conwert achieves record revenues in the first half of 2009

The business development of the publicly listed company conwert Immobilien Invest SE was characterised by a strong operating performance in the first half of 2009.

Mag. Peter Sidlo for conwert Immobilien Invest SE

Property Indicators, first half 2009. Source: conwert

Decidedly positive earnings could be achieved in the first as well as in the second quarter. conwert posted record half-year results in respect to revenues (+31% to EUR 227.91 million), earnings before interest, taxes, depreciation and amortisation (EBITDA, +16% to EUR 55.58 million) and cash earnings (Funds from Operations, FFO: +72% to EUR 44.44 million). This improvement primarily relates to the higher rental income and the increased proceeds from the sale of properties. The company expects an overall positive business development in 2009.

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Savills retained to market ultra-prime retail development opportunity

Savills, on behalf of a private US client, has been exclusively retained to market a portfolio of prime retail development sites on Mexico City’s preeminent shopping street for US$26 million.

Julia Dietrich (Diet-Rich-Consulting) for Savills

The three corner sites are all located within a 150 metre radius on Avenue Presidente Masaryk; each is approved for a self-contained two storey property. Totalling 32,226 sq ft (2,993 sq m), the sites are being offered by way of a joint venture agreement whereby the investor will assume 80% ownership and construction cost, with the remaining 20% held by the current owner.

Avenue Presidente Masaryk Mexico City. Image: Savills

The owner is developing and preleasing the properties working to a construction programme that will lead to completion by Q4 09.

Javier Kutz Clever of Savills Mexico says: “Masaryk is ‘the place’ the luxury brands want to be. Recognised by the domestic and foreign retailers, this particular retail destination has not been impacted by the global financial crisis, and it is particularly evident in the pre-let of the largest of the proposed units to an established luxury brand on a 10 year lease for its flagship Mexico store.

King Sturge Real Estate Economy Index: The Downturn has yet to Hit Rock Bottom

Germany: * Real Estate Climate loses 50 index months in five months, and now stands at 48.2 points * Serious decline of the Real Estate Economy down to 136.7 points

Robert Ummen for King Sturge Deutschland

The deterioration of the mood on the German real estate market continues unchecked. Admittedly, the November survey of the King Sturge Real Estate Economy index – being based on a monthly poll – suggests that the downward trend has slowed. Thus, the equally poll-based Real Estate Climate dropped from 55.4 index points the previous month down to the current low of 48.2 points.

Report

King Sturge Real Estate Economy Index November 2008

However, what is surprising when taking the annual development into account is the breakneck pace of the downturn. In just five months, the mood among the 1000 industry players regularly interviewed by the independent market research company BulwienGesa AG dropped by 50 index points. The most pessimistic market assessment reflects the downturn of the Real Estate Economy that is based on macroeconomic data, and that stood at 136.7 points in November (compared to 150.7 points the previous month).

“You hardly need a crystal ball to divine that the year 2008 is over, as far as business goes. Major deals are probably not to be expected anymore, to say nothing of large-scale transactions. What is more, many real estate projects have been put on the back burner or shelved altogether,“ observed Sascha Hettrich, Managing Partner of King Sturge Deutschland.

The all-time low of the Real Estate Climate, which dropped from 55.4 down to 48.2 index points in November, reflects the present state of paralysis the German real estate industry is in. The sombre mood can be traced back to the low Invest Climate most of all. The indicator for investment and purchase decisions hit a new record low at 35.7 points (compared to 41.3 the month before). This means that no major transactions are conducted these days. The Rental Climate, the second sub-indicator of the Real Estate Climate, remained relatively stable at 61.4 index points, down from 70.4 points in October. Then again, market players are expecting the rent and income development to deteriorate even in this area.

As in the month before, a steady cash flow and favourable refinancing options caused the residential real estate to remain the most stable segment even in November. Rising vacancy rates precipitated by the present economic development and the regressive consumer spending are reflected in a reticent ratings of the commercial, office, and retail sectors.

The Real Estate Economy, which is based on statistical ratios such as DAX, ifo, DIMAX, and interest rates, experienced a drastic downturn in November. It plummeted down to 136.7 points, which translates into a 9.3 percent decrease. In face of so serious a decline, business in 2009 is expected to start out slow.

“At the same time, there are indeed some bright prospects,” argued Hettrich. “For instance, the economic aid program launched in early November has earmarked funds for additional investments in infrastructure and building redevelopments. It is definitely a positive signal for the construction and real estate industry,” Hettrich added. “Naturally, there is always the chance that the program’s impact may turn out to be just a drop in a bucket.”

NAI Research-Spotlight of the week: Zürich – net yields still at up to 4% / prime retail location up to 7′500/SM/year

Zurich: The real estates consultation group NAI apollo lights up this week in collaboration with the international NAI network the real estate location Zurich.

Silke Hoffmann for NAI apollo

The Greater Zurich Area is the largest commercial region in Switzerland and is driven by the financial and industrial sectors. Renowned for its stability, quality of life and highly-skilled, multi-lingual workforce, Zurich attracts numerous multi-national corporations. Attractive tax packages and the relatively strong economy have ensured a comparatively sustained uptake in the market, resulting in an ever-shrinking available supply. In light of the recent global economic issues, growth is expected to slow and develop into a period of stagnation.

