News from 08/28/2007
According to the German newspaper Börsenzeitung, several IPOs for REITs will take place in Germany within the next ten months, resulting in a market capitalization of around €11bn.
Deutsche REIT: First commercial property portfolio sold for €27mn
Deutsche REIT has sold its first portfolio of commercial property to an institutional investor. The portfolio consisting of a logistics property in Heinsberg and a retail warehouse in Werl comprises a total lettable area of 63,361 m² and was sold for €27.36mn. According to Deutsche REIT, Revenues from this sale can even be increased through asset management. The company stated that its earnings outlook of €11mn to €12mn minimum before taxes for the whole year has already been achieved. Through the transaction, acquisitions of large-scale commercial property projects have become possible for Deutsche REIT; it seeks for such deals to prepare its first REIT. The company had acquired the Heinsberg property only a month ago.
The current crisis in U.S. subprime mortgages is affecting the German market for property investments. Rothschildt investment bank expects financing of larger transactions to become more difficult. This could turn out to be an advantage for Self-financed investors.
After Sachsen LB got into a financially precarious situation due to the U.S. subprime crisis, Landesbank Baden-Württemberg (LBBW) is going to take over the bank for a purchase price of €300mn minimum to maintain its stability.
Berlin: Residential rents still rising
Berlin residential rents are on the rise although vacancies remain stable. While only slight increases have been recorded for postwar buildings, rents for apartments in older housing in the inner city have gone up considerably. Price developments are influenced by the investment market boom: Capital investors are also on the lookout for condominiums. This market segment is being reinforced by the trend to move back into the city. With regard to private housing, centrally located "townhouses" are particularly favored.