The Real Estate division manages and optimizes Werhahn's commercial property holdings. Its portfolio is weighted heavily toward real estate in good to prime locations in greater Cologne and Duesseldorf, the Rhine-Main region and Berlin. The Neuss-based division also offers consulting in corporate real estate management (CREM) for all divisions of Wilh. Werhahn KG. CREM identifies mission-critical and non-mission-critical properties and develops or disposes of them according to their strategic importance.

Location is key to success

The Real Estate division is concentrating its activities on the management of its own properties in Germany. This includes the systematic planning and control of its portfolio of commercial properties in excellent locations in selected German cities. The division is also active in Corporate Real Estate Management (CREM). This provides a service for companies in the Werhahn Group, advising them on all property-related matters.

 

The German investment market for commercial real estate has overcome the uncertainties it faced in 2009. Foreign investors in particular are once again looking for German office and retail properties. Investment is made easier by the low interest rates worldwide and the economic recovery in Germany. The focus of potential purchasers is still on buildings in prime locations, with the possibility for long-term leases. Real estate in outlying areas is still being avoided by investors for security reasons.

 

Rents have also passed their low point. Once again, slight rent increases are being achieved, particularly with respect to retail rentals. It can be observed that the potential for rent increases in prime locations is growing to a much greater extent than for secondary locations, with the poorer sites lingering far behind the better locations.

 

In 2010, net sales for the Real Estate division were slightly up on the previous year. The increased revenue generated by rent for the complete occupancy of an office building renovated in 2009 almost offset the vacancies in a property for sale. The Real Estate division has used the high demand for property in prime inner city locations to dispose of properties in Munich and Düsseldorf. Following the sale of the property in Munich, the division once again focused its portfolio on property in the Rhine-Ruhr area, which together with Berlin forms its core regions. The operating result fell short of the previous year. The reason for this was the scheduled costs of extensive renovation work at two properties in Cologne and Berlin, which were directly related to new leases. The earnings from sales had a positive effect.

 

The Real Estate division estimates that, during 2011, the property market will continue to recover from the crisis. It is presumed that the increasing demand for real estate in prime locations will also continue to rise in 2011, leading to price increases. In order to benefit from this development, the division plans to add more properties of this type to its portfolio. The division expects the rental business to stabilize as the rental markets follow the economic recovery more slowly. In addition to the general trends, it is now believed that the timely optimization of the portfolio in 2011 will lead to increases in net sales and revenue.