News from 08/27/2008
Degi: Commercial building acquired on Frankfurt's Zeil for Degi Europe Retail
Degi, held by Aberdeen Property Investors, has acquired an office and commercial building on the Zeil shopping promenade in Frankfurt. The investment volume for the 5,100 sqm of lettable floor space at Zeil 127 is quoted by the manager of the fund at more than €30mn. It is reported that the seller is the Nassauische Sparkasse (Naspa) savings bank, which will remain in the building long-term as the principal tenant. The new acquisition is to be integrated into the Degi Europe Retail special fund administered for institutional investors. Degi was advised during the transaction by Kemper’s Jones Lang LaSalle, Frankfurt. The five-story commercial building was constructed during the ‘50’s and comprehensively modernized in 2000. According to Degi, the space is completely rented.
Dortmund: Cornerstone laid for €72mn Westfalentower project
Today, KPE and Credit Suisse Asset Management Immobilien KAG celebrate laying the cornerstone for their €72mn project called “Westfalentower” on Westfalendamm. This starts the construction on an 18-story high-rise designed by Köhler Architekten (Frankfurt ) in addition to which a six-story, L-shaped office building called “Forum” and a four-story, U-shaped office building called “Atrium” are planned. The firms Atisreal GmbH and DoReal IC (Dortmund) are responsible for marketing the total gross floor area of approximately 23,000 sqm. Completion of the project is scheduled for the first quarter of 2010.
Commerz Real: Two office projects acquired in Vienna for €98mn
Commerz Real AG is expanding its activities in the Viennese urban development project called “TownTown.” For approximately €98mn, the firm acquired two more office objects in the development area located in the eastern part of the city. The developer and seller is a project company established jointly by the municipal real estate development company IWS, or Immobiliendevelopment Wiener Stadtwerke BMG, and the private Soravia AG. Taken together, the two objects comprise approximately 30,000 sqm of total lettable area. When a preliminary occupation rate of 75% is reached, the properties are to be transferred into the open-ended property fund hausInvest europa. Back in October, 2007, Commerz Real purchased six office buildings in the “TownTown” project for some €97mn.
Saarbrücken: Irish acquire “RastpfuhlCarré” shopping center
An Irish investors’ group has acquired the shopping center called “RastpfuhlCarré” in Saarbrücken. The center opened in May has approximately 6,300 sqm of lettable area and 180 parking spaces. It was developed by Roleg KG based in Saarbrücken, a joint venture established by LEG Saarland and the Rosco group from Bad Hersfeld. The brokerage house Savills, which brokered the deal, reported that the purchase price is in the “eight-digit range.” The anchor tenants, among others, are Rewe, Aldi, the Sparkasse Saarbrücken savings bank and the state-owned apartment construction company Woge. Despite the difficult financing environment, the Irish investors are planning to acquire further objects, Savills said.
Open-ended funds: More yield, less risk
In the portfolios of private and institutional investors, open-ended funds raise returns and reduce risk, and thus improve the risk-reward ratio of the asset investment. This is the result to which a scholarly study commissioned by the Federal Association Investment and Assetmanagement (BVI) arrives. Above all, the low correlation with other classes of investment was perceived as positive. Through the admixture of open-ended funds, a private investor with little inclination to take risks can reduce the risk of the portfolio by 21% while achieving the same returns, the report claims. By comparison, it says, the risk of an investor more willing to take risks declines by up to even 32%.
Conwert: Lower earnings, higher rental revenues
Conwert Immobilien Invest SE, Austria, has submitted figures for the first half of 2008. Compared to the previous year, lower gains from fair value adjustments led to lower earnings before interest and taxes (EBIT): approximately €87.14mn (first half of 2007: €101.61mn). Earnings before taxes (EBT) slackened to €54.12mn (first half of 2007: €90.09mn). Funds from operations (FFO) dropped slightly to €25.87mn (first half of 2007: €28.01mn). Due to the strong development of rental revenue, €72.25mn (+44% compared to the first half of 2007), earnings before interest, taxes, depreciation and amortization (EBITDA) climbed by some 29% to around €48mn. During the second half of the year, the firm intends to concentrate on the management and development of the existing property portfolio. Conwert predicts that earnings will approximately equal the level of the record-setting year 2007.
Eurocastle: Tender offer to shareholders
Eurocastle Investment Ltd., the Fortress subsidiary specializing in German commercial properties and loans, is making a tender offer to buy back shares in the company. During the period from August 21 until September 18, 2008, the firm wants to repurchase up to 3.2mn shares at a price of €6 per share. The tender price is €1.10 above the final August 13, 2008 price on the Euronext Amsterdam exchange. The most recent shareholders meeting on June 4, 2008 gave a green light for the offer running to a total of €19.2mn; the board confirmed the decision on August 13. ABN Amro Bank is commissioned to conduct the transaction through Euronext Amsterdam. In the middle of August, Eurocastle again announced a loss: for the second quarter of this year, net loss amounted to €31.6mn; net asset value fell back by 1.6%.
HRE: €241mn participation in Oaktree loan portfolio
Via a syndicate, Hypo Real Estate Bank AG (HRE) is participating with approximately €241mn in financing a senior tranche of the Herkules Portfolio. The U.S. investor Oaktree acquired this property portfolio from Deka Fonds in the summer of 2006. HRE announced that its financing share comprises a senior tranche, almost all of which is to be Pfandbrief-refinanced. The total financing, including the junior tranche, amounts to around €900mn and was arranged in fall, 2006 by the syndicate of Barclays Capital, Morgan Stanley and Société Générale. The financed real estate portfolio consists of 47 objects in cities located mainly in Hesse and North Rhine Westphalia.