positioning of all retail space, a comprehensive redevelopment program and revenue enhancement with state-of-the-art LED advertising signage.  In addition to being anchored by Viacom, 1515 Broadway is also home to the Minskoff Theater, one of the city's largest live performance theaters and Best Buy Theater, which is the city's premier rock concert venue together with other national retailers such as Billabong, Aeropostale and Oakley.

Michael Laginestra, Scott Gottlieb, Andrew Sussman and Ramneek Rikhy from CBRE Group, Inc., Chris Smith and Gina Love from Shearman & Sterling LLP and a team of in-house professionals represented Viacom in the transaction. SL Green handled this record setting lease with its team of in-house professionals together with Noah Shapiro and Russ Rabinovich from Haynes and Boone, LLP.

Viacom is home to the world's premier entertainment brands that connect with audiences through compelling content across television, motion picture, online and mobile platforms in over 160 countries and territories. With media networks reaching approximately 700 million global subscribers, Viacom's leading brands include MTV, VH1, CMT, Logo, BET, CENTRIC, Nickelodeon, Nick Jr., TeenNick, Nicktoons, Nick at Nite, COMEDY CENTRAL, TV Land, SPIKE, Tr3s, Paramount Channel and VIVA. Paramount Pictures, celebrating its 100th year in 2012 and creator of many of the most beloved motion pictures, continues today as a major global producer and distributor of filmed entertainment. Viacom operates a large portfolio of branded digital media experiences, including many of the world's most popular properties for entertainment, community and casual online gaming.

Singapore's Largest IPO Expects to Raise $407 Million for M&L Hospitality Trusts

Singapore City, Singapore

New initial public offerings are beginning to move quickly in Singapore.  The first this year will be the largest to date. It is being launched by Singapore's first real estate investment trust.  M&L Hospitality Trusts hopes to raise $407 million U.S. ($509 million Singapore).

 M&L expects to make its debut on the Singapore Stock Exchange May 7.  ($1 U.S. equals 1.2530 Singapore dollars)

Others are expected to follow shortly.

When it debuts, Reliance Communication's undersea cable unit will easily overtake M&L's IPO in expected dollars raised. Reliance plans to raise $1.4 billion by floating its undersea cable networks via a business trust.

Other large Singapore IPOs in the pipeline include the Formula One franchise, English football club Manchester United and the aircraft leasing business of asset management firm Investec.

M&L Hospitality Trusts owns hotels in Singapore, Australia and Japan.   The Trust is made up of a real estate investment trust, M&L Hospitality Real Estate Investment Trust (M&L REIT), and a business trust, M&L Hospitality Business Trust (M&L BT).

Investors in M&L Hospitality Trusts will hold stapled securities each consisting of one unit in M&L REIT and a unit in M&L BT.

According to its preliminary prospectus, published on the Monetary Authority of Singapore (MAS) Opera website, M&L plans to sell up to 585.4 million units at an indicative price of S$0.80 to S$0.87 a unit. 

M&L REIT will distribute 100 per cent of its taxable income from listing date to the end of 2013. At least 90 per cent of its taxable income will be distributed in years after 2013,

Analysts forecast M&L REIT may yield up to 8.05 per cent this year and 7.7 per cent to 8.3 per cent in 2013.

DBS Group, JPMorgan and UBS are the joint global coordinators, book-runners, issue managers and underwriters.

According to its press release, M&L owns the Ibis on Bencoolen and Ibis Novena hotels in Singapore, Four Points by Sheraton and Swissotel in Sydney, Travelodge Docklands in Melbourne and the Hilton Nagoya in Japan. The six hotels have a total 2,509 rooms.

 M&L Hospitality Trusts is sponsored by Grandline International which is owned by the Kum family, a leading Singapore's shipping industry group.

M&L REIT is managed by M&L Manager Pte Ltd and M&L BT is managed by M&L Trustee-Manager Pte Ltd.

Russians Emerge as Biggest Spenders on U.S. Luxury Residences

Quick now. Who are the biggest spenders on U.S. luxury residential properties?  The Chinese? The Japanese? The Brazilians?  Donald Trump?

The Russians. That's who.  According to RT-TV Moscow, billionaires from Russia and the former Soviet Union, have spent $1 billion in acquiring trophy American luxury homes in the past four years. And then they invested millions more in upgrades and fancy renovations.  

All this while the world, including Russia, struggles to come out of the worst depression in 80 years. The Russians see their purchases as new status symbols.

Billionaires from China, India and Brazil continue to purchase trophy properties in the U.S. but they can't match the zeal or the pocketbooks of the Russkies, according to researchers and analysts who monitor such activity.

For instance, two of the most priciest properties earlier this year were purchased by Dmitry Rybolovlev, billionaire and former owner of one of Russia's largest potash fertilizer concerns, Uralkali.

He bought the most expensive New York apartment at 15 Central Park West for $88 million and then bought Donald Trump's Palm Beach villa for $100 million.

The Who's Who roster of Russian billionaires writing checks for AAA American residences grows monthly.

Shaquille O'Neal's former Star Island Miami home

Russian composer and music producer Igor Crutoy paid $48 million for a flat at the Plaza Hotel in New York City.

Yuri Milner, founder of Moscow-based DST, which invests in internet companies including Facebook Inc., Twitter Inc. and Groupon Inc., paid $100 million for a 2,370-square-meter (25,510 square feet) mansion in Los Altos Hills, CA.

The owner of Russian Standard Bank and Russian Standard Vodka, Roustam Tariko, closed the most expensive home purchase in Miami Beach since 2006 when he bought a $25.5 million estate in April 2011.

Construction tycoon Vladislav Doronin, an often-photographed companion of British model Naomi Campbell, bought retired basketball star Shaquille O'Neal's home on Star Island in Miami Beach for $16 million in 2009 -- and then spent $20 million more on renovations.

These mega-sized deals have pushed prices of other landmark residential properties to new highs. For example, the penthouse at 157 West 57th Street, New York's tallest residential building, is now selling for $115 million, up from the original $98 million listing.

So far, the Russian billionaires are favoring New York, California and Florida, which also happen to be popular business and vacation destinations for foreigner