Annual Report 2003 - IVG Immobilien AG

Transcription

PASSION FOR REAL ESTATE.
Annual Report 2003
IVG Group in Figures
m
2003
2002
Change
2001
2000
1999
Turnover
411.5
471.2
-12.7%
319.3
321.3
423.6
Total operating performance
545.7
637.8
-14.4%
486.6
434.7
543.6
EBITD
224.8
350.3
-35.8%
259.8
201.0
172.8
EBIT (operating earnings)
174.2
188.7
-7.7%
165.8
147.7
96.4
Net income from ordinary activities
99.9
111.1
-10.1%
90.0
91.1
80.1
EBT
87.3
96.6
-9.6%
77.4
80.3
73.2
Net income for the year
66.5
70.4
-5.5%
68.1
61.9
53.9
Investments
565.2
358.3
57.7%
432.2
306.5
1,179.9
Total assets
3,427.8
3,185.3
7.6%
3,021.9
2,585.4
2,520.7
Fixed assets (book values)
2,839.7
2,675.5
6.1%
2,441.5
2,112.6
2,070.5
83.1
89.4
-7.0%
96.2
91.1
90.0
917.0
769.5
19.7%
758.4
690.4
659.7
Equity ratio (book values) %
25.6
24.5
4.9%
24.3
27.4
25.3
Equity ratio (market values) %
39.0
41.2
-5.3%
45.2
49.6
48.8
1,671.4
1,642.3
1.8%
1,894.0
1,845.0
1,793.8
14.41
14.16
1.8%
16.33
15.91
15.73
Employees
717
750
-4.4%
763
709
747
Dividend per share 
0.34
0.34
0.0%
0.34
0.33
0.31
Fixed assets cover %
Shareholders’ equity (book values)
Net asset value
Net asset value per share
*
Including tax required additional depreciation  116.4 million
**
Proposed
*** Excluding special dividend ( 0.20 per share)
**
*
***
Overview 2003
E B I T ( O P E R AT I N G E A R N I N G S )
EBT
 million
 million
188.7
147.7
165.8
96.6
174.2
73.2
80.3
77.4
2000
2001
87.3
96.4
1999
2000
2001
2002
1999
2003
C O N S O L I D AT E D N E T I N C O M E
N E T A S S E T VA L U E
 million
 million
68.1
61.9
70.4
2000
2001
2002
2003
M A R K E T C A P I TA L I Z AT I O N
1,845.0
1,894.0
1,642.3
1,671.4
15.7
15.9
16.3
14.2
14.4
1999
2000
2001
2002
2003

1,761
0.31
1,507
1,247
962
2000
1,793.8
DIVIDEND PER SHARE
(year-end share price)  million
1999
2003
Net asset value per share
66.5
53.9
1999
2002
2001
2002
0.33
0.34
2000
2001
0.34
0.34
1,075
2003
TOP 10 INDUSTRIES
1999
2002
2003
TOP 10 TENANTS
Net rent (%)
Net rent (%)
Public institutions
25.5
Régie des Bâtiments (BRU)
7.9
Wholesale and retail trade
11.1
EBV Erdölbevorratungsverband (HAM)
6.9
Financial services
9.5
European Union (BRU)
3.9
Electrical, micro/optoelectronics
7.3
Kesko Oyj (HEL)
3.8
Other services
6.9
Lucent Technologies Network (MUC)
3.5
Telecommunication
6.5
COVA Central Orgaan Voraadvorming (HAM)
2.0
Real estate
6.0
EPCOS (MUC)
1.7
Electricity, gas, water supply
5.9
PwC (BRU)
1.6
Media, PR, media production
5.0
Statoil Deutschland (HAM)
1.6
Transport, storage, aero, auto
4.8
Segafredo Zanetti (HEL)
1.5
R E A L E S TAT E H O L D I N G S ,
R E A L E S TAT E H O L D I N G S ,
BY REGION
BY TYPE OF USE
Total 3,294.5 million
Total 3,294.5 million
Berlin
9.9%
Düsseldorf
6.0%
Frankfurt
3.4%
Hamburg
8.2%
Munich
12.4%
Brussels
25.3%
Budapest
1.4%
Helsinki
9.4%
Office, business parks
80.8%
London
5.1%
Commercial, logistics
10.9%
Milan
3.8%
Retail
4.4%
Paris
9.4%
Other
3.9%
Stockholm
2.5%
Other
3.2%
R E N TA L I N C O M E ,
R E N TA L I N C O M E ,
BY REGION
BY TYPE OF USE
Total 205.7 million
Berlin
9.2%
Düsseldorf
5.4%
Frankfurt
Hamburg
Munich
