News from 07/01/2008
Nuremberg region: Siemens sells Areva headquarters in Erlangen for €77mn
The British financial service provider group Aerium acquired the German
headquarters of the nuclear technology firm Areva NP in Erlangen for its fund Aerium
Opportunity I. Siemens Real Estate (SRE) reports that the sales price was €76.9mn, specifying that the ground now sold has a new office building, two
recently renovated buildings and a garage with 500 parking spaces on a total net
area measuring 46,700 sqm. The buildings, it said, are rented for 15 years to Areva
NP, a joint venture comprised by Paris-based Areva SA and Siemens AG. Siemens will
go on using a small part of the renovated buildings. Zsolt Sluitner, manager of
SRE, commented that the present sale is a part of Siemens’ strategy of reducing its
ownership quota at selected locations, adding that the due diligence phase has
already begun for further sizeable office locations in Munich, Erlangen, Nuremberg
and Frankfurt.
Estavis: Two portfolios sold for €61mn
Estavis AG sold two portfolios for a total of €61mn to a Swiss asset management
firm and to a private fund recently issued in Great Britain. The larger portfolio,
Estavis reports, comprises 423 units, including 111 commercial units, with a total
surface area of 54,158 sqm. The objects are said to be located mainly in Berlin,
Halle, Stralsund and Wilhelmshaven; the sale price is quoted at €44mn (€818/sqm).
The purchaser is said to be upholding a financial proviso for this
transaction. The second portfolio is reported to have 326 units (14 commercial
units) in Berlin, Chemnitz and Hannover, among other sites, with a total area of
21,228 sqm and a sales price quoted at €17mn (€775/sqm). As the sales have no
turnover or result effects until the new 2008-09 business year beginning on July 1,
Estavis’ board is expecting that turnover and earnings for the business year now
ending will be lower than last year's values.
Sovereign wealth funds: Degi estimates investment volume at $150bn
According to current studies, 62% of all sovereign wealth funds are investing in
properties, 95% of them directly, 69% indirectly; 39% have their own property
divisions. Degi Research reports this in its newest “ImmobilienFokus” on the topic of “Sovereign Wealth Funds and Their Significance for the Global Property Investment Markets.” Seen in absolute figures, the Abu Dhabi
Investment Council fund, the biggest fund worldwide with a total property volume of
$70bn, tops them all, the report states. According to Degi Research’s evaluation,
the sovereign wealth funds are currently investing only an average of 4 to 11% of their
investment portfolios in property; however, the high share of property
transactions implies a significant increase of the asset class in their portfolios.
Due to the funds’ high growth dynamics and their stronger orientation towards
risks and returns, Degi’s researchers assume that the trend will be maintained and
will be targeting some 15% in the future; they estimate the investment volume
of these funds at a total of $150bn by 2010.
Securitizations: Eurohypo expects return of CMBS
According to a study compiled by Eurohypo London, a comeback of the securitization
of property credits is imminent. In the study, “Financing Property: From
Securitisation to Covered Bonds,” Philippe Tannenbaum, Eurohypo’sdirector of research in London, writes, “Future emmissions will have more comprehensible and
altogether more transparent structures.” After the financial crisis, he continues,
dried up the market for securitizations via commercial mortgage backed securities
(CMBS) for instance, while the “pfandbrief” experienced a renaissance, a
“supplementary coexistence” of securitizations, pfandbriefs and pfandbrief-like
convered bonds will be probable in the future. Securitizations and covered bonds
will not be competing with each other, Tannenbaum added.
European investment market: Transaction volume at lowest level since 2003
Jones Lang LaSalle (JLL) is expecting a 44% drop in transaction volume on Europe’s
commercial property markets for the first half of 2008 compared with the same
period in the previous year, commenting that the credit crisis has reduced market
activity to the lowest level since 2003. The volume for the first six months will
probably reach €69bn, the report says. For Great Britain, Germany and France, JLL is
expecting a volume of €35bn by the middle of the year, a 60% reduction compared to
the same period of the prior year. In Germany, after €8bn in the first three months,
the transaction volume for the second quarter could fall back to €3 – 4bn. Tony
Horrell, JLL's director of capital markets Europe, said, “We meanwhile believe that
the total volume for 2008 will be approximately 45% lower than the prior year’s
€244bn.” The prices, he continued, will undergo corrections on all the markets and
in all the segments. JLL researcher Nigel Roberts added, “As the financial crisis is
gradually beginning to have effects on the real economy and is undermining
confidence, we assume that, in the second half of the year, a significant weakening
of the user’s market will also become visible, as fundamental data will
come under pressure.”
Stuttgart: 100,000 sqm office space takeup in first half year
On Stuttgart’s office rental market, there has been a takeup of more than 100,000 sqm of office space in the first half of 2008, thus clearly surpassing last year’s value, Jones Lang LaSalle (JLL) announced in its current market information. According to the JLL report, more than 120 transactions contributed to
this result. 11 of them were rentals with a surface area of over 2,500 sqm. JLL
comments that this was striking for the Stuttgart office market, which is not only
relatively small—with just over 8mn sqm—but also has a strongly
localized orientation. Approximately one quarter of the total takeup volume was
attained in the high-price segment between €15 and €20/sqm. According to Sandro Camillo,
director of JLL’s Stuttgart office, a number of large-scale inquiries are still
in the pipeline. “If they arrive, we could reach the 200,000 sqm mark by the end of
the year,” Camillo said.
Duisburg: Imperial invests in container terminal in Logport II
The Imperial group is investing in a new container terminal in Duisburg’s Logport II trimodal logistic center. The new terminal is to start operating in spring, 2009. On an initial area of approximately 35,000 sqm, four tracks with a length of half a train each and a crane for handling of cargo by water and by railway are projected. Erich Staake, CEO of Duisburger Hafen AG and chairman of Logport Logistic-Center Duisburg GmbH’s management, says that, with the new transportation concept offered by this terminal, the Duisburg harbor can handle larger quantities than up to now. Moreover, he adds, the new terminal will improve
the connecton between the Upper Rhine and the ocean harbors and shorten transportation times between Duisburg and the Zara Range (Zeebrugge, Antwerp, Rotterdam, Amsterdam) thanks to transportation directly to destination.
PSPI/Immac: Britons acquire six nursing homes, further buys planned
A consortium composed of the British firm Public Service Properties Investments Limited
(PSPI) and Hamburg-based Immac Holding AG acquired a portfolio comprising six
nursing homes in Germany. The homes situated in Northern and Central Germany and
in Berlin have 403 nursing home spaces and 154 apartments for assisted living. PSPI
quotes the total transaction volume at €36.3mn, the net initial return at 7.3% and
the accumulated initial rent at €2.65mn. Marseille Kliniken is renting the
properties for 20 years—with an option on a further five to ten years. Before the
end of the present year, PSPI intends to invest a further €150mn in nursing homes in
Germany, if suitable opportunities materialize.