News from 10/20/2008
Düsseldorf: HSBC Trinkaus withdraws from “Kö-Bogen” office project
Following Strabag Real Estate, the private bank HSBC Trinkaus & Burkhardt has now also left the European-wide contract award process for the “Kö-Bogen” project in Düsseldorf. The bank argued that the office project planned at Jan-Wellem-Platz in the Düsseldorf city center can no longer be profitably built, and declared that the special requirements laid down by the city are unacceptable. Andreas Schmitz, the spokesperson for the Trinkaus board, told the daily newspaper Rheinische Post that the “disproportionately long construction period lasting until 2014” was a further obstacle. The consensus among media reports is that only Bouwfonds MAB Development, in conjunction with the architect Jürgen Meyer, and the enterprise Die Developer, in conjunction with the architect Daniel Libeskind, were left as candidates at the time of last Friday’s deadline. That would mean that Hochtief has meanwhile also withdrawn from the project. The City of Düsseldorf wants to choose a candidate at the end of February, 2009. Acquisition of the site is to cost €46mn; moreover, the city is demanding that a €120mn guarantee be deposited.
Leipzig: Respite for €200mn shopping center project
Signing the urban planning contract for the €200mn “Höfe am Brühl” shopping center and residential project in Leipzig's inner city has been postponed. Due to a newly added agreement, project developer mfi, seated in Essen, now has an end of February deadline. THOMAS DAILY was told by urban planning magistrate Martin zur Nedden that if the contract isn’t signed by then, the city can cancel the permits for the shopping center without paying any indemnification. When asked, Klaus-Martin Callhoff, mfi project director, replied that the reason for the delay is the renewed examination of the project by mfi’s partner, the Canadian investor Ivanhoe Cambridge. Callhoff said that he is still “firmly convinced” that the project will go forward, adding that there are no financial problems and that the present plans drawn up by the architectural office Grüntuch Ernst will be retained. According to previous announcements, construction work was scheduled to begin this month.
Rewe: 2.100 new branches planned for Europe
During the coming three to five years, the food trading group Rewe wants to open some 2,100 new branches in Europe, 750 of them in Germany. This figure, the company says, already takes closings of locations into account, so that this is a genuine increase. In Germany alone, the concern wants to invest a “high nine-digit sum” in the expansion. In an interview with the daily newspaper Die Welt, Rewe’s CEO Alain Caparros denied the necessity for a program to stimulate economic activity in the retail branch. In his estimation, “retail is an economic stimulation program in and of itself.”
IKB: Crisis leads to new-business problems
The financial crisis has plunged the lender IKB back into dramatic turmoil. The bank announced that, due to difficult refinancing conditions, it might have to halt new business completely in some divisions. In its financial report for the first quarter of the 2008-2009 business year, the board pointed out that “considerable slumps in earnings” may be expected due to the threat of a recession, and noted that long-term property loans, in particular, can now seldom be refinanced. IKB’s CEO Günther Bräunig made it clear that even after takeover by the financial investor Lonestar, for the bank to survive it is necessary “that the financial crisis will end and the capital markets will start functioning again.” During the coming twelve months, the bank will need €14bn to €16bn in refinancing. These funds are to be provided mainly by drawing on credit lines amounting to €1.5bn provided by KfW, its previous parent company, and other funding institutions.
InCity Immobilien: €40mn retail property investment planned
InCity Immobilien AG, a company specialised in the realisation of properties in inner city locations, is expanding its activities in its new REIS (Real Estate Investment Service) Retail Properties business division. It wants to invest some €40bn throughout Germany to acquire city center retail real estate. After its already completed entries into the Cologne and Celle city centers, the firm stated that it has received commitments from institutional and private investors totaling up to €10mn. It announced that it will use these funds, in combination with debt, to purchase more city center retail property and claimed that, with a project volume totaling €60mn, the pipeline is well filled.
Düsseldorf: Topping out for new E-Plus headquarters
The mobile telecommunications network operator E-Plus Group celebrated the topping out ceremony for its new headquarters in northern Düsseldorf. The building is under construction on a 15,400 sqm site in the commercial park called “Quartier(n),” not far from the present E-Plus main administration facilities. After completion, the object is to have approximately 34,000 sqm of gross floor area, some 30,000 sqm of which are rentable floor space. The design was drawn by the architectural office NPS Tchoban Voss. The project was implemented by a consortium of the firms BBS and Pöttinger. The builder, Apellasbauwert Property, sold the property in September, 2007, to the Commerzbank subsidiary Commerz Real AG, which will act as landlord for the building. Aengevelt Immobilien GmbH & Co. KG initiated the project in the fall of 2006, subsequently brokered the lease and advised Apellasbauwert during the sale. According to previous announcements, the investment volume amounts to approximately €86mn.
Apartment market: Berlin landlords expect rising rents
Rents in Berlin rose 2% this year. This trend will continue in 2009, the current “Marktmonitor 2008” poll, compiled by the League of Apartment Enterprises in Berlin-Brandenburg (BBU), says. According to board member Ludwig Burkardt, the international financial crisis has little influence on the development of the market. “During the past years, Berlin has established itself successfully as a location for future technology and research,” he explained. The average rent among the 365 enterprises belonging to the league in Berlin currently runs to €4.56/sqm, which is still 19 cents below the rent index. Above all, BBU sees potential rent increases in the boroughs of Charlottenburg, Kreuzberg, Pankow, Schöneberg, Steglitz and Zehlendorf.