Regional developers ponder the need to go overseas
Real estate has traditionally been a localized business. Now developers are considering the costs and benefits of moving out of the comfort zone and going international, as Helena Keers reports.
|Salway: looking at value
FRANCIS SALWAY, CHIEF executive of Land Securities, the UK's largest quoted property company, says he has no plans to invest in overseas development opportunities despite rival Australian and US developers entering the UK market.
Salway says: "We are not planning to go overseas and this decision is partly influenced by our sector spread in the UK. We think to diversify overseas would be to diffuse the value for our shareholders."
Land Securities, which last year completed an innovative asset-backed bond issue, is the biggest developer in Europe according to the 2005 survey by Euromoney that analyzed advisers, developers and banks and measured financial performance such as net asset value, revenue, functionality, growth and portfolio mix [see articles in this issue: Commerical is investment; Funds aim to keep up with the investment flows].
Some analysts believe that by not investing abroad the company is hoisting a for sale sign since Land Securities converted into a Reit could become a bid target for aggressive US Reits seeking exposure to the UK market. Salway says he doubts that this will happen.