Annual Report 2016-2017

Portfolio Germany

Portfolio development

The portfolio continued to perform positively over the past twelve months. Asset management actively worked on further improving the letting situation in view of Züblin's intention to sell the German portfolio. The expected fall in annual rental income due to the termination of a major lease in Hamburg was partially compensated by new lettings. Annual rental income declined by EUR 0.2 million compared to the prior year. The economic vacancy rate rose from 6.4% to 10.8%.

At the property in Stuttgart, Mittlerer Pfad 9, the lease agreement with long-term tenant Bosch was extended in terms of space and duration. Bosch is now leasing the entire property for a term of ten years starting from the completion of the tenant fit-out. This results in a weighted average lease term (WALT) of eleven years for the property. In Stuttgart, Mittlerer Pfad 2-4, further new lettings were agreed and rental income rose by 9% during the reporting period. The lease agreement with the main tenant Panalpina in Hamburg, Nagelsweg 37-39, was extended by five years on the basis of reduced space. The newly vacant space enabled us to exploit the current strong demand for office space in the Hamburg sub-market of City-Süd. We signed a new long-term tenancy agreement for ten years with the tenant “BAD”, which has also helped to diversify the tenant structure. The WALT of this property is about five years. By extending two leases in Germering, Streiflacher Str. 7, WALT rose to over six years.

Market development

Office properties were the most important asset class in 2016 with a transaction volume of EUR 23 billion, contributing 44% to commercial investment turnover. Investment demand remains very strong due to the continuing record highs in the letting market. Office space turnover within the eight most important German office locations totalled 3.7 million m2 in 2016, up 7% on the previous year and the highest figure ever recorded.

The market outlook for 2017 is for a continuation of the strong uptrend of recent years combined with stable economic growth. Employment is at record levels and unemployment has fallen steadily which creates a very strong underpinning for the office real estate market in Germany.

Based on the good economic backdrop and favourable real estate market environment the Board of Directors has decided to take advantage of this opportunity and realize the portfolio values at their current attractive levels. A transaction is currently being negotiated with the aim of closing the deal within the first half of the new financial year. The targeted sales price for the German portfolio is around CHF 13 million higher than the appraised value which underlines the attractiveness of the transaction for Züblin and its shareholders. The German portfolio is therefore presented as discontinued operation in the annual report.

Portfolio overview

CHF/EUR in million31.3.201731.3.2016
   
Market value in CHF158.7135.4
Market value in EUR148.4123.9
Annual rental income in CHF10.711.1
Annual rental income in EUR10.010.2
Vacancy rate10.8%6.4%

Major tenants

TenantSector % share of annual rental income
  Portfolio GermanyTotal
    
Bosch Group, StuttgartTechnology13.5%7.6%
Panalpina Welttransport (D) GmbH, HamburgLogistic5.6%3.2%
Alpine Electronics GmbH, StuttgartTechnology4.9%2.8%
Level 3 Communications GmbH, StuttgartTechnology2.5%1.4%
Rechenzentrum Land NRW, DüsseldorfGovernment1.8%1.0%
Total 28.4%16.1%

Lease contract analysis EUR in million

Prop. No.City, addressProperty certificatesZüblin EMSDate of acquisitionYear of construction/ renovationAnnual rental income CHF 1000Vacancy (CHF) %Capitalisation rate in %Discount rate (nominal) %OwnershipPlot size m2Office m2Retail m2Trade/ logistics m2Other space m2Total usable space m2Vacancy m2Vacancy (m2) %No. of parking spaces
Investment category Office                 
6Hamburg, A.-Einstein-Ring 17-21 1.1.199919921 45526.67.508.757 53813 59034013 9303 81427.4246
7Hamburg, Nagelsweg 37, 39 1.1.199919861 19716.16.256.754 6168 8734909 3631 53416.4191
8Hamburg, Wandsbeker Zollstr. 11-19  1.1.19991970 20029514.66.007.252 9016 5317827 3133284.5100
 Total region of Hamburg   3 60218.2   15 05528 9941 61230 6065 67618.5537
                    
9Dusseldorf, Rossstrasse 96 1.11.20011984 20091 0830.86.507.751 3156 393466 439190.375
10Dortmund, Hansastrasse 30DGNB 1.7.20041986 20115049.86.007.006273 0155442863 84540510.50
11Witten, Marktstrasse 2  1.7.200420024156.46.758.256871 7801 1106203 51067319.20
 Total region of Dusseldorf    2 0024.4   2 62911 1881 65495213 7941 0978.075
                    
12Stuttgart, Vor dem Lauch 14  1.1.200019829558.48.509.006 8807 7885473338 6681 02311.8180
13Stuttgart, Mittlerer Pfad 2-4  1.12.200019912 0641.86.507.508 52115 81671016 5262041.2414
14Stuttgart, Mittlerer Pfad 9  1.6.2000199183018.26.006.003 6207 3483751237 8451 59720.4121
 Total region of Stuttgart    3 8497.4   19 02130 9529221 16633 0392 8248.5715
                    
15Wiesbaden, Kreuzberger Ring 24  1.8.200120014784.67.508.002 3723 631773 7082286.198
16Munich-Germering, Streiflacher Strasse 7  1.3.200219994060.06.007.252 5122 9544493 4032697.970
 Total others regions    8832.5   4 8846 5855267 1114977.0168
                    
 Total office    10 33710.6   41 58977 7191 6549224 25684 55010 09411.91 495
Investment category Retail                  
17Marl, Marler Stern 1-80  1.7.2004197432015.710.0012.502 222-2 5632 56348719.00
 Total retail    32015.7   2 222-2 563-2 56348719.0
                    
 Total German portfolio    10 65710.8   43 81177 7194 2179224 25687 11310 58112.11 495

Ownership of 100% DGNB Deutsche Gesellschaft für Nachhaltiges Bauen

Energie-Monitoring-Systems (EMS) existing

Energie-Monitoring-Systems (EMS) in planning

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Annual Report 2016-2017

Annual Report 2016-2017 (6.23 MB)