The NAI market report informs about the most important topical economic data and property market data as well as trends and future developments in the real estate segments office, retail trade and in the capital market.

The most important data about Zurich at a glance:

_ Foreign interest remains strong despite the current low lending availability to investors. However, the market is small and prime properties are in short supply. Swiss companies are able to make rapid decisions and generally make up the market’s principal purchasers; owner-occupation remains stable, with the majority of growth in the pharmaceutical, biotechnical and financial sectors. The first signs of the slowdown are in the reduction in volume; yields have barely decreased softened with and the net yields continue ing to lie at up to 4% for valuable real estate. transact a sub-4% for prime premises. Rents remain buoyant with persistent demand.

_ Prime office rents within the CBD are located along Bahnhofstrasse and surrounding streets, peak passing rents are around CHF 950/SM/year with rents falling off to about CHF 300 to 380/SM/year for quality, semi-fitted premises in non-core areas. Growth has been consistent, with companies such as Kraft Foods Europe, Google, Vifor (Galencia Group), and Credit Suisse taking occupation of large floor plates between the city and the airport. New developments are planned in Zurich West, including the Prime Tower and its annexes on the Maag Areal and to the north of Zurich.

_ Bahnhofstrasse is the prime retail location and counts major global brands among its tenants. This year has seen a number of newcomers with Apple’s new shop, Loro Piana and Blancpain. Although rents are traditionally around CHF 3’500 to 3’800/SM/year, deals have resulted in rents over 7’500/SM/year. The recent opening of the Sihl City shopping center in proximity to the center of town has added some 41,000 SM of retail space to the market and is almost fully let.

Merger of Hypo Real Estate Bank International AG into Hypo Real Estate Bank AG completed

Board Member and Chief Operating Officer Frank Krings “First step towards simplifying the Group structure” Hypo Real Estate Group has completed the previously announced merger of its two real estate banks today.

Hans Obermeier for Hypo Real Estate Group

The merger of Hypo Real Estate Bank International AG into Hypo Real Estate Bank AG became effective upon registration in the Commercial Register at the Munich local district court, with retrospective economic effect from January 1st, 2008. The company’s registered office is Munich.

The name of the new company will be Hypo Real Estate Bank AG. Board Member and Chief Operating Officer of Hypo Real Estate Holding AG, Frank Krings stated: “The merger of the two banks combines the real estate finance expertise of Hypo Real Estate Group in one legal entity. The merger is an important initial step on the way to simplifying and integrating the Group structures, at the end of which a more streamlined and less complex Hypo Real Estate Group will exist.”

Rockspring acquires Shopping Center in the spanisch Puerto Real

Andalucía: Rockspring, advised by Savills, has acquired Tres Caminos retail park located in Puerto Real, Cádiz for a price in excess of €20 million (£16.4 million).

Julia Dietrich (Diet-Rich-Consulting) for Savills

The 9,250 sq m (30,347 sq ft) retail park is let to tenants including Media Markt, Lidl, Kiabi and Merkal. It lies adjacent to a warehouse occupied by homeware retailer, Leroy Merlin.

Luis Espadas, head of retail investment department at Savills Madrid, says: “Rockspring has acquired the asset via a forward funding structure which was agreed in 2006. This structure was commonly used in 2004-2006 due to the lack of product and high prices. Nowadays purchasers are focused on existing mature product with a proven track record, at opportunistic prices”

Netherlands: Retail rents are stagnent

Netherlands: According to Savills latest retail report on the Netherlands, demand from large retail chains has bolstered the city centres and in high-streets up to 90% of all stores belong to a retail group.

Julia Dietrich (Diet-Rich-Consulting) for Savills

Whist overall purchasing power has been affected by rising consumer prices, the Dutch market has seen new international entrants such as Starbucks, Triumph, Desigual and Apple. These coupled with the desire of existing large retail formats including H&M, C&A, Esprit, Score and Bestseller to expand, have led to a rise in flagship stores. Of the current 27.2 million sq m sales areas, on average 7.5% is vacant against 7% last year. Furthermore this rate varies between 6% for large retail schemes and 9% for city centre units, mainly on B locations.High-street prime rental levels remain at average 1,000 sq m/year for medium-sized cities and up to 2,500 sq m/year in Amsterdam, which is a 3-4% annual rise over the past few years. However, due the economic climate these levels have remained stagnant since the beginning of 2008.

Report

.The Netherlands Retail Market

Jan Peter Hebly, managing director of Savills retail in Netherlands, says: Overall activity on both the investment and leasing markets has weakened considerably. There is considerable pressure on rents and yields in non-prime locations but high-street rents remain stable, due to strong national and international demand. We expect prime retail to keep outperforming the property market.

The report continues to outline the correction in the Dutch investment market, and confirm that overall this market will exceed the turnover of 2007 but in reality this is due to three significant deals, the largest being the Unibail-Rodamco portfolio which transacted at 775 million. Savills states that it does not expect a rise in investments before the end of 2010.

On the high-street yields have moved out 150 bps to 6.5% , while in the shopping centre sector the increase was 130 bps to 6.8%. In addition, prime rental warehouse yields have moved up to 7.5%, an increase of 125 bps.

