News from 03/10/2010
IVG: Loss considerably reduced - further problems with projects
IVG Immobilien AG has considerably reduced its consolidated net loss and attained positive operating results. Changes in portfolio property values and the Airrail Center in Frankfurt are both still problems. According to preliminary, unaudited figures, the year was closed with a consolidated net loss of €158mn, after a loss of €451.7mn during the previous year. Operating profit (EBIT) improved from €-98.6mn in 2008 to €64.1mn. The decreased value of real estate inventory (€194.2mn) was offset by the first-time fair value accounting of the storage caverns now under construction, which contributed positive earnings of €197.0mn. Construction cost overruns in the development segment took a toll amounting to €166.9mn, of which €149.4mn are accounted for by the Airrail Center project on the railway station at Frankfurt airport. Revenues increased from €608.6mn during the prior year to €838.6mn, thanks primarily to the completion and sale of a property in Italy, and to lease proceeds from the IVG Caverns Fund. According to IVG's CEO Gerhard Niesslein, debt and risk are to be further reduced in 2010, especially through completion and sale of projects.
Gagfah: Pre-tax loss falls to €92mn - dividends for fourth quarter
Gagfah S.A. closed its 2009 financial year with a pre-tax (EBT) loss of €92.3mn. During the previous year, a minus of approximately €119mn had been booked. Compared to a year earlier, the value of its properties slipped back by 2%, leading to a valuation result of €-197mn. Funds from operations (FFO) fell from €200.2mn to €190.0mn. For the fourth quarter, the firm quoted a value of €55.5mn (fourth quarter of 2008: €58.7mn) and announced a divided of €0.20 per share. The firm, which is Germany's biggest apartment company listed on the stock exchange, sold a total of 11,300 units for €520mn in 2009. Within the framework of its individual sales program, 2,394 units were marketed at a 27% profit margin and a total volume of €137mn - 1,143 units were sold during the fourth quarter alone. Despite an average of around 5,400 fewer units, profit from the leasing of investment property rose by 2.8%, from €473.0mn to €486.3mn, and thus by 6.1% per unit. Average management costs per unit were reduced by 3.9% to €391.
Munich: HIH acquires the 43 hectare Siemens site
Together with its co-investor, RFR Holding GmbH, HIH Hamburgische Immobilien Handlung has acquired 43 hectares in Munich for private placement. The seller was Siemens Pension Trust e.V. Siemens AG will rent the entire area on Otto-Hahn-Ring in the Neuperlach district for the next 13 years, with an option to extend for another 15 years. The office and commercial park has a net floor area of around 370,000 sqm. For the initial 13 years, an average yield of 9.5% annually and a total cash backflow of about 250% is expected, according to HIH's announcement.
Retail: CBRE sees falling returns at prime locations
According to observations made by CB Richard Ellis (CBRE), peak yields for shopping centers in prime locations and retail parks have declined again since the beginning of the year. CBRE's chief researcher, Jan Linsin, commented that yields on such retail properties have fallen by 25 basis points to 5.50% and 6.50% respectively, due to strong focus and limited supply. CBRE remarked that, at present, institutional investors from Germany that have strong equity positions are showing great interest in such property. The firm said that open-ended funds and special funds, which had tended to focus largely on office space, are currently realigning their portfolios in favor of retail properties, increasing their retail investment volume by 23% to €1.36bn last year. Total sales of retail property in Germany, on the other hand, fell by 43% to €3.47bn.
Stuttgart: Icade Reim invests €130mn in business center
French property investment company Icade is investing approximately €130mn in a business center at the Stuttgart central station. Under the name of "Look 21," a new building with 14,260 sqm of office and 7,240 sqm of retail space is to be developed on the site of the former Mercedes branch on the corner of Turlenstrasse and Heilbronner Strasse. The design was drafted by the Schaller Kyncl architectural office. In addition, 100 apartments with a total area of 14,200 sqm are planned for the rear area. At the presentation of the project, Frank Doucet, business manager for Icade Reim Germany, said that marketing is now being launched and that his firm is very confident it will soon be able to announce an anchor tenant for the project. Until construction begins, the existing building will be rented to firms from the creative sector on one year terms.
HCI Capital: Loss rose to €56mn - more property funds planned
HCI Capital AG, a listed issuing house for closed-end funds, slipped deeper into the red in 2009. According to preliminary figures, the consolidated net loss runs to €55.8mn (2008 loss: €16.3mn). Revenue plummeted from €120.6mn during the previous year to €42.6mn. The financially distressed fund initiator attributed its negative consolidated earnings mainly to non-cash impairments during the first half of 2009 amounting to approximately €40mn. The placement volume in 2009 reached only about €126mn, after some €599mn in 2008. Hardly more than €1mn in equity was raised for property funds. This is supposed to change in 2010 with a broader offer of property funds, starting with HCI Wohnkonzept Hamburg, a fund investing in rental apartments in Hamburg. After heavy losses in 2008 and 2009, HCI sees renewed opportunity for upward movement in 2010.
Berlin: EasyHotel opens its first location in Germany
At the beginning of the week, the first branch in Germany of the UK-based low budget chain, easyHotel, was opened in the Mitte district of Berlin. The new five-story building near Rosenthaler Platz has 125 rooms. A total of approximately €6.5mn was invested in the project. The owner and project developer is Nippon Development Corporation Real Estate Management GmbH. The operator is i.gen hotels GmbH. So far, easyHotel has a total of twelve locations.