Real Estate 2018: Discussion

Who’s Who Legal brings together two leading experts to discuss issues facing real estate lawyers and their clients in the industry today.

Ciaran Carvalho, CMS Cameron McKenna Nabarro Olswang LLP, England

Martin Holler, Giese & Partner sro, Czech Republic


Have there been any significant developments in real estate law in your jurisdiction over the last 12 months?

Ciaran Carvalho: There have been a number of recent developments impacting UK real estate law. One of the major changes has been in relation to capital gains tax affecting overseas investors into UK property. CMS held two seminars on this theme – both were attended by over 100 of our clients and contacts showing the level of interest in the impact of these changes. There has also been a recent change to the France/Luxembourg double tax treaty affecting overseas investment in French real estate, and we also ran a popular seminar about this for our contacts. New approaches to tax structuring will be required in both cases. We have produced podcasts on these issues: see episodes 5 and 9 of The Real Deal podcast, available on iTunes.

Retail insolvency and the negotiation of company voluntary arrangements (CVAs) has been another major theme, with several very high-profile examples hitting the news. CMS recently held a roundtable dinner for our retail landlord client base to discuss their perspectives on future CVAs. We sense a greater need for balance between landlords and tenants on this topic.

Other major developments include the New Electronic Communications Code, governing the installation of broadband and mobile apparatus in buildings; and the Minimum Energy Efficiency Standards, making new leases of properties that are particularly energy-inefficient unlawful.

Martin Holler: An amendment to the Czech Building Act aims at simplification and acceleration of permitting processes by introducing the “joint proceeding”. Instead of having to apply for a planning permit, an environmental impact assessment (EIA) or a building permit in separate proceedings, the amendment introduces a joint planning and building permit proceeding linked with an EIA. The deadlines are noticeably shorter than the combined deadlines in the individual proceedings. Nevertheless, developers can still opt for separate proceedings. Additionally, the catalogue of constructions, for which builders benefit from simplified permitting procedures, (eg, family houses, pools, etc) was extended.

Environmental organisations are now generally excluded from participation in planning and building permit proceedings. One exception is proceedings requiring an EIA. This change caused an uproar that led to a constitutional complaint.

The statutory pre-emptive right of co-owners of real estate was also reintroduced. The all-new Civil Code had eliminated that in 2014.


International investors are responsible for an increasing share of real estate transactions across the world. How has this affected your practice?

Ciaran Carvalho: The CMS real estate practice encompasses a large and continually growing number of overseas investors, particularly from Asia, Canada and the Middle East. Europe and particularly the UK remain attractive places to invest, given their relative stability and economic health in comparison to other major regions of the world.

In the past 12 months, we transacted approximately £5 billion of real estate with Chinese/Hong Kong buyers on the purchase or sell side. This is a trend set to continue, though Chinese government restrictions on investment into real estate means we are seeing Asian money coming from a more diversified range of sources across Korea, Malaysia, Singapore and Japan, as well as China/Hong Kong.

CMS is well placed to support overseas investors given our unparalleled coverage in Europe, where we have the largest real estate team, and supported by our network of Asian offices in Hong Kong, Singapore, Beijing and Shanghai, in addition to Dubai as a hub for the Middle East. Our major overseas clients include Angelo Gordon, Ivanhoe Cambridge, PSP, CPPIB, Abu Dhabi Investment Authority, GIC, Greenland Group, R&F Properties, Hao Tian, Mitsui Fudosan, Mitsubishi Estate, Employees Provident Fund of Malaysia, Hanwha Life and Far East Consortium, among many others. We also act for a broad range of European investors who remain active in the UK, including DWS, Union Investment, PPF Real Estate and AXA Investment Managers.

Martin Holler: The core of my practice over the past 20 years has been advice to leading international real estate investors and lenders. The Czech real estate market to a large extent has been shaped by international investments. Investors appreciate the stable market and high transparency. Traditionally, most investors are from the UK, the USA, Germany and Austria. Recently, there were high hopes on the market for major investments from China. However, with a few exceptions, we have not seen this happening so far. On the other hand, local investment groups now play a major role on the market, especially with regard to large office and logistic projects. Also, we see international investors with an increasing appetite in residential portfolios.


Which sectors are currently the busiest in your practice? Why do you think this is?

Ciaran Carvalho: There is an increased level of activity around distribution/logistics warehousing and light industrial property. We have seen a huge amount of both investment and development of larger “big box” distribution centres near transport hubs alongside smaller-format “urban logistics” sheds. Consolidation of logistics payers and major pan-European deals in this space is set to continue. In one of the largest deals of the past 12 months, we advised Brockton and Dunedin on the sale of three portfolios of light industrial property for £559 million. The 130-asset portfolio was purchased by Blackstone and M7 Real Estate.

