Real Estate Forum - November 2008

lobal digest

Avison Young Formalizes Ownership Structure

The various partner offices that operated under the Avison Young brand have formally merged, creating what’s believed to be the largest independently owned commercial real estate services company in Canada. With more than 300 employees, the new entity will be based in Toronto and will have 10 other locations throughout Alberta, British Columbia and Ontario.

The formation of Avison Young Canada Inc. is part of what CEO Mark E. Rose describes as a five-year strategic plan to grow the firm into an international presence. Previously, “the company was really a series of partnerships trading under one banner,” says Rose. For most of the past decade, he explains, Avison Young shareholders were trying to find a way to bring the company together in a more cohesive manner. In fact, the discussion at the firm’s annual meeting, he says, was about the possibility of “coming together under one common stock ownership, and then funding the company to be a consolidator.”

Terms of the deal aren’t being disclosed, but Rose reveals that no funding was necessary because existing shareholders agreed to throw their underlying equity into the larger company. “What is very interesting is all of the partners who are now shareholders have agreed to stay with the company, and keep their shares in it, for a significant amount of time,” he adds. Davies Ward Phillips and Vineberg LLP advised Avison Young in the transaction.

The integration process, Rose says, should take less than a year to complete since the only redundancy is in back-office operations. “We will be putting some national structures in place in terms of leadership for all of the service lines,” he says, which will likely involve the addition of management.

The firm is looking first to strengthen its position in Canada, with a particular focus on the eastern part of the country. Then it will look to grow its reach into major financial centers such as New York City, London, Frankfurt, Paris, Tokyo and Hong Kong. As for service lines, Rose says the company will concentrate on being a full-service global operator. —Sule Aygoren Carranza

SKANSKA CONVERTING HANGAR INTO 45,000-SM RETAIL CENTER Stockholm—KF Fastigheter has tapped Skanska to handle the second phase of the Bromma Center in the western part of this city for SEK $700 million. The locally based firm will rebuild and expand a 61-year-old airport hangar into a three-story shopping center totaling 45,000 sm, as well as an 11,000-sf parking garage. Work is currently under way and slated for completion in the spring of 2010.

CHINA WELCOMES FIRST
W HOTEL TO HONG KONG
Hong Kong—Starwood Hotels &
Resorts Worldwide Inc. has brought its
W brand to China with the debut of W
Hong Kong. Located on the waterfront
in the city’s commercial, entertainment
and cultural district, the tower features
393 guestrooms, including 42 suites,
as well as Asia’s first Bliss Spa, two
restaurants, swimming pool, fitness
facility, 8,200 sf of meeting space and
the W lounge. The hotel, Starwood’s
third W in Asia, is owned by Sun Hung
Kai Properties and was designed by
Glamorous Corp. and G+A.

Triland Builds Sarajevo’s First Shopping Center

Dallas-based Triland Development, an affiliate of Crow Holdings, is developing what’s believed to be the first modern retail complex in the Bosnian capital of Sarajevo. The $40-million Alta Shopping Center is slated for delivery next September.

“This type of investment is going to help change the perception of Bosnia,” says managing director for Colliers International in Serbia, Jovica

Jakovac, who is a member of the project’s leasing team. “It shows that foreign companies can successfully do business here. Others will start looking at Bosnia for investment opportunities.”

Jakovac says Colliers has received considerable interest from retailers for the 23,000-sm complex. He anticipates the firm will have the mall’s 11,900 sm of leaseable space fully contracted before its debut. “We’re determining the right mix of stores to ensure the best quality. We expect about

80% of the retailers will be new brands to the Bosnian market.”

A number of retailers have already inked deals, says Jakovac. Though he would not disclose the details of the agreements, the executive says one of the major tenants will be a supermarket, with 2,000 sm of space. The shopping center will also feature a 1,000-sm fitness center, boutiques, restaurants and cafes.—Danielle Douglas

Alta Shopping Center

JER PARTNERS TAPS EXEC TO HEAD LATIN AMERICAN INVESTMENTS

Mexico City—JER Partners has added Alejandro Marina as vice president of Latin American investments. In this position, he will be responsible for placing equity capital into commercial real estate in Mexico and thtoughout Central America for the McLean, VA-based firm. Marina was