News from 03/20/2008
Arcandor: Sale of Karstadt properties to be finalized
After months of negotiations, Arcandor has sold its 40% stake in the property company Highstreet to a consortium including RREEF (Deutsche Bank), Pirelli RE, Generali Real Estate Fund and the Borletti Group, attaining a sale price of some €800mn, according to the concern. Almost two years ago, Arcandor integrated its properties in Highstreet, a joint venture with the Goldman Sachs subsidiary Whitehall. The buyers' consortium is to manage Highstreet in collaboration with Whitehall which holds the remaining 51%. Approval of the antitrust authorities for the sale is still pending. The deal is planned to be finalized at the end of May, 2008. After the sale, Karstadt is to be the tenant of the properties and will have to pay more for the properties' usage.
Berlin: Kleihues + Kleihues plan Wertheim area
The architectural office Kleihues + Kleihues in Berlin has won the urban planning competition for the last vacant lot at the Leipziger Platz. The organizer of the competition was Orco Germany S.A. which wants to develop a multi-use building ensemble on the Wertheim area measuring approximately 22,000 sqm: 55% shopping and entertainment, 30% residential, 15% office space. Commencement of construction is planned for early in 2009; completion is scheduled for the middle of 2012. The investment volume runs to around €250mn. The master plan is currently being prepared. Orco Germany acquired the grounds at Leipziger Platz at the end of 2006. However, because of disputed ownership, it was not possible to develop the premises before now.
TAG Tegernsee: Fivefold profit rise to €31.1mn
TAG Tegernsee Immobilien- und Beteiligungs-AG (Property and Participation) increased its profit fivefold during the 2007 business year compared with the preceding year. The firm announced that, on the basis of preliminary figures, earnings before taxes (EBT) for 2007 will be €31.1mn (2006: €6.4mn). The turnover for 2007, at €146.1mn, rose by 36% compared with 2006 (€107.3mn). The target for the 2007 business year was thus emphatically confirmed, TAG stated. The reasons for the positive results were, among others: stable rent income, strong growth in the property portfolio, and profits from property sales. The company intends to publish definitive figures for the 2007 business year on April 24, 2008. Bau-Verein zu Hamburg (Hamburg Construction Association), a TAG subsidiary, also closed the 2007 business year successfully: sales revenue, it was released, rose by 23% to €96.6mn (2006: €78.6mn), while earnings before taxes (EBT), at €13.8mn, were below the previous year’s figures (2006: €16.4mn), as had been planned. Pending the annual financial statement by the board of supervisors, both companies propose dividends amounting to €0.10 per share.
Immoeast: Turnover rises—profit slows
Immoeast AG, Vienna, reported that it attained rising turnover and rental earnings during the first three quarters of the 2007/08 business year. According to the company, profit development, although also positive, was slowed by a slight devaluation of the property inventory after an internal appraisal at the end of the third quarter. Turnover rose by 62.2% to €211.8mn while earnings before taxes (EBT) climbed by 9.0% from €203.6mn to €221.9mn and operating profit fell by 22.3% from €159.1mn to €123.6mn. Also reported were advanced current negotiations for the sale of a number of objects with a market value of approximately €300mn. Immoeast emphasized that the company is still strongly financed by equity capital, asserting that the equity capital quota on the balance sheet rose from 73.9% to 76.3%. It says that even when future investments in projects for which contracts have already been signed are taken into account, the equity capital quota of 53.3%is still significantly higher than the 50% rating targeted for the long term.
FranconoRheinMain: Significant growth in 2007
FranconoRheinMain announced significant growth of its core business during the 2007 business year: the properties held as financial investments rose during the reported period to €146.7mn (2006: €44.1mn), and rental earnings increased from €1.4mn in 2006 to €6.4mn in 2007, according to the company's annual financial statement for the 2007 business year. In keeping with this growth, earnings from rents were improved to €5mn, from €0.9mn during the previous year. FranconoRheinMain also recorded increases in its EBIT and in its annual surplus: the EBIT ran to €11.5mn, compared with €4.0 during the same period in the previous year; the surplus for the year grew from €2.3mn in 2006 to €6.2mn in 2007. The firm is estimating the return per share at €0.22 (undiluted). The equity capital (IFRS) on December 31, 2007 amounted to €50.5mn, compared to €44.0mn on December 31, 2006.
Pacific Star: Wördemann and Stürmer form joint venture
Dirk Grosse-Wördemann, previously the CEO of Allianz Real Estate GmbH, Dr. Matthias Stürmer, Eon’s Head of Alternative Investments until July 1, and the Pacific Star Group announced a joint venture in Munich: the Pacific Star Europe GmbH. The Singapore-based Pacific Star Group is one of Asia’s leading real estate investment houses. The new company’s strategy is to be presented at a press conference on March 26 in Frankfurt.
Düsseldorf: Weight Watchers rents 3,200 sqm in “Living Office”
Commencement of construction for the “Living Office” loft ensemble on the former Rheinmetall area in the Derendorf district of Düsseldorf is approaching: a lease on some 3,200 sqm was signed by Weight Watchers Deutschland GmbH to be its new headquarters. This helps Living Office, with its planned 6,000 sqm of usable area on seven floors, to attain sufficient preliminary letting. Even before building has begun, more than half of the area is rented. The owner of the project is a subsidiary of the U.S. foodstuffs concern Cargill. Colliers Trombello Kölbel advised and brokered on behalf of Weight Watchers. Occupancy of its German headquarters is scheduled for the summer of 2009.
Frankfurt region: Green light for commercial center in Hanau
Hanseatische Betreuungs- und Beteiligungsgesellschaft (Hanseatic Supervision and Participation Company) mbH (HBB) will be allowed to build a shopping and services center with apartments at the Westbahnhof (Western Station). Local newspapers in Hanau, quoting Mayor Klaus Kaminsky (SPD), reported that the parliamentary majority for the “Postcarée” (“Post Office Block”) is assured. The investment volume is placed at €30mn to €40mn. Construction is to begin during the summer. For the 26,000 sqm construction site, HBB is planning, among other objects, a 4,000 sqm grocery store, a new building with a drugstore and an organic products market, and also a residential and commercial building. A further 3,000 sqm of office space are to be developed in the Hauptpost (Central Post Office) building.