IVG may go on EUR 100-200 mln Christmas shopping spree

IVG Immobilien, Germany's largest commercial real estate company, may buy properties worth as much as EUR 200 mln by the end of December, the company's ceo Wolfhard Leichnitz has disclosed during a conference in Germany.

Leichnitz told reporters IVG was in talks to buy the properties, most of which are in Germany. IVG noted that peak office rents in Western Europe rose an average of 1.7% in the third quarter. Peak rents remained constant in Berlin, Dusseldorf and Frankfurt, and rose in Hamburg and Munich.

Earlier, IVG indicated it expects an increase in net profit, before minority interests and hybrid investors, to around EUR 145 mln from EUR 110 mln last year. 'Office markets in Europe are booming and investor demand on the part of international property investors remains very high. In this situation, IVG has an excellent positioning with its four business segments enabling us to grow further and strengthen our market position,' said Leichnitz.

IVG said that in the first nine months of 2006 it improved all earnings ratios as against the previous year. Against the first nine months of 2005, Group EBIT improved from EUR 140 mln to EUR 208 mln. Net profit improved from EUR 56 mln to EUR 127 mln.

In the Portfolio Management segment, IVG focuses on office properties in major German cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Munich) and selected European capitals (Brussels, Helsinki, London, Paris). IVG contracted property portfolios for a total of EUR 1.4 bn in the first nine months, with Germany the focus of these investments. IVG said some of the purchases will partly recognised in the balance sheet in 2007.

The company is continuing with its programme to dispose of properties 'not in line with the portfolio' and this should be concluded by 2008. 'In the last nine months, properties valued at EUR 600 mln were sold, generating disposal gains of EUR 110 mln (previous year: EUR 46 mln),' IVG reported.