News from 07/17/2008
DeTeImmobilien: Strabag to become new owner of Telekom subsidiary?
According to a "Financial Times Daily" (FTD) report, the Austrian construction concern Strabag is about to have its bid accepted in the auction procedure for DeTeImmobilien. The competitors Hochtief and Bilfinger Berger, it says, are out of the race, thus making a Strabag takeover of the Telekom subsidiary probable. Strabag had repudiated any interest in DeTeImmobilien in an interview with the FTD; in the meantime, however, a spokesperson confirmed takeover negotiations.
SEB Asset Management: Logistics object acquired in Doncaster for €63mn
SEB Asset Management is reentering the British market. It acquired a grade A logistics object for its SEB ImmoPortfolio Target Return mutual fund in "West Moor Park" in Doncaster from a circle of private investors. The building, completed in 2003, extended in 2005 and comprising approximately 70,000 sqm of lettable area, is leased until 2023 to the British apparel chain Next Group plc. The total investment was quoted at a converted sum of approximately €63mn. The location in South Yorkshire has two direct expressway connections and there is a harbor and an airport nearby. Choy-Soon Chua, the director of property investments at SEB Asset Management, said, "The current market situation in the United Kingdom is positive from a buyer’s perspective. We will continue to monitor the investment climate." SEB sees good short-term acquisition opportunities on the London office market, for instance.
Düsseldorf: Transaction volume on investment market down by 50%
During the first half of 2008, the Düsseldorf investment market felt the effects of the U.S. mortgage crisis: despite a half-year record in office rentals and sinking vacancy rates, property buyers were acting with caution. While almost as many properties were sold as during the first half of 2007, the total volume was much lower, according to the current market report compiled by Colliers Trombello Kölbel. Between January and June, properties worth approximately €438.2mn changed their owners. The transaction volume was thus more than 50% below that of the same period of the previous year (first half of 2007: €907.5mn). For the second half of the year, Colliers Trombello Kölbel is predicting a yield level in accordance with interest rate developments. The demand for properties with good tenants or projects in first-class locations, as well as top products, will exceed the supply by far. Opportunistic products, however, especially in secondary locations, will meet with little buying interest at the moment, the report says.
Study: Degi sees risk potential for investments in Southeast Asia
A current Degi study sees increasing investment possibilities in the property branch in Southeast Asia. However, due to political and legal insecurity, and lack of transparency, the growth markets investigated - Vietnam, Thailand, Malaysia and Singapore - still represent heightened risks for sustained investments. In contrast to Germany, REITs, with a current investment volume of €21bn, are an established investment instrument in the region, states the report. It goes on to say that security-oriented investors with little inclination to take risks and a low quota of outside financing, the so-called core investors, are still an exception to the rule, at the moment. The analysis of benchmark data for the property market, such as rent increases, turnover development and vacancy reduction, is said to show positive signs through 2009. "Nonetheless, we are expecting a significant rise in vacancies and further yield reductions for 2010" Thomas Bayerle, Degi research director, cautioned. It is estimated that by that time, more objects will be completed than in the total of the last seven years.
Stuttgart region: Agreement on up to 10,000 sqm of sales area in commercial area
In the approximately 80 hectare commercial area called "Flugfeld Böblingen-Sindelfingen" (“Böblingen-Sindelfingen Airfield”), up to 10,000 sqm of retail area are to be developed. The Stuttgart region association wants to sign a contract with the airfield special purpose association, which limits the sales area for merchandise that competes with the inner city to approximately 3,500 sqm. Such wares as kitchens, furniture and carpets will be alloted 6,500 sqm – but only on small individual areas. The establishment of a big furniture market, for example, is to be prevented. The contract is an exception to the recently enacted regional plan which limits retail in commercial areas.
LHI Leasing: New property leasing model in Halle
To help relieve their budget deficits, many communities are flirting with the sale of their residential firms. Since the sale of Dresden's Woba to the financial investor Fortress and the negative referendum in Freiburg, however, such deliberations have become politically problematic. The city of Halle now hopes to profit from a new sale and lease back model conceived in cooperation with LHI Leasing and the NordLB. Via the newly founded object company HWG Wohnungsverwaltung, of which the municipal apartment company HWG holds 99.9% and LHI 0.1%, 2,243 city-owned apartments and 16 business units will bring in €81mn and nonetheless remain under HWG's administration. After debts are subtracted, the city will retain approximately €43mn for debt reduction. HWG will then lease back the apartments for €5mn annually from the object company, which will use the money to pay interest and principle for the €81mn loan. NordLB will provide the credit. HWG is receiving rental payments amounting to some €71mn annually. When the loan is paid back after 30 years, HWG will buy LHI's share back for a nominal sum. According to Heinrich Wahlen, HWG's CEO, the leasing model will have no effect on tenants and staff members.