One of the largest commercial deals in Dusseldorf this year to date
Network communication company, Nokia Siemens Networks, has signed a deal with the €800m Valad German Aktiv fund, managed by the Valad Property Group, in one of the biggest commercial deals this year to date.
The company will move into a business park close to Dusseldorf Airport to take 17,000sqm of office, high-tech and warehouse space on a 5-year lease paying €2.5m per annum. This deal closely follows Valad’s lease contract with luxury car maker Daimler AG which is for over 27,600sqm of space, combining office, storage and production use until 2023.
Klaus Kortebein, CEO of Valad Germany, said: “We have been established in Germany since 1999 and have local experts in four Valad offices around the country which continues to be a buoyant occupier market. We are delighted to have signed leases with global names such as Nokia, Siemens and Daimler, which takes the total space leased by Valad in Germany to over 70,000sqm in the last four weeks alone.”
Both properties sit within the Valad German Aktiv fund, which focuses on acquiring higher yielding mixed commercial properties with good rental prospects and upside opportunities through intensive asset management. The fund was launched towards the end of last year and now comprises a portfolio valued at approximately €800m.
Credit Suisse acquires office building for €24.5m
Credit Suisse Asset Management Immobilien Kapitalanlagegesellschaft has acquired an 11,600sqm office building in Austria for €24.5m. The seller was San Diego-based Westcore Properties, which opened a European office in the Swiss city of Lausanne last year.
The six-storey, class-A building is located in the Wienerburg submarket of Vienna and was acquired by Westcore as part of a three-building portfolio from electronics firm Philips for $108m in February 2007. Marc Brutten, Westcore chairman, said the disposal was the culmination of a process to add value to the asset. He said: “Our team improved the physical plant and exterior while renegotiating the major leases to new 10-year terms, creating significant value.”
Westcore Properties owns and manages its property assets in Europe through Westcore Sarl, which is responsible for operations throughout Europe. Westcore Sarl has acquired some 160,000sqm of industrial and office buildings in Switzerland and Austria in the last 15 months.
In May 2008, Westcore Properties expanded and diversified its European operations with the opening of Airport Development Partners SA, an affiliate focused on the acquisition, operation and development of regional airports in Europe. Airport-related projects are currently being pursued in Switzerland, Austria and Poland.
Office take-up in Brussels increases by 6.4%
According to Savills’ research, take-up in the Brussels office market has increased by 6.4% compared to the H1 average of the last five years, surpassing initial expectations and reaching 285,000sqm which represented a 2% increase on the same period in 2007.
John Defauw, director and co-head of Savills’ Brussels office, said: “Office demand remains robust in Brussels and we have seen some very strong letting transactions take place by both public and corporate tenants. In particular, the corporate sector has accounted for 78% of lettings demand.”
In addition, there were 14 reported transactions above 5,000sqm compared to only 11 during H1 2007 and eight during the H1 average of the last five years.
With regard to prime rents, the report showed that this average figure remains unchanged at €295sqm although rents increased by 2.5% in the key sub-markets such as The Midi District and the Louise District as rents now stand respectively at €200sqm and €210sqm.
In terms of the investment market, the report stated that levels in Belgium reached €1.41bn during H1 of 2008, which is down 46% compared to the same period in 2007.
In Brussels, investment reached €1.054bn, down 23% compared to the same period in 2007.
Worldwide News
Australians default on a record number of loans
According to Reserve Bank figures, home buyers and other borrowers in Australia defaulted on a record $3.5bn of loan payments in the March quarter, as higher interest rates pushed them over the brink.
Reserve Bank figures showed the ratio of bank assets that were impaired (borrowers falling behind on payments) shot up from 0.19% at the end of December to 0.31% at the end of March. It is the most dramatic surge in bad debts since these records began in 1994.
In addition, the banks’ standard mortgage rate rose from 8.05% at the end of July 2007 to 9.35% by March 2008. It has since risen to 9.6% - adding more than $100 a month to the cost of servicing a typical $250,000 mortgage.
Other Reserve Bank data showed high interest rates and petrol prices were causing Australians to become thriftier with credit cards, with balances per card growing at the slowest pace in 13 years. The average card balance stood at $3,115 in May, up $30 from April. But with the number of cards up 5% in the year to May, outstanding balances were 10% higher than a year earlier. The figures come amid anecdotal reports of home buyers avoiding default on mortgage payments by putting them on credit cards.
Also, housing groups have called for bigger incentives to investors to build affordable rental properties. The call comes as the Rudd Government works on a plan to give investors $8,000 a year for 10 years to build and rent new homes to low-income earners at 20% below market rates.
Bank of Mexico raises interest rate twice in a month
The Bank of Mexico has raised interest rates for the second time in less than a month to slow inflation which is at its highest level in nearly four years (5.26%).
The bank decided on Friday 14 th July to increase interest rates by a quarter point to 8%. It last raised interest rates on 20 th June to 7.75%.
The bank also said it was considering raising its inflation predictions for 2008 to about 3.5% from 3% because of rising fuel and food costs. Last year, inflation was at 3.76%.
You know it’s a downturn when you have to bribe the broker
As the office vacancy rate for metro Detroit in the US edges near 25%, landlords are looking for anything that will give them an edge when it comes to bringing brokers to tour buildings.
To entice brokers to bring tenants to tour office buildings in the area, some building owners are doling out gift certificates, free tanks of gas and iPods to these brokers. Larger gifts, such as vacations, go to brokers who sign deals. Landlords at one office complex will even offset the carbon footprint created on the trip to the property.
Owners say the giveaways and gimmicks might not guarantee a lease, but they do get the attention of busy brokers who get barraged with daily e-mails about all the buildings in town with vacant space.
According to John Strabel of First Industrial Realty Trust, the cost is justified as a marketing expense. Money from the marketing budget for the leasing of buildings has been spent on iPods given to brokers and even plasma TVs, rather than advertising, he said.