AMB Property Corporation(R) Stabilizes Lyon, France Development With 264,000 SF Lease

France: AMB Property Corporation(R) (NYSE: AMB), a leading global developer and owner of industrial real estate, today announced it has stabilized its AMB Isle d’Abeau Logistics Park C development in Lyon, France with a 264,000 square foot (24,500 square meter) lease agreement with Wincanton, a leading European supply chain solutions provider.

Rachel E. M. Bennett for AMB Property Corporation

Lyon is France’s second largest metropolitan area and the primary distribution hub for goods entering Europe via the port of Marseille. The logistics park’s location serves one of the larger pan-European distribution networks due to its proximity to the main transportation access routes into Barcelona, Milan, Switzerland and Paris.

“Many customers in Europe are focused on time-critical decisions, and when their requirements call for well-located, Class A distribution facilities at key European trade hubs, we’re pleased they continue to turn to AMB,” said Mo Barzegar, AMB’s managing director, Europe.

“We approached our expansion in the Lyon region with great deliberation. While the leasing process might have posed a challenge for most real estate companies, AMB showed great commitment and integrity while working with us,” commented Egbert Maagd, Wincanton’s CEO for France. “In addition, the building location and functionality provides Wincanton with a strategic solution for our business in this region.”

As of September 30, 2008, AMB’s portfolio in Europe totaled more than 13.6 million square feet (1.3 million square meters) of operating and under development properties.

Italian Out-Of-Town Retail remains healthy, despite falling consumer confidence

Italy: Savills’ Autumn Italy out-of-town retail report reveals that despite the lower consumer confidence triggered by the global economic downturn, retailers continue to be active in Italy. This means that as development slows there will be strong retailer demand for existing shopping centres and retail parks with a focus on the quality of product.

Julia Dietrich (Diet-Rich-Consulting) for Savills

The report shows that retailer demand continues to be strong, particularly from international chains such as Fnac, Footlocker and Zara. Also some big box and fashion retailers are going into new retail parks around the country. Furthermore, Savills reports that development remains relatively robust and 10 new centres have opened this year with a further 1 million sq m (10.7 million sq ft) in the pipeline, although new openings are mainly the result of previously approved and financed schemes so pipeline developments are likely to slow.

Lionello Rosina, head of Savills in Italy, comments: “Although negative economic and financial conditions are causing uncertainty amongst retailers and investors, the Italian out-of-town retail market never reached excessive levels of oversupply, so we continue to expect successful trading for quality schemes.”

Prime shopping centre rents currently stand at €800 per sq m per year for units of 150 sq m (1,615 sq ft) and €300 per sq m per year for units totalling between 1,000 sq m – 1,500 sq m (10,763 sq ft – 16,146 sq ft).

On the investment front, as seen in other sectors, yields have softened and pricing levels are unclear. Wherever there may be potential purchasers, top quality available assets are in short supply. Susan Trevor-Briscoe, of Savills research, comments: “There continues to be a mismatch between vendors and purchasers’ expectations. Prime yields have undoubtedly moved out. But the extent of the yield shift, estimated on average at up to 100 basis points over a year, will be defined as activity recommences in 2009. Movement will be greater for secondary schemes, where as prime centres will be seen to suffer less.”

The report shows that the overall Italian economy is weakening: consumer prices increased by 4.1% in August 2008 and general spending is down. However it finds that retail trade increased by 2.1% in July 2008 compared to the previous year. Taking into account inflationary pressures, the value of retail sales from January to July 2008 was actually 0.1% lower than the same period in 2007.

There are currently about 795 shopping centres in Italy, totalling 11.6 million sq m (124.9 million sq ft). Shopping centres make up 88.7% of the out of town retail sector, with retail parks comprising 8.2% and factory outlets 2.9%. Distribution of out-of-town retail is not consistent across the country, with 59.2% of existing schemes located in the North and only 16.6% in the South, whilst Central Italy has a 24.2% share.

Looking forward, Savills predicts that the stalling of further development, along with the long planning process will mean that the sector will not suffer from oversupply. Prime rents are likely to remain stable at least for good quality schemes, where retailed demand will continue to be good. There will be ever more differentiation between primary and secondary quality schemes, as retailers looking to consolidate their brands seek quality locations.

Changes to the Supervisory Board of Hypo Real Estate Holding AG – Dr Michael Endres to be nominated as Chairman of the Supervisory Board

Changes to the composition of the Supervisory Board of Hypo Real Estate Holding AG will take place related to the provision of a liquidity facility by a financial consortium, Deutsche Bundesbank, and the German Federal Government.

Hans Obermeier for Hypo Real Estate Group

The Supervisory Board members who are independent from and unaffiliated to J.C. Flowers & Co. LLC and Grove International Partners LLP (who are both advising a group of investors) namely, Prof Dr Klaus Pohle, the current Chairman, Prof Dr Gerhard Casper, Mr Johan van der Ende, Dr Frank Heintzeler, Dr Thomas Kolbeck, Dr Pieter Korteweg, Mr Thomas Quinn, and Prof Dr Hans Tietmeyer, have resigned from office.

Dr Axel Wieandt. CEO Hypo Real Estate Holding AG. Image Hypo Real Estate

Hypo Real Estate Holding AG has submitted an application that Dr Michael Endres, Mr Bernd Knobloch, Dr Edgar Meister, Messrs Sigmar Mosdorf, Hans-Jörg Vetter, Bernhard Walter and Manfred Zaß be appointed to the Supervisory Board by court order at short notice.

