2010AWARDS & AnnuAL REVIEW - PERE

GLOBAL
When it comes to deals, you can’t get much larger, or more complex,
than General Growth Properties (GGP). When the US
REIT filed for bankruptcy protection on 16 April 2009, it was
heralded by some as a “once in a lifetime” buying opportunity
for rivals. The largest real estate-related Chapter 11 filing in US
history, GGP took with it approximately 158 cash-flowing regional
shopping centres. However, when GGP filed for bankruptcy
protection there was one firm already out of the starting
blocks: Brookfield Asset Management.
With a total debt load of more than $27 billion, roughly $4 billion
of it due in the 12 months following the failure of Lehman
Brothers, GGP was struggling to calm panicked markets and its
creditors and fend off circling hedge funds. As a result, Brookfield
was negotiating with GGP about providing rescue financing.
Once GGP filed for Chapter 11, though, the REIT was put
into open play for all real estate investors, not just Brookfield.
MIDDLE EAST, nORTH AFRICA FIRM OF THE YEAR LATIn AMERICA
1. Qatar Investment Authority
2. Kuwait investment Authority
3. Mubadala
DEAL OF THE YEAR
1. General Growth Properties’ recapitalisation by a Brookfield Asset
Management-led consortium
2. Apollo Global real estate’s takeover of Citi Property investors’ platform and funds
3. the Blackstone Group’s takeover of Bank of America Merrill lynch Asia real estate Principal
investments platform
As with most sovereign wealth funds, real
estate has become an attractive diversifier
for the Qatar Investment Authority. Like
other investors of its magnitude, Qatar
forwent making commingled fund investments,
opting instead to make direct investments
in assets via its various entities,
including Qatari Diar, The First Investor
and Qatar Holdings.
That’s not to say Qatar wanted nothing
to do with commingled funds. In May, The First Investor,
which is controlled by Qatari Diar, launched opportunity
funds targeting Brazil and Russia, aiming to raise a combined
$1 billion.
Still, Qatar’s major headlines derived from its direct investments
in London. On top of its 24 percent stake in developer
Songbird Estates, Qatar also was behind a joint investment
in the development of the “Walkie Talkie Tower” at 20 Fenchurch
Street. Add to that the trophy purchase of landmark
Harrods department store in Knightsbridge in a deal valued
at more than $2 billion, and 2010 was quite the acquisitive
year for the Middle East, North Africa Firm of the Year.
10 PERE | 2010 AwArds & AnnuAl review
Harrods: Qatar’s
London trophy
In total, 131 firms expressed an interest in GGP, with 18 parties
eventually signing confidentiality agreements. But the most intense
competition Brookfield faced was from rival REIT Simon
Property Group, which engaged in an extremely public battle to
take over GGP in its entirety. As each side corralled equity partners
and creditor support, Brookfield and its consortium of investors,
including Bill Ackman’s Pershing Square and Fairholme
Capital Partners, edged into the lead, ultimately being named
the stalking horse bidder in May 2010.
That success, however, wasn’t the end of things for Brookfield.
Simon may have withdrawn from the race, but as Brookfield
faced the GGP auction it knew it had to cement its position. Securing
equity commitments from the Teachers Retirement System
of Texas and The Blackstone Group, Brookfield transformed
what had been a solo recap deal into an $8 billion equity infusion
by some of the largest real estate investors in the world.
1. Hines
2. AMB Capital Partners
3. equity international
FIRM OF THE YEAR
Hines is no newcomer to the Latin
America market. Indeed, you
could argue Hines is the granddaddy
of Latin American investing,
closing its first Mexico deals
EcoLogistics, Mexico:
institutional industry
in the early 1980s before expanding into Brazil in 1998. Today,
Brazil is one country firmly in Hines’ vision as it becomes an
increasingly attractive destination for LPs, as well as other
fund managers.
Part of Hines’ focus follows the close in September of the
firm’s third separate account with the California Public Employees’
Retirement System, which raised $190 million of equity
and is now fully invested. That mandate targeted primarily
logistic, office and affordable residential in Brazil.
In 2010, though, it was the firm’s industrial activities across
the whole Latin American region that really shone through.
Hines executed 14 industrial leases in Brazil totaling more
than 2.4 million square feet of space and accounting for more
than half of all Class A warehouse leases in the country. Meanwhile,
in Mexico, the firm’s 258,000-square-foot EcoLogistics
industrial property in San Luis Potosi became the first industrial
building to achieve LEED certification in Mexico.