News from 08/20/2007
PMM Partners: New fund invests €180mn in Germany
The British company PMM Partners, Hampton Wick, has closed its second German fund. For the Phoenix Spree Deutschland, £39.5mn were raised. The fund, with headquarters in Jersey, shall invest around €180mn in German residential and retail properties. PMM Partners has already undersigned purchase contracts amounting to over €18mn for the fund; these include two nursing homes in Bremen, residential property near Hanover, and a commercial building in Berlin. Furthermore, PMM's property offers, amounting to €47mn, have also been accepted. PMM expects these transactions to result in a blended yield in excess of the fund's target of 7.4%. PMM has been active in Germany for two years and issued its first German fund in 2006.
Düsseldorf: Development Partner is selling two retail projects
Development Partner AG is selling two retail projects in Düsseldorf to DIC Asset AG. Transfer of the properties to DIC Asset shall be completed in Q4 2008. One of the two properties in question is the former Kaufhalle on Nordstrasse; it is currently being rebuilt and is getting a dm drugstore, a Kamps bakery, and a café as renters. The other property, a one-time location of a Wal-Mart store, is on Nürnberger Strasse in Reisholz. Demolition work is already underway there. In 2009, “Germany's largest Edeka store shall emerge� there, said Development board member Winfried Siebers to the Rheinische Post. The sale took place as part of a package that involved six additional properties, including two objects in Cologne and Bonn, as well as the former Kaufhalle in Moers. Volume of the sale amounts to €125mn.
Gagfah: €500mn for acquisitions
Gagfah SA, the residential company belonging to the financial investor Fortress, substantially increased its Q2 results and is confidently optimistic for the entire year. As Fortress Europe head Robert Kauffman informed, Gagfah considers the chances for additional acquisitions to be good: Resources of around €500mn were said to be available. The manager did not, however, divulge a concrete goal for the volume. Since the IPO in October 2006, the firm, headquartered in Luxemburg, has acquired around 30,000 residences in 20 transactions for €1.6bn and maintains a portfolio of around 170,000 units.
Open-ended funds: Advantage through financial crisis?
German open-ended funds may draw advantages from the subprime crisis and the resulting credit shortages. “The crisis will be an opportunity for German open-ended property funds,� says Degi chief analyst Thomas Beyerle in Die Welt. US property funds, he continues, are struggling at the moment with enormous outflows of resources. “This could put prices under pressure, so that German open-ended funds could acquire properties with attractive net initial returns.� Christian Ulbrich, director for Germany with Jones Lang LaSalle, also sees the situation for open-ended funds as positive: “Open-ended funds have to pay at least 50% of the
purchase price with their own capital and, therefore, have no problem getting bank credits.� Investors from Great Britain and the US, who often finance takeovers with up to 90% of outside capital, are in a more difficult position, he says.
Capitalizing on the strategy of the Bayerische Bau und Immobilien Gruppe (BBIG) to optimize its portfolio, the Australian financial investor Babcock & Brown has acquired the Minerva portfolio at a total volume of €350mn to €400mn.
Hamburg: Irish investor buys “smart city� for €60mn
Signature Capital Ltd. recently acquired the “smart city� at 124 Friedrich-Ebert-Damm in Hamburg's Wandsbek district for €60mn. Seller of the nearly 30,000 m² of retail and leisure space is the Raffay corporate association. In addition to the Raffay “smart� car dealership, main tenants include, among others, a UCI Multiplex Cinema and the Elixia Wellness Center. The rental agreement with UCI was recently extended to a term of 35 years.