18/12/2008 | Corporate News
Fair Value REIT-AG sells office property "Airport Office II" in Düsseldorf
73• Profits of € 1 million recognized in income generated by sale
• Spanish group of investors acquires property as of the end of the year
Munich, December 18, 2008 – Fair Value REIT-AG has sold the office property "Airport Office II" in Düsseldorf. The property, which is located in direct proximity to Düsseldorf International Airport's terminal building, changes hands for a purchase price of around € 15.3 million. Fair Value REIT-AG first acquired the property, which was then under construction, in October 2007. The successful sale means that according to IFRS the company records profits recognized in income of around € 1 million after selling costs have been deducted. The property has been bought by a group of Spanish investors, with ownership, risks and rewards being transferred at the latest by December 30, 2008.
Frank Schaich, Fair Value REIT-AG's CEO, explains the background to the transaction: "The location and the anticipated demand from tenants convinced us from the very outset. That is why we bore the entire rental risk for this property ourselves when we acquired it. Back in September 2008, just three months after its completion, contracts were already concluded for all of the office space and parking lots. As we believe that, given the current situation on the market, it is important to document this success by recording profits, we engaged Jones Lang LaSalle to market the property to international investors after they successfully assisted in fully letting the property."
The successful sale of the property underscores Fair Value REIT-AG's competence in creating value even on a difficult market. "We were able to exceed our original forecast for contractual rent by 9% - which is a key factor behind the attractive purchase price we have now generated. This was a highly profitable investment for our company, with a total return of around 20% of the equity invested," Frank Schaich went on to say. “The sale will cause our equity ratio under Section 15 of the German REIT Act to increase on the balance sheet date. The proceeds will also increase our latitude to exploit investment opportunities by using the exit tax privilege.”
2008