Total 205.7 million
4.2%
16.3%
14.1%
Brussels
24.3%
Budapest
1.4%
Helsinki
2.8%
73.8%
London
2.9%
20.7%
Milan
4.1%
Retail
2.6%
Paris
7.9%
Other
2.9%
Stockholm
3.8%
Other
3.6%
I V G T E N A N C I E S B Y E X P I R Y D AT E
AV E R A G E M O N T H LY R E N T S P E R m 2
% of net rental income/year

44.9
18.2
10.4
10.9
9.20
9.22
1999
2000
11.16
11.19
11.09
2001
2002
2003
7.92
15.6
5.55
2004
2005
2006
2007
2008 ff.
1997
1998
P R O J E C T D E V E L O P M E N T,
P R O J E C T D E V E L O P M E N T,
BY REGION
BY TYPE OF USE
IVG share of total value € 1,123 million
Brussels
Berlin
Düsseldorf
Frankfurt
Munich
15%
15%
Budapest
2%
6%
Helsinki
4%
23%
London
12%
89%
Milan
1%
9%
Paris
18%
Other
2%
4%
01 Mission
01 Mission statement
02 Letter to our shareholders
06
07
16
20
30
Our Business
Portfolio management
Real estate portfolio
Project development
Investment funds
36
37
40
42
44
46
Markets
Economic environment
IVG locations in Europe
Rental market
Investment market
European network
of excellence
Mission statement
58
59
65
70
Investor Relations
IVG shares
EPRA
Corporate governance
72 Employees
73 Employee numbers
73 Employee
development
76
76
87
93
112
114
116
122
Financial Information
Group Management Report
Consolidated Financial Statements
Notes to the IVG
Consolidated Cash Flow Statement
Key figures by segment
Changes in shareholders‘ equity
Other information
Real estate is our strength.
IVG is one of Europe’s major listed real estate companies, with
property under management worth some €6.3 billion – including
€3.3 billion in its own real estate portfolio.
We pursue a clear strategy in our core activities of portfolio
management, project development and investment funds:
Focus on office properties and business parks in major European
cities and growth regions
Upgrading of the existing real estate portfolio
Demand-driven project development
Exploitation of cyclical differences between real estate markets
Development of the funds business
Combined with our value-driven corporate philosophy, this is a
strategy for continued profitable growth.
IVG synergizes the property and capital markets for private and
institutional investors.
2.3
Letter to our shareholders
Dear Shareholders,
IVG successfully exploited the opportunities offered by Europe’s real estate markets in 2003:
Good performances in a tough economic climate.
Proposed dividend matching the previous year’s high level.
185,000 m2 in new lettings, against market trend.
Entered the attractive Helsinki property market by acquiring POLAR Real Estate Corporation.
Profitable disposals in stable investment markets.
2004 saw a pivotal change in share ownership at IVG. The 49.9% stake held by Sirius – until then IVG’s
largest shareholder – was taken over by Sal. Oppenheim Bank (25.1%), HSH Nordbank (11.16%), DZBank, WGZ-Bank and IKB Deutsche Industriebank. The Board of Management greets the new ownership structure. With their strong capital base and experience in real estate, the new owners can actively
support and secure the continuation of IVG’s successful European strategy for the long term.
