Dawnay Day: German office properties also now in sight
The British investor Dawnay, Day Group, 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, announced Chairman Guy Naggar in an interview with the Börsenzeitung. The first investment in Germany was the acquisition of office property in Düsseldorf from Cap Gemini.
In Naggar's estimation, the German office market is the most interesting in continental Europe—although doing business in this country is still difficult. For one, vacancies are very high. For another, recoverable rents are relatively low in international comparison. Because cyclical development is likely to relax, the right entry point has just now come, thinks Naggar. Despite the difficult basic conditions, Dawnay, Day, requires investments in office properties with a beginning yield of at least 6%, emphasized the chairman.
Search for retail properties to get more difficult
Up to now, Dawnay, Day, has arisen in Germany as an investor in retail properties. So, in August 2005, together with Hilco UK, the firm acquired a portfolio of 74 small department stores sold by KarstadtQuelle. On top of that, in August 2005 Dawnay, Day initiated a property fund, Dawnay, Day Treveria, that is listed on the stock exchange and invests in German retail properties. So far, Treveria has invested €2.3bn of a targeted total volume of €4bn, said Naggar. The location of a property, as well as its worth, are the central investment criteria. Dawnay, Day, expects a beginning annual yield of at least 6.25%. Because it was difficult to find suitable retail properties, his company now searches for new investment possibilites, said Naggar.