Volume 7, Issue 124, August 31st 2014 Mall of Berlin sets new standards Inside REFIRE for German retail and financing REFIRE is a specialised report focused on providing market intelligence and back- After a number of delayed starts, it looks like Europe’s biggest urban shopping ground analysis to finance professionals development, the Mall of Berlin, is all set to open on the 25th September in the in German and continental European real city’s historic Leipziger Platz in Berlin-Mitte, between the Reichstag, Friedrich- estate investment. strasse and Potsdamer Platz. It is certain to set new standards in many respects – its sheer scope and size, its innovative approach to reconstructing a whole city Whatever your particular area of speciali- quarter rather than just bundling the usual retail suspects under one giant roof, sation, we think you’ll find timely, incisive and the selection of retailers themselves, many of whom would not traditionally information within our pages, helping to in- be drawn to German cities’ downtown shopping centres. form you of the key deals, the numbers, the markets, the players and the people. The financing of the giant project Resurgence in M&A market has also broken a number of records, helps Lone Star shed DüssHyp The areas we focus on are: and set a new standard for the ability of US private equity investor Lone Star developers to realise massive projects has sold its second German real estate US Funds in Europe without the traditional reliance on typi- financing bank, Düsseldorfer Hypothek- European REITs cal bank lenders as the primary financial enbank (DüssHyp) to a consortium for an German Real Estate Finance providers. undisclosed price. The deal follows on German Non-Performing Loans (NPLs) Deutsche Hypothekenbank, the the heels of its sale of Corealcredit Bank Retail Property Funds Bayerische Versorgungskammer in Frankfurt to neighbouring see page 3 Mortgage Securitisation (BVK) and BNP Paribas Real Estate CMBS/RMBS REIM are providing €600m in long-term JLL wins Hatfield Philips Privatisations financing for the Mall of Berlin project, mandate for €300m+ German Refinancing a consortium owned by High Gain retail portfolio Euro-zone Property Financing House, the vehicle of prominent devel- It’s been a busy but very fruitful period for oper Harald Huth, and his 30% partner special real estate loan servicer Hatfield REFIRE has an extensive network of con- the London-based Arab Investments, Philips (HPI). Following on from a com- tacts in the field of continental European controlled by the Affara family office. plex restructuring process related to its real-estate finance, which enables us to The deal was arranged by Berlin-based Talisman 6 CMBS, which we reported on bring you the latest and most relevant news. Primor Capital Partners, with law firm in an earlier issue of REFIRE. see page 5 However, we always want to know more Noerr acting for the lenders and GÖRG about what’s going on in this dynamic sec- Partnerschaft von Rechstsanwälten IVG Immobilien to sell off tor, so make sure your company is keeping representing the borrowers. The Squaire, Silberturm us informed of your moves. Send your me- The Bavarian occupational pen- The Bonn-based IVG Immobilien AG, un- dia communications to news@refire-online. sion fund BVK is putting up the lion’s til recently Germany’s largest real estate com for our consideration. share of the loan at €450m, while Han- company until it filed for insolvency last nover-based Deutsche Hypo is lend- year is back in the news over reports that ing €80m as consortium leader and it is selling two of the Frankfurt properties CONTENTS in this Issue: agent, and two debt funds managed with which it is now most closely associat- by BNP Paribas REIM are putting up ed - The Squaire and Silberturm see page 8 DEALS ROUNDUP / from page 3 the remaining €70m. The loans are for EDITORIAL / page 4 10 years, with BVK’s lending ranked as Asian hotel groups discover REPORT - /ROUNDUP page 10 senior, the BNP loans as subordinate, German market UPCOMING EVENTS / page 29 and Deutsche Hypo’s spread across With Asian investors becoming increas- PEOPLE…JOBS…MOVES / the other two. ingly active on the German market, one SUBSCRIPTION FORM / page 34 The deal ranks as one of the big- area which can expect to start seeing a lot gest-ever German real estate financ- more interest is the hotel sector. Most ho- ings not principally provided by a bank tel groups have already made see page 12 2

lender, and certainly one of the biggest non-bank lenders in property financing REFIRE loans ever provided by a German insti- will grow further.” Real Estate Finance tutional investor, BVK. The spectacular Mall of Berlin at Intelligence Report Europe The financing partnership is part of Leipziger Platz, on the location of the the strategic co-operation between famous Wertheim department store Deutsche Hypo and which was destroyed Operating Office Germany’s biggest in the war, will have REFIRE “BVK separate- Habsburgerallee 95 pension fund manager ly confirmed that it 80,000 sqm of letta- 60385 Frankfurt am Main, GERMANY BVK which was agreed is looking at several ble retail space when Tel: +49-69-49085-785 upon last autumn, and it opens, with more Fax: +49-69-49085-804 new projects, some in Email: [email protected] which we reported on the residential sector, than 270 retail and in these pages. Accord- which it plans to be- gastronomy tenants, Managing Editor: ing to André Heimrich, along with 30,000 Charles Kingston come more involved in, Tel: +49-69-49085-785 board member and both as a lender within sqm of residential Fax: +49-69-49085-804 head of investments at a consortium, as well space. Along with a Cell: +49-172-8572249 the €60bn BVK, “Our 12,000 sqm hotel, a Email: [email protected] as on its own.” agreed collaboration further 50 stores will Subscriptions: with Deutsche Hypo for projects like be opened in an adjoining building next Tel: +49-69-49085-785 this can serve as an excellent example year, while the residential area is ex- Fax: +49-69-49085-804 Email: [email protected] for future projects, while with the possi- pected to include the completion of 250 bilities open to us as a financier, we will top-quality apartments, also by early Advertising: certainly be looking to finance further next year. Tel: +49-69-49085-785 Fax: +49-69-49085-804 big projects.” The new centre (pictured, left) will be Email: [email protected] BVK has already financed several the largest in Berlin in terms of shops and major German transactions over the tenants, although not actually in terms Editorial Advisory Board: Klaus H. Hausen past two years, including the Silber- of lettable retail space. That honour Colm O’Cleirigh, B.Arch.Sci. turm in Frankfurt (the belongs to the Gropius Margarete May, Rechtsanwältin ex-Dresdner Bank Passagen in Berlin’s David Scrimgeour, MBE Christian Graf von Wedel headquarters, now Neukölln neighbour- Glenn J. Day FRICS leased to Deutsche hood, another project Andreas Lehner Bundesbahn) and of Harald Huth’s which Stefan Engberg, MRICS Tower 185 in the was completed in the Publisher: Frankfurt business late ‘90’s and current- REFIRE Ltd., district, developed ly has 85,000 sqm of 49 Sandymount Avenue, Ballsbridge by CA Immo. BVK retail space. Huth sub- Dublin 4, Ireland separately con- sequently also com- firmed that it is looking at several new pleted another huge mall, the Schloss Real Estate Finance Intelligence Report Europe projects, some in the residential sector, in Berlin’s Steglitz neighbourhood. The (REFIRE) is published 22 times a year, at the be- ginning and in the middle of each month, with which it plans to become more involved opening hours in the Mall of Berlin will two holiday breaks. REFIRE is editorially inde- in, both as a lender within a consortium, be the longest in Berlin, however, with pendent of any selling or investing institutions. In- as well as on its own. tenants required to keep their stores formation contained in REFIRE is under copyright protection and is based on sources believed to The €70m tranche from BNP Parib- open from 09.00 to 22.00, rather than be reliable, though their complete accuracy can- as REIM funds is the largest financing until 21.00 as is normal in Berlin’s other not be fully guaranteed. Neither the information ever granted by German debt funds. big shopping centres. contained in REFIRE nor the opinions expressed therein constitute or are to be construed as con- “This large-volume financing is a further Deutsche Hypo is the proper- stituting an offer or solicitation of an offer to buy important step towards establishing ty financing division of north German or sell investments. REFIRE accepts no liability debt funds in Germany and underlines landesbank NORD/LB. Active in Ger- for actions based on the information herein. our market leadership in the area,” said many, UK, France, Benelux and Poland © 2014 REFIRE Ltd. BNP REIM chairman Reinhard Mat- it has a balance sheet of €31.3bn. Ba- tern. “We are convinced that the role of varian BVK manages a total investment 3 www.refire-online.com

...... DEALS ROUNDUP volume of €59bn. BNP Paribas REIM The buyer is a consortium headed ing bank specialising in financing resi- Germany, part of the French banking by London investment group Attestor dential properties, offices, hotels, logis- group, specialises in property Special Capital LLP and investment banker tics and parking with mortgage small Funds and Luxembourg SICAV solu- Dr. Patrick Bettscheider. The new bond loans in the region of €10-50m. It tions. The firm has €4.3bn of assets owners plan to convert the mandatory also engages in syndicated loans with under management in 13 funds, two convertible bonds in the bank into per- other lenders. of which are debt funds. BNP Paribas manent equity capital, and to boost the Lone Star rode in to rescue DüssH- bought iii-investments late last year core capital position of the bank, while yp in 2010 in the midst of the financial from Germany’s HypoVereinsbank, a continuing to run DüssHyp as a going crisis after the ailing Düsseldorfer bank subsidiary of Italy’s UniCredit Group. concern. had been absorbed in 2008 for safe Attestor manages $1.5bn assets for keeping by the BdB Association of investors (according to the sparse in- German Banks’ special protection unit. Germany/Banking formation available on the company), The BdB subsequently brought in fur- Resurgence in M&A market while prominent wheeler-dealer Bet- ther help from government bailout fund helps Lone Star shed DüssHyp tschneider recently sold out of Frank- SoFFin, to protect the integrity of both furt-based MainFirst, a boutique in- DüssHyp’s deposit insurance and its US private equity investor Lone Star has vestment bank he co-founded in 2011, Pfandbriefe. sold its second German real estate fi- to establish Swiss-based Interritus Lone Star is thought to have injected nancing bank, Düsseldorfer Hypothek- with former Commerzbank director more than €500m to strengthen the core enbank (DüssHyp) to a consortium for Ulrich Sieber. The buying consor- capital position of the bank. DüssHyp an undisclosed price. The deal follows tium completed the deal with Lone has continued to make losses, however, on the heels of its sale of Corealcredit Star through holding company Ocean with the latest figure €25.9m of losses Bank in Frankfurt to neighbouring Aare- Holding. Both parties are thought to be for the first half of this year, after full- al Bank at the end of last year. The deal holding equal shares of 45%. year losses in 2013 of €60m and €86m in is the largest German bank takeover Founded in 1997, DüssHyp is a small 2012. The core capital position remained since the onset of the financial crisis. (€12bn balance sheet) Pfandbrief-issu- weak, reaching 8.5% at end-2012 – only

Time for core plus and value add investments in Germany.

The PAMERA Real Estate Group is a professional local partner for investors focusing on office and retail assets.

Take advantage of our experience and track record in purchasing and actively managing properties with upside potential. Represented in the five most important German real estate markets, our strong team will partner you through- out the acquisition, leasing, optimisation, refurbishment and sales process.

Creating real value.

Interested in our expertise? Please call Mr. Gunther Deutsch at +49 89 210 256-10 or send an email to [email protected]

