GERMANY - German real estate company IVG has refilled its assets under management basket after a slump in the first quarter of 2008, thanks to institutional interest in indirect real estate.
IVG's total assets under management now stand at €14.1bn, up to levels seen at the end of 2007 and higher than the €13.7bn seen at the end of Q1 2008.
The company's institutional assets increased by €500m to €10.8bn in the first half, mainly through additional purchases for clients, according to the firm.
"Institutional investors' interest in increasing their indirect real estate exposure is unbroken", IVG noted in a statement.
The group therefore launched a German office property fund for institutional investors is the second quarter of this year and already bought a €100m property.
More importantly, the asset manager will soon open its much-anticipated Asian fund to institutional investors.
"We will make more acquisitions for most of the 30 institutional funds and increase the fund volume by year-end," said officials, noting IVG expects its total acquisitions to exceed €1bn in 2008.
The company also noted the porfolio established to become a listed real estate investment trust (REIT) is still on hold but currently has a value of €3.4bn.
"Since the situation in the financial markets is still uncertain, it is currently not possible to list the portfolio on reasonable terms," IVG noted.
The group's total income, including IVG Funds, Development, Investment and Caverns for the first half decreased by 11.8% compared to the same period 2007 to €463.2m.
IVG's EBITDA halved from €322.4m to €150.2m, confirming fears of a major impact on the company by the financial crisis, as voiced earlier this year by CEO Wolfhard Leichnitz. (See earlier IPE Real Estate article: Financial crisis will affect 2008 result - IVG)
However, in a statement regarding the latest results Leichnitz stressed "IVG's operational
performance was strong in the first half of this year".
"This strong performance is not reflected in our figures. In the first half of this year, the market-related decrease in the valuation of the real estate portfolio - which does not affect our cash flow - led to a decline in our key financials," he added.