News from 11/21/2008
Munich: Commercial property sales and revenues slump
The sales figures for commercial land and buildings in Munich have fallen off drastically. According to a current report compiled by the municipal advisory committee, 47% fewer office and commercial buildings were sold during the first nine months of 2008. Revenue in this segment actually plunged even more, by 67%, to €605mn. The number of sales of office and commercial land fell by approximately 36% and revenues in this sector plummeted by 72%, to €79mn (previous year: €286mn). The reductions on the residential market are somewhat less dramatic: during the first three quarters, 132 apartment houses changed ownership, 14% less than last year (153). On the condominium market, the advisory committee is expecting the number of sales to be similar to that of last year.
Hamburg: Building permit for development of Unileverhaus site
Union Investment Real Estate AG has received a permit to revitalize the high-rise at Dammtorwall 15 known as the “Unileverhaus.” The landmarked high-rise built in 1965 is to be supplemented next year by a separate new building with a hotel, apartments and offices. Completion of the project, valued at approximately €270mn and to be based on green construction standards, is scheduled for 2011. Union Investment said it is nearing the conclusion of negotiations for a long-term lease to Scandic Hotels, the leading Scandinavian operator. The project, until now called “Central Plaza,” is to bear the name “Emporio.” Nord Event GmbH was obtained as the ensemble's first tenant. Dr. Frank Billand, a member of the managing board of Union Investment Real Estate AG, asserted that even before the beginning of official marketing, demand for leases in the Emporio is enormous. “Users of properties in very high-quality locations such as the ‘Emporio’ are placing more and more emphasis on the sustainability of buildings,” he said. After its completion, in 2011, “the Emporio will be one of the most sustainable building complexes in Hamburg.”
Neumünster: Two investors plan shopping arcade
Two investors have presented plans for shopping arcades for the center of Neumünster. One, ECE Projektmanagement GmbH, is planning the so-called “Holsten-Galerie” with 60 to 70 shops on more than 20,000 sqm of sales area. It is to be developed in the Sagerviertel district and to extend up to the Gänsemarkt. Commencement of construction is slated for spring, 2010. The other, Karstadt and HBB Hanseatische Betreuungs- und Beteiligungsgesellschaft, wants to modernize and expand the existing Karstadt department store. A retail area that would connect directly to the existing building and be called “Forum am Teich” is envisioned. According to the plans, Karstadt’s 10,000 sqm of sales area would be expanded by a further 17,000 sqm.
Retail: Rents in global luxury locations keep on rising
Fifth Avenue in New York (€1,051/sqm/month), Causeway Bay in Hong Kong (€1,031/sqm/month) and the Champs Elysées in Paris (€644/sqm/month) are still the most expensive retail locations in the world. According to “Mainstreets Across the World,” the recent market report compiled by Cushman & Wakefield, prices in 94% of the 236 retail locations monitored are either still rising or remaining stable, despite the global financial crisis. As in 2007, the ranking of the German locations is led by Kaufingerstrasse in Munich (€280/sqm/month), followed by the Zeil in Frankfurt (€240/sqm/month) and Schildergasse in Cologne (€230/sqm/month), Tauentzienstrasse in Berlin (€220/sqm/month) and Königsallee in Düsseldorf (€220/sqm/month). The top international retailers pursued expansion during the past twelve months in the so-called emerging markets, and considerably boosted rents in some established locations. C&W registered a 182% price rise on Colaba Causeway in Mumbai, followed by a 114% jump on Valikonagi Caddesi, in the European part of Istanbul, and by +100% on Mumbai's Linking Road.
Stuttgart: Purchase prices and rents for residential properties rise, says IVD
According to IVD Süd, the property market in Stuttgart and the Stuttgart region has not been hit by the financial market crisis because there were hardly any large-scale package sales and no market overheating here. Moreover, there were fewer large deals on the commercial property market than in many other locations. At the moment, the report says, there is solid demand on the city's property market. Accordingly, prices for residential properties climbed slightly: the cost of high-quality, single-family houses increased to €680,000 (autumn of 2007: €650,000). Mid-terrace houses now cost €330,000 (autumn of 2007: €300,000). For condominiums, the increase was from €2,300/sqm to €2,400/sqm. For new condominiums, IVD registered price growth to €3,300/sqm (autumn of 2007: €3,200/sqm). There were steep rent increases for new buildings and renovated old building objects of high quality: compared to last year, prices rose from €10.80/sqm to €11.80/sqm.
Hesse: First state-wide property market report available
In 2007, some 54,000 sale contracts for real estate were signed in the state of Hesse, bringing in approximately €17.87bn in revenue according to the Property Market Report for 2008 compiled by the ZGGH, a body of the advisory committees for property values of the State of Hesse. Of those contracts, ZGGH says, 35% went to undeveloped plots, 37% to plots with buildings, and 28% to condominiums. The euro transaction volume,however, is 8% for undeveloped plots, 79% for plots with buildings and 13% for condominiums. The market report also shows the values for residential construction sites. The highest value in 2007, at €2,800/sqm, was found in Frankfurt. The ZGGH was established in July, 2007 at the Hessian State Authority for Grounds Management and Geographic Information.
Cologne: Meag starts marketing Cologne Oval Offices
With the opening of a new letting lounge, Meag Munich Ergo Asset Management has launched the marketing phase for its Cologne Oval Offices project at Gustav-Heinemann-Ufer. In April, the firm laid the cornerstone for the approximately €80mn office project, which MEAG is developing for the builder, DKV – Deutsche Krankenversicherung AG. Construction should be complete by the end of 2009. More than 30,000 sqm of floor space—enough room for some 1,680 of the health insurance's staff members—are being built.