News from 05/08/2008
IVG Immobilien: Significant Q1 earnings decline
In the first quarter of 2008, total income of IVG Immobilien AG has climbed by €22.9mn to €229.7mn compared to the same period last year. The Bonn real estate firm attributed the results especially to growth in rental income, the sale of a development in Düsseldorf and to the first-time valuation of a project in London. That the earnings before interest and taxes (EBIT) of €102.1mn is nevertheless below that of the previous year's quarter (€131.4mn) is due to a, “substantial decline in the unrealised market value changes in the investment portfolio,” according to IVG' board chairman Wolfhard Leichnitz. The firm's consolidated net profit came to €12.1mn after €71.0mn in Q1, 2007. The company pointed out that forecasts for the current year are hindered by two opposing effects which cannot be taken into account: The first, given the lack of any reliable market forecast, is change in the market value of the property portfolio; the second is the income from the envisaged sale of the caverns. Without consideration of these effects, total income for 2008 of between €1.3bn and €1.4bn and a consolidated net profit of between €90mn and €100mn is expected. For the 2008 business year, a dividend of at least €0.70 per share is being sought.
UBS: Black Rock assumes mortgage assets for $15mn
UBS AG has reached an agreement with the US asset manager Black Rock for the sale of US mortgage market securities. As reported by the Swiss bank, Black Rock wants to pay $15bn for paper worth a nominal $25bn. According to the provided information, the package consists of bonds from the US sub-prime market and somewhat higher valued Alt-A mortgages. The securities will be held in a new Black Rock fund according to UBS-CEO Marcel Rohner. The sale should be finalized by the end of June and will substantially reduce the risk in UBS's remaining portforlio. Since the third quarter of 2007, the bank has attempted to mitigate what is already $38bn dollars in write-offs due to the sub-prime credit crisis and it has reduced positions connected with US subprime loans by 60%. At the end of March, the bank had a net exposure of $15.648bn on the books – three months earlier it was $27.578bn. For the Alt-A mortgage paper, the net exposure amounted to $17.1bn and therefore was about a third less than at the end of 2007.
Corpus Sireo: Less profit in 2007 – investments announced
Corpus Sireo, Düsseldorf, announced further investments for fiscal 2008. At a financial statement press conference, Michael Zimmer, board of executives chair, expressed confidence that in one or two years the company's earnings of 2006 will be surpassed. Further growth should be generated particularly by purchases of asset management companies. In the 2007 business year, the company reported a profit before taxes (EBT) of €40.6mn – a decline of around 47% from the previous year (2006, €76.5mn). Just through the sale of the residential company Immeo and the rest of Corpus Sireo Residential No.9 GmbH, revenues in 2006 reached €39.2mn. Such large volume transactions did not take place in 2007 and thus provides the reason for the decline in profit.
Frankfurt: NPC topping-out ceremony for 124 apartments in Bockenheim
NPC Group celebrated the topping-out ceremony for its ca. €35mn “Living Galvani” residential project located between Voltastraße, Galvanistraße and Ohmstraße in the Bockenheim district of Frankfurt. On the 3.000 m² lot in the City West area, 124 luxury apartments with a living space of 10,240 m² are being developed. On the ground floor of the new seven-story building, there will be four shops with a total sales floor of 412 m² and 128 underground parking spaces will be provided. The 2-3 room apartments will be between 55 and 90 m², the Maisonettes on the top floors will be 115 to 120 m². NPC reported that they plan to sell the residences in a block to an institutional investor.
Warehousing: Turnover in Q1 climbs 8 % - Rents constant
Turnover of warehousing space in the regions of Berlin, Düsseldorf, Hamburg, Frankfurt, Munich and Wiesbaden/Mainz climbed about 8% to around 287.000 m² during the first quarter of 2008 according to a current market report from Jones Lang LaSalle. While there was a decline in turnover in the regions of Frankfurt, Berlin and Wiesbaden/Mainz between 26% and 74%, the Hamburg and Munich regions booked growth from 12% to 16%. The peak rental rates have remained stable since the end of 2007 in the observed regions. The highest rents were in the Frankfurt and Munich regions with €5,80/m²/month and €6,50/m²/month respectively.
Köln: Pandion Real Estate buys DEG headquarters in Müngersdorf district
DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH sold its headquarters on Belvederestraße in Köln-Müngersdorf to Pandion Real Estate GmbH. DEG's headquarters has an administration building and two outbuildings on a lot of around 9.000 m². The disposal followed a structered sale process organized by the Cologne branch of Atisreal. By agreement, the price is being withheld. Pandion Real Estate plans to transform the buildings into an exclusive residential ensemble. DEG, an enterprise of KfW-Bankengruppe, will move with its 380 employees into a new building on Kämmergasse, in Cologne's city center, in August 2008.
Berlin: Investa's Schloßstraße project approved
In addition to the "Forum Steglitz" and the "Schloss-Straßen-Center" shopping centers, as well as the projected "Boulevard Berlin," construction on another retail project is now due to start in October. Investa-Immobiliengruppe received a permit to build a five-story office and retail building on Schloßstraße in Steglitz from the district building department. The building will replace the Woolworth's at the corner of Schloßstraße and Ahornstraße. The investment is approximately €40mn. The design is from the office of Eicke Becker, Architects. Three of the five floors are foreseen for use by the flagship store of a fashion retailer. Since Woolworth holds a contract, that company could also move into the new building, Robert Gierth from the Berlin branch of Investa told the daily newspaper Die Welt. The planned use of the upper floors is for offices and health services.
Sport Fundgrube: Sporting goods retailer seeks space to expand
The sporting goods chain Sport Fundgrube wants to expand in all of Germany. Therefore the firm from the Bavarian town of Hausham seeks retail space between 400 and 1000 m² in towns of more than 20,000 inhabitants. The chain announced that its preference is for “basic structures with large contiguous retail space in a highly frequented environment.” The locations should be, if possible, on a main artery or next to a shopping center. Sport Fundgrube currently operates 46 branches in Germany, Austria and Slovakia. Just recently a new branch was opened in Karlsruhe. The established shops carry well known brands of sporting goods and all the shops are held in the franchise system.