The new heavyweight in the German property industry is expanding internationally, and could be heading for flotation
Last May Veba, the German energy group, merged its property investments and services into a new company, Viterra. Though its ties with the Veba group are expected to remain in place for the next three years, a separate listing of Viterra is not entirely being ruled out.
The company is organised into four operating divisions. The residential investment division controls the company’s portfolio of 130,000 housing units. Indirect holdings in the form of shareholdings in other companies add another 52,000 residential units.
One of the division’s major transactions last year was the acquisition of a controlling interest in WohnBau Rhein-Main, which owns 14,000 residential units in the RheinMain area. Today, 95% of the shares by are held by WBRM-Holding, a 50/50 joint venture between Viterra and HypoVereinsbank. Financing for the €500m transaction was arranged by HypoVereinsbank. In 1997, Viterra bought a 50% stake in Deutschbau, a housing company that was privatised by the federal government and Deutsche Post. The other 50% is held by Deutsche Bank.
The recent acquisitions have helped Viterra to diversify its property stock away from its traditional heartland in the Rhine-Ruhr region.
In Berlin, Viterra bought Gruppe Nord Wohnungsunternehmen, a small housing company with 2,000 units, from a public-sector housing company. This company will be used as a platform for further acquisitions in the region. According to a company spokesman, Viterra will look at residential portfolios with a minimum lot size of 500 units in any of the German centres.
As part of its active portfolio management, the group is also selling stock. In 1998, around 2,700 units were sold. Emphasis is put on selling stock to the tenants.
The housing development division concentrates on building quality schemes at affordable prices. Cost-efficient construction enables Viterra to offer discounts of up to 20% on similar developments in the area. At the same time, construction periods can be reduced by half.
Viterra plans to grow this business and has set up 12 regional offices across Germany. In 1998, 1,100 units were developed and sold. For 1999 and 2000 an increase to 1,650 and 2,000 units has been projected. Viterra will also take this business cross-border. An office has been opened in Poland and the first project is due to commence next month. An office will be established in the Netherlands later this year.
The residential services division provides a wide variety of property management and facilities management services. Having already established a leading position for energy services, Viterra is seeking to maintain its leadership role in the European markets and at the same time expand its activities in the US.
The company is planning to increase the development activity of the commercial property division. At the end of 1998 the development programme included 32 projects with an investment value of more than €350m. These include the Zollernhof in Berlin with 16,500m2 for Veba and ZDF, the public television channel.
Details on the 1999 performance are not out yet. Viterra has forecast an operating profit of €174m, marking a 16.7% increase over 1998, on a projected turnover of €1.3bn.
Viterra
Grugaplatz 2
45131 Essen
Tel 49 201 459 1900
Fax 49 201 459 1902
e-mail: info@viterra.de
www.viterra.de