Berlin . Düsseldorf . Frankfurt . Hamburg . München . London www.pamera.com 4

...... EDITORIAL

The long and winding road - from Chongqing to our very own Duisburg

The Yuxinou Railway is a freight rail velopment of new transport arteries across Still unquantifiable is the amount of Chi- route which links China with Eu- the globe – new versions of the Silk nese real estate investment that is allocated rope along the New Silk Road. It Road that the Chinese government indirectly via asset and fund managers, al- starts in the southwestern Chi- is now actively promoting to propel though it is certainly more than that invested nese city of Chongqing, carves the movement of both goods – and directly. Obviously Germany has much catch- through the Alataw Pass into companies themselves – out into the ing-up to do. The UK is still - by far - the pre- Kazakhstan, and after chugging wider world, and get away from the ferred destination in Europe for real estate in- through Russia, Belarus and image of China as mere sweatshop vestment, with a Chinese market share of 6%, Poland, it terminates in the old for the world’s manufacturing. The compared to the estimated 1% in Germany. steel-making city of Duisburg, in process has been underway in Afri- This is certainly going to change, not least Germany’s most populous state ca for a decade now, and its results because of the investment pressure that of North Rhine-Westphalia. are plain to see. Europe is now increasingly many Chinese institutions now find them- If you live in Europe and use an iPhone in Chinese investors’ sights, and while trans- selves under. With a falling property market or an iPad, there’s a good chance that your formation won’t happen overnight, the long- at home, the pressure to look out beyond smart device landed up in Duisburg after term implications of this historical develop- their borders is increasing, and the Eurozone a 14-day, 11,200 km journey from the Fox- ment are inevitable. is offering stable if modest returns, in addition conn factory in Chongqing, one of Apple A recent study by consultants Ernst to a currency hedge. Inc’s principal contract manufacturers. Two & Young shows that Chinese companies Recent regulatory changes in China now years ago the train, about 800m in length, made 68 sizeable direct investments in Ger- permit Chinese insurers to double their alloca- ran weekly. By the end of 2013 it was run- many last year, not counting mergers and tions to infrastructure and real estate to 20%, ning three times a week. Now, after a sev- takeovers. This pushed Germany to the top and while the larger players are likely to look enfold increase in volume since 2012, the of the table – ahead of the UK and France at accessing the market initially through funds train is about to start arriving daily. – of European destinations favoured by the and listed companies, drawn by attractive div- Now, Duisburg would not normally be Chinese for industrial development, and idend yields, they will inevitably develop the considered a first-choice destination for nudged the Chinese into third place overall, expertise and the contacts to invest directly. international capital looking to invest in behind the US and Switzerland, for German Furthermore, investments of up to €1bn, Germany. True, the city has undergone a inward investment. which previously required special govern- renaissance since its decline from its glo- Several factors are at play here. The Chi- ment dispensation, now merely need to be ry days as a steel producer and a centre of nese government’s recent moves to lower registered with China’s National Develop- the mining industry, but most investors are the barriers to Chinese companies’ overseas ment and Reform Commission (NDRC), more naturally drawn to its neighbour, Düs- investment will now enable Chinese capital greatly speeding up the ability of Chinese seldorf, which has a much more urbane to move much faster, a hindrance which led companies to think boldly and move fast. and glamorous feel to it. them to lose out on several deals in the re- REFIRE has had a very positive response Duisburg is, however, the largest inland cent past. While ‘official’ Chinese investment from German companies wishing to partic- port in the world. Although deep inland, more in German real estate has been modest so ipate in our forthcoming “1st Annual Ger- than 20,000 seagoing ships stop off at Duis- far, we have no doubt this is about to change. man-Chinese Real Estate Forum” taking burg every year, and more than 40m tonnes Inofficial investment, however - from private place in China, with highly-targeted Chinese of various goods are handled through the individuals, family groupings or investment investor participation. The Forum will include city’s sophisticated container port facilities. pools and club deals cobbled together from a full day’s conference devoted to German For investors in logistics and infrastructure, the wider mainland and overseas Chinese real estate opportunities for outbound Chi- the city is very much on the map. community - is already rampant. nese investors in each of three cities: Hong REFIRE recently met with Duisburg’s Just last week a REFIRE staff member Kong on January 19th, Beijing on January office for economic development, where was witness to an almost surreal dispute be- 21st and Shanghai on January 23rd. the CEO told us that the previous day he tween a seemingly wealthy Chinese lady and For speaker positions and sponsor- had held no less than FOUR meetings with a local Frankfurt financial institution. The lady ship opportunities, along with the ability different groups of Chinese investors. All was having difficulty understanding why she to participate in the week-long road-show, were anxious to soak up anything they couldn’t buy the two newly-built apartments things will be moving fast between now could learn about what it takes to run the that she wanted - on her credit card. The no- and the Expo Real in Munich in early-Oc- world’s most successful inland port. tion that Germany has compliance standards, tober. Make sure to stay tuned to our Doubtless they were also weighing up and likes to have SOME idea of the source of website to follow developments: www. investment opportunities in the infrastruc- sizeable sums of money, was proving difficult refire-online.com ture and real estate that accompany the de- for the would-be investor to digest... Charles Kingston, Editor 5 www.refire-online.com

just averting intervention by Germany’s erlands and larger cities in France and Germany/NPLs financial watchdogBaFin had it reached Spain. It doubled new business lending JLL win Hatfield Philips the critical level of 8.0%. By end-2013 it in these areas in the first half-year to mandate to sell €300m+ had recovered to reach 13% €260m, including extensions. German retail portfolio Lone Star has been continuously re- Lone Star still owns a further two ducing DüssHyp’s balance sheet, par- German banks – the stricken Düs- It’s been a busy but very fruitful period ticularly its public financing book which seldorf industrial lender IKB and the for special real estate loan servicer Hat- has been shrunk from its then €17bn to Frankfurt-based MHB Bank. It may be field Philips (HPI). Following on from a €6.4bn now. The bank has a commercial hoping that the recent resurgence in complex restructuring process related property loan book of €1.2bn, of which German banking M&A activity may also to its Talisman 6 CMBS, which we re- approximately €200m is underwriting help to smooth a path to exit for those ported on in an earlier issue of REFIRE, US property deals, southern European holdings as well. Recent merger deals Hatfield Philips has now mandated prop- loans, or securitisations which it no lon- include the BNP Paribas takeover of erty adviser JLL to market 127 German ger wants. While these are likely to be Munich-based online broker DAB, and retail properties held by the well-known shed, DüssHyp does want to expand ABN-AMRO’s subsidiary Bethmann Treveria Silo E portfolio, the so-called its domestic property lending, along Bank’s takeover of Credit Suisse’s ‘Orange Loan’. with lending into markets like the Neth- German private client business. Several weeks ago the company

BASIC RETAIL EXPERTS

WE ARE SEARCHING FOR RETAIL PROPERTIES INDIVIDUAL OBJECTS FROM 3 MIO. EUR AS WELL AS PORTFOLIOS FROM 20 MIO. EUR

Of interest are full line retail distributors, food discounters, specialist retail and local supply centres as well as neighbourhood shopping centres with a focus on PLEASE daily consumer products having credit worthy anchor tenants from the German CONTACT retail food sector. Manfred Kronas You may find our detailed Purchasing Criteria at Managing Director www.grr-gmbh.de Tel +49 9131 92 00 8-824 [email protected]

GRR Real Estate Management GmbH | Wetterkreuz 15 | D-91058 Erlangen | +49 9131 92 00 8-810 | [email protected] | www.grr-gmbh.de 6

announced that it had implemented a The UK-listed Treve- environment, but is reaping workout strategy and restructuring of ria, which was set up an “uncertainty” dividend from the €225m ‘Apple’ Whole Loan in the Tal- specifically to invest in the crises raging in the Ukraine isman-6 Finance Plc CMBS. That loan, German retail properties, and in the Middle East, caus- originated in 2005 by ABN AMRO, was went into default on the ing investors to seek the safe- granted to a group of German companies €360.4m Orange Loan ty of bricks-and-mortar invest- to buy commercial properties throughout in October 2012, with ments. Germany. HPI’s solution involved a com- HPI refusing to extend With premium residential plicated transfer of shares from the origi- the debt for a second properties now in scarce sup- nal German borrowers to two Irish-based 12-month period. There ply, already high prices can be holding companies, and an agreement followed a court battle in 2013, in which expected to rise still further, say the KGAL for a final settlement of German -inter the insolvent Treveria unsuccessfully tried researchers. They point to the numbers: company loans, generating enough from to subordinate the Orange Loan claims transaction volumes in German residen- the settlement to exceed the cost of the behind other higher-ranking claims, tial real estate rose in the first six months restructuring. pleading a recent German decision based to nearly €7bn, a further rise of 3% over Now, out of the same Talisman-6 on a principle of “equitable subordination” the same period last year. Only a lack of CMBS, comes Hatfield Philips’ final drive HPI’s CEO Blair Lewis said in a state- suitable assets led to the market losing to sell off the remaining 142-strong Ger- ment, “After careful consideration, we some of its dynamic factor in Q2, leav- man retail portfolio, with a new sales pro- firmly believe now is the appropriate time ing that quarter somewhat behind last cess called Project Sunrise. to market the portfolio given its intrinsic year’s. The second half is also unlikely to With about 15 of the assets already value and attractive lease profile. This, see the same level of large transactions, earmarked for individual sale, which combined with the strength of the market, for the same reason. should raise just under €8m, JLL will should result in significant investor inter- However, the researchers forecast be selling a portfolio of 127 commercial est. We look forward to the sales process a demand for new housing of 256,000 properties, with the sales process due and maximising proceeds to noteholders.” units annually until 2025, which will keep to kick off in September. HPI expects to Over at JLL, Peter Birchinger, head the market under pressure. Purchase raise between €300m and €380m from of portfolio investment in Germany, said, prices for apartments rose by 1.7% in the whole 142-asset portfolio, which “Due to the excellent market conditions Q2, while rents rose by 1.1%, showing has been primed for sale over recent and the highly attractive nature of the little sign of an end to the upward trend. months by asset manager Corpus Sir- portfolio, we expect high demand from Potential investors should be adjusting eo, working with Berlin’s Acrest Prop- both national and international investors.” their strategy of looking for properties in erty Group and IC Immobilien Gruppe Hatfield Philips, founded in 1997, has the already-stretched A-cities and going to stabilise the portfolio. over €15bn under management as a pri- on the “controlled offensive”, particularly Recent valuations of the portfolio mary and special servicer. It is a subsid- in smaller German cities, they advise. are now more than two years old, with iary of US-based LNR Property, which The KGAL researchers also look at the most recent – from BNP Paribas in was itself acquired in April last year by the prospects for retail real estate. De- May 2012 – valuing the assets at€395m. Starwood Property Trust, the largest spite the increased competition from However, these are no longer consid- commercial mortgage REIT in the US. the online trade, Germany remains the ered realistic valuations. The vacancy most attractive market worldwide for rate is high at 28.05%, the WALT is 3.77 retail investment, they claim. Of a total years, and the annual rent roll is €24.5m, Germany/Residential property of €16.9bn of investment in commer- generated by mainly city centre retail Germany reaping “uncertain- cial property in Germany in H1, a total properties in A and B locations across ty” dividend from Ukraine, of €4.9bn or 30% went into retail, with Germany. Among the assets are the Glo- Mid-East crises - report nearly €10bn being allocated to the ria Galleria on the Ku’damm in Berlin (the segment by year-end. Foreigners were largest single asset, perhaps worth up German institutional asset manager the driving force behind these figures to €95m according to some estimates), KGAL says in its latest half-yearly re- in H1 with a market share of more than department stores in Brühl, Koblenz port that the German residential property 50%, in many cases representing retail- and Euskirchen, and shopping centres market is not only benefiting from -Ger ers desperate to find suitable outlets for in Solingen and Wilhelmshaven. many’s own stable internal economic their international brands. 7 www.refire-online.com

Greenman Investments Greenman are sector specific investment fund managers. Our sole focus is the German food retailing asset class, Fachmarktzentren. Our funds own 18 Fachmarktzentren, with a value of over €100m located across Germany. Our investment strategy delivers: • low finance & operational costs • high annual rent surpluses • twice annual investor distributions • flexible investment structures • conservative exit models • operational transparency

For more information about Greenman and our Q2 2014 investment priorities please contact a member of our investor relations team at [email protected] or call us on +353 1 647 1121 Visit us at www.greenman.com Premier Benchmark Property LTD., t/a Greenman Investments is authorised as an Alternative Investment Fund Manager by the Central Bank of Ireland under the European Union (Alternative Investment Fund Managers) Regulations 2013. Authorisation number C123941. 8

