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ePaper created 2012-04-27, 18:43:33 | version 1.23.1
Given the ongoing defensive investment strategy pursued by real es- tate investors, top returns again declined in 2011. Funds with strong equity bases, such as international sovereign and pension funds and various German open-ended property funds, are often prepared to accept lower returns in return for being able to invest cash inflows promptly. According to Cushman & Wakefield, top returns declined for shopping center investments in Germany to 4.8% by the end of 2011 from 5.15% in the previous year. As a result, the current level is at the lower threshold of the ten-year range of 4.8% to 5.75%. Share price performance The price of Deutsche EuroShop shares began 2011 at € 28.98. By mid-April the price had fallen to € 26.00, but by 1 June 2011, less than two weeks before the Annual General Meeting, Deutsche Euro- Shop shares reached their highest price of the year at € 29.06 (Xetra closing price). In the summer and autumn, stock markets worldwide experienced significant falls and were extremely volatile. The major- ity of real estate shares were not spared. Deutsche EuroShop shares recorded their lowest price of the year on 23 November at € 22.94, recovering to € 24.50 by the last trading day of the year. The shares closed the year with a performance of -11.1% (including dividends) (2010: +28.1%). Evaluation of the financial year The Executive Board of Deutsche EuroShop is satisfied with the past financial year. The Billstedt-Center and the expansion of the Altmarkt- Galerie and the A10 Center, which were included in our results for the first time, made a significant contribution. Revenue was planned at between € 184 million and € 188million and totalled € 190.0 million (2010: € 144.2 million) as of the re- porting date, corresponding to an increase of 32%. Earnings before interest and taxes (EBIT) were projected between € 157 million and € 161 million; ultimately these increased by 34%, amounting to € 165.7 million (2010: € 124.0 million). We expected earnings before taxes (EBT) excluding measurement gains / losses of between € 75 mil- lion and € 78 million. They rose by 35%, totalling € 86.5 million (2010: € 63.9 million). As in the previous years, we exceeded earnings forecasts. Deutsche EuroShop has proven once again that it has an outstanding shopping center portfolio and is well positioned. Based on calculations from Jones Lang LaSalle, retail space let in Ger- many increased by 88% to a new record of 686,000 m2. Two devel- opments are visible here. Firstly, disproportionate growth of interna- tional concepts, which accounted for 59% (previous year: 52%). The trend towards large-scale retail premises continues unabated, with a 37% rise in the average space let to 700 m2. The share of lease agree- ments over 1,000 m2 increased from 14% to 18%. Of the leased spac- es over 1,000 m2, more than half are now over 2,000 m2, compared with around a quarter in the previous year. Nevertheless, demand for smaller retail premises of under 250 m2 remained high, accounting for 49% of all leases. Textile retailers were the most significant demand group, accounting for 42% of floor space. This group was dominated by the categories young fashion (29.4%), textile discounters (28.8%) and clothing stores (24.8%). In second place after textile retailers was telecommu- nication / electronics with 12%, followed by food / gastronomy with 11%. Real estate market With an 18% growth in transaction volume to € 22.62 billion, the com- mercial property investment market in Germany continued its expan- sion course in 2011, according to information from CBRE. The market was dominated by individual transactions, with portfolio transactions representing just under a fifth of the volume. Retail properties, which are again the dominant usage form, accounted for just under 47% of these transactions and investments in this asset class rose disproportionately by 36% to € 10.55 billion in 2011. CBRE considers this increased interest in retail properties as evidence that real estate investors are continuing to diversify their portfolios into this rather more stable counter-cyclical asset class. Foreign investors, particu- larly those in the US, Canada and the UK, increased their investment volume in German retail properties by more than 50% to € 4.3 billion, increasing their retail investment volume from 37% to 41%. The most important investor groups in 2011 were asset and fund managers, repre- senting 26%, and open real estate and special funds, representing 25% of investments in retail properties. Unlike investments in office property, a good two thirds or € 7.1 billion of investments in retail property are not concentrated in the top five locations. Shopping centers continued to dominate the retail property segment, with a 44.6% share of transactions, followed by retail properties in prime locations (28.5%) and specialist retailers and retail parks (24.8%). The transaction volume in shopping centers rose by 32% to € 4.7 billion in 2011 compared with the previous year, which had itself seen strong growth. DES Annual Report 2011 9