News from 07/07/2008
Residential portfolios: LEG NRW deal saves market from slump
Transaction volume and the number of residential portfolios traded have suffered setbacks in Germany: according to calculations performed by Cushman & Wakefield (C&W), 125,000 residential units with a volume of approximately €4.7bn were sold during the first half of the year. Due to reduced average prices, the estimated transaction volume plunged by some 34% compared to the previous year and the number of sold residential units fell by around 11%. The year’s biggest deal up to now was the June sale of LEG NRW, with about 93,000 residential units, to Goldman Sachs’ Whitehall Fund. Martin Braun, director of C&W Deutschland’s capital markets division, said, “Without this transaction, there would have been a real slump in transaction volume.” Apart from Goldman Sachs, he continued, financial investors that had increased their activity on the German residential property market since 2004 had now largely withdrawn from the market. Such firms as Cerberus, Blackstone and Oaktree have sold the portfolios they had acquired. Matthias Franz, the senior consultant corporate finance at C&W, explained, “The expectations these investors had with regard to short-term privatizations and asset management potential were only partially fulfilled.” As trends have been declining for years, C&W is predicting a further reduction in both units traded and in transaction volume for 2008, as well.
German office markets: Rental turnover again at record level
Germany's office rental markets attained high turnover rates in the first half of 2008 and despite some negative prognoses are heading toward a new annual record. Space take-up on nine office markets examined by Atisreal reached some 1.82mn sqm, thus achieving a new half-year record result: a plus of 11% compared to 2007 and surpassing the figures attained at the beginning of the millennium. Jones Lang LaSalle (JLL) also reported take-up increases averaging 9% during the first six months of the current year in the analyzed locations. This result tops the average first half-year take-up over the last five years by almost one third. Rents, too, climbed in the first six months of 2008. According to Atisreal, with two exceptions, rents on all the surveyed locations increased since mid-2007. It reported that the strongest growth was recorded in Munich where it rose a good 11% to the current €34.50/sqm. The highest premium rent is again attained in Frankfurt (plus 7%, to the current €37.50/sqm). Vacancy rates in the analyzed cities have decreased by a total of 4% since mid 2007, Atisreal continued. While JLL expects a take-up volume matching the level of the previous year, Atisreal considers an increase possible: "Chances to even surpass last year's already outstanding turnover figures are good for the entire year of 2008," said Peter Rösler, chairman of Atisreal's management board.
Cologne: Allianz sells Lufthansa building to Whitehall Fund
The former Lufthansa building at Kennedy-Ufer in the Deutz district of Cologne has been sold by Allianz to Goldman Sachs’ Whitehall Fund within the framework of a package deal, the daily newspaper Kölner Express reported. Since Deutsche Lufthansa AG moved out at the end of 2007, the building on the right bank of the Rhine has been largely vacant. The sale took place on July 1, 2008, the paper wrote, and added that Whitehall Funds has not yet made any decision regarding the future of the building.
Berlin: Danish investors acquire 1,097 residential units in Berlin
The property management provider Strategis AG announced that it has acquired 1,097 residential units in Berlin for a Danish consortium. In an interview with THOMAS DAILY, the company confirmed that the portfolio includes objects near the district courthouse in Berlin's Charlottenburg district and in the “Grüne Stadt,” or “Green City,” on Greifswalder Strasse in Prenzlauer Berg. Properties in two neighborhoods in Zehlendorf and one neighborhood in Köpenick were also bought. No information was given with regards to either the purchaser or the price. The portfolio is to be optimized and further developed by Strategis AG. The Danish investors participating in the purchase and advised by Strategis have already invested €435mn in the German residential and commercial property market since 2005.
Eurohypo: Consortium finances Lone Star purchase of Post objects
In a club deal, Eurohypo, DekaBank, Natixis and Société Générale are financing Lone Star’s acquisition of approximately 1,000 properties belonging to Deutsche Post, the German mail. Transaction leader Eurohypo announced on Friday that the volume will exceed €700mn. The U.S. financial investor acquired the 1,267 commercial properties owned by the DAX listed concern and located mainly in Germany for €1bn.
Düsseldorf region: Call center rents 2,070 sqm in new building at airport
The call center service provider TheBeeCompany GmbH will open its fourth German location in Düsseldorf. For that purpose, the firm has leased 2,070 sqm of office space in the new “Air-Port-Office” project . The project has a total of some 6,000 sqm of lettable area being developed on the “Quartier(n)” area at the airport by Frankfurt-based PBG Projektentwicklung Baumanagement Gesellschaft mbH. PBG has already sold Air-Port-Office to Commerz Real AG. The ten year lease, as well as the acquisition of the premises and the sale to the end investor, was brokered by Aengevelt. Quartier(n) comprises a total net construction area of approximately 125,000 sqm. Among the firms which have already settled in the quarter are E-Plus, C&A and the business consultant Capgemini.