Verband deutscher Pfandbriefbank- Germany/Acquisitions according to Colliers in Frankfurt. en figures Deutsche Bank, ECE said to If ECE takes over as joint owner, it A further study crossing our desk have bought Palais Quartier will then be managing five of Frankfurt’s comes from the vdp Verband deutscher for €800m six largest shopping centres, along with Pfandbriefbanken, the association of the recently-opened Skyline Plaza in Pfandbrief-issuing banks, which cor- Reports circulating around Frankfurt the city’s Europaviertel, the highly pop- relates closely with the KGAL study. suggest that a deal may already have ular Main-Taunus-Zentrum on the city’s Based on actual transactional data, the been struck for a change of ownership fringes, the Hessen-Center and the Isen- vdp figures show that Prices on the Ger- of the whole Palais Quartier complex in burg-Center. The MyZeil has among the man property market advanced yet again the centre of Frankfurt’s shopping dis- highest retail rents in Germany, at €320 in the second quarter of 2014. The vdp trict (pictured, right). A number of media per sqm per month second only to Mu- property price index for the German mar- reports quoted reliable sources saying nich’s very top rents. ket as a whole climbed by 4.7% in the that Deutsche Bank Also in the months April to June 2014 compared (through subsidiary package is the with the corresponding quarter one year Deutsche Asset & as-yet-unbuilt cor- earlier. Wealth Management) ner which housed “We observed the strongest price in- and shopping centre the building of the crease in the market segments compris- operator ECE are pay- old Frankfurter ing multi-family houses and office prem- ing about €800m for Rundschau news- ises. Against the backdrop of historically the complex. paper, which the low interest rates and favorable under- If this is true, then buyers are thought lying economic conditions, demand the price would be likely to sell on for German residential and commercial considerably lower than straight away to a properties as an investment opportuni- that at which owner Dutch bank Rabo- third party developer. The plans envisage ty persists. This applies again, and to a bank had been looking to sell since the an 8-storey mixed-use office/residential growing extent, to institutional investors beginning of the year – for a price closer property of 15,000 sqm office and 3,500 from abroad,” said Jens Tolckmitt, chief to €1bn, it is thought. The construction sqm residential, with retail on the lower executive of the vdp. costs for the complex, which opened in floor. In the housing market, the price of 2009, were estimated at €1.2bn. owner-occupied residential property rose Rabobank’s development subsidiary by 2.5 % compared with the same pe- MAB built the complex at Frankfurt’s Germany/Office Properties riod the previous year. For single-family Hauptwache , in the heart of Frank- IVG Immobilien to sell off and two-family properties, the increase furt’s shopping district. It consists of the The Squaire, Silberturm on the same quarter last year was 2.6 %. 136-metre tall office towerNextower , the The figure for condominiums was more 99-metre-tall Jumeirah Hotel, Frankfurt’s The Bonn-based IVG Immobilien AG, modest, with prices rising by 2.2 % over most prominent shopping centre MyZeil, until recently Germany’s largest real es- the same period. and the reconstructed Thurn-und-Taxis tate company until it filed for insolvency Multi-family house prices saw a con- Palace, which gives the centre its name. last year is back in the news over reports siderably larger rise. The capital value While the shopping centre, the hotel that it is selling two of the Frankfurt prop- index for multifamily houses rose by and the Palace have become accepted erties with which it is now most closely 7 % when compared with the second parts of Frankfurt’s inner-city, the tower- associated. quarter of 2013. This was fuelled by a ing office building has remained largely Various reports last week said that sharp rise in new lease rentals, which empty since being built, despite its ab- IVG is lining up a new attempt to sell increased by 5 % against the second solutely prime location. A mere three The Squaire, the giant ship-shaped office quarter of 2013. At the same time, there floors have been let out, leaving 27,000 and hotel property at Frankfurt Airport was a 1.9 % fall in the cap rate index for sqm still vacant. Critics say this is be- above the airport’s mainline railway sta- multi-family houses. Overall, in the sec- cause of the unrealistic rent expectations tion. The property has been a mill around ond quarter of 2014, the vdp residential of its owner. The new owners will want to IVG’s neck since its inception, and con- property price index rose by 4.8 % com- ‘reposition’ the property on the market, tributed in no small way to IVG problems pared with the second quarter of 2013. probably at a more realistic market rent, with construction delays and massive

...see page 10 9 www.refire-online.com

Connecting Global Competence

Welcome to the global real estate network

Success is the sum of the right contacts – and EXPO REAL is the place to meet them. This prominent international trade fair spans six halls and is attended by no less than 36,000 real estate professionals from across the sector. It is home to top-level discussions between leading real estate experts and is the place where the foundations are laid for future real estate projects. Join us and tap into this potential for your business.

Book your ticket now and save up to €35: www.exporeal.net/tickets

Where all threads come together Find out more – and get connected: 17th International Trade Fair for Property and Investment blog.exporeal.net October 6–8, 2014 | Messe München | Germany www.exporeal.net 10

cost overruns. It was completed in 2011, Germany’s tallest building, and served as of 55 properties in Belgium, France, is two-thirds of a kilometre long, has the headquarters of the Dresdner Bank. Germany, the Netherlands and Sweden, 146,000 sqm of lettable space, including Following the bank’s absorption into bought through portfolio transactions two Hilton hotels, and includes consul- Commerzbank, the building was reno- and a successful buyout offer for the tancy group KPMG as its main anchor vated and leased to the German railway listed Tamar European Industrial Fund tenant, but it is still not completely let. operator Deutsche Bundesbahn on a (TEIF), which will see that Fund de-listed The nine-storey Squaire is IVG’s big- 15-year lease, where it houses 2,000 em- from the London Stock Exchange next gest asset, with a valuation of €800m ployees. IVG Funds bought the building month. The assets in the Tamar fund now after construction costs of more in 2011 from Commerzbank. The price were valued at €130m. than €1bn. The insolvent IVG, which is IVG hopes to get is €450m, according to The deal included 10 warehouses now owned by its creditors after wiping reports. with lettable space of 153,000 sqm lo- out the shareholders, is now restructur- cated around the populous Randstad ing €3.2bn of debt after the deal with region in the Netherlands, bought from its bondholders allowed it to write off Europe/Acquisitions Rockspring for €71m. It also included €2.2bn before de-listing. It owns about MStar Europe move into five light industrial properties in Germa- €4bn of office property assets across gear with €260m light indus- ny from a fund advised by VALAD for Europe, while its institutional funds di- trial portfolio €44.7m. vision manages €12bn of real estate for The German assets are in Frankfurt, hundreds of investors. MStar Europe, the joint venture between Pulheim near Cologne, Stelle near Ham- While IVG seeks a buyer for its insti- US group Starwood and the UK’s M7, burg, and two in Ratingen, near Düssel- tutional funds division, it is also clearly has agreed to buy a portfolio of light in- dorf. At nearly 100,000 sqm, the price looking to lighten up here as well on its dustrial assets located mostly in France, equates to just under €450 per sqm. The heftiest assets. Next up on the block for Germany and the Netherlands for €258.7 strategy for Germany is to buy multi-ten- sale, according to reports in Frankfurt, is million. With a planned target volume of anted assets at a unit value of between the landmark Silberturm tower near the €500m, the acquisitions see the group €3m and €10m per asset, with “plenty of Frankfurt main railway station. passing the halfway stage in its planned value-added potential”. In other words, The 32-storey, 166m-tall tower with investment programme. MStar will buy portfolios of up to €100m, 33,400129_RZ_ sqm Refire_125x87_REAG of lettable space 23.07.14was once 15:47 SeiteThe 1 613,000 sqm portfolio consists with vacancy rates of up to a third and in need of capex, even on very short re- maining leases, where it can add value through active asset management, it Professional Excellence says. since 1896 According to Richard Croft, the CEO of M7 Real Estate: “We set up MStar Eu- REAG is an independent consultancy specialising in real estate. Our professional team in Europe provides services to national and rope to seize the opportunities that we international clients primarily in the following fields: identified in continental Europe to as- semble a portfolio of high-yielding multi- • Appraisal (ImmoWertV, BelWertV, Red Book, IFRS) let assets, some of which require active • Investment Advisory (Document DD/management, distressed and creative management. The speed portfolio consultancy) with which we have deployed capital • Technical Services (Technical DD, Project Monitoring) validates that strategy. We continue to • Environmental Due Diligence see Germany as a particularly attractive • Green Building (BREEAM, LEED) Messe Munich market for our value-add or opportunis- Represented in Berlin, Frankfurt, Hamburg, Bremen, 6. - 8. October 2014 tic approach to investment.” Cologne and Munich, please call: The deal marks the second light in- REAG GmbH Real Estate Advisory Group Germany Please visit us: Bockenheimer Landstraße 22, 60323 Frankfurt/Main Hall A1, Booth 231 dustrial joint investment programme be- Tel. +49(0)6924752670 tween the Connecticut-based Starwood [email protected] www.reag-aa.com and M7. The pair set up MStar in June Regulated last year, a UK-focused venture, which by RICS has since bought 27 assets in the UK 11 www.refire-online.com

with a value of €70m. M7 brings a wealth ation of €130m. The joint venture says it REFIRE also noticed a report from the of experience to the European markets, expects to pay about 250 basis points German Federal Office of Statistics re- where it also invests in and manages above three-month Euribor for the senior cently detailing building permits granted assets alongside private equity firm HIG loan. While initial talks have been held, for non-residential buildings across the Capital and US private equity group the search for a lender is expected to be country for the first six months of 2014. Oaktree stepped up a notch following the formal Overall a total of 92.2m cubic metres Commenting on the launch of the de-listing of the TEIF from the Exchange of building space was approved, 0.7% European platform, Adam Shah, senior in September. less than in the same period last year. vice president of Starwood Capital said: The makeup varies considerably from “These transactions are a continuation of last year, however. Many more hotels our successful platform in the UK in ac- Germany/Hotels were approved, against many fewer quiring light industrial real estate. These German hotel market invest- office properties. The allocation for ho- assets have strong existing cash flows in ment hits record high tels and gastronomy rose by 29.4%, for place and we expect to drive additional light industrial buildings by 12.2%, and value to the portfolio through our shared We report elsewhere in this issue on the for retail and warehousing properties by expertise in managing these assets. arrival of several Asian hotel operators 9.8%. Permits for office and administra- As to the financing, the ever-vigilant on to the German hotel market. Inevi- tive buildings fell by 6.2%, while insti- James Wallace over at CoStar Finance tably they are draw by the need for ex- tutional (government) buildings dropped has been digging around to get a good pansion, but it’s also true that the market off by 20.3%. Building permits for public picture of just how the whole deal is for investment in German hotels has hit sector development fell by 21%, while being financed, particularly the main- a record high at the half-year point, as they rose for private sector developers ly-French assets being inherited from the underscored by data from property advi- by 1.5%. Tamar European Industrial Fund . He’s sors JLL and Colliers International. Meanwhile, the prominent Frank- come up with the following picture: Overall investment in the German ho- furt downtown Hilton Hotel recently The €500m MStar Europe II Fund, tel market touched somewhere between changed hands in one of the largest in- which is 95%-owned by Starwood €1.36bln and €1.5bln as of June, high- dependent hotel transactions in Frank- Fund IX and 5%-owned by M7 Real Es- er than the previous historic high from furt in the last 10 years. The seller is the tate, used a wholly-owned subsidiary 2007, and up 110% year-on-year. Only UK-based London & Regional Proper- Lux Starlight to buy the shares in TEIF 38% of the transaction volume came ties, who bought the property in 2005 for €130m. This involved putting down from single investments, while the ma- for €100m from the open-ended fund €66.7m in cash and inheriting the exist- jority was attributable to packaged or Grundbesitz-Invest. The new owner ing debt, consisting of an unpaid balance portfolio deals. Ursula Kriegl, head of was identified by acting broker CBRE of €67.2m in mid-April. Hotels & Hospitality at JLL Germany, Hotels only as “new investors specialis- The majority of the remaining debt expects to see the €2bn investment ing in the luxury hospitality sector”. The of €60.1m is held equally by Deutsche threshold reached by year-end. lease and operating contract with Hilton Bank and Macquairie Bank, who jointly Reflecting the strength of the- Ger will remain in place. The new buyer, or refinanced TEIF on 13th December with man hotel market, the joint stand of buyers, of the 342-room hotel (including a 20-month loan to facilitate the closed- HospitalityInside at the upcoming Expo 14 suites) is financing more than €50m end fund’s wind-up, at a cost of 6.75%. Real in Munich from 6th-8th October, of debt with HSH Nordbank. The loan, with a due date of 20th July which promotes the interests of the CBRE’s Philipp Kraneis said the 2015, included built-in reductions based hotel industry, has greatly increased deal had been concluded in the very on business plan targets, including as- its floor area and for the first time is short time of two and a half months. set disposals and reduced leverage. A now a large island stand with four open “The Hilton Frankfurt is a state of the art further three of the Fund’s assets have a sides (Halle C2, Stand 230). The “World building positioned at the heart of the lien on them of €7.1m from BNP Paribas, of Hospitality” stand will feature 20 city center’s financial district. Its loca- due to mature in 2016. companies from 10 different countries, tion, the fact that it has a lease with a All of this leads to a new borrowing including 6 specialised consultancies high profile branded operator and the requirement of about €85m to refinance and 13 major hotel groups, including current strength of the hotel market the inherited debt, based on a 65% LTV such brands as Accor, InterContinen- all made this transaction an incredibly five-year senior loan on a carrying valu- tal, Hyatt, Kempinski and Wyndham popular investment opportunity.” 12

