IVG

The former industrial conglomerate is transforming itself into a real estate, logistics and financial services company. IVG is a listed German company with operations in three divisions: property and facilities management; logistics; and financial and technology services. The company’s industrial roots date back to 1916; since privatisation in 1993 IVG has increasingly focused on core business, shedding industrial operations. The group had a turnover last year of DM 782.2m, a 44% increase over 1996. Pre-tax profits rose by 23% to DM 80m; the rise in after tax profits, up 40%, was even more marked due to tax benefits last year. In 1997, IVG invested DM 482m of which almost three-quarters went into property. IVG Immobilien, the property arm of the group, has a diversified portfolio. The most recent valuation shows a book value at the end of 1996 of DM 534m. Improving the quality of the portfolio is a key objective for the company; older buildings with limited potential in peripheral areas are being sold, and the proceeds reinvested in high quality properties in good locations. Other buildings are being extensively refurbished. As a result of these measures, rental income fell slightly last year. The turnover of IVG Immobilien decreased by 1.9% in 1997 to DM 172.8m. In order to diversify and take advantage of the higher yields compared to the German market, IVG bought two buildings in the centre of Paris last year. This initial step abroad is expected to be followed by further acquisitions in European capital cities. IVG Immobilien is expanding its project development activities, both in the commercial and residential fields. As a mean of risk management, only first class locations are considered, and most projects are joint ventures. The group is targeting Berlin, where it has joined forces with Hanseatica and the Westdeutsche Immobilienbank to develop the Leibniz-Kolonaden. The mixed-use scheme on a 10,000 m2 site near the Kurfurstendamm, is scheduled for completion in 1999. Another partner in Berlin is the developer Botag; in 1996, IVG acquired a 49% stake in the company and has agreed to acquire a majority stake in the future. IVG Logistik provides a range of logistical and distribution services to the oil and gas industries. Airport-related services were transferred from the services division to the logistics operation at the beginning of 1998. At present IVG is operating at the airports in Frankfurt, Munich, Stuttgart and Berlin. Further acquisitions of airport service companies are on the agenda. Facilities management, part of the property division since the beginning of the year, is seen as another growth area. IVG will concentrate on the high end of the market, offering services for complex properties. The services area of the business will concentrate on financial products and information technology. December 31 (DMm) 1997 1996 turnover logistics 428.8 205.4 services 180.6 161.3 property 172.8 176.2 total 782.2 542.9 pre-tax profit 80.0 64.8 Property portfolio book value (DMm) n/a 534 net rental income(DMm) n/a 51.5 lettable space (m m2) n/a 1.2 vacancy rate (%) n/a 12.6 IVG Holding Sanderstrasse 5 53177 Bonn tel +49 228 844250 fax +49 228 844325