ANNUAL REPORT 2006 - DG Hyp

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COMMERCIAL REAL ESTATE FINANCE On the whole, the market for commercial real estate in Germany enjoyed positive growth in the 2006 financial year. The most important trend compared to previous years is the significantly greater proportion of foreign investors. Last year, for the first time, they invested more than all of the German investor groups together. At the start of this shift, these investors were mostly US or UK funds; however, investors actively participating in the German market now include players from a range of other European countries (including Scandinavian nations, France, Spain and Switzerland) as well as Australia and Canada. At the same time, competition between banks for commercial real estate finance heated up once again. Several German competitors have returned to the German real estate market. In addition, international competitors are increasingly forcing their way onto the market, with the REAL ESTATE LENDING PORTFOLIO, BY REGION (31 DEC 2006) Rhineland- Palatinate Schleswig-Holstein Saxony-Anhalt Saxony Saarland North Rhine- Westphalia Thuringia International Business Lower Saxony Baden-Württemberg Hesse Bavaria Berlin Brandenburg Bremen Hamburg Mecklenburg- Western Pomerania 20 Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2006 Management Report aim of gaining a foothold as the commercial sector in Germany takes an upturn. Given this background, latitude was limited in terms of both volume and margins. Office buildings The European market for office properties benefited from positive economic growth in the euro zone and in the United Kingdom. After the difficulties of the past few years, this positive market growth is characterised by increasing prices, high office space turnover and the lowest vacancy levels since 2003. On the German market in particular, in top locations such as Hamburg, vacancy rates are falling slightly and topof-the-range rent is rising. In total, it can be seen that the positive trend enjoyed in 2005 continued during the 2006 financial year. in % Baden-Württemberg 9.4 Bavaria 10.0 Berlin 7.8 Brandenburg 3.9 Bremen 0.5 Hamburg 3.4 Hesse 7.7 Mecklenburg-Western Pomerania 2.9 Lower Saxony 14.9 North Rhine-Westphalia 15.3 Rhineland-Palatinate 3.3 Saarland 0.4 Saxony 3.9 Saxony-Anhalt 2.3 Schleswig-Holstein 8.8 Thuringia 1.6 International Business 3.9 TOTAL 100.0
Management Report Commercial buildings Despite the increase in prices, there is continued high demand from international investors for commercial properties in Germany and Europe. This trend is mostly driven by the fact that attractive returns can still be generated as a result of the current favourable financing conditions. US investors clearly dominate the market, accounting for 66 per cent of the volume of transactions. Buyers from the United Kingdom (12 per cent) and Germany (6 per cent) accounted for a far lower proportion of the total investments. REAL ESTATE LENDING PORTFOLIO, BY TYPE OF PROPERTY (31 DEC 2006) Offices and administrative buildings Healthcare Trading/ retail properties and storage Hotels Commercial housing Agricultural projects Other commercial properties Manufacturing industry Residential properties Manufacturing industry in % 0.9 Residential properties 63.3 Commercial housing 10.7 Hotels 1.3 Trading/retail properties and storage 9.3 Healthcare 1.2 Offices and administrative buildings 8.8 Agricultural projects 1.7 Other commercial properties 2.8 TOTAL 100.0 In this regard, investors are increasingly focusing on smaller and medium-sized towns with good connections to the big cities, which enjoy comparatively modest rents and purchase price multiples. Demand is focusing on individual properties in 1a locations as well as shopping centres, specialist retail store centres, business parks and supermarket portfolios. Commercial housing In view of demographic growth, the centres of Germany’s big cities in particular are increasingly attractive for commercial housing. Investor interest is focused less on the new construction of apartment blocks, but rather on existing housing properties. Here, there is demand from foreign investors in particular for portfolios, with larger deals having become more scarce and the number of small transactions increasing. Modernisation activities are being driven further by the commercial housing sector. Profit opportunities can be found, particularly in top quality stocks of housing suitable for retired persons. Logistics properties The European logistics property market has gained significantly in importance over the past few years. The volume of transactions increased, from € 3.8 billion in 2000 to more than € 10 billion in 2006 – up 160 per cent in six years. Germany benefits from its location at the heart of Europe. In the first three quarters of 2006, € 1.7 billion was invested in German logistics properties, almost the same amount as in the whole of 2005. Hamburg holds the top rank for sales of logistics space, with significantly in excess of 400,000 m 2 . This is followed by Frankfurt (around 300,000 m 2 ), Munich (approx. 250,000 m 2 ) and Dusseldorf (around 260,000 m 2 ). Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2006 21
Page 1 and 2: Deutsche Genossenschafts-Hypotheken
Page 3 and 4: CONTENTS Letter from the Management
Page 5 and 6: In the past few years, DG HYP has s
Page 7 and 8: PROPORTION OF RESIDENTIAL REAL ESTA
Page 9 and 10: DEVELOPMENT IN DEMAND FOR RESIDENTI
Page 11 and 12: From DG HYP’s perspective, immo e
Page 13 and 14: Active portfolio management as a ke
Page 17 and 18: Management Report The sales drive f
Page 19 and 20: Management Report RESIDENTIAL REAL
Page 21: 1 2 3 1 2 3 Office Building “Kant
Page 27 and 28: Management Report Overall, new port
Page 29 and 30: Management Report LOCAL AUTHORITY L
Page 31 and 32: Management Report REFINANCING STRUC
Page 33 and 34: Management Report FINANCIAL SITUATI
Page 35 and 36: Management Report Costs development
Page 37 and 38: Management Report strategy, monitor
Page 39 and 40: Management Report c) Credit scoring
Page 41 and 42: Management Report DG HYP VaR (10-DA
Page 43 and 44: Management Report A system for coll
Page 45 and 46: Management Report NUMBER OF EMPLOYE
Page 47 and 48: Management Report Business Developm
Page 49: FINANCIAL STATEMENTS Financial Stat
Page 52 and 53: ASSETS BALANCE SHEET 31 Dec 2005
Page 57: PROFIT AND LOSS ACCOUNT FOR THE PER
Page 60 and 61: Notes to the Financial Statements N
Page 62 and 63: Notes to the Financial Statements N
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Notes to the Financial Statements (
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Notes to the Financial Statements N
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Notes to the Financial Statements C
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Notes to the Financial Statements A
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Notes to the Financial Statements A
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Notes to the Financial Statements O
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Notes to the Financial Statements (
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The following is an English transla
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In regular discussions with the Cha
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Corporate Bodies and Committees; Ex
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Corporate Bodies and Committees; Ex
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ANNUAL REPORT 2006 - DG Hyp

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