News from 02/26/2008
Retail industry: Kemper’s expects rising rents for prime locations in 2008
According to Kemper’s, rents for retail areas in prime locations are likely to rise by averages of 11% in Germany’s “Big 7” cities and 5.1% nationwide. Price leaders will be Munich (€300/sqm), Frankfurt (€260/sqm), Düsseldorf (€225/sqm), Berlin (€220/sqm) and Hamburg (€215/sqm). In eastern Germany, Leipzig (€115/sqm) and Dresden (€100/sqm) are expected to be at the top of the list. As in the big cities, rents in medium and small towns also will continue to increase. Over all, Kemper’s is expecting a “stable demand for, and a slightly rising turnover of, retail space.”
Hansainvest: London office building acquired for €180.4mn
Hansainvest, a part of Signal-Iduna Group, placed the winning bid on the London office building “One London Wall.” The insurance company acquired the object for ₤136mn (some €180.4mn) from the British developer Hammerson and the joint owner, the Japanese construction company Kajima. The 13-story building was completed in 2003 and includes ca. 18,500 sqm of office space. Annual yield from rent amounts to ₤7.7mn (about €10.2mn), meaning a net initial yield of 5.6%.
UBS: Planning to invest $1bn in China
The Swiss banking giant UBS plans to launch a new fund for property investments in China. According to English-language media reports, up to $1bn are to be invested with the focus on residential property. The fund intends to raise $300mn in equity capital. UBS will partner with Gemdale Corp, a Shanghai-listed, Chinese property developer. As early as the end of January, Gemdale’s board approved the joint venture with UBS, the company's shareholders followed with their approval at the end of February.
Frankfurt: GE Real Estate acquires office tower for €33mn
GE Real Estate acquired an 18-story office building in Frankfurt from a private investor for some €33mn. The object, completed in 1972 on Bleichstrasse 64-66, includes 10,000 sqm of office space and was previously rented to Dresdner Bank. In 1999, the building was completely modernized. The new owner intends to again modernize until mid-2008 and to then bring the office space onto the market. GE Real Estate was advised by NAI Apollo during the transaction. Earlier, the Spanish hotel chain NH Hoteles planned to construct a hotel with 209 rooms and eight conference rooms in the building. In mid-February, however, Jan Simons, general Manager of NH Hoteles Deutschland, announced that these plans were abandoned. Currently, NH Hoteles is looking for another location in Frankfurt on which to build a hotel.
Offenburg: Plans for shopping center with 10,000 to 15,000 sqm retail area
A shopping center in the center of Offenburg with 10,000 to 15,000 sqm retail area is to be constructed on the former Sparkasse (Savings Bank) site in Gustav-Ree-Anlage. The municipality’s plans are based on a report from the Dortmund urban planning agency Junker & Kruse. According to the report, the center should include a full-range retailer comprising at least 2,000 sqm and an electronics retailer on 1,500 sqm. Sparkasse and C&A are seen as possible tenants as well. A call for bids is to be issued in the current year by the city council and the earliest possible date for completion is said to be the end of 2012. Wolfgang Sandfort, a city manager responsible for development, told regional newspapers that companies interested in the shopping center are lining up. Nine years ago, attempts by ECE Projektmanagement GmbH to build a 20,000 sqm shopping center failed.