News from 03/26/2007
Dawnay, Day Group, known in Germany until now as a retail property investor, wants to strengthen its acquisitions of German office properties and business parks. Together with partner Sirius, Dawnay, Day, already possesses a business park portfolio of over €200mn. This shall grow to €1bn. Similarly, Dawnay, Day, wants to invest up to €1bn in German office properties with joint-venture partner Brookfield.
Degi: Office building in Hannover bought for €60mn
Degi Deutsche Gesellschaft für Immobilienfonds mbH has invested around €60mn in an office ensemble in Hannover's List sector for its Degi German Business Fund. Seller of the five office properties in the Pelikan Quarter is Eurohypo AG. Main tenants of the building, with a total area of 29,574 m² and an underground parking garage with 542 spaces, are N-Bank (a public bank owned by the state of Lower Saxony), IKK Niedersachsen (health insurance), HDI Rechtschutz Versicherungs AG (legal insurance), and SSA Global Technologies GmbH. Thomas Beyerle, leader of Research & Strategy at Degi, expects good yields with less-than-average risk from the engagement and announced to the Hannoverschen Allgemeinen Zeitung that there will be more purchases of office properties in Hannover following this one.
Alstria: IPO shall bring up to €450mn
Alstria Office AG wants to collect between €220 and €270mn of net revenue with its IPO on April 3, according to the stock exchange prospectus. In addition, it shall bring a reallocation of around €200mn, reports the Financial Times Deutschland (FTD). The issuing volume of €450mn for around 50% of the shares means a markup of just under 10% to the net asset value which is estimated to be €800mn. Alstria would be the first large newcomer from the property sector to the stock exchange in 2007, the IPO would at the same time be a test for market capacity. The environment for IPOs has declined since the market slide of February 27, when the Dax Leitindex temporarily went from over 7,000 points to under 6,500. Alstria aspires to reorganize itself later into a tax-deductible REIT.
The Bundestag has passed the law for the introduction of Real Estate Investment Trusts in Germany (G-REITs). SPD and CDU/CSU factions in the lower house of German parliament voted for legislation that shall be effective retroactively from January 1, 2007. Federal Finance Minister Steinbrück described the law as an “an attractive package overall“ that will have a positive impact on the financial community, as well as the property sector. That the exit tax now gives incentives to firms to separate themselves from their hitherto “dead portfolio capital“ will give a new impulse to the construction economy and trade. The parliamentary process could still be concluded in the first quarter for the necessary endorsement process of the Bundesrat (Federal Assembly) to be concluded efficiently.
Munich region: Morgan Stanley buys logistics property in Unterschleißheim
On March 23, Morgan Stanley Real Estate Investment GmbH acquired a logistics/transportation center for €21.4mn. Located at 2 Ohmstraße in the Munich region's city of Unterschleißheim, the property has 19,948 m² of usable area and includes nearly 200 parking places (125 for cars, 73 for trucks). The property's current tenant, Logistik 3000 GmbH & Co. KG, will remain under a triple net rental agreement with a term of 15 years. Morgan Stanley acquired the property for its open public property fund Morgan Stanley P2 Value. The acquisition is the fund's second in Germany, and the property is destined for the fund's trading portfolio, which has grown to include seven buildings. Thirteen other properties are dedicated to the core of the portfolio.
Bonn: IVG to develop 8,000 m² office area in “Artquadrat“
In the summer, IVG wants to begin construction on the office project “Artquadrat“ behind Bonn's Kunsthalle, a federal art and exhibition complex. An office building on Emil-Nolde-Straße with around 8,000 m² of usable area is intended. A parking garage with more than 500 parking places that belongs to the project has been completed for four years. Overall, IVG wants to invest around €30mn. The first tenant shall move in at the end of 2008.
Greifswald: Partial sale of the municipial residential holding WVG planned
The administration of Greifswald, a city of just a little over 53,000 that's located in the northeastern German state of Mecklenburg-Vorpommern, plans a partial sale of the communal residential company WVG. The city parliament has decided to start a bidding process for 49.9% of the WVG. In a first step, it shall be checked if there are interests with an offer that's acceptable to the city. The WVG manages a total of around 18,000 units, over 10,000 of which are its own flats.
Munich: Akelius acquires 147 residences in Moosach
Akelius GmbH, subsidiary of the Swedish Akelius Fastiheter AB, enlarged its Bavarian building portfolio to 443 residential units with the acquisition of 147 residences in Munich's Moosach Quarter. Sontowski & Partner brokered the transaction, which brings Akelius GmbH's German holdings to 3,000 residences, distributed among seven locations. With a portfolio of 26,000 residences, Akelius Fastigheter is Sweden's largest private residential firm.
Estavis: IPO could bring up to €136mn
The Berlin property firm Estavis wants to offer its stock for a price from €28 to €41.50. Estavis wants to make the exact range known the day before the beginning of the subscription deadline from March 27 to 29. The first note is planned for April 2. After subtracting capital expenses, up to €77mn should flow to Estavis from new shares from a capital increase, said the firm's head and controlling shareholder Rainer Schorr. The firm, which specializes in residential properties, could collect up to €136mn from the capital market. Estavis wants to use issue proceeds to develop its property business. The Berlin firm buys residential buildings in need of refurbishment, packages them, and resells them to institutional investors like insurance companies or other property companies listed on the stock exchange.