Germany/Hotels investor, although so far the buyer’s iden- been empty for three years, following the Asian hotel groups discover tity and the purchase price have not been insolvency of then-operator Hospitality German market released. The 123-room hotel is one of Management. The target audience for the largest in the region, located in a the new four-star-plus hotel will be Chi- With Asian investors becoming increas- vineyard and in walking distance of the nese business visitors. The building will ingly active on the German market, one historic town centre, and easily accessi- have 224 luxury rooms and 16 suites area which can expect to start seeing a ble from regional centre Ludwigshafen, when it opens in end-2015. lot more interest is the hotel sector. Most said Christie + Co, which advised the The Hong Kong-based New Century hotel groups have already made big seller. The country house-style hotel in- Tourism Group is China’s second largest strides to accommodate Asian visitors, cludes a restaurant, bar, winter garden, hotel group with 118 hotels, and this is but the stream can expect to turn into a a 180 sq.m. spa and eight conference their first venture outside China. The proj- flood over the coming years – hence the rooms for up to 150 people. ect will pay lip-service to local clientele, visible efforts by most chains to - under In March this year the Chinese ho- but overall it will have a very strong Chi- stand their Asian guests’ needs better. tel and tourism company New Century nese feel to it. Its three restaurants plan The first hotel deals are already being Tourism Group paid at least €9m for a to import chefs from China and establish done in Germany, with more expected. 17-storey vacant hotel high-rise on the a reputation as the new best place to eat Just recently a group of group of Chinese border between Frankfurt and Offen- authentic Chinese in the region. (Ed: al- investors bought a 4-Star Steigenberger bach, with plans to invest a further at though there has been a certain scepti- Hotel in Deidesheim between Frankfurt least €25m in the property. The property, cism in Frankfurt circles about the choice and Stuttgart from a Luxembourg-based previous run as a Golden Tulip hotel, has of location for the new hotel, given the 13 www.refire-online.com

ambitious plans of a neighbouring Holi- year,” said Far East Orchard managing ysed the activity of 182 European lenders day Inn in Offenbach to invest in a further director Lucas Chow. “For this purpose, of which the group defined as Alternative 300-room development in the city, we’re we are utilising the synergies provided Lenders, including insurance companies, frankly looking forward to the promised by our joint venture partner Toga Group.” property companies, private equity and gastronomic delights in the new hotel, Adina Apartment Hotels offers high-end debt funds now account for 40% of the which happens to be on the right side of studios and apartments, aimed at the total.(16% in Q1 2012). town for REFIRE’s editorial offices…) executive staying for more than a couple Cushman & Wakefield’s Corporate Meanwhile, the Singapore-based Fra- of nights, and operates seven hotels in Finance team tracked a total of €32.7bn sers Hospitality is launching its serviced Berlin, Frankfurt, Hamburg, Copenhagen of real estate lending during H1 2014, apartments concept in Germany, hav- and Budapest. It plans to grow its Ger- including €27.3bn of origination (new ing bought a first asset in Frankfurt (for man portfolio to 15-20 assets. investment lending, new development an undisclosed price, and is looking for Arthur Kiong, CEO of Far East Hospi- lending and refinancing) Given the in- more properties across the country. tality, said the acquisition strengthens the creasing risk appetite amongst lenders, According to Andreas Erben, MD of firm’s standing in Europe and provides a it is expected that the second half of the Colliers International Hotels which ad- basis for future activity. “Europe is highly year will be just as active. vised Frasers on the deal “The Frankfurt attractive for international tourists and will The core markets of western Europe asset is the first milestone in the identi- remain the most important tourism region – UK, France and Germany - remain the fication of further suitable locations for in the world.” Far East Hospitality plans to top targets for real estate lending with Frasers. Further target locations are, become a leading regional player with its 60% of all tracked loans during H1 2014 among others, Munich, Berlin and Ham- own hotel and apartment brands. secured by assets in these markets. In- burg.” The asset is located on the main terest in non-core markets has increased, boulevard in Frankfurt’s European Quar- however, driven by new opportunities ter (Europaviertel) near the train station. It Europe/Financing and demand from lenders to move up the will be operated under the long-stay con- C&W study highlights risk curve in search of superior returns. cept Capri by Frasers. broadening range of Euro Whole loan financing is becoming in- Frasers manages 81 serviced apart- property lenders creasingly popular with many senior debt ments across the globe. It is part of Fra- providers, whilst average LTVs across sers Centrepoint, one of Singapore’s The financing of the Mall of Berlin primar- western Europe and CEE markets are largest property companies with total ily through an occupational pension fund now more evenly aligned. assets of around S$10.5bn (€6.2bn) in 19 BVK, joined by Deutsche Hypotheken- Whilst margins in the majority of mar- countries across Asia, Australasia, Eu- bank and BNP Paribas REIM-managed kets have continued to compress, the rope, and the Middle-East. debt funds, as reported elsewhere in this pressure has eased during the second Another Singaporean group, Far East issue, shows how the market for com- quarter. According to C&W’s report, the Orchard, which is the listed arm of Sin- mercial property lending has undergone all-in-cost of financing in the UK for a 50% gapore’s largest private property investor significant change in the last 2-3 years. A leveraged transaction, secured on a prime and developer Far East Organisation is new update from property adviser Cush- UK asset has fallen from 6.53% in H1 also making its first foray into Europe by man & Wakefield underlines how new 2008, to approximately 3.39% in Q2 2014. buying a 50% stake in a European ho- players have been changing the shape of European property debt funds continue tel portfolio in Germany and Denmark as the lending environment. to play a vital role, with Cushman & Wake- part of its recently-launched joint venture Cushman & Wakefield’s European field currently tracking 39 funds looking to with Australia’s Toga Group. The hotels Real Estate Lending Update, published raise €22.1bn to target real estate debt. have a book valuation of €107m. earlier in August, concludes that ‘alter- After a promising 2013, the European Far East Orchard’s hospitality subsid- native’ non-bank financial institutions CMBS market has slowed in H1 2014. De- iary took 50% of four Adina Apartment continue to take up a more significant spite this, investor demand remains strong hotels, two of which are in Berlin, one is share of an increasingly diversified mix of and market commentators see further is- near Frankfurt’s Opera House near The- active lenders in Europe, whilst the drive suance in the near term. The availability of aterplatz, and the fourth is Copenhagen. into ‘non-core’ markets including Spain, loan-on-loan financing has grown rapidly “This purchase underlines our expansion Portugal and Italy also gathered pace during H1 2014, with CWCF recording over plans, which started with a number of ho- during the first half of this year. €5.5bn of debt being secured across nine tel property acquisitions in Australia last C&W’s Corporate Finance team anal- transactions in the first half of 2014. 14

German office market 2014

Catella Research: dynamic economic environment drives demand from national and inter­ national investors for property in A and B locations; value­added properties increasingly being targeted. Decreased returns for quality properties are the “price” for the changed risk assessment; rental rates stable overall.

Kiel

14,0014.00 6,76.7 Rostock

11,0011.00 7,17.1 Lübeck

12,5012.50 7,57.5 Schwerin Wilhelmshaven 11,0011.00 Hamburg 8,508.50 8,18.1 6,76.7 24,0024.00 4,54.5

Oldenburg

12,0012.00 Bremen 6,56.5 12,8012.80 5,85.8

22,5022.50 4,74.7

Berlin

12.0012,00 HannoHanoveverr Potsdam 7.27,2 Osnabrück 14.0014,00 Salzgitter Braunschweig 12,0012.00 11.0011,00 5.45,4 6,26.2 6.86,8 10,8010.80 Magdeburg 13.7013,70 6.506,50 6,56.5 6.06,0 Bielefeld 6.86,8 10,8010.80 Münster 7,57.5 14.0014,00 5.95,9 Gütersloh Cottbus 8.008,00 Paderborn 6.36,3 8.508,50 10,5010.50 11.5011,50 7.17,1 8,308.30 6,86.8 13.5013,50 6.4 7,57.5 6.36,3 Hamm Bochum Dortmund 13.2013,20 Halle/Saale 9,509.50 11.5011,50 Duisburg 6.16,1 7,07.0 7.57,5 Essen Hagen 9.509,50 8,208.20 Leipzig Krefeld 7,87.8 Ratingen 7.07,0 Kassel Mönchen- Wuppertal 12.0012,00 DüsseldorfDusseldorf Gladbach Solingen 5.55,5 12.0012,00 13,0013.00 Dresden 8,508.50 6.36,3 DüsseldorfDusseldorf 6,86.8 27.5027,50 Neuss 9,19.1 Leverkusen Weimar 12,0012.00 4.54,5 Erfurt CologneKöln Jena 6,36.3 12.0012,00 Siegen Gera Ratingen Marburg Chemnitz 21.5021,50 7.57,5 10.5010,50 7.007,00 Aachen 11,0011.00 7.07,0 7.97,9 10,0010.00 14.0014,00 4.94,9 7,207.20 7,57.5 11,0011.00 7,27.2 9,009.00 6.36,3 Bonn 7,97.9 14.0014,00 7,37.3 8,08.0 6.36,3 Neuss 17.5017,50 5.35,3 10.0010,00 6.66,6 Koblenz 38.0038,00 Prime rents and prime yields 4.44,4 11,0011.00 14,0014.00 13.0013,00 9,509.50 7,17.1 5,85.8 Frankfurt/M. 6.96,9 7,37.3 9,009.00 2 Wiesbaden Offenbach/M. 6,86.8 12.50 Prime rent in €/m Schweinfurt Mainz Aschaffenburg Darmstadt Bamberg 7.5 Prime yield in % 9.509,50 12.5012,50 6.86,8 6.26,2 13,0013.00 Würzburg Trier 13,0013.00 6,46.4 6,56.5 14,0014.00 11,5011.50 6-month trend: rising 12.0012,00 10,0010.00 6,16.1 7,17.1 Erlangen 7.27,2 7,57.5 Fürth stable Mannheim Kaiserslautern NurNürnbergemberg Ludwigshafen Heidelberg 8,808.80 falling 7,17.1 13,513.5 9,609.60 9.709,70 14,0014.00 5,45.4 Saarbrücken 6,76.7 6.56,5 6,06.0 Heilbronn

11,5011.50 Regensburg Karlsruhe 6,26.2 11,0011.00 11,0011.00 13,0013.00 6,46.4 7,07.0 6,16.1 Stuttgart Ingolstadt

20,0020.00 5,05.0 11,0011.00 6,06.0

Ulm Augsburg

15,0015.00 5,95.9 MunichMünchen

33,5033.50 Freiburg 4,44.4

14,8014.80 13,5013.50 6,56.5 6,66.6 Konstanz

Contact: [email protected] 15 www.refire-online.com

...from page 13

“Despite the supply of debt steadily increasing in most Europe/Research European markets, margins seem to have stabilised over the Union Investment survey highlights growing past quarter. This has helped accelerate the movement up investor risk appetite the risk curve for many lenders,” said Frank Nickel, chair- man & CEO of Germany, EMEA Corporate Finance. The semi-annual survey carried out by leading German fund man- “Lenders are aggressively competing for the right assets ager Union Investment shows a clear shift in the willingness of with strong fundamentals. This profile has now extended to investors in Germany, France and the UK to take more investment locations and sectors that would not have been attractive risk, and move up the risk curve from their recent fixation with 6-12 months ago. This trend has been captured in the trans- Core to Core-Plus. actions we have been involved in so far this year,” added The survey results point to a clear sign of recovery in inves- Mike Morrison, Partner, EMEA Corporate Finance. tor confidence, including a marked willingness to invest outside classical metropolitan areas, engage more closely with previous- ly-shunned southern European markets, and are prepared to con- Germany/Residential sider much larger-sized deals than before. Pramerica in profitable €79m Berlin resi- The latest Investment Climate barometer readings from Union dential exit Investment are based on the responses from 167 European insti- tutional investors, in a survey carried out by market research group Munich-based Pramerica Real Estate Investors decided Ipsos during June and July this summer. The survey methodolo- recently to take advantage of the strong run-up in German gy uses four different sub-indicators – market structure, overall residential real estate prices when they, along with Ber- economic outlook, locally-relevant conditions, and expectations lin-based joint venture partner Kauri CAB Management – each with a weighting of 25%, to arrive at an index score. GmbH, closed on the sale of a portfolio of 25 residential ‘Alt- More investors are starting to implement a core plus strategy bau’ properties in popular residential Berlin neighbourhoods, in response to high prices for prime property and an improved realising €78.6m. Pramerica, which is part of US insurance market outlook. They are willing to accept shorter leases, invest in giant Prudential, typically operates on behalf of a wide range development projects and make greater compromises on pre-let- of institutional investors. ting prior to purchase. The portfolio, consisting of ever-popular 5-6 storey older Half of the firms plan to increase the share of secondary cit- buildings built in the years 1886 and 1913, has about 50,000 ies in their portfolio over the next 12 months, seeing conditions sqm of lettable space in the Neukölln, Kreuzberg, Schöne- particularly favourable in home markets. Apart from Germany, UK berg, Wedding, Tiergarten and Prenzlauer Berg neighbour- and France, the most popular markets for B-strategies are Swe- hoods. The transaction comprised the remaining assets den, Spain and The Netherlands. After years of being focused al- acquired through a joint venture that Pramerica Real Estate most purely on security, 60% of the investors surveyed (particulary Investors formed in August 2011 with Kauri CAB to invest in among French respondents) said the return on investment is back residential apartment blocks in Berlin. as key motivation in their strategies. Over the last three years, the joint venture amassed 953 High demand for scarce assets is leading managers to de- apartments, with Kauri CAB sourcing the acquisitions. Kauri velop new sales strategies as well. Some 68% said they aim to CAB also oversaw the day-to-day property management, exploit market opportunities to streamline portfolios, dispose of rental negotiations and refurbishment. mega-properties or take profits. “While re-calibrating their - over Sebastiano Ferrante, head of Germany for Pramerica all risk profiles, opportunities for selling in markets experiencing Real Estate Investors said, “The sale represents an excellent high demand are being seized upon much more actively than in outcome for Pramerica Real Estate Investors and our part- recent years,” said Union Investment board member Frank Bill- ner. Most important, this sale confirms the successful track and. “Substantial portfolio deals are also set to become a more record of European value-added transactions we have made prominent feature of the market again.” Some 41% are preparing on behalf of our clients for the last 15 years. We intend to sales; 40% want to invest more into existing holdings, the survey leverage this experience to capitalize on future investment showed. opportunities in the German residential sector.” While sustained interest rate rises are not on the horizon yet, Kauri CAB was set up in 2008 to take advantage of cy- investors are aware of the risk and 56% give this a higher priority clical opportunities in the German property market, partic- than in prior years. Measures include stress tests to analyse the ularly residential in Berlin, and to be a co-investor as well impact of rate hikes, and more than half are stepping up activi- as being a property and asset manager. ties to secure rental income. The optimistic investment mood lifted 16

performance expectations, with 65% rating their financial situa- year of the restructured Corealcredit Bank from US private equity tion better than last year and most expecting a rise in business group Lone Star. The MDAX-listed Aareal saw its gross profits rise performance over the next 12 months. Differences between the in the second quarter of this year by 44% to €65m, in line with ex- three nations polled have all but disappeared, with a marked pectations, and its net profit up 60% on a year ago to €34m. improvement in sentiment in France, where the index was up Aareal Bank, which has traditionally had a strong exposure 3.4% to 69.3 points, the most optimistic reading for several to foreign borrowers, also upped its new business lending from years. The German index gained 0.2pt to 69.9, while that for the €1.6bn in the first quarter to €2.6bn in the second quarter. Ac- UK fell by 14 points to 70.9 on the scale. cording to long-time bank chairman Wolf Schumacher, the bank is “well on course” to meet its lending targets despite growing competition as previously reticent competitors get back into the Germany/Financing market. Full year operating profits are now expected to come in at Corealcredit figures boost Aareal Bank’s €400m, up from previously forecast €380m, while full year lending bottom line should be close to €9bn – slightly down on last year’s €10.5bn. Aareal closed on the €342m acquisition of Corealcredit Bank, Wiesbaden-based real estate financierAareal Bank has seen an the former labour union-owned AHBR Bank, in March of this immediate impact on its bottom line following the acquisition last year, so the full effect of the takeover is only now being reflected

