Housing created for some 200,000 people since change of owner at the end of 2007 | Commercial areas established for approx. 125,000 employees | Turnover and earnings again increased in 2018
Aurelis Real Estate has initiated a considerable volume of project developments since its privatisation in December 2007: in the years 2008 to 2018 nearly 13 million square metres of brownfield land throughout Germany were developed for construction. An estimated gross floor area of approx. 16.5 million square metres has been created on these plots of land. The investments by Aurelis and the property developers, who subsequently realised their construction projects on the areas, are estimated to have amounted to just over 54 billion euros. As a result, new housing has been provided on a scale approximating to the German city of Kassel: it is thought that more than 200,000 people now live on land previously developed by Aurelis. Commercial real estate has also been created for some 125,000 employees.
Aurelis CEO Joachim Wieland points out that these projects have been realised in cooperative processes with municipalities: “We have jointly developed the land and usually found a consensus even in difficult situations. With the successful transformation of unused plots of land we have been able to make an important contribution to creating more residential housing – as a private partner to the local authorities.”
In the meantime the most well-known Aurelis land development projects have been completed to a large extent. These were, for example, Europaviertel in Frankfurt, Le Quartier Central in Düsseldorf and numerous projects in Munich, including Stadtquartier am Hirschgarten. The company has now shifted its focus, placing a greater emphasis on the development and asset management of corporate real estate and light industrial properties.
Excellent annual result for 2018
In addition to this long-term analysis, the Eschborn-based company also presented figures for the 2018 business year. In the past year it was possible to increase the earnings before interest, taxes, depreciation and amortisation (EBITDA) to EUR 439.8 million. This EBITDA was – as in previous years – attained through rental income and the completion of the sale of real estate. The earnings after taxes (EAT) were EUR 263.3 million (previous year: EUR 160.6 million).
CEO Joachim Wieland outlines the reasons for the excellent result: “We have been able to continually increase the occupancy rate. In a positive market environment, we took advantage of the high demand for such stabilised properties and selectively sold them. This also included the sale of the Laetitia portfolio with 32 corporate properties, above all business parks, warehousing and logistics real estate.”
Rental income and sales proceeds increased
In 2018 the rental income increased from EUR 94.3 million to EUR 104.0 million. New and follow-up lease agreements with an annual rent volume of EUR 26.4 million were concluded in the past business year (previous year: EUR 43.9 million). This figure is slightly higher than the average for the past five years of EUR 24.0 million, therefore. The high result in the previous year was in part due to a lease agreement with Deutsche Bahn AG. Aurelis is currently creating a rental area of more than 50,000 square metres for the company in Frankfurt’s Europaviertel.
The sales proceeds increased to EUR 1.15 billion in 2018. In addition to the Laetitia portfolio, Aurelis sold other properties. Among these were, for instance, the Gewerbehof in Hamburg Altona and the electronics competence centre of Deutsche Bahn AG in the business park “Triebwerk München”. The sale of the new construction for the North Rhine-Westphalia “State Office for Nature, the Environment and Consumer Protection” (LANUV) in Duisburg also contributed to the sales proceeds. Following a construction period of nearly two years Aurelis completed the complex of buildings to schedule and at the forecast costs in December 2018.
Further acquisitions and investments in the portfolio planned
In the year under review the company acquired properties with a total volume of EUR 36.5 million (excl. transaction costs) and the sales were certified by a notary, among other things for the former “Turbinenwerk” (turbine factory) in Mannheim on a plot of approx. 180,000 square metres. Together with the local authorities, Aurelis found a solution to avert the municipal right of first refusal. In close cooperation with the municipality, the area is now to be upgraded in order to attract new companies.
The transfer of ownership, benefits and encumbrances was registered for real estate purchases with a volume of EUR 90.9 million. This also included, for example, an industrial estate covering 85,000 square metres in Neuss which currently has a leasable area of just less than 40,000 square metres.
“We will continue to purchase corporate real estate with upside potential and optimise it together with the users,” explains Joachim Wieland. “We can use our entire expertise here: from acquisition to upgrading a location through development and obtaining of building rights, from refurbishment of existing properties to new construction and tenant management. At many locations in Germany we have already gained experience with the revitalisation of a variety of commercial locations.”
In the year under review the asset manager and developer had an investment volume of approx. EUR 947.0 million for conversions, extensions and new construction in the pipeline (previous year: EUR 880.0 million). These measures have either been contractually agreed upon or are under construction. Following completion the projects will become part of the company’s own rental portfolio, have already been sold or are to be sold.
Wieland points out that the 2018 result cannot be reproduced in the subsequent years: “Although the sale of real estate is part of our business model, the result for 2018, to which the sale of the Laetitia portfolio made a significant contribution, nevertheless has to be described as extraordinary.”
As at 31.12.2018 Aurelis had a portfolio of existing properties with annualised rental income of approx. EUR 65.0 million. The company plans to continue investing in the portfolio and in purchases in the coming years, and thus intends to continually increase the rental income.