News from 07/31/2008
Investment market: Revenues down 40% says Degi - “No crisis”
Transaction volume on the German real estate investment market fell 40% to €17bn in the first half of this year according to Degi. The slump should not be seen as a symptom of real estate crisis Thomas Beyerle, head of research at Degi, commented. In comparison to the record year of 2007, the market has lost momentum, but revenues are still above the long-term average dating from 2000. “The fact is that Germany at midyear can once again shine with the fundamental data, that Germany was again chosen as a hot spot with foreign investors.” Degi's chief researcher predicted that a transaction volume above the eight year average of €35bn can be foreseen for the next three years as well. Investment volume should reach approximately €40bn this year.
Hamburg: IVG to develop office complex “Fleet am Rödingsmarkt”
IVG Development will build a new office center at Rödingsmarkt 20-26 for IVG Investment GmbH. The "Fleet am Rödingsmarkt" project south of the city centre includes a general overhaul of the existing building and construction of a new nine-story building. Construction should start in December of this year and IVG projects its completion by the end of 2009. The resulting complex should provide 9000 sqm of flexible, repartitionable office space. Plans and design are by LH-Architekten, Hamburg, which won a design competition against six other architectural firms.
Braunschweig region: British investors buy 502 residential units
Investors from Britain have acquired a portfolio of 502 residences from Wolfenbütteler Baugesellschaft mbH. A group of 202 residences are located in the Oker district of Goslar and a further 146 are in the Bündheim and Harlingerode districts of Bad Harzburg. The sale to Burntan/Merington GmbH yielded proceeds of several millions according to the Braunschweiger Zeitung. The apartments which, in part, are in poor condition are to be renovated for €1.5mn. The buyer signed a social charter that prohibits re-sale in less than three years.
Frankfurt: Berenberg Bank rents 1,200 sqm in office villa
Starting in November 2009, the Frankfurt branch of Berenberg Bank, Germany's oldest private bank, will be the sole tenant in "Moritz-von-Schwind-Haus," an office villa in Frankfurt's Westend district. The landmarked building at Bockenheimer Anlage 3 will be completely renovated and extended by GeRo Real Estate AG and Vivum GmbH. According to earlier reports, the investment volume runs to about €6mn. The new tenant expects ca. 1,200 sqm of office space to be available at completion.
Office market: JLL's European Office Rental Index sinks for the first time since 2005
The European Office Rental Index from Jones Lang LaSalle (JLL) sank in the 2nd quarter of 2008 for the first time in three years. While the index, based on the weighted performance in the 24 most important cities, showed a plus of 3.9% using a one year comparison, it sank for the first time since Q1 2005 by 0.2% over the quarter. According to JLL, the drop is due primarily to the sinking prime rents. in London (-4.4%) and Brussels (-3.4%). In six cities, three of them in Germany, the prime rents have climbed (Berlin +2.4%; Hamburg +2.2%; Munich +1.7%; Prague +2.4%; Stockholm +2.3%; Madrid +0.6%). All other markets recorded stable prime rents. JLL also found that user demand everywhere in Europe is surprisingly strong, but in most countries the readiness to pay the demanded prime rates is weakening. The level of take-up in the second quarter managed to reach the level of the previous quarter at 3.2mn sqm. However, JLL registered a half-year volume that declined by around 5.7% compared to the 2007 record year. In the second half of the year JLL expects that in most European cities there will be a decline in demand.