Guest Column: Dr. Thomas Herr, Managing Director of VALTEQ Gesellschaft mbH Lots of cooks? Then only with a cookbook!

You know the saying about the other hand, however, the progressively many cooks and the spoilt broth? deepening focus on the commercial, It’s particularly annoying when it isn’t legal and technical specialities of just broth that is spoilt, but instead, a real estate transactions demands a real estate transaction worth millions. more generalistic coordination and My experience from several hundred clarification of interfaces, as well as the transactions with a total volume of over standardisation of trivia. 120 billion Euro is that many transaction The question hangs in the air: How do www.valteq.de processes are slow, poorly structured we now get from the subroutines we’ve and, as a result, ultimately expensive. since developed to a truly integrated due demands a great deal of experience and And this has nothing to do with the quality diligence review, in spite of constantly skill on the part of the investors. of advisers; it’s the way their cooperation changing teams? Let’s look at the example There are already a number of initiatives with one another is organised. It’s a point of data quality. From one country to next in this direction, such as, for example, on made to me by Karsten Jungk of Wüest and, for that matter, from one transaction the matter of data room structure at the & Partner, who works as an appraiser to the next, there are differences in the Gesellschaft für immobilienwirtschaftliche in a different position in the constantly depth of the data, the period recorded, Forschung e.V. (gif), the matter of changing transaction teams. The and so on. At the same time, there are standardisation of technical due diligence streamlining of transaction processes obscurities. Which consultant is actually processes at the RICS, as well as more was also discussed during a meeting of dealing with which questions? It stands to informally on the periphery of conferences the German GRI Panel this year – Why, reason that the legal adviser takes care of and in smaller expert circles. Yet it would the question was asked, are purchase the entries shown in the land register, but be useful if the major providers in the contracts negotiated from scratch over who, for example, is responsible for the due diligence fields of legal, technical, and again, just to end up with 90% of the matter of developments? Is the situation commercial and valuation could find a provisions always being the same? And on site consistent with that shown in the platform upon which – in order to maintain why are there no uniform indexes for data? Is it the technical or legal adviser’s the image – they could take care of a joint data rooms? The professionalisation of job to conduct these checks? Or let’s cookbook for transactions; one that assigns our industry has certainly made great look at the building permits: Is this review everyone a role at the head chef’s side, progress through the specialisation and a technical or legal matter; or is it both? whether as the garde manger, boucher, differentiation of job descriptions. On the To oversee and manage these interfaces entremetier, tournant or pâtissier.

Sponsored Statement 17 www.refire-online.com

in Aareal’s figures. The highly-conservative bank said it was holding off on the issue of a scheduled hybrid bond of €300m, real estate for your success destined to pay down the last remaining injections of silent reserves from the state bank bailout fund during the finan- cial crisis, and Schumacher said it might even be able to re- pay these without recourse to the proposed bond. Servicing Founded in 1910, AENGEVELT IMMOBILIEN is the interest on these reserves hampers the bank’s dividend one of the largest and most experienced real payout, he said, hence the need to repay them as soon as possible. estate service providers in Germany. Aareal’s core capital ratio is currently a comfortable 12.5% with the state’s €300m, but would be 12.2% without, said Schumacher, adding that the bank was targeting a 10.75% ratio, to be topped up by further equity-raising measures such as the hybrid bond. He also hinted at the bank’s interest in buying further loan portfolios or complete takeover, while refusing to be drawn on the level of the bank’s interest in buy- ing Westimmo, for which it has re-entered the bidding fray (see elsewhere in this issue). The bank is also now starting to prune its Corealcredit Bank subsidiary after the first couple of quarters integrating it into its main structure. According to various reports, up to 30% of the jobs at Frankfurt-based Corealcredit are expected to be axed, or 35-40 of the 160 staff remaining. Meanwhile, Aareal has been active in a lot of prominent European financing deals this year. Earlier this month, the UK’s Brockton Capital financed its UK retail parks portfolio It offers comprehensive, individual customer consul- with a new loan of around €190m, provided by Aareal Bank on a five-year facility held against a portfolio of eight parks. ting both nationally and internationally in the market The parks are valued at about €300m, implying a loan-to-val- segments of of ce premises, retail, logistics, ue of 63%. hotel and residential. The deal will see existing arrangements across different assets in the portfolio paid back, including facilities with Santander and GE Capital, which inherited its position fol- The company will support and advise you on the lowing its purchase of Deutsche Postbank’s £1.4bn UK basis of its extensive real estate research across the commercial property loan book in November last year. Aareal entire value creation chain of your properties - from was the existing lender on two assets in the portfolio. The new financing includes a tranche for capital expendi- buying properties to project initiation/management, ture that will be used to carry out asset management across leasing and portfolio analyses right through to the the portfolio as well as allow the sponsor to make new ac- exit and sales stage. quisitions. The portfolio is a joint venture between Brockton Capital’s second £500m fund, which was raised in 2010, and its asset manager Pradera. Other recent Aareal deals include a £300m refinancing AENGEVELT Immobilien GmbH & Co. KG of the Hilton London Metropole and the Hilton Birmingham Kennedydamm 55 Metropole for Tonstate Group in the UK in July; a €228m D-40476 Düsseldorf loan to Aerium alongside pbb Deutsche Pfandbriefbank to refinance a portfolio of 23 mainly Parisian properties Phone +49 211 8391-0 · [email protected] provided in the same month; and the provision in February www.aengevelt.com of a €72m four-year facility for Helical Bar for its Europa Cenralna retail park in Gliwice, Poland. 18

Germany/Financing income and current earnings re- sharply, while Westimmo said Westimmo doubles first half mained stable at around €65m. administrative costs continue profit while awaiting sale According to Claus-Jürgen Co- to be pruned back, by 11% to outcome hausz, (pictured, right) chairman €29.5m from €32.1m. of the bank’s managing board, To help prime the bank for Despite being embargoed from writing “We are very satisfied with how sale, Westimmo’s restructuring any new real estate financing business, business has developed in the has seen the transfer of all as- the Mainz-based Westdeutsche Immo- first half. The excellent results sets that are not in conformity bilienbank AG (WestImmo) posted prof- were achieved through a con- with its profile as a Pfandbrief its for the first half-year double those of sistent reduction in costs and risks. The bank into the EAA. This has left West- last year. The good figures will do no harm bank remains profitable despite the re- immo’s equity reduced by €450m, but in helping Westimmo in its search for a striction on business activities.” leaves it with a still-comfortable equity buyer, with a sale of the bank out of ‘bad With its parent company WestLB be- ratio. “WestImmo is now a lean and fo- bank’ EAA Erste Abwicklungsanstalt ing wound up, Westimmo has been quar- cused Pfandbrief bank with a core Tier still expected before the end of the year. antined within EAA, preventing it writing I ratio of 13.4% and a very low risk po- Net pre-tax profit jumped to €39.6m new business, which has seen its inter- tential”, said Cohausz earlier this month over the first six months, up from €19.7m est-bearing securities decline. However, when presenting the half-year figures. He in the same period last year. Net interest provision for bad debts has also fallen also said he expects the full-year figures

European Office Property Clock Q2 2014 SM The JLL Property Clocks Note • This diagram illustrates where JLL Amsterdam, Helsinki, St. Petersburg estimate each prime office market is within its individual rental cycle as at Cologne, Moscow end of June 2014 • Markets can move around the clock at different speeds and directions Dusseldorf, Stuttgart • The diagram is a convenient method Berlin of comparing the relative position of Frankfurt, Hamburg, Munich, Oslo markets in their rental cycle • Their position is not necessarily representative of investment or Kiev development market prospects • Their position refers to Prime Face Rental Growth Rents Rental Values Slowing Falling

Lyon Geneva, Zurich

Rental Growth Rents Luxembourg, London City, London West End Accelerating Bottoming Out Warsaw Dublin, Stockholm

Istanbul Edinburgh, Manchester Lisbon, Rome, Prague Athens, Barcelona, Bucharest, Budapest, Brussels, Copenhagen, Madrid, Milan, Source: JLL, July 2014 Paris CBD

This data is based on material/sources that we believe to be reliable. While every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. Neither Jones Lang LaSalle nor any of its affiliates accept any liability or responsibility for the accuracy or completeness of the information contained herein. 19 www.refire-online.com

to be strongly positive. Germany/Residential Görlitz) would be disposed of quickly. EAA board member Matthias Warg- Westgrund triples its holdings Most of the assets are in Lower Sax- ers said the sale process is proceed- with Berlin residential buy ony (particularly the Volkswagen city ing ‘satisfactorily’, and he still expects of Wolfsburg), Brandenburg, Mecklen- a conclusion by the end of the year. In We reported in the last issue of REFIRE burg-Vorpommern and Saxony. The new July, Reuters reported that German fi- (Issue 123) about the recent acquisition acquisition brings Wertgrund’s holdings nanciers Aareal Bank and Berlin Hyp by listed German housing firm Westgr- to about 20,000 units. and private equity investors Black- und, when it paid about €390m for near- The new portfolio (after disposals) stone, KKR and Apollo are still among ly 13,300 apartments from berlinovo, a generates rental income of €37m and the bidders for WestImmo, with the bids company majority-held by the state of has an occupancy rate of 91%. The exceeding €300m. Berlin. The deal is likely to provide a strong new revenue stream will boost Westgr- Westimmo is still allowed to service boost to Westgrund’s full-year figures, as und’s annual rental revenue by more than and process its existing loans as a spe- improved rental income works its way 150% to €61m. cialist commercial real estate financier through to the company’s bottom line. The properties in the portfolio have and Pfandbrief-issuing bank. It can re- After the largest German residential a chequered history. They represent all new or in some cases slightly increase deal for several months, Westgrund said the non-Berlin assets of the berlinovo existing commitments, and manage all its that about 12,000 of the residential units group, the former BIH Berliner Immobil- covered assets for its issued Pfandbriefs, and 63 commercial properties will be in- ien Holding, which now finds itself left while awaiting the outcome of the bidding tegrated into its existing holdings, with holding a remaining 14,000 units in Berlin process to become its new owner. the rest (mainly in Neubrandenburg and for the long haul, as was its stated goal.

