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A flood of redemptions from real estate funds has rocked the sector in the UK, forcing leading investment houses to stop customers taking their money out. The industry hopes the worst is over, but market opinion is not unanimous that the future looks brighter. Julian Marshall reports.

Published in conjuction with: ABN Amro - BNP Paribas - Citi - Commerzbank - Deutsche Bank - Fortis - HSBC - ING - Rabobank - SEB - Société Générale - Standard Chartered

Against a backdrop of the most savage falls in UK commercial real estate values ever recorded – IPD’s UK index fell 3.6% in November and 3.7% in December – the real estate derivatives market has not been found wanting.

Real estate’s role in corporations’ approach to improving sustainability and showing sensitivity to the environment has never been clearer. A recent survey conducted by the Economist Intelligence Unit of 1,254 senior business executives, including more than 300 chief executives, revealed the role real estate and facility strategies play in corporate sustainability efforts. Nearly half of all respondents named as their leading sustainability priority a goal that is addressed mainly through real estate-related strategies.

Deutsche Bank has cut back staff numbers in its European commercial real estate business, letting go at least 16, including some senior management. Paolo Massi, managing director of commercial real estate for Europe, the Middle East and Africa, was let go at the end of January, as was Morgan Garfield, managing director and head of UK conduit lending. John Nacos, head of commercial real estate, Europe, remains at the bank.

Testing the limits of green development

Morgan Stanley slashes US residential business...

India’s stock markets might be going to rack and ruin but leading domestic real estate firms are queuing up to sell shares in real estate investment trusts (Reits) in Singapore.

The Greek property sector is growing thanks to a surge in retail development. Concurrent capital markets’ liberalisation has allowed investors and developers greater access to the equity and debt markets. Phil Moore reports.

Morgan Stanley will scale back its residential mortgage operations in the US in response to the continued deterioration of the mortgage markets. The firm will discontinue its UK-based residential mortgage lending business, Advantage Home Loans. About 1,000 employees in the US and the UK will be affected by this restructuring. These cutbacks were announced in mid-February.

For the past five years or so, commentators have frowned at Australia’s listed property trust sector, which has consistently outperformed every other major asset class in the country, and argued that this success couldn’t last. And for the past five years they’ve been wrong.

Having bailed out the US investment banks in their hour of need, sovereign wealth funds are also turning their vast pools of cash towards real estate. Industry experts predict a doubling of investments by these funds to $10 billion within five years.