Other commercial property in Germany, Baden-Württemberg, Mannheim in Mannheim

Information

Participation in a project for the construction and further leasing of a commercial facility

General information:

• The required total capital of investors is € 6 million
• The project is implemented through a specially created project company in the form of KG or GmbH
• Each investor will own a share in the project company, in proportion to his contribution
• The project company will own the land plot with the building located on it
• The project company will receive operating income from the lease of the building (2.65 million euros per year)
< li>The exit from the project and the receipt of the main profit is planned in approximately 8-12 years by reselling the building
• Return for investors over 10% per annum after all expenses and taxes
• The project will be implemented with the involvement of bank financing, thus the risks are minimized
• The project is managed by a well-known German management company
• The structure of the project company will be created with the participation of experienced lawyers and tax consultants

1. Location:

City of Mannheim with a population of about 300,000 people.is the economic and cultural center of the Rhine-Neckar region.

The project site is located in the east of the city, there is a convenient connection with the federal highway and autobahns, public transport stops are nearby. The city center and the airport are within a short drive.

The site on which the project is being implemented has an area of ​​30,000 m2 and is located on the territory of a former American military base with a total area of ​​46 hectares, which is being reconstructed into a modern industrial zone.

In accordance with the "Blue City Mannheim" concept, about 20% of the territory is occupied by green spaces and a forested area.

A significant part of the industrial zone has already been built up; branches of well-known companies are located on the territory. The industrial zone will create more than 1,000 new jobs in this location.

2. Object description:

Plot area: 30.000 m2

The total usable area of ​​the building will be 19.080.91 m2, the area of ​​the underground floor - 3.991 m2.

42% of the area (8. 112 m2) will rent the hotel.The rest of the area will be rented out as office space, for which there is a steady demand from IT and cultural enterprises.

Modern premises will be created, partly presented in the form of lofts. The advantage is the ability to create an individual layout at the discretion of the tenant.
The project is supported by the city authorities.Thus, he received the right to present himself at the exhibition of residential and commercial real estate in Cannes (MIPIM) as one of the four most important projects from the Rhine-Neckar region.

Work on the reconstruction of the existing building began in September 2016, the completion of all work is scheduled for the 3rd quarter of 2018.

3. Tenants and rental income:

The tenant of 100% of the area allocated for the hotel is a subsidiary of a large hotel chain, the lease agreement was signed for 20 years.

This hotel has a unique concept and will create a new offer in the market of this region.Taking into account the operator's extensive experience and good contacts with important people and institutions, the hotel is expected to reach a high level of occupancy in the shortest possible time.

Office space is currently rented at 31%, leases signed for 5 to 10 years with options for renewal from 2 to 5 years.

Rental income at current employment is € 1. 65 million.Expected rental income at full lease is €2.6+ million (additional value subject to variable income under agreement with the music studio (see below)).

All tenants receive a rental holiday for a period of 6 months, after which the rent is paid in full.The exception is the exhibition organizer (one of the tenants of the office space), who will receive a rental holiday of 18 months due to his contribution to the project.

An additional lease agreement for 1000 m2 of basement space has been signed with the music studio. This area will be used as rehearsal and recording space for local bands.A fairly high return on this agreement should be expected as rehearsal space is in high demand in Mannheim.

Negotiations are currently underway with other potential tenants of office space, who should sign contracts by mid-June.If all potential tenants sign contracts, the leased area of ​​office space will reach more than 80%. Given the high demand, full commissioning is planned to be achieved by autumn 2017.

4.Financing structure and financial indicators of the project:
The total project investment is about € 33 million.(only the possible additional costs of equipping the recording studio and music rooms are not taken into account).

Accorded to a loan from a local bank in the amount of € 21 million., which will be issued in three parts: € 12 million, € 5 million and € 4 million.
Interest is 1.75%, 2.2% and 2.4%, plus a loan body of 3% annually.

More than €4 million has already been invested in the project.in the form of financial investments and work performed by the organizer.

Currently, the remaining investment requirement is € 6 million.(This amount will be used to purchase a land plot with an existing building). The financing bank evaluates the object at this amount. This does not take into account the organizer's labor costs and signed lease agreements.

Negotiations are underway to obtain additional funding from the financial institution KfW. If yes, the loan will have a positive impact on the cost of capital expenditures.

The expected profitability of the project from renting out the premises exceeds 10%.

More detailed information will be sent to interested investors upon request.

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