GERMANY - German listed real estate company IVG said preliminary result for 2007 are more doubling its return on the previous year at €290m, despite the continuing sub-prime lending crisis.

Good returns were achieved by profits from purchases and sales, higher rents as well as a re-structuring of the company, IVG told its shareholders in an open letter.

IVG incorporated its institutional fund manager OIK and renamed it IVG Institutional Funds last year. Furthermore, it sold most of its southern European property portfolio as well as its residential holdings in Berlin to concentrate on "strategic activities" in other markets.

In its outlook for 2008, the real estate company is more positive than most analysts and investors, who are cautious about the development of the property market.

"We do not share the pessimism," said IVG chief executive Wolfhard Leichnitz.

"Our research team expects a further increase in rents in all real estate centres in Germany. This is caused by the continued economic boost combined with a shortage in office property and only a small number of building projects," he added.

IVG also announced it will increase its investment universe by using more than €1.3bn in free liquidity and unused loans.

Inflows in the region of €1bn are expected from the launch of IVG's first German REIT scheduled for April or May should "the market be receptive for it at that time", the company noted.

Germany's Deutsche Bank and Swiss UBS have been named as investment banks for the €3.5bn vehicle which will comprise IVG's German office property holdings.

IVG also named Rolf Moritz Webeler and Harald Gude as chief executive and chief financial officer of the IVG Immobilien-Management Holding, its REIT subsidiary, in December.

Both will continue in their old positions at IVG, chief executive of IVG Transaction and IVG Investment respectively, until a successor is found.

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