News from 10/27/2008
Frankfurt: DZ Bank’s office tower approved after all
With a backdrop of the merger of DZ Bank, seated in Frankfurt, and WGZ Bank, based in Düsseldorf, the black-green (Christian Democratic Union/Green Party) coalition in Frankfurt's city hall has decided in favor of an expanded high-rise master plan according to which a new 175 m tall office building, planned for Platz der Republik, is to be approved after all. The coalition parties reported that the expansion of the plan will help to “stabilize the banking location.” The bank, however, will have to “make a binding declaration” to the effect that the expanded floor space will be for its own use. They added that the requirement for a 30% minimum residential use of floor area developed in excess of the normal limits for high-rises could be satisfied in the building belonging to Union Investment on Wiesenhüttenstrasse in the railway station district. DZ Bank has in the past itself suggested using the Union building for that purpose.
Residential market: Rents rise again in third quarter
Compared to the same quarter in the previous year, rental prices placed in newspaper advertisements in nine of the top ten cities have risen in Q3. The empirica research institute, using IDN ImmoDaten's price data, reported the sharpest increase in Hamburg, up 11% to €8.33/sqm. Rents per square meter in newspaper advertisements ran to more than €8/sqm in 11 cities, €7 in 13, €6 in 22, €5 in 44 and €4 in 26 cities. The trend in sale prices for advertised condominiums is somewhat different: within the top ten cities, offered prices went up only in Heidelberg (11%, to €2,443/sqm), Munich (2%, to €2,946/sqm), Frankfurt am Main (2%, to €2,262/sqm) and Stuttgart (2%, to €2,067/sqm). Nationwide, the advertised price per square meter surpassed €2,000 in seven cities. A further 31 cities ranged between €1,500 and €2,000; 64 cities between €1,000 and €1,500. Average prices lower than €1,000/sqm are found in 16 major cities.
Kristensen Properties: Danes take over Griffin Forvaltning and its 145 funds
The property investment company Kristensen Properties, Denmark, present in the German real estate market since 2002, has taken over Griffin Forvaltning, also based in Denmark, and with it, the management of 145 funds holding properties in Germany, Denmark, England and Finland. Kristensen stated that the takeover was precipitated by the economic difficulties suffered by the Griffin group. Griffin Forvaltning’s employees will be retained by Kristensen. After the takeover of Griffin, Kristensen will reportedly manage assets worth approximately €2.3bn.
Stuttgart: Government financing for “Stuttgart 21” stands
An agreement has been reached between the federal government and the state of Baden-Württemberg to finance the big “Stuttgart 21” rail infrastructure project. The daily newspaper Stuttgarter Zeitung reported that, based on committee documents, the Berlin government coalition’s budget committee, at its meeting on November 13, will approve funds of approximately €500mn. A total of some €320mn is to go toward reconstruction of the Stuttgart railway terminal between 2010 and 2015. According to the paper, a further €180mn will be provided after 2015. All in all, the cost of the project is estimated at about €3.1bn. Around €1.3bn of the cost will be shouldered by Deutsche Bahn AG. The state of Baden-Württemberg will participate with about €370mn and the city of Stuttgart will bear some €32mn. It has not yet been determined when the signing of the financial agreement, originally slated for October, will actually take place.
Berlin: Federal government provides €600mn guarantee for BBI Airport
The road has been cleared for financing the new Berlin Brandenburg International Airport (BBI) in Schönefeld: according to media reports, the federal government will participate as a third partner, together with the federal states of Berlin and Brandenburg, in a one hundred percent government-backed guarantee for up to €600mn. The federal government will hold a 26% stake in the airport company, while the states of Berlin and Brandenburg will hold 37% each. The guarantee is intended to securitize loans amounting to €2.4bn. Before a financial agreement is signed, the EU must determine whether the guarantee is anti-competitive due to government aid.
Curanum: Nursing home operator seeks investors
The daily newspaper Financial Times Deutschland reported that the nursing home operator Curanum is looking for an investor to solidify its shareholder structure—without, however, wishing to give up its independence. After NordLB announced that it had decided to divest itself of its stake, CFO Bernd Rothe is assuming that other shareholders will also want to sell.
Dresden region: Novum apartment cooperative files for insolvency
The daily newspaper Sächsische Zeitung reported that the Saxon residential firm Novum, seated in Kamenz, near Dresden, has filed for insolvency. The reason is said to be a demand made by a British bank for repayment of an €8mn loan. The loan, originally granted to the cooperative by DZ Bank and DG Hyp, was sold to a British and an Irish bank. Novum’s operative business does not appear to be in difficulty: “Novum’s figures look relatively positive,” Andrew Seidl, the insolvency administrator, told the paper adding that he had seen far more difficult balance sheets than this one. The vacancy rate of the apartments, at approximately 10%, is significantly lower than elsewhere. The cooperative owns an inventory of 700 apartments in Kamenz and Königsbrück.