The respective resolutions effecting these changes have been passed by the relevant court authority today.

It is planned that Dr Endres will be nominated as Chairman of the Supervisory Board.

The new members of the Supervisory Board are all experts with longstanding experience in the banking sector, including situations of corporate restructuring. Moreover, they represent the spectrum of institutions which have agreed to commit supporting the continued existence of Hypo Real Estate Group as a going concern, and the Group’s restructuring.

Dr Axel Wieandt, CEO of Hypo Real Estate Holding AG, commented: “On behalf of the entire Management Board, I would like to thank the retiring members of the Supervisory Board for their excellent, engaged and trusting cooperation, particularly during the weeks since my appointment to the Company’s Management Board.”

Vivacon AG increases EBIT by 230% to EUR 67.2m and net income by 108% to EUR 34.7m in Q3 2008

Vivacon AG (ISIN DE0006048911) generated revenues of EUR 47.6m following EUR 60.3m in the quarter of the previous year. EBIT improved by 230% to EUR 67.2m (Q3 2007: EUR 20.4m) and pre-tax profit reached EUR 50.5m following EUR 11.6m in Q3 2007. The market valuation of hedging instruments (inflation and interest swaps) has negatively influenced the pre-tax profit by EUR -6.1m (Q3 2007: EUR -2.5m). Net income reached EUR 34.7m compared to EUR 16.7m in Q3 2007.

Sven Annutsch for Vivacon AG

The acquisition of further ground lease portfolios with an annual ground lease cash flow of EUR 3.0m and especially the positive impact from the declined real interest rate level have contributed to the result improvement. Moreover the 43% revenue growth of the private investor segment has contributed to the solid group revenue growth.

The 9M 2008 figures look as follows: revenues amounted to EUR 126.1m (9M 2007: EUR 117.8m), EBIT resulted to EUR 87.1m (9M 2007: 39.2m), EBT was EUR 52.3m (9M 2007: EUR 33.2m) and net income reached EUR 34.7m following EUR 31.7m in 9M 2007.

In the 9M 2008, the undiluted EPS reached EUR 1.75 following EUR 0.86 in the same period of the previous year. Order backlog amounted to EUR 57.9m following EUR 117.7m at the end of September 2007.

Vivacon is currently in several negotiations about acquisitions of new ground lease portfolios as well as the disposal of real estate portfolios currently held for sale. At present, the German real estate market is characterized by significantly expanded negotiation processes and a strong decline in portfolio transactions due to the international financial crisis. Against the background of the difficult market environment and the uncertainty of future signing dates, the management board is not keeping up the previous communicated full-year net income guidance of EUR 60m.

Press release: DIC Asset AG braves the crisis, posting sound consolidated net income of EUR 18.5 million

DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the nine months of the 2008 financial year. The company withstood an increasingly challenging market environment, posting consolidated net income of EUR 18.5 million for the first nine months of 2008. DIC Asset AG has thus once again generated an attractive return of 13 per cent after taxes. Rental income was the main contributor to this result, with another strong (57 per cent) increase, to EUR 101.0 million (9m 2007: EUR 64.4 million).

Thomas Pfaff Kommunikation for DIC Asset AG

EBITDA (earnings before interest, income taxes, depreciation and amortisation) grew by a remarkable 32 per cent, to EUR 92.0 million (9m 2007: EUR 69.8 million). Cash flow from operating activities (after interest and taxes paid) rose by EUR 6.8 million, to EUR 29.3 million (9m 2007: 22.5 million).

FFO (funds from operations, earnings before depreciation and amortization, taxes and profits from sales, development projects and dividend income) was up strongly year-on-year, growing 32 per cent to EUR 38.9 million (9m 2007: EUR 29.4 million). FFO per share increased to EUR 1.24 (9m 2007: EUR 1.03). Operating profit before depreciation and amortisation (EBDA) thus rose by 4 per cent, to EUR 39.5 million, equivalent to operating profit per share of EUR 1.26 (9m 2007: EUR 1.32). Reflecting the development of consolidated net income, earnings per share declined to EUR 0.59 (9m 2007: EUR 0.83).

The decline in consolidated net income, to EUR 18.5 million (9m 2007: EUR 24.0 million) was predominantly attributable to a change in sales strategy, which was adapted to the prevailing market environment, as DIC Asset AG successfully focused on sales of small-to-medium sized properties, with smaller transaction sizes. In a market that was obviously difficult during the first nine months of 2008, a total of 12 properties with an aggregate value of EUR 56 million were sold.

Ulrich Höller CEO DIC. Image: DIC

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, commented on the results: “The high quality of our portfolio secures stable cash flows: clearly, this affirms our business model. Furthermore, we anticipate equity investor demand for businesses with sustained value once the current crisis is over. It is particularly during turbulent times – such as the situation we are currently experiencing – that our sound, long-term financing structure and our sustainable cash flows show their true value.”

The lower level of sales was the main contributing factor to a 16 per cent decrease in total revenues for the first nine months of 2008, to EUR 140.6 million (9m 2007: EUR 167.4 million). In contrast, the strong increase in rental income, to EUR 101.0 million (up 57 per cent), reflected the expansion in the real estate portfolio as well as successful letting activities. New rentals for a total of 158,300 square metres of floor space were contracted during the first nine months of 2008 – up 71 per cent on the same period in 2007, and equivalent to EUR 16.6 million in annual rental income. Rental income increased by approx. 1.5 per cent compared to the beginning of 2008.

