• CA Immo: added value from procurement of planning permission, sale of land and selective proprietary developments
• 2012: Investment volume of about € 245 m in Frankfurt and Berlin

Berlin’s property market is booming – an increasing population and growing services sector are driving demand sky-high both for apartments and for offices. This is contrasted by a supply of property that has seen building solely on an “as-required” basis over the past few years and is scarce in many segments. This potential is increasingly enticing international property companies into the German capital and Austria also has a strong presence there.

CA Immo helps design the new Berlin
Since taking over the German urban district developer, Vivico, in 2008, CA Immo has had a presence in Berlin with total property assets with a market value of about € 519 m. Just under half of this (€ 222 m) is accounted for by property assets under development. CA Immo currently has three development projects under construction in Berlin with a total investment volume of € 194 m. The Group also owns some 1.4 m sqm of land reserves (with planning permission) in the German capital, some of these reserves being large sites with the potential for residential construction.

Dr. Bruno Ettenauer, CEO of CA Immo comments: “We can currently leverage vast potential in Berlin and are benefiting from the present positive market situation. We are rapidly pushing forward development all around Berlin’s main railway station (Hauptbahnhof) in the government quarter with Europacity. One of the projects that we will be completing there by the end of this year is the new German headquarters of the oil group TOTAL. We can exploit the large volume of excess demand across the board. This excess demand can be seen particularly in the residential and hotel sector, where we are participating with the lucrative sale of dedicated building plots and a few joint venture projects. We are implementing proprietary developments exclusively in the fields of commercial use, particularly in the office and hotel sector.”
In 2011, 56% of sales revenues were accounted for by building plots within the framework of German urban district development, for which the relevant value-adding zoning permits had previously been acquired. Ettenauer: “We were able to sell these building plots at well above book value and also have the advantage of not losing any rental income in subsequent years as a result.”

It is obvious that supply will increase rapidly along with demand – numerous developers have discovered the location for themselves. Ettenauer: “We are aware that we will not be the only project developers in Berlin over the next few years. I am expecting the limited availability of project funding to create “healthy regulation” in the project development sector here.” The prerequisites for financing commitments include a high pre-leasing ratio (at least 40%) and a good credit rating, along with experience and a proven track record on the part of the investor. Ettenauer: “We can furnish all of these and will continue to be able to do so, so that we are well placed to provide a high-quality supply of property quickly here.”

Urban district development – from brown field to fully integrated neighbourhood
Urban district development describes a specific form of development project, in which extensive, derelict or former industrial properties are systematically transformed into modern, mixed-use urban districts. The existing land reserves acquire added value in this process through the acquisition of planning permission and are then turned to account by means of sales, proprietary development projects or joint venture developments. Once a project is completed, CA Immo either integrates it into its own asset portfolio or sells it on completion to an end investor.
Ettenauer: “In the residential sector, in particular, we are increasingly looking to sell plots or enter into joint ventures at an early stage. This enables us to keep the time-to-market short in markets with a high residential demand – such as Berlin, for example – while simultaneously jump-starting the district as a whole.” The latest examples are the joint venture between CA Immo and Hamburg Team in Berlin’s Europacity, which plans for the construction of some 550 apartments at “Hamburger Stadthafen” (city harbour)  in Europacity, Berlin, and the joint venture with Reggeborgh Investment in Berlin’s Flottwellstrasse (250 apartments).

Goal: speedy, profitable utilisation of land reserves
More than 80% – € 300 m – of total investment volume in 2012 is being poured into ongoing construction pro-jects in Germany. Frankfurt and Berlin, in particular, are the focus of investment activities. Ettenauer: “With the completion of the Skyline Plaza shopping centre, planned for 2013, we will have largely finalised the development of Frankfurt’s Europaviertel district. We are currently at the stage, in the development of the Europacity in Berlin, at which we were in Frankfurt three years ago. Here – after acquiring the zoning permits - our aim is to rapidly and profitably utilise land reserves.”

CA Immo in Germany
Total property assets in Germany have a market value of € 2.4 billion, corresponding to about 45% of the total portfolio. Whereas, in Austria and Eastern Europe, CA Immo is principally seen as a portfolio manager, in Ger-many the focus is clearly on project and urban district development. About one-third of the German property assets take the form of development projects (€ 771 m), totalling over 80% of CA Immo’s total development project business. Major German urban district developments are, for example, the Europaviertel district in Frankfurt or Europacity around Berlin’s central railway station (Hauptbahnhof). In addition, CA Immo’s asset portfolio in Germany has a market value of € 1.5 billion and includes landmark buildings, such as the Spreebogen office building, the Königliche Direktion building (formerly housing the headquarters of the “Royal Railway”) or the “Hamburger Bahnhof – Museum für Gegenwart” museum of contemporary art (all of these are in the centre of Berlin), and the Hessen Portfolio with approximately 450,000 sqm of rentable area (36 properties with long-term leases to the German state of Hessen) in and around the cities of Wiesbaden, Kassel, Marburg and Giessen. In terms of classes of use, 90% of the German property asset portfolio comprises office properties.

 CA Immo in Berlin – overview of projects

Europacity urban district
The Berlin West and Mitte districts are merging – and CA Immo is directly involved in the process: the project site for the new Europacity urban district, with an area of about 40 hectares,   is located in the immediate vicinity of the central railway station (Hauptbahnhof) and will connect the districts of Westberlin and Berlin Mitte. The main owners of the project site areas are CA Immo Deutschland (about 20 ha), Deutsche Bahn AG (about 10 ha) and the state of Berlin (about 6 ha). The development goal is the creation of a mixed-use district immediately adjacent to the Charité university hospital, the seat of government and the central railway station. CA Immo currently has two projects under construction at this site: the TOUR TOTAL office block and the InterCity Hotel Berlin Hauptbahnhof.

 TOUR TOTAL – first office block in the new Europacity district
The German headquarters of the oil company TOTAL is being erected in the immediate vicinity of Berlin’s central railway station (Hauptbahnhof). With a gross area of 18,000 sqm, this is the first office block in the new Europacity district. CA Immo is the planner and owner; the building has been designed as a “green building”. Planned completion is the second quarter of 2012. The total investment volume is about € 70 m.

Intercity Hotel Berlin Hauptbahnhof
CA Immo is putting up the “InterCity Hotel Berlin Hauptbahnhof” for the Steigenberger Group between Berlin’s central railway station and the Chancellery. The eight-storey building has been designed as an upper mid-range hotel. With about 410 rooms, this will be the largest InterCity Hotel; the building will cover a gross area of 19,800 sqm and have room for about 70 parking spaces. The total investment volume is € 53.2 m.

CA Immo is building for Mercedes Benz
In addition to the construction projects in Europacity, CA Immo is also building the new German headquarters for Mercedes-Benz Vertrieb Deutschland (MBVD) in the Berlin Friedrichshain district. The foundation stone for the “green building”, certified by the DGNB (German Sustainable Building Council), was laid in November 2011 and the lease commences from mid-2012, initially for a ten-year period. With this project, MBVD is bundling all its previous Berlin locations in one newly erected property to be planned and built by CA Immo to MBVD’s specifications. CA Immo has the role of both owner and investor in this project. The total investment volume is about € 72 m.

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