Corporate | 7 May 2007 08:30
MAGNAT Real Estate Opportunities GmbH & Co. KGaA / Miscellaneous/Miscellaneous
Release of a Corporate News, transmitted by DGAP - a company of EquityStory
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MAGNAT Real Estate Opportunities GmbH & Co. KGaA signed contracts for the
sale of its investments ‘Podillja’ in Chemelnitzky/Ukraine and
‘Vossbergstrasse’ in Berlin/Germany. Both investments were made in 2006 and
were classified as ‘distressed real estate’.
The project ‘Podillja’ comprises the development of a wholesale market in
the town of Chemelnitzky, which is the most important trading location for
Central Ukraine. With an initial investment of USD 2.5 million, MAGNAT has
co-financed the completion of development phase 1, consisting of 4.500
stores and to be opened in mid-2007. Further, the investment agreement for
‚Podillja 2’ was signed with the local project partner. Development phase 2
will comprise an additional 5.000 units for a total investment of USD 25
Mio.
The project ‚Vossbergstrasse’, a property in a prime location in
Berlin-Schoeneberg, comprises the conversion of a vacant office building
into 12 exclusive lofts with a total usable space of 1.600m². Already prior
to the start of the construction works, MAGNAT sold 94.5% of the shares in
the project company, for a fixed price and an additional profit
participation in the development gain. The total project volume is EUR 3.2
million.
The management of MAGNAT, with CEO Jan Rüster und CFO Peter Waldner, gives
the following additional explanations: ' These projects demonstrate very
clearly the execution of our ‘develop and sell’ strategy. We are
particularly pleased that we were able to realize these first two exits at
a very early stage of MAGNAT – i.e., only one year after MAGNAT had been
established. At the same time, these two investments are live examples of
our ‘distressed real estate’ portfolio: Both ‚Podillja’ und
‚Vossbergstrasse’ were – particularly at the time of the investment
decisions – very challenging projects, with a corresponding risk profile.
Therefore, we were able to achieve attractive purchase terms, which in turn
were a decisive factor for the high value added at exit. Bottom line is
that the returns, for both projects, distinctly exceed our own,
above-average yield requirements – and is further improved by the short
holding period.'
+++ About MAGNAT:
MAGNAT is a real estate company with a focus on real estate development in
Eastern European countries. Seed investors were the Silvia Quandt family,
the two financial investors Themis Equity Partners and Heliad Equity
Partners, and the management. In the course of two capital increases in
2006 and a further capital increase in spring of 2007, a number of
institutional investors, amongst them Swiss Real Estate, invested in
MAGNAT.
With its opportunistic strategy, MAGNAT capitalizes on inefficiencies in
real estate markets. In contrast to traditional investment strategies,
MAGNAT not only benefits from rental income, but also and primarily from
attractive development yields and the comparable short time of capital
employed in its projects. All projects must meet an above-average yield
requirement.
Management focuses on real estate markets with interesting development
cycles, i.e. undervalued markets ('anti-cyclical investing') and markets
with high economic growth rates ('growth markets'). The regional focus is
currently on Central, Eastern and South-Eastern Europe, supplemented by
opportunistic, special situations in the German home market.
DGAP 07.05.2007
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