Real Estate Forum - January 2008

lobal digest
Hilton Garden Inn Moves Into Turkey

Turkey’s first Hilton Garden Inn is scheduled to open in December 2009 in the town of Diyarbakir. The 150-key property is one of several to be built in the country by a joint venture of Hilton Hotels Corp. and Amplio Gayrimenkul Yatirim ve Gelistirme Anonim Sirketi.

The firms have entered into a non-exclusive strategic development alliance wherein Amplio will construct the hotels under the Garden Inn and Hampton Inn Hotels brands and Hilton will manage them. The duo intends to build 3,000 rooms in 15 to 20 properties in Turkey’s secondary cities over the next five years.

The arrangement is very much in line with Hilton’s global expansion model, says Mike Collini, the firm’s London-based vice president of development for Northern Europe. “As we got moving with our international development growth, we saw significant opportunities coming from Turkey,” he says. “It’s an emerging nation, it’s been performing very well economically in the past few years and it’s a prime location for hotel development.”

Diyarbakir is typical of the type of city the partners intend to target. “There’s a complete lack of existing quality accommodations in a region that has a high population and sees a lot of business activity,” says the executive. Site work on the hotel, which will cater primarily to business travelers at first, is scheduled to begin by the end of the first quarter, he adds.

The Hilton Garden Inn Diyarbakir is the ninth Hilton property in the country, after the firm debuted the first Hilton in Istanbul 52 years ago.

Yet Turkey isn’t the only country in which the brand will grow. Hilton intends to expand the Garden Inn name across Europe, with plans to open new properties in Bari, Matera and Lecce, Italy; Rzeszow, Poland; Frankfurt; and Perm, Russia over the next 24 months.—Sule Aygoren Carranza

Hines’ European Fund Buys Prime London Asset

Hines’ London office has acquired 15 Suffolk St. in London’s West End from Arab Investments. The property is the first acquisition for Hines’ Pan-European Core Fund (HECF) in the city. Terms of the deal, including the purchase price, were not disclosed. King Sturge represented the seller.

Though Hines was not actively seeking an asset in London, the opportunity to purchase the six-story, 21,200-sf office building in a deal that was not widely marketed was too good to pass up, says Andreas Schreurs, fund manager for HECF.

“London is the most attractive office market in
Europe and the prices have been very high in the
past couple of years,” he explains. “The returns
there weren’t where we wanted them for this partic-
ular fund. In the past six months, however, there
15 Suffolk St. has been quite substantial movement in pricing, and
if we have an opportunity to acquire a property,
particularly in the West End, it’s always something we will consider.”

Built in the mid-1950s, the property has recently received a major renovation. It is 100% leased to boutique investment manager Fleming Family and Partners through 2022.

This is the fifth asset for the fund, which owns two properties in Paris and one each in Munich and Birmingham, UK. Schreurs relates that the open-ended vehicle has spent nearly all of its equity but has another closing in the first quarter of 2008. The company intends to ultimately raise € 1. 5 billion of equity to achieve a total fund volume of about € 3 billion. Its current gross asset value is nearly €350 million.—Sule Aygoren Carranza

SIX SWISS INDUSTRIAL ASSETS TRADE IN € 61.6M SALE-LEASEBACK Guernsey, UK—Swiss convenience food company Orior Ltd. has sold and leased back its six-property portfolio for about € 61. 6 million. ThreadGreen Industrial Ltd., a locally based fund managed by ThreadGreen Partners LLP, bought the assets. The facilities, which comprise some 68,221 sm of office, distribution, production and cold storage space located throughout Switzerland, represent nearly all of Orior’s manufacturing operations.

GC, FINANCIAL ADVISOR NAMED FOR 300-ACRE OMANI PROJECT Muscat, Oman—Omagine Inc., the majority owner of the 300-acre Omagine project here, has selected Consolidated Contractors Co. Oman LLC to serve as general contrac-

Omagine

tor. The firm’s subsidiary, Journey of Light Inc., has also signed a memorandum of understanding to make BankMuscat SAOG, the project’s exclusive financial advisor. JOL and its partners are establishing Omagine SAOC, a joint stock company that will develop, own and operate Omagine. The project will consist of cultural, educational and entertainment space as well as some 3,900 residential units. Construction is expected to last four to five years.

PREI BUYS ROUND HILL CAPITAL Tokyo—Continuing its expansion in Asia, Prudential Real Estate Investors has acquired Round Hill Capital Partners Kabushiki Kaisha, an investment management firm based here. The deal, the terms of which were not disclosed, gives the Parsippany, NJ-based company a presence in Japan. The combined entity will do business as Prudential Real Estate Investors (Japan) K.K.