REAL ESTATE – Between five and 10 listed German property firms are to become tax-privileged German real estate investment trusts (G-REITs) in the coming months, says Jones Lang LaSalle, the US-based real estate broker.
On March 30, Germany’s parliament gave final approval to a law which legalised G-REITs retroactively from the beginning of the year.
In a research note, JLL did not provide the names of which listed German property firms would become REITs. Firms that have indicated their transformation into G-REITs or the launch of G-REIT subsidiaries include IVG Immobilien, Alstria and TAG AG.
At a news conference earlier this month, IVG chief executive Wolfhard Leichnitz said his firm would decide in the summer whether launch a G-REIT subsidiary.
The JLL researchers said that while the G-REIT law would create a vibrant new market, the government, by banning most residential property from the vehicles, "had missed the chance" to make Germany Europe’s largest REIT market.
Even without residential property built before 2007, real estate experts believe that G-REITs could have a market capitalisation of at least €40bn three years from now.
The JLL researches added that they expected further changes to the G-REIT law in the next few years, including a later inclusion of residential property.
In the same research note, JLL reported that in the first quarter, the volume of rented office space in Germany’s largest cities totalled 537,000 square metres in the first quarter, down 3% from a year ago.
But JLL said the first-quarter volume was still 16% above the five-year average and that hence, "there is no reason for concern" about possible weakness in German commercial property.
Separately, DB Real Estate, Deutsche Bank’s property fund unit, said one of its institutional funds had acquired four properties in the Parisian metropolitan area for €90m. According to DB Real Estate, the properties, built between 1990 and 1993, are fully rented to well-known French firms.
The institutional fund that acquired the properties has a total of €460m in assets, one-fifth of which is allocated to the French market.
All told DB Real Estate has five institutional funds (Spezialfonds) which invested around €700m on behalf of 46 institutional investors. The five funds also plan on investing another €1bn in commercial property in the future.