DIC Asset AG further optimised its operating efficiency as it continues to grow the business, thanks to cost-cutting measures and economies of scale. Total expenses were reduced by 38 per cent, to EUR 69.6 million (9m 2007: EUR 111.4 million), mainly due to lower asset disposals reflecting the lower volume of sales. At the same time, the 39 per cent increase in staff and administrative expenses, to around EUR 11.0 million, was clearly lower than growth in rental income.

DIC Asset AG’s total assets increased by 4 per cent, to EUR 2.2 billion as at 30 September 2008, with net liquidity of EUR 69.2 million.

Long-term assets rose from EUR 1.9 billion at the 2007 year-end to EUR 2.1 billion. DIC Asset AG has secured its long-term financing: long-term fixed interest rate agreements are in place for 86 per cent of financial debt of EUR 1.6 billion, with close to 60 per cent having a maturity of over five years. Amounts due in the next 12 months only amount to approx. EUR 37.3 million (2.4 per cent), EUR 19 million (1.2 per cent) maturing in the next 1-2 years, and EUR 30.2 million (1.9 per cent) in the next 2-3 years.

Outlook: DIC Asset AG already achieved 90 per cent of its rental budget for 2008 after the first nine months, and expects to exceed its target level of 175,000 square metres of let floor space by the end of the year. At the same time, the company will continue to pursue its selling activities; given the prevailing market problems, it will focus on small-to-medium-sized properties. Taking into account the business performance seen to date, DIC Asset AG affirms its forecast published after the first half of 2008, expecting consolidated net income for the full year at an attractive level of between EUR 25 million and EUR 27 million. At EUR 54 million to EUR 56 million, full-year operating profit before depreciation and amortisation (EBDA) will be in line with the EUR 55.9 million figure reported in 2007.

Press Release HVB Group: Operating profit of €829 mn after nine months – Third quarter burdened by a further worsening of the financial market crisis – Excellent Tier 1 ratio of 15.3%

Nine months 2008 compared with the equivalent period last year: · Operating revenues declined by 35.4% in a difficult environment to €3,442 mn · Operating costs reduced by 4.5% (€2,613 mn) · Net write-downs of loans increased by 24.4% to €617mn · Profit before tax of +€70 mn
Claudia Bresgen for HypoVereinsbank

Today, HVB Group is presenting its results for the nine months ending September 30, 2008, and for the third quarter of 2008. The complete nine-month report at September 30, 2008, is scheduled for publication on the Internet on the Investor Relations website under www.hvb.de/ir on November 14, 2008.

Business performance in the first nine months of 2008:

The first nine months of fiscal year 2008 were characterised by a further significant intensification of the global financial market crisis. With the bankruptcy filing of the US investment bank Lehman Brothers in mid-September 2008, a global crisis of confidence emerged with negative repercussions for the entire banking sector. In this environment, counterparty risk climbed to hitherto unparalleled levels. The far-reaching crisis of confidence gave rise to substantial liquidity bottlenecks throughout the financial system, especially in the money market, which nearly came to a standstill. In addition, equity markets were characterised by massive price slumps; financial stocks suffered particularly abnormally high losses. In October, the effect of the financial crisis magnified, prompting central banks and governments to respond with an internationally co-ordinated bundle of measures to rescue and stabilise the financial sector from the difficult developments in the global financial system. These measures aim to provide the financial market with equity and liquidity alongside measures to ensure the sale of assets and deposit security protection from the German Government. HypoVereinsbank emphatically welcomes the Financial Market Stabilisation Programme, with the federal governments’ decisive, comprehensive and rapid response to the ongoing financial market crisis which has contributed to calming down the markets. Thanks to stable performance of the divisions not directly impacted by the financial market turmoil and its solid business model, HVB Group reported profit before tax of €70 million after the first nine months of 2008. In the third quarter of 2008, the extraordinarily difficult market environment resulted in a loss before tax of -€296 million or a net loss after taxes and deduction of minorities of -€258 million. The amendments to IAS 39.50 and IFRS 7 in the ‘Reclassification of Financial Assets’, in accordance with the IASB, with the approval of the European Union in mid-October 2008 into standard law has allowed the financial sector to reclassify specific financial assets from ‘Held for Trading’ and ‘Available for Sale’, provided that certain prerequisites are fulfilled (especially with changes in management intentions). In the third quarter, the HVB Group utilised these possibilities to reclassify financial instruments from ‘Held for Trading’ to loans and receivables for financial institutions and customers as of July 1, 2008, retrospectively. This reclassification had a positive effect on the income statement totalling €699 million before taxes. HVB Group’s operating profit of €829 million was also supported by the Retail, Corporates & Commercial Real Estate Financing and Wealth Management divisions which were not directly impacted by the financial market crisis and overall made satisfactory contributions amid an uncertain market environment. A pleasing trend is the excellent performance of the Corporates & Commercial Real Estate Financing division, which succeeded in increasing the high profit contribution already posted at the midyear mark of 2008. After the first nine months of the current fiscal year, the operating profit generated by this division had grown by a significant 6.6% year-on-year to €763 million. On the other hand, the results of the Markets & Investment Banking division, in particular, were adversely affected by the extremely difficult capital market environment, the considerable market turbulence and the collapse of various banks. The operating profit of -€469million was particularly affected by the negative trading result of -€801million. Other operating businesses (e.g. Fixed Income, Structured Equity, Financing and Capital Markets/Advisory) have, however, significantly positively contributed to the operating profit, in particular to net interest but also trading income. The division’s loss before taxes (-€848 million) was burdened not only by its faltering operating performance, but also by higher net write-downs of loans and provisions for guarantees and commitments, and negative net income from investments. The aforementioned reclassifications were reflected exclusively in the Markets & Investment Banking division, leading to a positive effect of €699 million on profit before tax. HVB Group posted a net loss after taxes and minorities of -€64 million after nine months. Owing to its strong capitalisation and diversified business model, however, HypoVereinsbank is solidly positioned, which is essential in this dramatic environment. Its Tier I Ratio stood at 15.3% at the end of September and is thus excellent by international standards. At 1.21 by the end of September 2008, the liquidity ratio of HVB AG as defined by the German Banking Act is ’solid’ in a challenging inter-bank-market and secures HVB Group well. Covered and uncovered financing funds are well-diversified in terms of both their maturity and their product diversification and credit quality. With this business model, its solid capitalisation and financial base and its strong market position in the key business segments, HVB Group is a reliable partner for customers and investors.

