News from 03/13/2008
Morgan Stanley: Klug announces €1.6bn purchase plan for 2008
Morgan Stanley Real Estate Investment GmbH is planning €1.6bn in property investments during the present year, CEO Walter Klug announced at this year’s Mipim in Cannes. The firm wishes to achieve further growth, in particular with its open property fund Morgan Stanley P2 Value and its special fund Morgan Stanley EurAsia. The two funds have already during the first two months of this year invested €450mn on acquisitions in Tokyo and Singapore, among others. In the future, the P2 Value portfolio is also to expand in North America, particularly in the U.S.A., and selectively in Canada. In Europe, on the other hand, only supplementary investments in established property markets are planned.
Sonae Sierra: More than €300mn in net profits attained in 2007
The Portuguese project developer Sonae Sierra attained more than €300mn in net profits in 2007, an 11% climb compared with the previous year. The Sierra Developments segment, which is responsible for the development of shopping and leisure centers and for plot acquisition, contributed approximately €61.6mn to this result. The firm recorded a reduction only in the total net profit from minority shares, which sank by 23% to €86.2mn. This was because the market value of the assets administered by the Sierra Fund rose more slowly in 2007 than during 2006, Sonae Sierra reported. For 2008, the opening of four shopping centers is planned—two in Italy and one each in Spain and Greece. According to the firm, the total investment volume for these projects is approximately €342mn.
Savills: Record-breaking result obtained in 2007
The international property consulting firm Savills plc. has obtained record-breaking results according to preliminary figures compiled for the 2007 business year. These show that the adjusted earnings before interests and taxes (EBIT) rose by 14% to £85.5mn. Turnover grew by 26% to £650.5mn (2006: £517.6mn). The group’s profit before taxes according to IFRS increased by 2% to £85.9 (2006: £84.4mn). Also in 2007, with the takeover of the property investment bank Granite Partners, Savills entered the U.S. market. Further highlights of the past business year were expansions also into Vietnam and Taiwan, as well as the opening of 29 new offices. According to Roy Frydling, head of Savills Germany, 2007 was “the most successful year to date” for Savills Deutschland. The reason for this was the immense influx of foreign capital into Germany.
Market: Germany plus UK and Russia “key markets for 2008”
Russia, Germany and Great Britain are the three key property markets in 2008. This is a central statement made by Jones Lang LaSalle (JLL) at this year’s Mipim press conference. Their statement said that Germany has a good chance to be the market with the strongest rent increases in western Europe. For Great Britain, traditionally the biggest investment market, JLL forecasts a 30% to 40% lower transaction volume during the current year. On the London office market, JLL expects an overcorrection, bringing with it very good opportunities for acquisitions. Russia should remain the most dynamic market in Europe. JLL forecasts significant developments particularly for the Russian retail market and for commercial parks in the Moscow region.
Rhein-Neckar region: Investment market transaction volume remains high in 2007
The demand for investment objects in the Rhein-Neckar metropolitan region, the core of which consists of the cities Mannheim, Ludwigshafen and Heidelberg, is still high. A total transaction volume of approximately 300.000 sqm of lettable area was registered in 2007, Ardeco Immobilien GmbH stated in its current “Investmentmarkt Report 2008”. As in previous years, office properties were particularly sought after. Ardeco recorded a considerable increase in the commercial and logistics property segment. That share of the total investment volume rose from 8.1% in 2006 to 30.2%. According to the report, two tendencies have crystallized due to the increase in demand and turnover volume. First, the focus of transaction locations switched from inner city sites to the edges of the inner cities and to urban fringes. Second, individual investments were made increasingly for larger premises—more than 80% of the transactions involved objects with a surface area of more than 10,000 sqm. More than half of the acquisitions were made by opportunistic investors, most of whom were active during the period before the subprime crisis began. During the fourth quarter, an above-average number of purchases was then made by property funds, Ardeco said.
ING Real Estate: Madrid shopping center acquired for €130mn
NG Real Estate has acquired the “Alcalá Magna” shopping center in Madrid for €130mn. The center, which was previously held by ING Real Estate’s project development segment, is to be moved to ING Retail Property Partnership Southern Europe Fund (RPPSE). Alcalá Magna has more than 34,000 sqm of sales area on two floors and has 1,200 spaces available for customer parking. It has been completely rented since its opening in October 2007, according to ING. Among the tenants are Inditex Group, H&M, C&A, New Yorker and Punto Roma. Just a few weeks ago, ING Real Estate acquired the Italian shopping center “Roma Est” for €400mn, which within the framework of a joint venture with CIC Real Estate, is also for its RPPSE Fund. The fund is investing in retail properties in Portugal, Spain and Italy, and targets a volume of €1.2bn.
MPC Capital: Offer to HCI shareholders published
MPC Capital AG, a specialized issuer of closed funds, wants to pay the shareholders of its competitor, HCI Capital AG, €14.22 in cash per share. The term of the takeover offer expires on April 9, 2008, with no minimum acceptance limit. With the planned acquisition of shares, MPC wants to use “growth opportunities” that depend “considerably on the marketing capacity of MPC and its competitors.” While the two firms are to continue acting independently of each other, marketing and acquisitions should be more effectively cross-linked. Since MPC earned almost one third less in 2007 than in 2006, the fund provider is also hoping for a strong boost from the takeover offer.
Mönchengladbach: „Regio-Gewerbepark“ almost completely rented
The property firm Bienen & Partner reported that the “Regio-Gewerbepark” (Regional Commercial Park) in the Güdderath district of Mönchengladbach is almost fully rented. Within five months, eight commercial units were constructed on an area of approximately 6,000 sqm. The project investor was the Dutch firm Blaauwgras B.V. which became involved through good contacts with the Dutch chambers of commerce, Bienen & Partner stated. In a second construction stage further areas are to be developed. Among the tenants of the commercial units already completed are Stairs Deutschland GmbH, Bela Transport Service GmbH and Ungerechts Maschinenbau.