Financial Modelling learn the nuMber 1 Skill in real eState Finance

learn to build full financial models Simple step-by-step instructions 100% online fully accredited by IRE|BS Real Estate academy

To lEaRn moRE aBouT ouR InTRoducToRy fInancIal modEllInG couRSE, vISIT uS aT IRE|BS Immobilienakademie GmbH www.irebs-immobilienakademie.de/online-courses Barocketage | Kloster Eberbach | 65346 Eltville Telefon: 06723 9950-30 20

from page 18

Berlinovo inherited 24 property funds as ings, he said. Funding for the acquisition Germany/Acquisitions a legacy of the near-insolvency of bank- would come from a rights issue, which Canadians, Korean pension ing group Berliner Bankgesellschaft, has been guaranteed by a consortium of fund in JV for €240m German whose total meltdown was only prevent- investors and German banks. investment ed by the injection of €22bn in equity by The up to €130m capital-raising exer- the city of Berlin, and the hiving-off of its cise, being handled by Arbireo Capital Korea’s Public Officials Benefit Associ- non-core properties into BIH. as sole financial adviser, is also expect- ation (POBA), the pension manager with In a complicated agreement at the ed to broaden Westgrund’s shareholder 6 trillion won (€4.5 billion) in assets, is to time, Berlin agreed to buy out all pre- base and lead current acquisition being invest approximately €250m million into vious shareholders of the funds with a seen as merely the “ignition for a further prime German real estate via Canadian view to gaining full control and then dis- growth path”, he said. Barclays Bank listed company Dream Global REIT. solving the funds. It is now very close to provided financing for the deal, with the The long-term joint venture with To- reaching the desired 100% by buying up bank also taking on the role of M&A ad- ronto-based Dream Global REIT (previ- shareholders’ interests. Before this sale viser for Westgrund. ously known, until recently, as Dundee to Westgrund, Berlin held 526 separate The Berlin-based Westgrund was International) will see POBA acquire a assets with 41,000 rental units – nearly founded in 1990 and floated on the 50% interest in seven properties owned all of them now residential, throughout stock market in 1998. Its stated strate- by Dream. The properties are: ABC Bo- Germany with a few in neighbouring Eu- gy is to invest only in assets with a pos- gen in Hamburg; Löwenkontor in Berlin; ropean countries. itive cash flow at the point of purchase, Werfthaus and K26 in Frankfurt; doubleU According to Westgrund CEO Arndt and in German cities with 50,000-plus in Düsseldorf; Z-Up in Stuttgart, and Krienen, the newly-acquired residential inhabitants. Its controlling sharehold- Marsstrasse 20-22 in Munich. The deal assets in this latest deal are located out- er is Swiss family office Wecken with was done at a cap rate of 5.3%. side the pricier neighbourhoods in their just under 50% of the shares, Quar- The deal is expected to close in stag- locations and were let to squarely mid- tenal Investments of Cyprus with 20- es through the third and fourth quarters dle-class tenants, which “ideally com- 6%, Angela Lechner with 10.2%, with of this year. Dream Global REIT said that plements” the company’s existing hold- 19.49% in free float. it would reinvest the net proceeds from the transaction into high-quality office properties in its target markets. “This strategic joint venture and signifi- cant acquisition of a high quality office port- folio in Germany allows us to expand into one of the most highly sought-after real es- tate markets in the world. With Dream, we have found a partner on the ground who is not only an experienced owner and opera- tor of real estate but also understands our unique requirements,” commented Eung- han Park, executive managing director of POBA, in a statement. Jane Gavan, president and chief ex- ecutive officer of Dream Global REIT, added: “This joint venture offers us the opportunity to diversify our sources of capital, to leverage our REIT operat- ing platform by generating joint venture management income and to continue to take advantage of the attractive invest- ment environment.” Founded in 1975, POBA – as a pen- sion fund for government officials - has Germany house price development 21 www.refire-online.com

grown from around 79,000 members to partners and with equity from the Cana- Germany/Study more than 235,000 last year. Its invest- dian capital markets. The opportunities Trend shift in migration ment portfolio includes commercial real in Germany are plentiful and strategic figures from east to western estate assets in the UK, China and Brazil. partners like POBA will help us grow in Germany Dream REIT (as Dundee) entered Germany and potentially elsewhere when Germany three years ago by acquiring we identify appropriate opportunities.” A new study produced by Hamburg-based a portfolio of over 1,000 assets belong- At the end of July, Dream completed Quantum Immobilien concludes that ing to the Deutsche Bundespost. It the acquisition of “Officium” in Stuttgart there has been a trend shift in the eastern has been gradually selling off and buying from developer Tishman Speyer. The as- German states, and that for the first time new assets, and repositioning itself on set is a multi-tenant property with a blue- since reunification, net migration from the the German market. Overall, Dream has chip tenant roster that includes insurer east to the west of the country has now invested €125m this year so far in Ger- AXA, banking group Deutsche Sparkas- stopped. In fact, says the study, certain many, and sold assets worth €21m. sen and software firmOracle . The acqui- eastern German cities have experienced According to Michael Cooper, board sition of the €46.9 million property has a a surge in population that had not been vice-chairman at Dream, “We are excit- cap rate of 6.6% and will add approxi- anticipated. This has clear implications for ed that we are being recognized for es- mately 28,000 sqm of high quality office real estate markets, it says. tablishing an excellent platform in under space in one of the Big 7 office markets The study, based on 2012 figures, three years that provides value to joint in Germany to Dream’s portfolio. Dream was produced by Quantum Immobilien venture partners to co-invest with us. We said it had arranged 7.5-year mortgage for the federal government as part of its now can grow with equity from the sale of financing for the asset at a loan-to-value “state of reunification” annual study. The properties from the original portfolio, with of 60% and an interest rate of 1.99%. Quantum Focus Nr. 12 study demon- 22

...... UPCOMING EVENTS AND CONFERENCES

EVENTS/ CONFERENCES strates how clearly the times have now Germany/Construction August-Sept-Oct 2014 past when young and well-educated east German construction booms, Germans headed en masse for employ- fears rise about Mietpreis- September 15th-17th Monday-Wed ment in western cities. bremse CoreNet Summit EMEA, Berlin Focussing on eastern Germany’s 10 The CoreNet Global EMEA Summit, be- largest cities, the nuanced study deals After a run of three good years since ing held in Berlin in 2014, is expected to with the question of residential housing 2010, there are further good times attract more than 550 attendees working in these cities and to what extent the ahead for the German construction in the corporate real estate space. More region has been underestimated by de- industry, with growth of 3.5% fore- than ever, CRE leaders have an unprece- velopers. Here the big winners are the cast for the full-year 2014 on turnover dented opportunity to change the conver- university towns, particularly those with of €285bn, and an even better 5.3% sation from cost to value within their or- strong technnology sectors, whose de- growth for 2015, according to a new ganizations and CoreNet Global Summits mographic developments have exceed- study by German leading credit insurer provide multiple opportunities to facilitate ed even the more optimistic forecasts. Euler Hermes. these conversations. These towns’ housing sectors are char- “Germany’s construction industry is more at: http://www.corenetglobal.org/ acterised by low vacancy rates, rising booming – against the general trend in Events/BerlinSummit2014/ rents and new construction activity. Europe”, said Ludovic Subran, chief Rural areas and cities with poor in- economist at Euler Hermes, presenting September 17th-18h Wed-Thurs frastructure and employment and edu- the study. Growth is coming almost ex- GRI Europe Summit 2014, Paris, France cational opportunities were still seeing clusively from the demand from private GRI Europe Summit 2014 reflects inves- major population outflows, putting further individuals to invest in their own four tor appetite for a greater geographical pressure on already weak rental mar- walls, with public construction a long scope and sub-sector analysis. But GRI kets. According to Quantum, the “main way behind. However, rising prices for Europe Summit is about more than this. winners” are cities like Leipzig, Potsdam, energy and material costs are keeping It is your best opportunity of the year to Jena or Dresden. These four cities and builders’s margins under pressure, at understand what your clients and peers other urban centres with similarly positive about 6%. This has also led to a high are really thinking, to get to know each “fundamental data” showed “healthy res- level of insolvencies, the second-high- other on a first-name basis, and engage idential market constellations with invest- est of any industry in Germany, although in a meaningful way. From this comes ment potential”, the researchers noted. the number is set to fall, according to new business opportunities and lasting Leaving aside Berlin, investment turn- Euler Hermes’ director for risk manage- relationships. More: www. globalreales- over in the eastern states has risen 38% ment Thomas Krings, by 3% in 2014 tate.org/Europe2014 since 2009 to €9.4bn in the year 2012. and a further 5% next year, as a result While Dresden and Leipzig have profited of improving payment practices. September 25th-26h, Thurs-Friday strongly, so have cities like Erfurt, Ros- The biggest threat facing the con- Unternehmens- & Industrie-Immobil- tock and Magdeburg. Dresden topped struction industry’s future growth is ien, Cologne the list in 2013, with a volume of €393m the so-called Mietpreisbremse, or rent- - Marktwert von Industriegrundstücken in multi-family homes traded, fully 44% al cap, due to be introduced across - Rendite-Upside ohne Risiko? above its 10-year average. Along with Germany next year. A similar move in - Liegenschaften aus Sicht von Indus- Leipzig, Dresden properties now sell for France led to a fall of 19% in new build- trie-Unternehmen a multiple of 16-17 times annual ‘cold’ ing projects and the granting of 13% - Multi-Tenant – Garant für nachhaltige rent (i.e. ex-utilities). less building permits. Renditen? In particular, the researchers con- In Berlin the Justice Minister in the - Industrie 4.0: Die Fabrik der Zukunft clude, value is to be found in those coalition government, Heiko Maas More at www.euroforum.de residential markets where the reduc- (SPD) confirmed that the lawmakers tion in the vacancy rate is not yet re- were excluding newly-built properties October 6th-8th, Monday-Wednesday flected in rising local rents, or where from the constraints of the Mietpreis- EXPO REAL - the 17th International Trade construction activity is still lagging the bremse, so as not to strangle the incen- Fair for Property & Investment, Munich level of demand. The full study can be tive for new construction as a measure The key event in the German commercial found here: www.quantum.ag/immo- to cool down demand for housing, par- real estate calendar www.exporeal.net, bilien-ag/research/ ticularly in the larger cities where de-

...see page 26 23 www.refire-online.com

WE CREATE VALUE WITH REAL ESTATE S InCE 1984

With real estate assets totaling nearly EUR 7.5 billion PATRIZIA is one of Europe’s leading real estate investment companies. We cover the entire value chain from purchase through asset management all the way up to increasing the value of the property. What sets us apart: 600 dedicated staff members in more than 10 countries that live and practice real values – the basis of our long-term customer relationships.

www.patrizia.ag/value 24

SWISS LIFE BUYS CORPUS SIREO, THE LEADING INDEPENDENT REAL ESTATE ASSET MANAGEMENT SERVICE PROVIDER IN GERMANY

from Switzerland and France to also like to give greater consideration Germany,“ says Patrick Frost, CEO again to co-investments. We are loo- of the Swiss Life Group. „Given our king forward to taking the next steps more than 150 years of experience in in our development alongside Swiss the real estate business and the ad- Life,“ says Ralph Günther, spokes- ditional expertise contributed by the person for the Management 550 employees of CORPUS SIREO, The business segments acquired by we are confident that we will be able Swiss Life comprise: to successfully expand this business - Asset management (commercial, area further.“ residential and retail) with full- Swiss Life is acquiring CORPUS service solutions for acquiring, op- SIREO and becoming a leading real CORPUS SIREO, with its head office timising and marketing customers‘ estate asset manager in Germany. in Cologne, was founded in 1995 and real estate portfolios or individual has since evolved from a regional properties; The Swiss Life Group is expan- real estate brokerage company into - Project development including the ding its position in real estate asset the leading German independent real design, building and marketing of management by acquiring CORPUS estate service provider, winning a residential projects; SIREO, the leading independent real number of awards over the past years - Investment management compri- estate service provider in Germany, as the top real estate asset manage- sing the design, launching and with retroactive effect from 1 January ment service provider in Germany. management of indirect real estate 2014. The sellers of the company are The company is also one of the investments; three German savings banks: Spar- two most popular employers in the - Marketing of residential property kasse KölnBonn (50%), Stadtspar- German real estate sector. CORPUS in the conurbations of Cologne / kasse Düsseldorf (25%) and Frank- SIREO provides real estate services Bonn, Düsseldorf and Frankfurt, furter Sparkasse (25%). This makes for third parties through its 11 branch as well as commercial properties Swiss Life a leading real estate asset offices in Germany and Luxembourg. throughout German manager in Germany. The purchase The company manages some EUR 16 price is EUR 210 million. Pending billion in real estate assets and gene- Swiss Life approval by the competition authori- rates revenues of approximately EUR ties, the transaction will be comple- 160 million. Its customers include The Swiss Life Group is one of ted in the course of the second half investors, banks, and companies with Europe‘s leading comprehensive life of 2014. proprietary real estate portfolios. and pensions and financial solutions providers. In its core markets of Swit- „This acquisition is an important step „With the globally focused Swiss zerland, France and Germany, Swiss to extending our position as a leading Life as its new owner, CORPUS SI- Life offers individuals and corpora- provider in one of our core strategic REO will be able to further develop tions comprehensive and individual areas, real estate asset management, its business systematically and enter advice plus a broad range of own and new markets. To this end we would partner products through its sales

Sponsored Statement 25 www.refire-online.com

CORPUS SIREO head office in Cologne

force and distribution partners such benefits solutions and high net worth Further information: as brokers and banks. individuals with structured life and swisslife.com and corpussireo.com pensions products. Swiss Life Select, tecis, HORBACH, Proventus and Chase de Vere ad- Swiss Life Holding Ltd, registered visors choose suitable products for in Zurich, was founded in 1857 as customers from the market according Schweizerische Rentenanstalt. The to the Best Select approach. Swiss shares of Swiss Life Holding Ltd are Life Asset Managers offers instituti- listed on the SIX Swiss Exchange onal and private investors access to (SLHN). The Swiss Life Group investment and asset management employs a workforce of around 7000, solutions. Swiss Life provides multi- with approximately 4500 certified national corporations with employee financial advisors.

