Business Round-Up: Blackstone attempts to polish nasty reputation - The Post

Business Round-Up: Blackstone attempts to polish nasty reputation

We’re trying to change, okay!? (Photo: black stone)
November 29th, 2019 5:43 pm| by Roselyne Min

Private equity firm Blackstone, recently under fire for having acquired thousands of Copenhagen residences to renovate and then rent at high prices, is changing the name of its management company in Denmark to Kereby (‘kere’ meaning ‘to take care of’ and ‘worry about’, and ‘by’ meaning ‘city’). Deputy CEO Kenneth Ohlendorff told Politiken that this step is a measure towards establishing a positive image of the company and “signalling that it cares about its customers.”

Nothing new under the sun

However, this is not the first time the company pulls a name change. It was initially called 360 North and it has helped Blackstone acquire 160 properties with 2300 residences in just two years.

According to DR, Blackstone holds around two percent of the private rental market in Copenhagen and Frederiksberg, and its Danish portfolio is approaching a value of eight billion kroner.

We’ve been “demonised”

The company made the decision in the wake of housing minister Kaare Dybvad Bek’s promise of a legislative intervention that would make it harder for investors to renovate apartments in order to significantly raise prices.

The CEO of Kereby, Lars Pærregaard, told Politiken that recent acquisitions have been made in a “respectful, sound, professional manner” and that they believe the company has been “demonised” during the heavy downpour of criticism they recently endured. 

So-called financial wisemen oppose government’s CO2 reduction target

New Danish climate laws are expected to be in place before Christmas, but Danish economy experts implore politicians to reconsider their aim of a 70 percent CO2 reduction by 2030 (relative to CO2 emissions in the 1990s). Such a sharp target may impact the country’s economy negatively, they warn. In an interview given to Berlingske, the Danish Economic Council suggests focusing on the overall goal of climate neutrality by 2050 and forgetting about detailed and binding subsidiary targets. “If it turns out that a 65 percent reduction by 2030 is the cheapest way to climate neutrality in 2050, then why should we pay more to reduce Danish emissions strictly by 70 percent,” asked Lars Gårn Hansen, one of the wiseman of the Councils. However, according to DR, the largest Danish business organisations, Dansk Industri and Dansk Erhverv, support the government’s 2030 plan. 

Once the climate laws are finalised, a climate plan will also be formed to set out the concrete tools the government wishes to employ to reach its goals. The wisemen believe that any details should be included in the plan instead of the laws. Unlike the laws, the plan is not binding, which allows for greater flexibility in the face of challenges that might lie ahead on the road between now and 2050. 

Norwegian Airlines closing routes to the US and Thailand

Norwegian Airlines is shutting down a number of departures from Copenhagen. Among others, certain trips to the United States and Thailand will no longer be available, which may increase ticket prices. By summer, Copenhagen airport will see 15 fewer departures each week. For example, routes from Copenhagen to Bangkok and Krabi will close come March 27. According to Hans Christian Stigaard, chief advisor and aviation expert at the consulting firm Realise, one of the reasons Norwegian closes these routes is simply that they are not profitable.

Nordea introduces negative interest rates

Nordea has announced that negative interest rates for private customers will come into effect from February 1, 2020. Private customers with deposits in excess of 750,000 kroner will be subjected to the deposit rate of minus 0.75 percent. The new interest rate will be applied to all types of deposit accounts except pension accounts and child savings. Nordea is the latest addition to the list of banks that have introduced a negative interest rate – Jyske Bank, Sydbank, Spar Nord and Ringkjøbing Landbobank.

Major banks warn of high cooperative housing prices

Denmark’s three largest banks, Nordea, Sydbank and Arbejdernes Landsbank, have told DR that prices for cooperative housing are sharply rising.

Arbejdernes Landsbank estimates that every third housing unit assessed by a property consultant is valued higher than what the bank itself can mortgage. Cooperative housing associations can choose between using public or private investment banks for valuation. According to a report from the Ministry of Transport and Housing, half of all cooperative housing in Denmark is evaluated by property consultants.

Despite stricter rules introduced in October 2018 to ensure more uniform assessments, Nordea claims it’s still encountering high ratings. “We believe that stricter requirements have not had the desired effect,” said Lise Nytoft Bergman from Nordea.

According to DR, the government will present a plan to regulate future valuation of properties, which is expected to impact the durability of those that have already been issued.

I don’t want your banana anymore!

The two Danish grocery conglomerates, Coop and Salling Group, which own Netto, Bilka, Føtex and more, have announced that non-organic bananas will no longer be sold at their stores starting next year. The companies explained that the decision was made to avoid chlorpyrifos pesticides contained in non-organic bananas. The use of chlorpyrifos in Denmark is not permitted, but is accepted below a certain threshold for imported fruit.

The stores that will only sell organic bananas are Kvickly, SuperBrugsen, Dagli’Brugsen, Irma, Fakta, Føtex, Netto, Bilka and Salling Super.

According to Coop, organic bananas make up a third of the company’s total banana sales, and a large part of bananas sold at Salling Group stores today are organic as well.