1. India: Debt-Heavy Hoteliers Get Help To Avoid Bankruptcy
India hoteliers facing debt pressures are getting some relief in avoiding insolvency from a bankruptcy court established in 2016 that is now also helping owners get distressed properties to market in a shifting financial climate.
Brokerage JLL said 51% of the country’s hotel transactions in 2023 occurred through proceedings of the National Company Law Tribunal in which owners sold properties or pared debt. “All these transactions were focused on debt-heavy, premium assets located in strong-performing markets, of which approximately 44% was transacted for under-construction hotels,” said Jaideep Dang, managing director of JLL’s hospitality group in India.
2. UK: WeWork Completes UK, Ireland Lease Talks
Global flexible space provider WeWork has completed lease negotiations as part of its strategic restructuring in the United Kingdom and Ireland.
New York-based WeWork has been shedding locations in several countries amid larger financial restructuring efforts that began last fall with a Chapter 11 bankruptcy filing in the United States. WeWork has been reducing its once massive British and Irish office footprints for several years with lease exits and renegotiations, and it now has 40 locations in the U.K. and Ireland, according to its website.
3. France: Avison Young Boosts Operations Despite Obstacles
Brokerage Avison Young is looking to ratchet up its operations in France in a challenging climate for commercial real estate, after moving to shore up its own finances internationally.
French regional President Thomas Canvel said he was not surprised by rumors that Avison Young faces potential difficulties, but told Business Immo the Toronto-based brokerage is ready to raise its profile in France. Like many of its competitors, Avison Young has not been spared by rising interest rates and the resulting real estate crisis, as its own credit rating was downgraded after defaulting on debt payments.
4. Germany: Investment Firm Buys 19-Property Portfolio
Berlin-based investment firm Livos Group acquired 19 commercial properties in six major German cities from Austrian investment firm S Immo AG for about €255 million, a price estimated at 9.5% below the properties’ total book value at the end of 2023.
The office and retail properties are located in Berlin, Erfurt, Hamburg, Leipzig, Potsdam and Rostock, with rental space totaling about 145,000 square meters. “With this acquisition, we are expanding our portfolio to include properties with great potential for value appreciation in some of Germany’s most dynamic cities,” a Livos Group statement said.
5. Canada: Cities May See Revenue Shortfall From Lowered Office Values
Rising office vacancies resulting in lower property values are sparking concerns about financial fallout for Canadian cities in the form of dropping tax revenue needed to provide essential services to residents.
The situation may force some cities to shift more of the tax burden to residential property owners, according to a new study from the Quebec Urban Development Institute. Canada’s national office vacancy rate reached 18.4% in the first quarter, according to brokerage CBRE, but the urban research group said not all cities will see their budgets affected equally because municipal taxation rates vary.
6. US: Large Banks Face Higher Risk From Commercial Property Loans
Commercial real estate loan portfolios of the nation’s biggest banks are facing increased risk, new federal data shows, with an estimated $1.6 trillion in property financing expected to mature over the next two years.
More than 65 of the largest U.S. banks are at higher risk of failure because of their commercial property loan exposure, according to a Florida Atlantic University analysis of first-quarter data. The 67 banks with more than $10 billion in assets have exposure to commercial real estate greater than 300% of their total equity based on data reported to regulators, with any ratio over 300% viewed by the Federal Reserve as excessive exposure that could put banks at greater risk of failure.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.