Cautionary statement regarding forward-looking information This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements, by their nature, are subject to known and unknown risks, uncertainties and other important factors. These may result in a substantial divergence between the actual results, developments and expectations of Swiss Life and those explicitly or implicitly described in these forward-looking statements. Given these uncertainties, the reader is reminded that these statements are merely projections and should not be overvalued. Neither Swiss Life nor its Mem- bers of the Board of Directors, executive managers, managers, employees or external advisors nor any other person associated with Swiss Life or with any other relationship to the company makes any express or implied representation or warranty as to the correctness or completeness of the information contained in this publica- tion. Swiss Life and the abovementioned persons shall not be liable under any circumstances for any direct or indirect loss resulting from the use of this information. Furthermore, Swiss Life undertakes no obligation to publicly update or change any of these forward-looking statements, or to adjust them to reflect new informa- tion, future events, developments or similar. Board of CORPUS SIREO Holding GmbH & Co. KG.

Sponsored Statement 26

...from page 22

mand is greatest for affordable housing. Germany/Project Development floor. All in all, over 60% of the devel- The decision has been welcomed RFR Holding buys Berlin’s opment has now been pre-let, and the right across the German real estate Upper-West Tower, strong building is expected to be completed at industry, where many landlords had pre-lets the beginning of 2017. feared being unable to charge an ac- RFR Holding is based in New York, but ceptable market rent for a new tenan- Berlin’s third-highest tower develop- was founded by the German-born Aby cy agreement. Jürgen Michael Schick, ment, the 118m-tall Upper West Tower on Rosen and Michael Fuchs. With over head of the IVD property association, the city’s Kurfürstendamm, has changed €10bn of real estate assets, the group has which represents landlords, comment- ownership after US property investor been a prominent German investor, own- ed: “This is a move in the right direction, RFR Holding bought the asset from ing the Bienenkorbhaus and Westendgate as finally the housing can be built which Austrian developer Strabag for a price among others in Frankfurt, the Kaufmann- can help to alleviate the housing short- thought to be around €250m. shaus in Hamburg, and other landmark age in urban areas.” The 33-storey development, on Bre- properties in Berlin and Nuremberg, along However, the gap is still growing itscheidplatz in the popular Charlotten- with prestigious properties such as the between building permits granted and burg district of City-West beside the zoo, Gramercy Park Hotel, the Seagram Building actual buildings built. “A lot of build- will have 53,000 sqm of lettable space and Lever House in New York. ing projects still fail to get built despite including offices, shops, and what will be having a permit. In central areas of the Motel One’s largest German hotel, with bigger cities demand for housing is still 580 rooms in 21,000 sqm of space. A Germany/Funds outweighing supply”, he said. Schick’s further 25,000 sqm is dedicated to office Record inflows of capital into organisation is still appealing to munic- space, with law firm Görg committing to German listed real estate ipalities and city planning authorities to take 5,000 sqm to house all their sepa- rezone more land for residential and to rate Berlin practice areas in one place. German real estate Spezialfonds saw speed up the issuing of permits, partic- Retail will take up a further 5,500 sqm, inflows of €3.1bn in capital in the first ularly in areas likely to be affected by while a spectacular 1,000 sqm Skybar half of this year, up 14% on the same the Mietpreisbremse. with 360-degreeGRAPH-3 is planned for the top period last year and the highest amount

Total Return Performance GPR 250 Index (€) 150

100

50

GPR 250 Europe

GPR 250 Germany

0 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Source: Global Property Research (www.globalpropertyresearch.com), 2014

Page 1 Graph of Total Return Performance of Europe and Germany in Euro currency over the past twelve months Charts courtesy of GPR Global Property Research 27 www.refire-online.com

ever recorded over a six-month period, inflows were stabilising around – such as the stock-mar- according to capital markets research about the 2012 level. ket flotation of Deutsche group Barkow Consulting. The figures “There are market rumours Annington last year – pre- are extracted from statistics issued by that institutions are again show- dominantly in the residen- the Bundesbank. ing interest in GOEFs, but these tial market, said Barkow. Germany’s listed property companies funds will never have the same He added that there was also had their best-ever half-year, collec- significance as before the crisis – potential for new products tively raising €3.3bn through rights issues and this is one of the reasons why in the commercial real es- and capital raising placements, a year- Spezialfonds are doing so well,” tate sectors, as they were on-year increase of 59%. Leading the CEO Peter Barkow (pictured, “heavily under-penetrated” charge here were the big listed residen- above) commented.. in Germany and “market participants are tial companies. A further record was set He also highlighted in his report how hoping for growth”. for the issue of convertible bonds, which the second quarter was “the best quar- reached a volume of €999m in the period. ter in capital markets’ history” for inflows The losers among the vehicles for into listed real estate, at €1.8bn. The Germany/Closed-end funds indirect investment in real estate were main impetus was demand coming from German market for new the large mutual or open-ended funds foreign institutional investors, he said, closed-end property funds for private individuals, which failed to with German investors lagging. He add- remains in doldrums reach last year’s levels of volume. Not ed, “German institutions are very slow- surprisingly, given the flurry of activity in ly but steadily rethinking their strategy A report issued this month by rating and the summer of 2013 when new, stricter mainly because of a lack of alternative research group Feri EuroRating shows regulations were being introduced, this investments – and because listed real clearly the extent to which the German year’s volume so far of €1.4bn in inflows estate can be invested in quickly.” closed-end real estate funds sector has is less than half that of the corresponding The supply was fuelled mainly by pri- nearly ground to a halt. In the second period of last year – although the figures vate equity funds selling their holdings quarter only three funds aimed at private for the second quarter showed signs that or from initial public offerings (IPOs) investors were launched, with a total of

GRAPH-1

Total Return Performance GPR 250 Index (€) 250

GPR 250 Europe

200 GPR 250 Germany

150

100

50

0 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14

Source: Global Property Research (www.globalpropertyresearch.com), 2014

Graph of the total return performance of Europe and GermanyPage 1 in Euro currency over the past five years REFIRE charts courtesy of GPR, Global Property Research 28

...... Markets Report

Hamburg logistics market surges in the Large spaces await tenants first half of 2014 In the Hamburg port and inner city areas, most of the available The Hamburg market for the leasing of industrial and logistics properties are in the size category of 10,000 sqm and over. These real estate posted significant gains in the first half of 2014, are primarily intended for contract logisticians. “The supply in well ahead of the same period the previous year. Elsewhere this segment has further increased in recent months thanks to in this issue we examine how this phenomenon is affecting new building projects and existing properties becoming vacant,” many of Germany’s larger cities – the example of Hamburg says Jörg Lojewski. “As we experienced a tangible revival of de- is a good one. mand in the first half of 2014, we now expect to see some good deals going through in this segment by the end of the year, as According to a recent analysis conducted by Realogis, total was forecast. Furthermore, the first logistics property developers turnover by all market players in Hamburg and surrounding are starting to take into consideration the possibility of a splitting region together amounted to 215,000 sqm during of the large spaces this period. This represents a plus of more than in their newly built 65% over last year (1st half 2013: 140,000 sqm). facilities, as there is This positive trend is attributable, among other still strong demand things, to the rising number of large-scale deals of for high-quality lo- more than 8,000 sqm, which was already forecast gistics properties last year, and which constituted 37% of the overall with possible al- turnover. ternative usages in the segment up to For example, the start of construction on the new air cargo 5,000 sqm.” center at Hamburg Airport marked the biggest deal of all, to- taling around 20,000 sqm. In big demand among logisticians Lack of land designations in Hamburg city for SMEs was the southern Hamburg metropolitan region, where two leases of 8,900 sqm and 9,500 sqm respectively were signed Many mid-sized companies plan to purchase their own ware- with logistics providers. house or production venue – partly because of the historically favourable conditions for financing right now. “What is more, the “Many companies don’t necessarily need to be close to the requirements that these companies have on such buildings are container terminals in the port, and logistics enterprises are often so individual that a leasing solution is not an option,” says increasingly willing to accept higher truck costs when de- Jörg Lojewski. But it is very difficult to find commercial and in- ciding where to locate their warehouses, in return for the dustrial properties in the Hamburg municipal area, as there is lower rents outside the conurbations,” explains Jörg Lojew- hardly any land available. Unfortunately, the administration failed ski, Head of Department at Realogis Immobilien Hamburg to designate land near the city centre for this purpose, with the GmbH. As many logistics centers in the metropolitan regions result that small and medium-sized companies now find them- now have good public transport connections, among others selves forced to move out to the surrounding districts. for their employees, these venues will remain interesting for many forwarding agents in the future as well. Companies moving to metropolitan regions

Still sought after were facilities with between 1,000 and The business development programs of the Hamburg metro- 3,000 sqm, mainly in the eastern districts of the city such politan regions have reacted to this and now offer commercial as Billbrook/Allermöhe (33% of all turnover). Jörg Lojewski: real estate with flexible section layouts for sale on the edge of “Unfortunately there is still a lack of high-quality real estate Hamburg city, at affordable prices in line with the market. Also, products in this popular location, which has again prevented the townships are attempting to lure companies with lower land an increase in turnover from being achieved in this segment.” taxes and a Hamburg telephone number. Many industrial areas now have an excellent infrastructure that makes the jobs there Units larger than 3,000 sqm accounted for around 22% much more attractive for employees, and the companies’ search of the overall result, and the segment from 8,000 sqm up- for specialist personnel considerably easier. wards for 37%. 29 www.refire-online.com

€57.8m in equity capital – after a first quarter which saw only a Relevant transactions in the first half of 2014: As expected, an in- single fund (from the Leipzig-based Publity) offered to inves- crease in large-scale deals compared to the same period last year: tors. The two quarters represent an all-time low for the sector. At the end of Q2 in 2013, before the introduction of the Hamburg Airport HH-Fuhlbüttel/North 20,000 sqm new stricter KAGB regulations, 14 funds with equity capital of Asropa Food GmbH Glinde/Surrounds east 11,700 sqm €422.1m were in the starting block with their BaFin licences, van Eupen Service Logistik GmbH & Co. Rade/Surrounds south ready for distribution. Commenting on the development, Feri’s 9,500 sqm Christian Michel said, “Since the KAGB regulations came into Spedition Dirk Vollmer GmbH Rade/Surrounds south 8,850 sqm force on July 22nd 2013, only four property Alternative Invest- ment Funds as recognised by the KAGB have been licensed by Logistics companies still lead the industry ranking BaFin.” However, he said the number was set to rise before the end of the year, with 24 funds altogether readying themselves In the ranking of floor-space turnover by industry, the Realogis for the market – albeit mostly in shipbuilding, aviation and pri- analysis did not expose any changes from last year. Logistics vate equity. It remains to be seen how quickly the market for services providers were able to defend their leadership with property funds can recover. around 67% of the turnover, even adding 4% to their lead com- pared with the same period the previous year. The areas with the most turnover were those close to the city, such as Billbrook/Al- Germany/Funds lermöhe in the east, the port and the southern outskirts of Ham- Warburg-Henderson raises €400m for TOP burg. The deals with logistician van Eupen and forwarder Dirk 5 German office fund Vollmer were among these transactions. Retailers placed a poor second with 17% (minus 3%), followed by industry/production German fund manager Warburg-Henderson, the joint venture with 14% (minus 1%) and other industries, again with 2% of the of UK fund giant Henderson Global Investors and Hamburg real estate changing hands. private bank Warburg, has closed a Special Fund investing in Germany’s top five locations at a €400m investment volume. Outlook Only 18 months after its launch, the Deutschland TOP 5 fund reached full investment, despite expansion after strong The rising demand for large properties will have a positive effect demand from existing investors, the manager said. The port- on the market for warehouse and logistics space in Hamburg, folio of core and core-plus assets now consists of six offices, and lead to a reduction of the vacancy levels in projects built located in Berlin, Hamburg, Frankfurt and Munich. Due to good on spec in this segment. Indicators of this positive trend include initial fund performance and the speed of investments, existing the resurgent container handling figures in the port of Hamburg, investors added another €22m in equity to the €208m originally the good consumer climate and the Government’s economic underwritten, to cover a further asset, the office property Val- growth forecast for Germany of 1.8% in 2014 and 2.0% in 2015. entinshof in Hamburg. Realogis expects a turnover volume around the five-year aver- “Given the intense competition for high-quality office as- age of 540,000 sqm by the end of the year. That would represent sets in Germany’s investment centres, we are proud to have an increase of around 6% year on year. reached full investment in the fund after 18 months,” said se- nior fund manager Daniel Fahrer. HIH Hamburgische Immo- One of the main tasks for the future remains the develop- bilien Handlung acts as asset manager. Warburg-Henderson ment of the port and the related infrastructure for smooth is planning several new property vehicles, with the investment traffic flows. The extension work being done on the BAB 7 focus on Germany and Europe as well as the US, in line with motorway to the north and south of the ElbTunnel has further the global plans of shareholder TIAA Henderson, said the fund aggravated the transport situation relevant to the logistics manager’s head of business development Nikolas Jorzick. industry in the region. Jörg Lojewski: “Logistics providers Separately, the UK-based TIAA Henderson Real Estate fear effects on the cost structure of container trucking due to (TH Real Estate) said that it had secured a new €54.7m debt these long-term construction sites. This could cause finan- financing on behalf of itsEuropean Outlet Mall Fund. The new cial difficulties for SMEs.” It remains to be seen how the crisis five year facility replaces the previous €39.2m financing, which in the Ukraine will affect the market. was due to mature in December 2014. The debt has been se- cured against phases one and two of Designer Outlet Parndorf. The loan, provided by pbb Deutsche Pfandbriefbank, 30

