News from 09/24/2007
Investment market: No more jumbo deals this year
"The party is over," says Catella Property Group‘s Andreas Quint, adding that large transactions with a volume of more than €500mn involving commercial property won‘t happen anymore this year. According to Catella, deals are currently put on hold with a volume totalling to €10bn. This year, the volume of transactions in the commercial property sector is said to decrease from €60bn to €50bn. In total, though, the market is "completely intact," according to Quint. Key data are appropriate, no decline in price level is imminent. Still, smaller transactions involving a lower share of external financing work out without problems.
State of Berlin: Bringing BGB property packages on the market
Berliner Immobilien Holding (BIH), a company owned by the state of Berlin, is bringing larger portfolios containing residential and office properties on the market. The property is part of the closed property fund of Bankgesellschaft Berlin (BGB). According to several media reports, a total of around 600 buildings encompassing a rentable surface of ca. 4.75mn m² are to be sold, which could yield a total annual rent of ca. €421mn. Approximately 50% of the property to be sold consists of 38,400 apartments in 153 buildings. The other half comprises commercial property. Preliminary talks with big investment companies are to be conducted during the forthcoming Expo Real in Munich, they say at BIH.
Ulm: Two office buildings sold to Irish investors
Quercia Stwo, a Luxemburg company owned by Irish private investors, has acquired office property in Ulm. "Businesspark Ulm I," encompassing a total surface of ca. 6,800 m² and 91 parking spaces, has already been built; "Businesspark Ulm II" comprises a planned surface of ca. 7,000 m² and 105 parking spaces and remains to be constructed. The existing property will be rented by the previous owner. For the "Businesspark Ulm II" project, a long-term rental agreement was concluded with a doctors‘ consortium even before completion. Seller is a project development company located in the Ulm region. Quercia Stwo was consulted by Cushman & Wakefield.
Grüezi Real Estate: Health resort clinic at Baltic Sea acquired
Grüezi Real Estate AG, a company based in Berlin, has expanded its portfolio by acquiring a mother-child clinic in Timmendorfer Strand close to Lübeck. The actual purchaser is Grüezi Commercial Properties GmbH, a 100% subsidiary of Grüezi Real Estate AG which primarily acquires health care property. The architectural ensemble consists of four buildings encompassing a usable surface of more than 4,000 m², containing, among other facilities, a therapy and sports swimming pool. For visitors, 38 apartments are located on the clinic area. Grüezi Real Estate AG intends to invest an eight-digit sum to acquire further health care properties. The company exists since 1999; in the business year 2006, it achieved turnover of €16.6mn and an EBIT amounting to €4.9mn.
Open-ended funds: Delay in negotiations concerning investment law
In the third round of negotiations, financial experts of the social democratic (SPD), the christian democratic (CDU), and the christian social (CSU) parties were still unable to effect a compromise concerning the amendment of current investment law. According to statements made by the parties involved in the negotiations, their deliberations will drag on until some time in October, and adoption of the amendments is not to be be expected before November. Apparently, representatives of both the CDU and CSU parties are campaigning for a higher limit of borrowing capital for open-ended property funds, stating that the currently planned limit of 50% is a disadvantage in competition with foreign investors.