GERMANY - German real estate company IVG posted another net loss in the second quarter of this year, but competitor Patrizia has reported a small net profit.
IVG said its assets under management now amount to €22bn but its net loss amounted to €54.5m in the second quarter after suffering a loss of €44.8m in the first quarter - a move which the company attributes to "the difficult market situation in the investment market".
Ongoing volatility in the investment markets and evidence of a recession has caused markdowns in property sales of around 10% relative to the most recent fair value, "which led to realised market value changes of -€52.4m" in the first half of 2009, according to IVG.
The company is continuing its realignment of the business and focused on delivering "stable, recurring income from the investment and funds businesses as well as on reducing the risk exposure by reducing the project development pipeline".
Officials stated "another goal is to improve the cost structure and to simplify the organisational structure of the company".
A major part of the business realignment is a restructuring of the portfolio, which has so far led to the sale of €550m worth of property, to "safeguard liquidity".
All loan maturities have also been settled or extended as planned.
Gerhard Niesslein, IVG's CEO, claimed the business is expecting to "stand out" against competitors largely because it has offices in "the most important European real estate locations".
Meanwhile, Patrizia reported it generated a net profit of €1.1m in the three months to the end of June, which improved its results slightly for the first half year but still left the firm in negative territory with a loss of 13.8%.
The company expects to generate more sales in the second half of 2009, which should move Patrizia's operating results onto positive ground from the current loss of €7.2m, said Wolfgang Egger, chairman of the board at Patrizia.
Patrizia has €2.5bn in assets under management.