Dr. Wolfgang Sprissler, Board Spokesman of HypoVereinsbank. Image: HypoVereinsbank

Dr. Wolfgang Sprissler, Board Spokesman of HypoVereinsbank:

“Despite the severe turmoil on the financial markets in the current fiscal year, we generated a positive operating profit after nine months. This was only possible because of our welldiversified business model, as investment banking worldwide has gone through realignment since the collapse of Lehman Brothers, if not earlier. October was another very difficult month for the capital markets, making it impossible to establish a reliable business forecast. On the solid basis of our business model, our strong capitalisation and funding base, we are nevertheless firmly determined to remain a reliable partner for our customers in the future.”

Overview of figures for the first nine months of 2008:

Operating revenues amounted to €3,442million (9M/07: €5,327million), which corresponds to a decline of 35.4%. Net interest income, excluding dividends, rose by 2.6% to €2.877million. Net fees and commissions came to €1,118 million (9M/07: €1,340 million), which represents a decrease of 16.6%. Net trading income of -€819 million was heavily burdened by the trend in capital markets (9M/07: €857 million). Operating costs (€2.613 million) stayed significantly (4.5%) below the prior-year level (€2,737 million). Operating profit was pleasingly positive after nine months, coming to +€829 million from €2,590 million in the previous year. Net write-downs of loans and provisions for guarantees and commitments increased by 24.4%. Profit before tax was +€70 million, while net loss after tax was -€64million. Reclassification effects had an effect on net interest income, net trading income and risk provisioning through the effects of reclassification.

Press release Hypo Real Estate Group: Negotiations for a EUR 50 billion liquidity facility for Hypo Real Estate Group completed

* Provisional pre-tax loss of approx. EUR 3.1 billion in the third quarter of 2008, including write-offs of approx. EUR 2.5 billion on intangible assets (DEPFA) * Further negative impacts on earnings expected in the fourth quarter of 2008 and in 2009 * Application for support from SoFFin being prepared

Hans Obermeier for Hypo Real Estate Group

Hypo Real Estate Group and a financial consortium, Deutsche Bundesbank, and the German Federal Government have finalised the announced EUR 50 billion liquidity facility, which has been partially guaranteed by the Federal Government. The relevant legal documentation has been signed, or is ready to be signed. The funds under the facility will be made available as and from 13 November 2008.

Subject to an extension of the Federal guarantee beyond 31 March 2009, the liquidity facility has a term maturing on 31 December 2009. In line with EU regulations, the Federal guarantee will initially have a term maturing on 31 March 2009. Hypo Real Estate Group will approach the Federal Government in due course in respect of an extension of the Federal guarantee beyond its initial term.

In accordance with the contractual agreements, the costs of the liquidity facility will be equivalent to 93 basis points per annum (p.a.) over three-month Euribor (based on today’s reference interest rates). In addition, a debtor warrant (Besserungsschein) involving costs of a further 90 basis points p.a. on average has also been agreed which has to be paid over a seven year period on a cumulative basis to the extent the Group generates a pre-tax profit provided that payments will be capped at EUR 100 million p.a. in the years 2009-2011, and at EUR 150 million p.a. in the years 2012-2015.

Hypo Real Estate Group is providing collateral of EUR 60 billion (comprising loans and securities) to secure the liquidity facility. In addition, Hypo Real Estate Holding AG has pledged its shares in the Group’s operating bank subsidiaries as collateral for the Federal guarantee.

