German Fund Behind Year's Biggest Spanish Property Purchase Wants More
By - Oct 15, 2010 11:37 AM GMT+0200 - Bloomberg Agency
The German real estate fund manager that completed Spain’s biggest property purchase this year plans further acquisitions in the country to take advantage of lower prices.
“It’s a very good point in time to go for those really good properties in Madrid or Barcelona that we were never able to obtain in the past four years or so,” said Matthias Danne, the DekaBank Deutsche Girozentrale management board member who heads its property-fund arm. “We are working on Spain.”
Prime office values in Spain’s two largest cities have fallen since mid-2007 after the financial crisis plunged the economy into its worst slump in 60 years. The slide, combined with a slower decline in rents, meant that rental income as a proportion of the price rose by about 2 percentage points to 6 percent, according to property adviser Jones Lang LaSalle Inc.
DekaBank’s Deka Immobilien, Germany’s largest real-estate mutual fund manager, acquired an office building known as D640 in Barcelona’s financial district for 145 million euros ($202 million) in August and bought Banco Bilbao Vizcaya Argentaria SA’s main office in the same city in 2009 for 82 million euros. The property was leased back to the bank.
Prices for prime offices in the two Spanish cities have fallen about 35 percent from their peak, while rents are down about 27 percent from mid-2008, according to Madrid-based broker Aguirre Newman SA.
The deals in Spain and January’s 36 million-euro purchase of a distribution center in Prague show that Frankfurt-based Deka Immobilien is prepared to invest in less liquid markets for the right property, Danne said.
Poland ‘Attractive’
“We’re also looking at Poland, where we already have a significant portfolio,” Danne said in an interview last week at Munich’s annual Expo Real property trade fair. “Maybe there are one or two further deals there that might be attractive.”
Most purchases in Europe this year have been in the largest markets such as France, the Netherlands and the U.K. Germany has been less of a target because Deka has ample investments there, Danne said.
The fund focuses on properties that deliver reliable rental income for its investors, targeting the highest quality buildings in prime locations with tenants on long leases. PricewaterhouseCoopers LLP and Caja Madrid, Spain’s second- largest savings bank, are tenants at D640 in Barcelona.
Deka Immobilien is owned by Germany’s regional savings banks, which drive sales of the four mutual property funds that it runs. The funds attracted a net 1.25 billion euros in the first eight months of the year, according to Frankfurt-based BVI Bundesverband Investment & Asset Management.
Cash Rich
As a result, almost 25 percent of the 11 billion-euro Deka- ImmobilienEuropa fund was in cash or equivalents at the end of September.
“It’s a lot of liquidity,” Danne said. “We’re looking to reduce that, if we can find the right kinds of properties.”
He ruled out acquisitions in most of central and eastern Europe and Turkey.
Deka Immobilien sold the City Cronan office complex in Stockholm last month, taking advantage of high prices in what it said was Sweden’s largest single property transaction in at least three years. No price was disclosed.
Office prices in the U.S. are attractive for the 2.5 billion-euro Deka-ImmobilienGlobal fund, chiefly in the five largest cities, Danne said. Last month, the fund bought an office building near New York’s Grand Central Station for the equivalent of 95 million euros.
The same fund also sold an office complex in Seoul for 123 million euros in June -- one of two properties it owns in South Korea -- to take advantage of current prices, Danne said.
Some of the proceeds may be used to buy in Singapore, a market in which Deka Immobilien has been looking to invest “for months,” Danne said. “I’m optimistic that we will be able to do that quickly,” he added.
http://www.bloomberg.com/news/2010-10-15/german-fund-behind-year-s-biggest-spanish-property-purchase-wants-more.html
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“It’s a very good point in time to go for those really good properties in Madrid or Barcelona that we were never able to obtain in the past four years or so,” said Matthias Danne, the DekaBank Deutsche Girozentrale management board member who heads its property-fund arm. “We are working on Spain.”
Prime office values in Spain’s two largest cities have fallen since mid-2007 after the financial crisis plunged the economy into its worst slump in 60 years. The slide, combined with a slower decline in rents, meant that rental income as a proportion of the price rose by about 2 percentage points to 6 percent, according to property adviser Jones Lang LaSalle Inc.
DekaBank’s Deka Immobilien, Germany’s largest real-estate mutual fund manager, acquired an office building known as D640 in Barcelona’s financial district for 145 million euros ($202 million) in August and bought Banco Bilbao Vizcaya Argentaria SA’s main office in the same city in 2009 for 82 million euros. The property was leased back to the bank.
Prices for prime offices in the two Spanish cities have fallen about 35 percent from their peak, while rents are down about 27 percent from mid-2008, according to Madrid-based broker Aguirre Newman SA.
The deals in Spain and January’s 36 million-euro purchase of a distribution center in Prague show that Frankfurt-based Deka Immobilien is prepared to invest in less liquid markets for the right property, Danne said.
Poland ‘Attractive’
“We’re also looking at Poland, where we already have a significant portfolio,” Danne said in an interview last week at Munich’s annual Expo Real property trade fair. “Maybe there are one or two further deals there that might be attractive.”
Most purchases in Europe this year have been in the largest markets such as France, the Netherlands and the U.K. Germany has been less of a target because Deka has ample investments there, Danne said.
The fund focuses on properties that deliver reliable rental income for its investors, targeting the highest quality buildings in prime locations with tenants on long leases. PricewaterhouseCoopers LLP and Caja Madrid, Spain’s second- largest savings bank, are tenants at D640 in Barcelona.
Deka Immobilien is owned by Germany’s regional savings banks, which drive sales of the four mutual property funds that it runs. The funds attracted a net 1.25 billion euros in the first eight months of the year, according to Frankfurt-based BVI Bundesverband Investment & Asset Management.
Cash Rich
As a result, almost 25 percent of the 11 billion-euro Deka- ImmobilienEuropa fund was in cash or equivalents at the end of September.
“It’s a lot of liquidity,” Danne said. “We’re looking to reduce that, if we can find the right kinds of properties.”
He ruled out acquisitions in most of central and eastern Europe and Turkey.
Deka Immobilien sold the City Cronan office complex in Stockholm last month, taking advantage of high prices in what it said was Sweden’s largest single property transaction in at least three years. No price was disclosed.
Office prices in the U.S. are attractive for the 2.5 billion-euro Deka-ImmobilienGlobal fund, chiefly in the five largest cities, Danne said. Last month, the fund bought an office building near New York’s Grand Central Station for the equivalent of 95 million euros.
The same fund also sold an office complex in Seoul for 123 million euros in June -- one of two properties it owns in South Korea -- to take advantage of current prices, Danne said.
Some of the proceeds may be used to buy in Singapore, a market in which Deka Immobilien has been looking to invest “for months,” Danne said. “I’m optimistic that we will be able to do that quickly,” he added.
http://www.bloomberg.com/news/2010-10-15/german-fund-behind-year-s-biggest-spanish-property-purchase-wants-more.html
marbella property
360 property
