The German bank has brought together its corporate real estate, asset management and property services activities into one operation
At the beginning of last year, Dresdner Bank restructured its broad property activities under one roof, Dresdner Bank Immobiliengruppe (DB-IG). The new division offers a range of property services, including research and consulting, agency, and facilities management, as well as running Germany’s largest open-ended fund and taking care of the corporate real estate requirements of the Dresdner Bank group.
For retail investors the group has established Grundwert-Fonds, an open-ended property fund managed by Deutsche Gesellschaft für Immobilienfonds (DEGI). With property assets worth €7.2bn (DM14bn), Grundwert-Fonds is the largest open-ended fund in Germany. DEGI was one of the pioneers of cross-border investments in 1991. Today around 17% of the portfolio is invested outside Germany, notably in the UK, the Netherlands and the US.
Though the lion’s share of the funds is invested in offices – these account for 72.4% of the rental income – DEGI also invests in leisure projects. The first one was SnowWorld in Zoetemeer in the Netherlands, with indoor skiing and snowboarding facilities. The project also includes restaurants, conference and shopping facilities. Also on the agenda is the acquisition of the Space Park in Bremen, in the north of Germany. DEGI holds an option to invest around €500m in the 200,000m2 project which is expected to be completed in 2002.
Like other funds, Grundwert-Fonds has suffered from rising interest rates reducing the return. For the 12 months ending 31 July 2000, the fund earned shareholders a yield of 3.8%. Due to the lacklustre performance, shareholders redeemed units worth €416m in the first six months of this year.
The agency services of DB-IG are taken care of by Dr Lübke GmbH. A core competence of the company is the privatisation of housing stock, having been involved in the sale of 65,000 units. Other activities of Dr Lübke include agency services for property investment as well as letting and sale of commercial properties. DB-IG also provides a variety of facilities management and property management services.
So far the property services and the property finance businesses have been run separately. On the funding side Deutsche Hyp, itself a merger of three entities, is acting as mortgage lender for the group. In order to forge a closer link between the mortgage banking arm and the parent bank, Deutsche Hyp created eight regional Immobilien Centers across Germany.
Deutsche Hyp made headlines over the summer when it announced provision for bad debts in the order of €116m on total property loans of €31.4bn, reducing the operating profit for the first six months to €18.7m. The write-off emerged as a result of an internal audit and most of the shortfall relates to loans on commercial properties in East Germany.
The losses led to the departure of CEO Dr Eberhard Schäfer, and two other Deutsche Hyp board members.
In the first half of this year, international activities contributed 27% to new mortgage business, which totalled €1.2bn. The portfolio is spread over 14 different countries including the US and eastern Europe. The international business is distributed evenly among the different markets.
Dresdner Bank Immobiliengruppe
Bettinastr. 53-55
60325 Frankfurt
Tel 49 69 263 13856
Fax 49 69 263 51775
www.dresdner-bank-immobiliengruppe.de
