News from 07/15/2008
Warburg-Henderson: New Deutschland Plus fund to start investing in 2009
The first institutional investors from Germany have subscribed to shares in Warburg-Henderson's Deutschland Plus fund with an eight-digit euro sum. According to an announcement made by Warburg-Henderson KAG für Immobilien mbH, Hamburg, the open mutual property fund tailor made for domestic and foreign institutional investors is to raise €100mn in investment equity by the end of the year. A fund volume of at least €500mn is planned, which is to be invested in around 25 objects. The acquisition phase for the new fund, which is to focus on commercial properties in the ten largest German cities, will not begin until next year. On the basis of market analyses, Henning Klöppelt, the spokesman for the board of Warburg Henderson KAG, assumes "that the prices for properties in Germany will fall in 2009."
Ruhr area: Record-breaking office space take-up in Essen—Dortmund stable
On the office market in Essen, take-up of 88,000 sqm set a new half-year record, topping the previous year's result by more than 7%. At 37,000 sqm, the office market in Dortmund almost matched the prior year's result for the same period (-3%). This was reported in Atisreal Deutschland's “City News” for the first half of 2008. The brokerage house forecast that "for 2008, we are expecting very good space take-up for Essen; it may remain at about the same level as last year." In Dortmund, it expects good space take-up for the entire year. "Significant large-scale transactions will soon be reported—in projects, for instance," Atisreal said. Thanks to high demand and a tight supply of modern office space, peak rent in Essen rose, reaching €13.30/sqm (+9%) in the office market zone of Rüttenscheid/Bredeney. In the city core and in secondary locations, peak rents also climbed to €11.50/sqm and €10.50/sqm, respectively. In the Dortmund market area, the highest rent stayed stable last year at €13/sqm. That, however, is no longer being obtained on the inner city fringe (office market zone Rheinlanddamm), but in the city core. All in all, rent prices stayed relatively stable in all of the locations.
Aurelis: Hochtief subsidiary expands position as property holder
Aurelis, Hochtief's new property subsidiary, now wants to pay more attention than it previously has to its leasing portfolio, Aurelis CEO Joachim Wieland said at a press conference in Frankfurt yesterday. For 2008, Aurelis is expecting €98mn in rental income. "We will thus be exceeding our own expectations by about 10%," according to Wieland. He reported that Aurelis owns approximately 24.3mn sqm of land, 45% of which, or 60% of the value, is in the leasing portfolio, currently comprising 4,500 leasing contracts with a current market value of the rented buildings amounting to some €1.1bn. At the moment, he elaborated, one third of the buildings are vacant. This vacancy rate is to be reduced, the relation between rental income and operating costs is to be improved, and rents are to be adjusted when contracts expire. During the coming years, Wieland said income increases of 3% per year are possible from the occupied areas alone. He also sees great value increase potential in the refurbishment of the buildings. Objects with a total worth of €70mn have already been identified for this purpose. As a project developer, he went on, Aurelis wishes to be active beyond land preparation only in exceptional cases. Since the takeover by Hochtief Projektentwicklung and Redwood Grove International in September, 2007, plots worth €276mn have been sold. In 2009, Wieland stated, activities will focus on Frankfurt's "Europaviertel," or "European Quarter", for which marketing will start in fall, 2008, on the "Am Hirschgarten" project in Munich and on the "Quartier Central" in Düsseldorf.
DIC Group: Share of DIC Asset expanded to nearly 40%
Two shareholders, Deutsche Immobilien Chancen (DIC) group and Forum Partners, are expanding their involvement in DIC Asset AG still further. Forum Partners will transfer its 4.9% direct share to the large-scale shareholder Deutsche Immobilien Chancen, thus raising the unlisted property AG's stake in DIC Asset from 34.5% to 39.4%. In return, Forum Partners has extended its present convertible loan with right of conversion into 2.1mn DIC Asset shares, which was coming up for renewal in October, 2008, for a further period of three years, while at the same time subscribing to an additional convertible loan which carries the option of conversion into 1.5mn shares. Both bonds will mature in 2011. Ulrich Höller, the CEO of DIC Asset AG, said, "The transaction will have a long-term stabilizing effect on the ownership structure of our company."
Real I.S.: Bayernfonds Grossbritannien 2 fully placed
The closed property fund Bayernfonds Grossbritannien 2, issued by Real I.S., has been completely placed. Since marketing started in the middle of May, 2008, more than €50mn of equity have been raised for the fund, Real I.S. reported. With a total volume of approximately £70mn, the fund is investing in the Telford House office property in London's West End which Real I.S. acquired last February. The recently renovated property with 5,580 sqm of lettable area is completely rented to the House of Commons.
Munich: Aik acquires "LessingPalais" office property
Düsseldorf-based APO Immobilien-Kapitalanlagegesellschaft mbH (aik) has acquired the object called "LessingPalais" in Munich for one of its special property funds. The seller of the centrally located property at Lessingstrasse 11 was a company allied with the Arminius Real Estate Opportunity Fund, L.P. The urban villa in the classical style has three stories with a total of some 2,269 sqm of office space. It was rebuilt in 1954 according to historical plans and then became the headquarters of the Gagfah residential firm.