Monthly Archives: May 2010

Aberdeen renews Deutsche Bank’s lease in Focus, Warsaw

Aberdeen Immobilien Kapitalanlagegesellschaft entered into a long-term renewal lease agreement with Deutsche Bank for its Polish head office in Warsaw. The property is directly held by the Open-ended Property Fund Degi International.

The Focus Filtrowa building, which comprises a rental area of 34,000 sqm, was built in 2000 and purchased by Aberdeen Immobilien for Degi in 2007.

The centrally-located property has held its own against numerous competitors, including new developments in the area. The 9,900 sqm lease agreement has a fixed term of seven years.

Cushman & Wakefield acted as broker on behalf of Aberdeen, whereas Jones Lang LaSalle represented Deutsche Bank.

REIT results questioned

If you don’t like those scary articles in which big bank analysts with total job security predict dire things for your industry, or at least a part of it, don’t read AlphaVille’s take on Nomura’s bean counter Mike Prew. He’s just warned that if you want to know what REITs are really worth, you need to look at the cash flow.

The cash flow accounts are often neglected in REIT analysis which is surprising. It’s a better measure of a business’s profits than earnings because a company can show positive profits and earnings, and still not be able to pay its capital servicing requirements. It’s cash flow that pays the bills (Enron went bankrupt in 2001 with 2Q ‘profits’ of $1bn but cash flow negative by $1bn).

Warimpex posts Q1 results

Hotel developer Warimpex, listed on the Vienna and Warsaw stock exchanges, posted a 38 per cent increase in sales in the first quarter of 2010, pushing revenues to €20.4m.

The sales growth was primarily due to revenues from the new hotels that opened in Berlin and Łódź in 2009 and that had a very good start, but revenues at hotels in Poland, Germany and France also improved. However, it will be some time before Prague and Bucharest see a significant recovery.

“The hotel industry in Poland benefits from a high level of domestic demand, and over half of the guests at these hotels are from Poland. Thanks to this, the decline in international business on the Polish market did not have as significant an impact as was seen in the Czech Republic, for example,”  said Warimpex’s CEO Franz Jurkowitsch.

The company notes that development financing has again become available at reasonable terms and will allow to move forward with the planned projects.

GTC and Polnord to build mall in Warsaw

Globe Trade Centre and Polnord signed a set of agreements on co-ownership of a SPV that will own 7.5 ha of land in Wilanów district of Warsaw. The two companies GTC and Polnord will develop a 60,000 sqm shopping and entertainment center on the plot, currently owned by Polnord. Construction is expected to start within next 12 months, after obtaining a building permit. The total cost of investment, including land, is estimated at  €170m.

GTC will have a leading role in the development and management of the project with a full support of Polnord. The value of  the mall upon completion is estimated at €250m.

Bratislava Kempinski to open June 17

Cityof Hotels.com is reporting that the 231 room Kempinski Bratislava River Park is scheduled to open June 17. Located right on the Danube, it’s part of a larger project that was designed by Erick van Egeraat for J&T Real Estate. In late 2008, J&T slashed prices on the flats being sold as part of the development, marking the beginning of tough times for the entire residential sector in the Slovak capital.

Prodi: Fiscal federalism for European finance

Former Italian prime minister Romano Prodi says Europe must centralize authority in order to save the Euro. If you’ve been following the roller coast ride of the past couple days on the equity, bond and FX markets, it’s hard to disagree.

When the euro was born everyone knew that sooner or later a crisis would occur. It was inevitable that, for a such a bold and unprecedented project, in some countries (even the most virtuous ones), mistakes would be made and unforeseeable events occur. It was also clear that the stability and growth pact was – as I have said before – “stupid”, not because it was mistaken in its objectives, but because it was founded on purely mathematical parameters without any discretionary powers or political instruments to enforce it. Germany and France were the first countries to violate it, although not in a destabilising way: their finance ministers decided to ignore the objections of the European Commission (possibly because they were “too big to fail”)… Continue reading

Orco Q1 losses fall

Orco’s first quarter losses fell to €15.6m from €54.8m in the first quarter of 2009. Revenues also fell more than €3m to €51.5m in the same period, while operational costs fell 12%. EBITDA rose 42% to €8m. The developer reports that €43m of project refinancing took place in the first quarter.