Closing Deals in the UK with the Benefit of Title Insurance

     Message from Jean-Claude Domaingue

      Director of Underwriting, Conveyancing Liability Solutions, UK

The uncertainties of recent years have prompted financial institutions to charge more for finance or seek to avoid deals altogether. With many of the loans from the buoyant pre-crisis days now reaching maturity, financing deals are being renegotiated and lenders are demanding reassurance.

Many exposures in the UK of concern to developers or causing reticence in lenders emanate from historical legal rights or where developers may be bound by restrictive covenants. Local communities can also use archaic legislation to make things difficult for developments that they do not want in their back yard. For example, people may apply for judicial review of a planning decision or look for rights like the potential that land could be used for a village green, such blocking tactics can cause huge financial losses.

In these situations, carefully underwritten title insurance can help. Providing assurance to a developer that historic legal obligations should not derail a project, comforts lenders being asked to fund that project.

As European consumers' switch their shopping habits to purpose-built malls from traditional town-center stores, prime shopping centers are the safest bet for property investors looking for stable income streams and a sure return, experts say.

After fears about the escalating euro-zone debt crisis curtailed investment in the first part of the year, spending on retail real estate is picking up across Europe. Direct investment in European retail property rose to €6 billion ($7.78 billion) in the third quarter, from €3.9 billion in the second quarter, according to research by property-services company Jones Lang LaSalle.

   - THE DEAL MAGAZINE

     - BLOOMBERG

 Brazil granted a tax exemption to foreigners who buy mortgage-backed securities or invest in funds that purchase them after sales of new debt supported by real estate loans fell almost 50 percent this year.

AMSTERDAM, Nov. 1, 2012 -- AMSTERDAM, Nov. 1, 2012 /PRNewswire/ -- Prologis, Inc. (NYSE: PLD), the leading global owner, operator and developer of industrial real estate, today published an in-depth research report into the performance of the industrial property sector in Europe.

The paper titled "Opportunities in the European Industrial Property Market" highlights the impact of cyclical factors such as the current deficit in Class-A space and supply-demand dynamics, as well as major structural trends such as the ongoing supply chain reconfiguration and the rise of e-commerce.

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    - FINANCIAL TIMES

A recent article on Property Wire just revealed that European banks have curtailed lending on real estate investments. Although still funding urban green projects in Paris and London metro, banks in Europe are only lending to large, International firms on a limited basis.

Most real estate investors are in a holding pattern on making new deals, or have ceased projects altogether that they've started. Many of them will wait to see how the European Debt Crisis will unfold. With the new requirements under Basel III, European banks will look to cut lending by 500 Billion Euros and de-leverage even more in coming years. This doesn't bode well for real estate investors in Europe.