Positive glow seen on horizon for some European property as credit channel loosens

The mood in European and US property markets is improving, with governments getting to grips with problems, more banks lending money than at the start of the year, and the prospect of inflation underpinning medium-term pricing, says Noel Manns, principal of the London-based opportunity fund group Europa Capital. Manns told PFE in an interview that Europa last month made the first investment for its third European vehicle, Europa Fund III, acquiring the Forum Steglitz shopping centre in Berlin at a net initial yield of 8% from UK REIT Hammerson. The acquisition resulted from long and careful selection for the fund, which at final closing collected e730m in equity from US and European investors. The group also raised a smaller vehicle last year, the Emerging Europe Fund with e164m in equity, targeted at eastern Europe, that has made just two investments - allocating e21m of equity into logistics properties in the Ukraine and Romania. "We had been looking to buy things for the last 12 months," Manns said. "I think we took the right decision - that to rush in wouldn't have been correct... The deal with Hammerson in Berlin was done at a price that suited both sides. And in this market that's what it's all about really: finding willing sellers."