The negative consolidated loss of Hypo Real Estate Group in the third quarter 2008 arising in the environment of a worsening global financial crises amounts to EUR 3.1 billion determined on the basis of numbers not finally discussed with the Supervisory Board. This negative result is largely attributable to the complete write-off of approx. EUR 2.5 billion of goodwill and other intangible assets recognised at Hypo Real Estate Holding AG that have arisen as a result of the first-time consolidation of DEPFA. These are impairments of book values which do not result in any cash outflows. Since the DEPFA goodwill and the intangible assets had already been deducted in the past for the purposes of reporting regulatory core capital, such losses will not reduce Hypo Real Estate Group’s core capital ratio. Further costs totalling approx. EUR 600 million recognised in income for the third quarter of 2008 were due to various factors, including the consequences of the collapse of Lehman Brothers, the situation in Iceland, a further impairment relating to the investment in Babcock & Brown and other losses in value relating to the CDO holdings of Hypo Real Estate Group. In addition, in view of the deterioration of the real estate markets, an additional amount of approx. EUR 100 million in portfolio-based allowances was recognised. The core capital ratio of the Hypo Real Estate Group (according to BIS rules) was 6.8 per cent as at 30 September 2008 (including market risk positions, 30 June 2008: 8.2 per cent). For the fourth quarter, Hypo Real Estate Group expects that results will be negatively affected as a result of the costs of the agreed liquidity facility including the additional costs for bridging the liquidity shortage until 13 December 2008 by Bundesbank which is being guaranteed by the Federal Government and the German Financial Markets Stabilisation Fund (Finanzmarktstabilisierungsfonds, “SoFFin”), as well as expenditure in conjunction with the necessary restructuring and repositioning of the Group. Overall, the market environment remains difficult. The costs of the EUR 50 billion liquidity facility and the restructuring will also impact on results for 2009.

Hypo Real Estate Group will postpone the presentation of its complete interim report for the period ending 30 September 2008 from 12 November 2008 (as originally announced) to 17 November 2008.

As already announced on 29 October 2008, in addition to the liquidity facility, Hypo Real Estate Group is seeking further extensive support from SoFFin. This support is intended to cover both additional liquidity and any significant capital requirements. The granting of such support by SoFFin forms the basis for the necessary restructuring and repositioning of the Group. Hypo Real Estate Group is currently preparing the relevant applications to SoFFin.

AMB Property Corporation(R) Leases 139,000 SF in Two Build-To-Suit Developments at Amsterdam and Houston International Airports

AMB Property Corporation(R) (NYSE: AMB), a leading global developer and owner of industrial real estate, today announced it has leased 139,000 square feet (12,900 square meters) in two build-to-suit developments at Houston’s George Bush Intercontinental Airport and Amsterdam Airport Schiphol.

Rachel E. M. Bennett for AMB Property Corporation

“This latest round of build-to-suit activity highlights the strength of our customer franchise at key air cargo hubs, as well as the need for high-quality airport-adjacent space, even in today’s slower economy,” said Hamid R. Moghadam, AMB’s chairman & CEO.

Forward Air has leased 71,000 square feet (6,600 square meters) of the AMB IAH Logistics Center III build-to-suit development next to Houston’s George Bush Intercontinental Airport. “With its strategic location near Houston’s international airport, AMB IAH Logistics Center III is the ideal facility to accommodate our expanding business,” commented Matt Jewell, executive vice president at Forward Air. AMB previously has completed 256,000 square feet (23,700 square meters) of build-to-suit-for-sale developments for the U.S. air freight forwarder.

Proximate to Amsterdam Airport Schiphol, AMB leased 68,000 square feet (6,300 square meters) of the AMB President Distribution Center build-to-suit development to IDEXX Laboratories BV. “As a current customer of AMB, we turned to them for our future facility requirements,” said Jon Ayers, president and CEO, IDEXX Laboratories, Inc. “AMB has worked closely with us to accommodate our growing customer base in Europe and has provided us with a facility solution that also positions us to compete more effectively in the international arena.”

NAI apollo Berlin brings legal advice to the central location

Berlin: NAI apollo – independent real estate consulting group and partner of the worldwide biggest network NAI Global for the entire German market – has consulted the lawyer Claudia Räthel in the decision for a central located office for the merger of three partners.

Silke Hoffmann for NAI apollo

The lawyer Claudia Räthel rents 170 sqm office space in the Brückenstrasse 4 in 10179 Berlin, central district. Lessor is the readybank ag.

Fair Value REIT-AG records sustained increase in rental results with solid longterm financing structure

Germany: • Revenues of € 10.3 million in the first nine months of 2008 • Consolidated net income after nine months totals around € 1.4 million • Funds from operations (FFO) up to € 0.28 per share • Economic equity amounts to 51% of immovable assets

Dirk Stauer (cometis AG) for Fair Value REIT-AG

Fair Value REIT AG has continued its positive growth in the first nine months of the current fiscal year according to preliminary figures. From January 1 to September 30, 2008 the company recorded revenues of € 10.3 million, of which around € 7.6 million stemmed from the fully consolidated majority interests in five closed-end real estate funds. In addition, Fair Value generated a further € 2.7 million from its portfolio of directly held properties. As of September 30, 2008 the net rental result totaled € 8.0 million.

At the same time, Fair Value REIT-AG also holds minority participations in a current total of eight closed-end real estate funds (associated companies). This resulted in income of € 2.2 million in the first nine months of 2008, which was booked as income from equity accounted participating interests in the financial result. After minority interests and net interest expense the financial result totaled € -2.1 million.

According to IFRS, Fair Value REIT-AG recorded consolidated net income of € 1.4 million in the first nine months of 2008, of which € 580 thousand stemmed from the third quarter alone. As a result, earnings per share totaled € 0.15 as of September 30, 2008.

