Business Activities
Real Estate Development Pipeline
Development Partnerships
- Babcock & Brown's core real estate development pipeline across both its principal investments and co-investments has a currently projected realisable end value in excess of $16 billion over 10 years.
- The Real Estate division has a long history of partnering with construction companies to undertake real estate development projects, with Babcock & Brown and its entities capable of delivering full planning and engineering skills through to sales and marketing skills.
- Going forward, Real Estate development activities will largely be focused on residential development opportunities in Australia and Italy which represent two out of the six core Babcock & Brown Real Estate platforms.
Real Estate Pipeline Summary - Australia
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|
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Homebush Bay |
Sydney, NSW |
12ha Sydney Harbour front land, 2400 apartments (1657 remaining) |
1,098 |
2010+ |
|
Victoria Park |
Sydney, NSW |
3.2ha Urban Renewal Project, 3km from CBD (777 apartments, 20,000sqm retail) |
503 |
2010+ |
|
Horton Park |
SE, QLD |
53ha in Centre of Maroochydore, capital of Sunshine Coast (4,000 resi lots, 60,000sqm retail and 100,000sqm commercial and 1662 car bays) |
1,500+ |
2012+ |
|
Capital Square |
Perth, WA |
1.8ha site in core Perth CBD (1000 apartments 30,000sqm commercial and 1662 car bays) |
1,200 |
2010+ |
|
Kodak, Coburg |
Melbourne, Vic |
20ha Melbourne infill, 8km from Melb CBD |
245 |
2010+ |
|
Ripley Valley |
Ipswich, Qld |
200ha of Urban Core, as new satellite city of Brisbane, inlc 2,400 resi lots, commercial and retail town centre |
100+ |
2011+ |
|
BLP |
63% Vic |
Listed LPT, with 11,927 lots remaining to be developed across 20 projects in A/NZ, 61% targetted Affordable living, 35% lifestyle |
2,000 |
2008+ | |
Italy
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|
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Romanina |
Rome, Italy |
600,000sqm mixed use development projects in Rome |
4,300 |
2011+ |
|
Northern Milan Projects |
Nth Milan, Italy |
220,000sqm in 3 projects - San Sesto Giovanni (42,000sqm resi). Villasanta (17,000sqm urban renewal) & Desio (35,000sqm light industrial) |
1,033 |
2011+ |
|
Central and Eastern Milan |
Milan, Italy |
4 predominantly resi projects, across 362,000sqm |
2,666 |
2011+ |
|
Total |
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15,000 |
| |
The GPT Joint Venture
Following a resolution of General Property Trust (GPT) unitholders at a meeting on 2 June 2005, GPT and Babcock & Brown entered into a real estate joint venture (GPT JV) on 30 June 2005 to pursue real estate investment, trading and development opportunities worldwide, and the establishment of a listed and wholesale real estate funds management business in Australia. The GPT JV has exclusive first rights to Babcock & Browns global real estate pipeline where funded by non-Babcock & Brown Australian capital, and property and funds management activities of Babcock & Brown and GPT in Australia (excluding Japan).
On 7 June 2007, a number of changes to the Joint Venture were outlined to ensure it is well positioned to build on the success and positive momentum achieved to date. The changes resulted in the appointment of Babcock & Brown to manage the Joint Venture portfolio (Joint Venture Fund).
Babcock & Brown and GPT maintain a 50% ownership in the Joint Venture.
Babcock & Brown Residential Land Partners
On 30 June 2006, Babcock & Brown successfully listed BLP. BLP raised $175 million in the IPO. Babcock & Brown is the Manager of BLP for an initial period of 10 years. BLP listed with an initial portfolio of 10 residential land projects at various stages of development, located down the eastern seaboard of Australia.
As at June 30 BLP's portfolio comprised interests in 18 projects with 11,162 lots remaining compared to 10 projects with 4,241 lots remaining at the time of listing only two years ago.
During 2007, BLP doubled its initial portfolio from 10 to 20 residential land projects and increased the portfolio’s geographic diversification by acquiring two projects in New Zealand and four projects in Western Australia.
Through its industry knowledge, relationships with key industry participants, and its reputation amongst residential property developers, Babcock & Brown is well positioned to originate further investment opportunities for BLP.
Asian Real Estate
Babcock & Brown's Japanese real estate operations were established in 1998, concentrating on the leveraged acquisition of income producing properties and building assets under management. Babcock & Brown was attracted to this market due to its size, attractive property yields relative to the cost of funds, and the opportunity to increase returns through more pro-active and cost-effective asset management. The fragmented nature of property ownership, and the historical absence of traditional property-financing techniques led to significant opportunities for Babcock & Brown.
On 4 April 2005, Babcock & Brown successfully listed the Babcock & Brown Japan Property Trust (the Trust), the first ASX listed property trust focusing on Japanese real estate market.
As at 30 June 2008 the Trust held interests in a portfolio comprising 44 properties; 21 office, 18 retail and 5 residential properties. At 30 June 2008 total assets under management for the Trust was approximately $1.8 billion.
Babcock & Brown's Japanese operations have the same general mix of advisory and investment activities as the Australian Real Estate business, although the Japanese business has more recently focused on syndication rather than use of the Group's capital to finance transactions.
US Real Estate
In March 2006, Babcock & Brown announced the acquisition of an equity interest in a circa $1.26 billion portfolio of multifamily properties in the southern US. The portfolio was acquired by a syndicate of institutional investors led by Babcock & Brown. Babcock & Brown also arranged and structured mezzanine funding for the transaction. Babcock & Brown has also acquired a portfolio of existing self-storage facilities in addition to development activities in this asset class.
During 2007 Babcock & Brown completed the acquisition of all of the common stock of BNP Residential Properties Inc (BNP) in a transaction valued at approximately US$833 million (approximately A$1,041million).
Babcock & Brown's primary interest in BNP is its high quality apartment portfolio of 8,180 apartment units in North Carolina, South Carolina and Virginia, with an average age of 14 years, which it owns and operates. The overall portfolio occupancy is currently over 95% and rental rates are experiencing strong growth from continuing improvement in market conditions.
Following completion of the BNP acquisition, Babcock & Brown’s multi family property portfolio comprises in excess of 28,000 units across nine states in the US with a more diversified and strengthened presence in the south east and a maintained focus in the high job growth Sunbelt states.
The BNP asset management platform, now rebranded Babcock & Brown Residential, is progressively assuming asset management responsibilities for the Alliance portfolio of multi family dwellings which were acquired in 2006.
On 17 May 2007, Babcock & Brown announced the acquisition of Gregory Greenfield & Associates, Ltd. (“GG&A”), a US-based regional mall owner and operator, as well as a portfolio of eight regional malls currently managed and controlled by GG&A. Included in the Babcock & Brown acquisition of GG&A is the asset management role for six additional malls in GG&A’s portfolio currently owned by third party investors. The transaction was completed on 10 August 2007, with the GPT joint venture acquiring a 51% stake in the retail portfolio.
Following completion, the management of Babcock & Brown’s existing portfolio of US retail properties is expected to be transferred to the GG&A platform.
European Real Estate
During 2007 Babcock & Brown established a number of joint ventures when interests in several existing retail, residential and office portfolios in Germany and Switzerland were syndicated to third party investors. Babcock & Brown which retains an ongoing co-investment interest has entered into agreements to manage the portfolios on behalf of the investors. The third party interest in these properties at 30 June 2008 was $2.0 billion.
In Italy, Babcock & Brown has a significant development pipeline across Rome and Milan. Babcock & Brown Development Fund was established in 2007 and is a closed end fund investing in three residential development projects in Milan.