Corporate | 23 July 2007 08:30
MAGNAT Real Estate Opportunities GmbH & Co. KGaA / Miscellaneous
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++ MAGNAT Real Estate Opportunities acquires 45 percent stake in office
tower development project in Kiev, Ukraine
++ Stake in project with already existing building permit acquired – Total
project budget including construction costs is approximately
USD 90 million
++ High double digit return expected, due to strong demand for high
quality office space in Kiev and continued yield compression
MAGNAT Real Estate Opportunities GmbH & Co. KGaA has acquired a 45 percent
stake in the project 'Prospekt Peremogi 67' in the capital of Ukraine,
Kiev. With an already existing building permit available, project time to
completion can be significantly reduced. Until mid of 2009, 32,000 square
meters of high quality office and commercial space and more than 400
parking spaces will be built. The property, located only 7.5 km from the
city centre of Kiev, offers excellent access both by car through its
location at the main road to the West, and by public transportation via a
nearby underground station. Due to strong demand for high quality office
space in Kiev und continued yield compression, MAGNAT expects a high double
digit return on capital invested for this project.
MAGNAT acquired the 45 percent stake from a local developer who stays as a
40 percent joint venture partner and who will continue to play an active
role in the project. Another 15 per cent were acquired by a co-investor.
Total cost for the acquisition of MAGNAT’s 45 percent share was USD 14.4
million. Construction budget for the whole project is USD 56 million, total
project costs are approximately USD 90 million. Pro rata costs for the
MAGNAT investment are therefore approximately USD 40 million (corresponding
to approximately USD 2,750 per square meter).
Considering the attractive market environment for developers, MAGNAT
is very confident in respect with respect to leasing and subsequently
selling the project. Monthly leasing rates for Class A office space in Kiev
have increased, due to continued high demand for high quality office space
in the city of Kiev, to USD 40 per square meter. Colliers refers in its
'2007 Real Estate Review' to an extremely low vacancy rate of 1.5 per cent,
which is expected to remain low for the next years. For similar properties
– if available at all – asking prices are USD 4,500 and above per square
meter. Moreover – and similar to other countries in Eastern Europe – a
continued yield compression can be observed.
Jan Oliver Rüster, CEO of MAGNAT, comments: 'Peremogi is the next milestone
for MAGNAT, and plays a central role in many respects: The project
complements in an excellent way our existing portfolio, as we achieve with
it a well balanced diversification of commercial and residential
investments. Furthermore, we are able to further improve our already very
good presence in the Ukraine. It is our view that Ukraine continues to be
one of the most attractive real estate markets overall, with distinct
double digit returns on capital invested in projects. And last, but not
least, we have invested already now three quarters of our total capital.
With our continued good pipeline, we predict that we will have completed
our investment program – ahead of our own plan – in autumn of this year.'
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.
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.
Contact:
MAGNAT Real Estate Opportunities GmbH & Co. KGaA
Grueneburgweg 18
60322 Frankfurt am Main
Investor Relations:
Jan O. Rüster, CEO
Tel.: +49 (0) 69 719 189 79 0
E-Mail: jan.ruester@magnat-reop.com
Press Relations:
edicto GmbH
Axel Mühlhaus / Werner Rüppel
Tel.: +49 (0) 69 - 90550 55 - 2
E-Mail: amuehlhaus@edicto.de
DGAP 23.07.2007
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