German's Von der Heyden Group (VDHG) has sold its flagship development in Poznań - Andersia Tower to the property fund Deka lmmobilien for an estimated EUR 80-85m, raising funding for future investments in Poland and abroad.
The company claims the transaction achieved a record-low capitalization rate compared to other office investments outside Warsaw.
With a total development area of 42,668 sq.m, Andersia Tower was the first mixed-use office development in the city, including a four-star IBB Andersia Hotel and class A offices. It was also an example of successful public-private partnership, as VDHG developed the project in co-operation with the Poznań municipality, which contributed the site.
This is by no means the end of VDHG's presence in Poznań, however, as the company gears up to add another two parts to the Andersia project. The construction of phase three, currently referred to as Andersia Front Office will add some 12,000 sq.m to Poznan's class A office stock. The development budget on this project is PLN 100m, and VDHG hopes to get a building permit and begin construction this autumn.
The fourth and final phase of VDHG's projects on Poznan's Andersa Square, Andersia Silver will include some 30,000 sq.m of net usable office area and cost some PLN 330m and take approximately 24 months to complete. After its completion, Andersia Silver will be the city's new tallest building (116 m). Currently Andersia Tower (102m) holds the number one position, but by 2010 it is to be beaten by Korona, a new project designed by Daniel Libeskind for the Poznań developer Wechta. Although the shape of the Libeskind building remains top secret, the investor got permission to build a structure no more than 105-m high.
New developments in Warsaw
"We concentrate on Poznań, Warsaw and Gdańsk for the moment, however we still have strong interest for Wroclaw. We are still interested in Lublin and hope to do more projects in this city. We also look at a larger transaction in Silesia, however it remains to be seen whether we succeed."
In Warsaw, VDHG aims to build a small office block in the prestigious Nowy Świat area and a prime residential project on Wilcza Street.
"The Nowy Świat Atrium or Courtyard project has undergone some changes and given the slower residential and the buoyant office market we have decided to build an office building. The quality shall meet the highest standards like all developments in which the Von der Heyden Group is involved. We are currently in advanced talks with the City Authorities and hope to start construction in spring of 2009. The building will have some 5.200 sq.m of net rentable office space, on the ground floor some 500 sq.m of prime retail. The total investment costs are currently estimated at around PLN 80m. Wilcza 22 is a complex renovation project and we expect to have it completed in summer this year."
Founded in 1989, VDHG has grown to become a pan-European player with property projects in Germany, Poland, Spain and the US. By 2009 its investments in Poland will have totaled EUR 300m. In Gdańsk, VDHG is developing a luxury hotel, which is to reach completion by summer 2009. Negotiations with potential contractors and IBB Hotels as the likely future operator are underway.
As far as further expansion is concerned, Mr Von der Heyden remains cautious, especially given the recent turmoil on global financial markets.
"I hate to say that, but I was praying for the last 12 months for this to happen, and unfortunately it became reality. This is why we have disposed two large properties in our portfolio during the last seven months and feel ready to take advantage of good opportunities. We do invest indirectly in Romania, Russia, and Ukraine through stock exchange listed real estate companies who are currently trading at a heavy discount on their net asset value and have a strong presence in these markets. We are currently very actively investing in Germany and it amuses us a bit how many people run East while we run West. It remains to be seen which market eventually shows better returns on equity."
