Monday, July 12, 2010

Interview: Mr. Andreas Martin, Head of International Acquisitions & Sales, Deka Immobilien Investment GmbH

The DekaBank Group, owned by savings banks and Landesbanken (Federal State banks), is the largest provider of open-ended real estate funds in Germany. The Groups two investment companies, Deka Immobilien Investment GmbH and WestInvest Gesellschaft fuer Investmentfonds mbH, have a total of more than 21 billion euro in assets under management. Deka Immobilien GmbH is affiliated with these companies and is responsible for global real estate purchases and sales, real estate asset management, and all other real estate services, including product development.
Bundling the Groups real estate services in Deka Immobilien and streamlining and simplifying organizational processes has generated large synergy effects that provide a win-win situation for all parties involved.

As noted by Andreas Martin, Head of International Acquisitions & Sales, while the two capital investment companies concentrate entirely on their core tasks of fund management, risk management and fund controlling, Deka Immobilien powerfully combines the functions of property acquisition and sale, real estate and resource management, and development of additional innovative products.
“Because we leverage this concentrated clout in the world’s real estate markets, backed by our own meticulous market research, we are a sought-after business partner. This in turn helps us continually improve the performance of our products and strengthen our leadership in the market for german real estate mutual funds,” he said.
This means that market participants have access to an even broader range of properties, offering attractive rental space in the office, shopping, logistics, distribution and hotel sectors.
The company's activities in the most liquid international real estate markets are represented by more than 410 offices, retail properties, hotels, shopping centers and logistics centers in 23 countries on four continents.
'We represent an international network of specialists providing the highest level of expertise and professionalism. For over 40 years, Deka Immobilien has been the acknowledged market leader with innovative products based on high standards of quality and transparency. Not only do we lead in the field of mutual funds and have set the standards for individual property funds and special funds for institutional investors, but also, our offerings have been confirmed by premium ratings — for the quality of both our products and our management.”
Properties are purchased on the basis of stringent return and quality criteria. The knowledge of local markets and leading market research ensures the quality of decisions during a timely, clearly structured and rapid investment process, he said.
Through the two capital investment companies, Deka Immobilien also offers a wide range of
open-ended mutual funds for private investors and special and individual funds for institutional investors. These two companies completely run all the property funds, managing their portfolios and performance.
“Besides these established investment products, we offer a variety of 'fund of property funds' models that are developed in collaboration with the FoF specialists of DekaBank/ Deka Investment GmbH. These products range from approaches based predominantly on German open-ended property funds all the way to international value-added and opportunity funds of funds, offering a wide spectrum of opportunity/risk profiles.”
Speaking on the company's investment strategy, he noted that all purchases and sales are systematically aimed at acquiring high-return properties for the Groups two investment companies and selling properties that no longer conform to its portfolio strategy.
He noted that along with very quickly and professionally handling large-volume acquisitions and sales in all of the world’s major real estate markets, the company also provides professionally organized financing services to other investors.
The advantages this generates for purchasing assets benefit millions of private clients, as well as institutional investors, insurers, pension funds, and savings and loan banks.
“We make all of our investments on the basis of thorough macro and micro research. For many years we have had our own in-house economics team for this, which has earned
various kudos from the market, as well as an international network of leading real estate consultants.”
Speaking on the worldwide acquisitions of the company, he noted that the center of activity is mainly properties in commercial agglomerations, preferably with long-term lease contracts. Those are predominantly: Office buildings/Commercial buildings; Shopping Centers; Industrial Parks; Hotels; Logistics Centers; Real Estate of Mixed Usage and Premises with Potential for Development. The company also develops Projects for the public sector and let them long-term to authorities generally to relieve public budgets.
The properties are purchased on the basis of demanding return and quality criteria. The familiarity with local markets and market-leading research ensure high-quality decisions as part of a systematic, clearly structured and speedy investment process. The process of buying and selling properties plays a very important role in active portfolio management of the kind practiced by Deka Immobilien. In order to hold onto existing clients and win new ones, property investments have to yield convincing returns, he noted.
“We achieve this not only through innovativeness and clout for making acquisitions and sales, but also by excellently managing the properties belonging to our funds. Our real estate management service package also includes first-rate building management and maintenance.
The focus is on ensuring long-term success for both investors and tenants, who profit from our size, market prominence and global positioning.”
In this context he noted that the company recently sold the fully let office property Eugene Investment & Securities Building in Seoul, for around 123 million euro. The closing of the transaction took place on May 31st.
Michael Endres, Senior Investment Manager, International Acquisition & Sales, noted that the building has been acquired by the Korean Public Officials Benefit Association, a semi-governmental fund company which manages the pension funds of civil servants.
Located in the city's Yeoido business district, the property has been held in the portfolio of the Deka-ImmobilienGlobal open-ended mutual property fund since September 2004. With an investment volume of almost 70 million euro in 2004, the price now achieved on the sale was around 30% higher than the current appraised value of approximately 95 million euro.
He explained that after uncertainty in the capital markets last year facilitated the exploitation of investment opportunities, the recovery already evident in some markets can now be used to realize sales at a profit. The total floor space of the property of around 40,000 sqm is let almost entirely to Eugene Investment & Securities on the basis of a long-term agreement.
“The sale of the property forms part of active portfolio management. In addition to the successful disposal of properties at a convenient moment, this includes acquiring properties of first-class quality in prime locations and value-enhancing property management,” he said.
Martin said that Korea continues to be an attractive market for the company, and investments will continue, even as some of the assets are flipped when the timing is right.