The office market also continues to perform well in London, Manchester and other major UK cities, fuelled by overseas capital. There is still a large volume of high-profile deals; for example, in three major recent deals, CMS advised AXA Investment Managers on the £650 million sale of Ropemaker Place to Singaporean investor, Ho Bee Land; Mitsui Fudosan on the sale of 70 Mark Lane in the City of London to Korea Investment & Securities for £200 million; and Lendlease and LCR on the forward sale of S9 (an office building of 278,000 feet, under construction at International Quarter London) to DWS (formerly Deutsche Asset Management) for around £240 million.

Martin Holler: Investment in retail assets, in particular large shopping centres, remains very strong. Here, as in most asset classes, the demand of international investors is much higher than the actual number of available projects on the market. However, the most active sector for us is currently development of and investment into large logistic centres. The Czech Republic is perfectly located to help neighbouring countries such as Germany and Austria with increased demand resulting from the success of online retailers such as Amazon. Good infrastructure and open borders within the Schengen Area make it very easy to use logistic centres in the Czech Republic as hub for Central and Western Europe.


Technological advancement is reportedly influencing the development of the legal profession. In your opinion, how will advances in technology affect real estate lawyers in the future?

Ciaran Carvalho: Our focus on technology is about making our services more efficient for our clients and our people, and we are constantly exploring new ways to upgrade our infrastructure and applications.

We have used document automation technology for over 15 years and have well over 500 automated documents for internal use created by our lawyers in tandem with specialist developers. We use HotDocs, an application that allows us to automate standard-form documents to produce time-saving, high-quality, client-specific first-draft documents ready for immediate review.

We will increasingly use new artificial intelligence solutions alongside document production capabilities to help streamline large-scale document review and the production of related reports. These tools will allow the quick and accurate extraction of key data points from a large set of documents. We have piloted this technology recently on a multinational/multi-language contract review exercise.

Real estate clients are also showing an interest in electronic signatures and are keen to embrace this although at the moment, the Land Registry will not accept them in normal commercial real estate transactions. There is likely to be some movement on this position in the near future.

Martin Holler: Real estate lawyers will increasingly use legal tech to remain competitive. The commoditisation of certain services, such as due diligence work, puts significant pressure on firms to find innovative and cost-efficient solutions. Legal tech can help them to cope with these client-driven demands. Currently, I don’t see any disruptive technological innovations that would fundamentally change our business. However, with the rapid development of artificial intelligence-based solutions, we must remain prepared for possible changes in the future.


How do you see the real estate market in your jurisdiction evolving over the next five years?

Ciaran Carvalho: We expect to see the continued consolidation of fund managers and propcos in order to achieve scale; we have already seen this with some of our major clients including Aberdeen Asset Management/Standard Life, Patrizia/Rockspring and Sainsbury’s/Argos.

Office landlords will look to reconfigure their portfolios in view of accelerating change in the workplace. This will include refurbishment of second grade assets and increased provision of co-working spaces. We are advising AXA Investment Managers on their 22 Bishopsgate development in the City which will set a benchmark in wellbeing standards. It has a dedicated floor called “the exchange” designated for co-working. CMS is also acting for WeWork, which last year became London’s biggest overall office occupier. CMS recently advised it on their acquisition of the Devonshire Square Estate. This is the third acquisition it have has of a building that it occupies in London.

We have also seen the emergence of the private rented sector (PRS)/build-to-rent as an attractive asset class in view of housing shortages. This will be clustered around major urban centres and incentivised by government. Up until now there has been growing interest and a modest amount of activity. CMS is currently acting on a range of PRS schemes in Manchester – for example, we are advising Select Property Group on the £750 million Circle Square scheme (for which we were named “Real Estate Team of the Year” at The Lawyer Awards in 2018); and Renaker, which we are advising on Manchester’s new tallest residential tower at Owen Street. We are also advising Grainger on a major PRS scheme at Pontoon Dock.

Martin Holler: The Czech real estate market has always been very stable. Even during the crisis 10 years ago, we didn’t see any major downturn. At this point, new developments and investments are still demand-driven. This is why I am confident that market conditions will remain positive over the next five years. As a result, more and more international investors with a rather conservative investment strategy, such as pension funds, will enter the market. Another factor is the relatively easy access to financing for real estate investments. International and local banks alike offer, and will continue to offer, lending under attractive conditions.

Back to top

Follow us on LinkedIn

News & Features

Community News



Pro Bono

Corporate Counsel

Women in Law

Future Leaders

Research Reports

Practice Areas


The Who's Who Legal 100


Special Reports



About Us

Research Schedule

It is not possible to buy entry into any Who's Who Legal publication

Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.

Copyright © 2019 Law Business Research Ltd. All rights reserved. |

87 Lancaster Road, London, W11 1QQ, UK | Tel: +44 20 7908 1180 / Fax: +44 207 229 6910 |

Law Business Research Ltd

87 Lancaster Road, London
W11 1QQ, UK