REAL ESTATE - German real estate firm Colonia exceeded its group-wide income targets by €4m, delivering €6.8m in 2005. As it announced the results, the firm said it would increase its guidance for the coming year “considerably” to €25m – almost double its previous figure of €12.2m.

Managing director Edgar Krauss attributed the performance to a “complicated combination of factors”, but pointed to Colonia’s opportunistic model and its exclusive focus on Germany. “Being opportunistic is easy, but making it work is more difficult,” he said. “We’re 100% consecrated to the German market.”

He added: “Now’s the time to buy, and to build up our portfolio. You know, the market isn’t as bad as people in Germany think it is. The export market is booming, and we expect the government to push through necessary reforms before the end of 2007 that will signal an economic turnaround.”

In contrast to France, he said, Germany had multiple urban property markets for Colonia to exploit. The firm, which has €800m in assets under management, is currently looking at Munich, Berlin Frankfurt, Cologne and Leipzig.

“It’s important to know the market well,” said Krauss. “People will move from economically weak cities to strong ones.”

Colonia expects to launch a German REIT in 2007. In the meantime, said Krauss, the firm planned to construct a €50m closed-end vehicle to invest in residential real estate.