Frank Schaich, Fair Value REIT-AG’s CEO, has a positive view of the operative development: “Our business is currently running better than expected. The office property Airport Office II in Düsseldorf, which was completed in the third quarter, is now fully let and in future it will contribute around € 1.1 million to revenues each year. Consolidated net income (IFRS) totaled € 1.4 million, exceeding our forecast for the first nine months.” In particular, the CEO highlighted the portfolio’s great earnings strength: “After adjustment for changes in valuation and extraordinary income, funds from operations (FFO) as of September 30, 2008 totaled € 2.6 million. This corresponds to FFO per share of € 0.28.”

The successful business in the first three quarters is also reflected in Fair Value REIT-AG’s balance sheet. Compared to December 31, 2007, total assets increased slightly to € 233.3 million. The company’s equity thus totaled around € 94.8 million on the balance sheet date, after taking a reserve for changes in the value of interest hedges into account. This resulted in net asset value (NAV) per share of € 10.08.

In addition, Frank Schaich underscored the high equity backing of the immovable assets and the solid financing structure: “Including minority interests in our subsidiaries, our economic equity totaled 51% of immovable assets totaling € 227 million. Around 84% of our bank loans including our participations in associated companies are fixed over the long term with an average remaining term for fixed interest rates of 5.5 years. Interest rates average 5.98% of all loans taken out and are partially hedged by derivatives. Only around 16% of bank loans have variable interest rates.” As a result, Fair Value REIT-AG has a solid long-term financing structure and is mostly independent of the current situation on the credit markets. In view of the excellent operating growth and the strong financial basis, the Managing Board believes that it will be possible to achieve the targets for the current fiscal year subject to the market valuation of the properties and financial liabilities at the end of the year.

Corporate News Vivacon AG

Nordrhein-Westfalen: Vivacon AG (ISIN 000604 8911) via special purpose vehicles has placed a third securitization of ground lease cash flows from its inventory.

Maren Nolte for Vivacon AG

The total transaction volume amounts to EUR 90m and the securitized ground lease cash flows to EUR 4.29m p.a. The resulting refinancing multiple of 21.0x corresponds to a loan to value of 58% of the assessed ground lease market value according to the respective appraisal. The securitized ground leases relate to 7,953 residential and commercial units. Fitch rated the complete transaction with AAA.
As with the two previous securitizations, the third securitization is also a Commercial Mortgage Backed Securities-Bond (CMBS) transaction. The term of the securitization is 7 years.

Including the two previous securitizations in 2006, the total transaction volume of the three securitizations amounts to EUR 269.5m with an underlying ground lease cash flow of EUR 12.1m p.a. The securitized ground leases relate to 22,954 residential and commercial units in total.

The placement of this transaction in the current difficult capital market environment as well as the AAA rating of the complete tranche underpins the high quality of the underlying ground lease cash flows: ground leases represent 100% CPI-indexed and generally 198 year dated cash flows. They are secured by a first ranking lien in the ground register and incur almost no operating expenses.

The proceeds which the company will receive at closing will be mainly used to repay the acquisition financing, short-term liabilities as well as for the acquisition of further ground lease portfolios. The closing is expected in the next few days.

Maren Nolte for Vivacon AG

Danish Real Estate Fund buys five residential and commercial properties in the city centre of Frankfurt at brokering of NAI apollo

Hessen: The Danish real estate fund Ejendomsselskabet has bought 5 residential and commercial properties in the city centre of Frankfurt.

Silke Hoffmann for NAI apollo

The 6.532 sqm large residential and commercial areas are fully let and are divided into 43 apartments and 6 commercial units. NAI apollo acted as consultant exclusively.

NAI apollo relies on competence and experience: Reiner Zacharias reinforced the investment team of NAI apollo

Nordrhein-Westfalen: Trend of universal brokers at individual location to international consulting companies with widely ramified branch network

Silke Hoffmann for NAI apollo

NAI apollo expands its competence at the location in Düsseldorf: With around 100 employees, six offices in Germany and a team of experts with decades of experience NAI apollo belongs to one of the leading independent real estate consulting groups in Germany. Simultaneously NAI apollo is the partner for the entire German market of the worldwide largest network of owner-operated real estate companies, NAI Global. As one of the leading providers of commercial real estate services, NAI Global manages a network with 5000 experts and 325 offices in 55 countries worldwide. In order to accomodate the increasing requirements of NAI-clients in the national and international investment area and to satisfy the demand for networked consultation, Reiner Zacharias (59) reinforces the investment team of NAI apollo as Senior Consultant since October 2008. Reiner Zacharias successfully operates in the German Investment market since approximately three decades and stands for numerous important national and international transactions. Reiner Zacharias operates from the NAI apollo location Düsseldorf and reinforces the nationwide activities of the group.

“The expansion of our real estate consulting group is very dynamic since 2005″, says MRICS and CEO Axel König to the commitment of Reiner Zacharias. “Reiner Zacharias is an outstanding investment expert, who brings with him a longtime experience from varied real estate segments at the location North Rhine-Westphalia. With his dedication as well as our German and international teams we can continue our determined offensive in the expansion of the investment sector.”

“The requirements of our clients in a global world clearly move away from a ‘universal broker’ who is present at individual locations”, says Reiner Zacharias, “to international consulting companies with widely ramified branch networks and widespread service offers and customer relationships. NAI apollo is an ambitious and dynamic company with profound knowledge and affiliation to a stable national and international network.”