German residential developer The Grounds has cancelled a contract worth €18.5 mln for the development of 34 homes in Erkner, Brandenburg.
The firm said that the contract was terminated by mutual agreement at the buyer’s request. According to Immobilien Zeitung, the buyer is reported to be Phoenix Spree Deutschland.
Despite the sale falling through, The Grounds said that the project implementation would continue unchanged and on schedule. The sales contract was initially signed in March 2022 for the scheme in Erkner-Hohenbinde close to the Tesla factory in Grünheide.
Although the cancelled deal means that The Grounds sale proceeds for the current financial year will be less than previously thought, the firm said that it would expect a compensation payment to the tune of €5.55 mln.
Jacopo Mingazzini, member of the management moard of The Grounds, said: 'The cancellation of the purchase contract at the buyer’s request has no impact on further progress of the project, which is being continued by The Grounds as planned.
'We have currently already reached a construction status of 48% and an award status of 90%. The first houses are expected to be ready for occupancy in summer 2024. Renewed marketing of the project will begin on 8 January 2024.
'Due to the attractive location and strong demand for residential units in the neighbourhood of the Tesla factory, we anticipate lively interest from potential buyers and expect notarisation to take place in the second quarter of 2024 at the latest.'
Elsewhere, The Grounds reported several development successes in 2023. The LennéQuartier accommodation in Magdeburg has already been fully completed and handed over, while the Property Garden project, which is also located in Magdeburg, is almost 70% complete and is scheduled for completion in April 2024.
Concluded Mingazzini: 'Both projects were already fully sold before construction began. It is also particularly pleasing that we were able to realise these two projects below the calculated budget.'
Image: The Tesla Gigafactory, Brandenburg
Photo: Michael Wolf