gives the Fund the firepower to under- successful ten year “extension” of the including Armani, Gucci, Polo Ralph take asset management at the property approximately €1.5bn flagship Europe- Lauren and Michael Kors. and work towards the development of an Outlet Mall Fund, which owns eight Since its big merger last year, TH a new phase at the scheme, which is outlet mall assets across Europe, in ad- Real Estate, jointly owned by US-based expected to open in 2016. The deal is dition to its indirect holding in three UK TIAA-CREF (60%) and the UK’s Hen- competitively priced, said TH Real Es- outlet mall assets. derson Global Investors (40%), is one tate, reflecting a conservative loan-to- Designer Outlet Parndorf is located of the largest real estate managers in the value on this prime Austrian retail asset. 30 minutes from Vienna’s centre, and 25 world, focusing on retail, office, logistics, The refinancing comes shortly after the minutes from Bratislava, the Slovakian debt and multi-family assets. It manages capital. The centre hosts designer stores $24bn of real estate and debt across 50 funds and mandates.

Germany/Acquisitions Swedish pension funds in- crease German commitment with Hamburg buy

Sweden’s Cityhold Group, which acts as real estate investment manager for Drive better performance, Swedish national pension funds AP1 and AP2 made a further commitment to build- improve sustainable returns ing up its asset abase in Germany when it bought the prominent Atlantic Haus in Hamburg earlier this month from a fund managed by Swiss bank UBS. The deal brings Cityhold’s German portfolio up to about €200m. Completed in 2007, Atlantic Haus is a high-rise office building in the Harbour Business District (HBD) of Hamburg, Ger- many’s second largest city. It is located 100 metres from the historic main building of the Landungsbrücken jetties, and, at 88 metres, is among the tallest buildings in the city. The gross lettable area of around 32,000 sqm and the 415 underground car park spaces are spread across three buildings of eight storeys each and the tower with its 21 storeys, and the building is almost fully let. The property was developed in 2007 for about €100m by Hamburg-based Quan- tum Immobilien, on the grounds of the old Bavaria Brewery, with financing from HSH N Real Estate. Along with neighbouring buildings the Empire Riverside Hotel and the Astra-Tower, built at the same time, the www.drivebetterperformance.com trio make up what’s know as the Hafenk- rone, or ‘crown’ of the harbour area. 31 www.refire-online.com

Asset Profiler and Immonet – a strong partnership The quality leader in the field of closed investment platforms at Immonet.de.

Identifying suitable investors as a seller Storing precise search profiles as an investor • Confidential transactions • Focused placement of investment desires • Qualified matching of investors • Profile is only shown to suitable sellers • Detailed matching analysis • Success through discretion and efficiency

AZ_Immonet_Investment_A4_hoch_englisch_02.indd 1 21.02.14 14:06 32

The Stockholm-headquartered Cit- to work out of a “home office”, will pro- good perspectives give its low volatility, yhold is jointly owned by two Swedish vide fresh impetus to the office market, steady rental increase and low level of national pension funds, AP1 and AP2, say consultants Wüest & Partner in a speculative construction. Among east- which together have €50bn under man- new study. ern German cities, Jena stood out with agement. The funds have earmarked The new study, “Perspektive Büro- the best profile, while others rated highly approximately €500 million in equity for flächenmarkt Deutschland 2014”, were Dresden, Rostock and Potsdam. Cityhold in a first investment phase. The which was compiled in collaboration with capital is intended primarily for long-term research firm Ottenströer, analyses the Germany/Research investments in core office properties in trends of the past five years in office in- Austrian residential prices major European cities, with investments vestment. The study concludes that the go into reverse, helped by to date in London, Munich and now Ham- above figures could double if Germany Russian sanctions burg. The first German investment was in continues to enjoy the same dynamic February this year, when Cityhold bought growth it has seen over that period. Austrian residential real estate, which a multi-let, 15,000-sqm office property This would particularly benefit cities had been rising at a steady 10% clip in Munich from IVG Institutional Funds. and their near suburbs in the western annually for the past several years, has The current portfolio amounts to a total part of the country – although it’s not experienced a trend shift and prices are value of approximately €800m. good news for office vacancies in rural now actually falling, according to a report According to Berith Kübler, respon- areas, C-cities, and the far-out periph- from specialist researcher IMMOunited, sible at Cityhold for asset management eries of the A- and B-cities, where high which tracks all property transactions in in Germany,“As Europe’s largest national vacancy rates will become even more the Alpine republic. economy and, above all, as a stable real ingrained. The report says that Austria’s falling estate market, Germany plays a key role prices are due to an increase in supply, for Cityhold’s property investment strate- with 44,141 properties changing hands gy. We are planning to further expand our in the first two quarters of this year, an investments in Germany. In this context, increase of 10% over last year. Austrian Cityhold has expanded its geograph- analysts are now expecting prices to fall ic target area to include Germany’s five 3% before next year, and continue falling largest cities.” beyond 2015. Kübler stressed the green and sustain- Particularly hard hit is luxury real es- ability credentials of the Atlantic Haus, tate (€500,000 upwards), which has seen pointing out how Atlantic Haus is con- demand falling by 5.5% in the first half, nected to the district heating supply and The study also highlights how free- with prices down by 4%. This has been uses a chilled frame for cooling purposes. lancers and self-employed workers will partly affected by the sanctions imposed The building has recently been awarded a become the most dynamic sector for the on Russia by the EU, according to Aus- LEED Gold sustainability certificate. office markets of the future, followed by trian newspaper Der Kurier. Vienna is the sub-segments of health and social ser- only city just about holding up, with pric- vices, IT and communication, manufac- es up 1.3%, but mainly at the lower end Germany/Study turing, finance and insurance and admin- of the market. Freelancers, seeking office istration. This is all in stark contrast to Germa- space, to provide German The researchers have identified a ny, where prices are still rising – although office impetus trend ‘away’ from working in a ‘home there is evidence of the larger cities see- office’. According to the Federal Sta- ing a levelling-out of the price level, while Investors in German office properties tistics Office, about 8.8% of non-self- new, smaller cities are coming to the fore. should be looking carefully at Germa- employed workers could do some work Prices of owner-occupied apartments in ny’s regional cities, particularly in west- from home in 1996. This rose to its peak German cities saw price increases by ern Germany, where the amount of office of 9.7% in 2008, and has since fallen to up to 21% in the past year – 10% in the workers is expected to grow by 80,000 7.7%, and is still in a downward trend. second quarter of 2014 – although the annually, creating extra demand of 2 mil- In pointing to cities with an attrac- rises were less spectacular in the big- lion square metres. The demand from tive risk-return profile, Wüest & Partner gest markets, according to an index by self-employed people, no longer wanting highlighted Bonn as offering particularly advisor F&B from Hamburg, which eval- 33 www.refire-online.com

uates prices for every city with more than Germany/Listed Companies to 4,000 apartments annually in Germa- 25,000 inhabitants. BUWOG plans to buy and ny, particularly in northern Germany and The biggest price jump was not in the build up to 4,000 apartments Hesse to add to its 8,000 units in Berlin normally booming property markets of annually and a further 17,000 German units. It also Berlin or Munich, but in the picturesque plans to itself build a further 5,000 units Bavarian town of Kempten im Allgäu. Ac- Recently-listed residential investor BU- for €1.5bn, a third in Berlin and the rest cording to F&B, Munich prices rose 1.4% WOG, which split away from Austrian in Vienna. The group currently owns and in Q2 making it still the most expensive mother company Immofinanz AG in manages a total of 53,000 apartments in city in Germany by far, at a full €1,000 April, said this week it planned to buy up Germany and Austria, valued at €3.5bn. more per square metre than the next most expensive city, Garmisch-Parten- kirchen in the German Alps. Despite the jitteriness of the Bundes- bank, whose remit is, of course, to worry on behalf of the nation and who issue spo- radic warnings about regional overheat- ing, the latest study by market research group empirica takes a more sanguine view on the market. Germany shows no sign of housing or credit oversupply, and rents, home prices and income are grow- ing apace so that no general bubble is emerging, it says in its latest report. None- theless, overheating is emerging in sever- al market segments, it cautions. Independent economics research house empirica’s latest house price ‘bubble index’ HAS risen, but still re¬mains on a healthy level, it says. Several sub-indices have moved into the red, however. One is the house price-income ratio in six of Germany’s Synergy largest cities (Hamburg, Düsseldorf, The interaction of two or Frankfurt, Stuttgart, Munich and Ber- more elements to produce a combined effect greater lin), up from only three last year, and than the sum of their parts that for rent multipliers in eight cities (the above minus Berlin, plus Bremen, When you need an edge When one plus one needs to equal three Essen and Cologne), up from six. When good is not good enough Adding a further cautionary note, em- That is when you need Situs pirica points to the higher visibility of du- Situs provides: bious studies in the media and elsewhere, • Real Estate Advisory Services • Primary Servicing/Loan Workouts proposing where one still can buy cheap • Outsourcing Platforms or how to refinance at good conditions. “Apparently we have reached the point where – to paraphrase the legendary in- Hugo Raworth Bruce Nelson +44 (0) 20 7220 1852 +44 (0) 20 7220 1850 vestor André Kostolany – the taxi driv- [email protected] [email protected] er stops asking experts for investment tips and starts issuing recommendations himself,” said the report. “The seed for a bubble has started to germinate.” 34

...... SUBSCRIPTION & REGISTRATION FORM

Real Estate Finance Intelligence Report real estate finance in continental Europe. Europe (REFIRE) is a twice-monthly Eng- • Published 16 times a year from Frankfurt am Main, in the business heart of Germany, lish-language report providing detailed REFIRE is available worldwide on subscription. Issue dates are the beginning and the mid- information and analysis on continental dle of each month, with two small breaks throughout the year. Each issue is delivered to European real estate finance. Each issue subscribers’ desks or home address by email notification and immediate PDF download. contains vital information about the latest • As a subscriber, you will be give a special login code enabling you to download the latest deals done in the major European markets, issue from day of publication, in addition to giving you full access to the full searchable and delivers insights into the significant de- archive of articles previously published. velopments in this hugely dynamic field. • Subscribers will also be able to avail of occasional special offers which REFIRE will ne- gotiate on your behalf, and which we will notify you about accordingly. Our readers are global investors in real es- • The normal price for an annual subscription is €595.00, but we are offering new sub- tate, asset managers, REITs and other real scribers the opportunity to subscribe for the first 12 months for only euro €385.00, a estate investing vehicles, lawyers, private discount of over 35% off the normal rate. investors, public sector authorities – in • For subscribers in the UK, the discounted first-year rate is Stg£275.00 (normal rate short, anybody who is interested in staying Stg£425.00). If you live in the US or Canada, the discounted first-year rate is US$475.00 up-to-date with and learning more about (normal rate US$730.00).

YES! I would like to subscribe to Real Estate Finance Intelligence Report Europe (REFIRE). As a first-time subscriber I qualify for the new subscriber discount of over 35%. I understand that I can cancel at any time and for any reason and I will receive a full refund on any undelivered issues. I would like to register for a free trial subscription to REFIRE. I understand that you will issue me with my own login code, enabling me to download the next two issues of REFIRE completely free of charge and with no obligation on my part to sub- scribe. With my login code, I will also be entitled to review all past editions. I would like to access REFIRE as part of a multiple subscription for my company, and would like you to contact me.

First Name Last Name

Job Title Company

Address 1

Address 2

City Country/State

Postcode/Zip eMail Address

Telephone No.

Method of Payment: Cheque Enclosed (please make payable to REFIRE) Please Invoice Me Please Charge my Credit Card: VISA Mastercard 3-digit Code:

Credit Card No.

Expiration Date Signature

Mail or fax to: Charles Kingston, Editor REFIRE, Habsburgerallee 95, 60385 Frankfurt, Germany. FAX +49-69-49085 804