News from 08/02/2007
Vivacon: 1,700 residences acquired, more purchases planned
Vivacon AG has acquired 1,700 residential units through its subsidiaries in various off-market transactions. With a residential and usable area totaling around 110,000 m², the properties are located mainly in North Rhine-Westphalia, Lower Saxony, and Bremen. The rental rate stands at approximately 87%. With this latest acquisition, the portfolio of the publicly-traded firm grows to its current level of 8,500 residences. According to Vivacon, more residential property portfolios of several thousand units are “under consideration.� In Q2 2007, Wiag, a joint venture of Vivacon and Forum Partners, took over 540 residences from Vivacon. With that, the Wiag portfolio now possesses 4,400 residential units. Vivacon's board of directors confirms its annual plan for a profit of €54mn to €58mn after last year's profit of €46mn.
US mortgage crisis: KfW vouches for IKB with €8.1bn
With €8.1bn, the German state-owned KfW Bank Group vouches for IKB Bank's possible losses in the US mortgage business. The SEC has been notified about the guarantee. A high mortgage approval rate to debtors with a low credit rating has created some turbulence in the US mortgage market. This turbulence, in turn, has resulted in a crisis for IKB that threatens its very existence; its equity is now assessed to be no more than €1.6bn.
Frankfurt: Vivico to build office tower for PwC
Vivico Real Estate is planning to construct a 185m high-rise in Frankfurt's
Westend district, close to Friedrich-Ebert-Anlage, naming it “T 185.� According
to reports from the Frankfurter Allgemeine Zeitung (FAZ), Vivico is the site's owner, as well as the project's developer, and it has already concluded a rental
agreement with the Frankfurt branch of PriceWaterhouseCoopers (PwC), the accounting
firm. The legally binding land-use plan for the area allows for a tower with 75,000 m² of gross
surface area, as well as a foundation of 35,000 m². PwC will rent the building's entire base and another 30,000 m² in the tower, reports the FAZ with reference to real
estate insiders. After completion, the building shall remain the property of Vivico. Neither
Vivico nor PwC commented on the reports.
Office market: Office space turnover rises by 25%
According to information from DTZ, office space turnover in the five German property centers of Frankfurt, Berlin, Düsseldorf, Hamburg, and Munich amounted to 1.2mn m² in the first term of 2007—outdoing the performance during the same period in 2006 (984,000 m²) by more than 25%. Munich is at the top of the list with 370,000 m². Besides that, Hamburg is steadily increasing its distance from the remaining cities: With a total of 285,000 m² of newly-rented office space in the first six months of 2007, its turnover surpassed Frankfurt's (186,000 m²), Berlin's (185,000 m²), and Düsseldorf's (175,000 m²) by ca. 100,000 m² each. From the beginning of January to the end of June, the volume of newly-rented office space in Hamburg rose by 50%, whereas in Düsseldorf and Frankfurt it climbed by 25%. In Munich, the plus was around 13%. Weakest performance was shown by Berlin, where the previous year's level was topped only slightly. All of the big German office markets are profiting from booming demand and, hence, an increase in rents. In Frankfurt, up to €36 per square meter are paid.
Public/Private partnership: Hochtief invests more than €100mn in Frankfurt schools
The construction company Hochtief will invest a total of €106mn in the construction and renovation of four Frankfurt schools. After completion, it will manage the facilities over a period of 20 years. According to information from Hochtief, the total volume of the public/private partnership contract it undersigned with the city of Frankfurt amounts to €260mn. Pre-construction measures are to begin as early as this summer break; completion of all four projects is planned for mid-term 2009. The city of Frankfurt expects a plus in cost-effectiveness of more than 15% from the partnership.