Good business year
IVG held its course in a tough economic climate. Net asset value – a key indicator reflecting the underlying value of a listed real estate company’s shares – was raised 1.8% to €14.41 per share. Group
net income, at €66.5 million, was only about 5.5% short of the previous year’s high figure. Due to the
POLAR acquisition, net rents rose from €226.1 million to €232.8 million. Lettings were also up, with a
grand total of 185,000 m2 newly let by IVG. The earnings figures allow the Board of Management and
Supervisory Board to propose a dividend matching the previous year’s high level of €0.34 per share.
Positive net lettings
IVG once again achieved positive net new lettings in 2003, bucking the market trend of falling rents.
trump the market
New tenancies were €27.6 million, compared with terminations to the value of €26.6 million. The quality of our portfolio and the proximity of our branch offices around Europe to their markets and customers contributed to the strong figure for new tenancies.
01 Mission
08 Our Business
01 Mission Statement
36 Markets
58 Investor Relations
72 Employees
76 Financial Information
Purchases of large lots of property, as through takeovers of listed property companies, are a key part of
IVG enters the
the IVG strategy. Transactions of this kind take a strong element of expertise and allow reasonable entry
Helsinki property
prices. IVG acquired a qualified majority of the Helsinki-listed POLAR Real Estate Corporation in October
market
2003 and now holds approximately 95%. The POLAR portfolio, worth €311 million at the close of 2003,
provides the basis for entering the attractive Helsinki market. In this complex transaction, IVG was able
to draw on its own considerable experience gained from the 1999 Asticus takeover in Sweden.
Timely real estate purchases and disposals are two sides of the same coin for IVG. As part of this sys-
Stable investment
tematic buy-and-sell policy, IVG used the relative stability of investment markets compared with rental
markets used for
markets to sell property chiefly in Brussels, Frankfurt, London, Madrid, Paris and Helsinki.
disposals
The IVG share price gained 11.7% in 2003. On a European comparison this means it is still significantly
IVG shares set to
undervalued. A clear corporate strategy, good performance data even when times are difficult and reso-
go on rising
lution of the shareholding structure all evidence untapped upside potential.
In addition, calls to institute tax transparency for property investment companies present a first opportunity to create an analogue to the real estate investment trusts (REITs) allowed in countries such as the
USA, France and the Netherlands. This could give a marked boost to German real estate shares.
IVG continued its strategic evolution in 2003 into an investment house specializing in indirect property
IVG: One-stop shop
investment products. The emphasis remains on office properties in major European cities and growth
for indirect property
centres.
investments
Acquisition of Wert-Konzept was completed with effect from 1 January 2003 and the company is now
integrated into the IVG Group. Wert-Konzept are long-standing and highly regarded initiators of closedend real estate funds. The end of 2003 saw the issue of »EuroSelect 07« – the first multinational fund
to combine Wert-Konzept and IVG expertise.
4.5
After a relatively brief run-up, IVG Immobilien KAG gained approval to engage in investment business
from Germany’s Federal Financial Supervisory Authority (BaFin) in February 2003. Through the new
company, IVG will serve the strong investor interest in open-end funds.
IVG thus provides a one-stop service offering investors the right indirect property investment to match
their varying risk/yield requirements.
Real estate expertise
IVG synergizes property and capital markets with a strategy founded on three main pillars:
and synergies from a
European network
IVG’s origins and expertise are in the property markets. IVG has a local presence in those markets
through its branch offices, which serve as property scouts and managers for all investment products.
A market-proven balance of local expertise and global management policies speeds decisionmaking and action.
With a portfolio under management worth 6.3 billion, IVG can judge opportunities and risks in
property investment with the heightened awareness of experienced owners.
Teamwork
IVG’s success is due in no small part to the vast real estate expertise and committed work of all IVG
in Europe
employees around Europe, to whom we extend special thanks and recognition. Raising the earning
power and value of IVG is a challenge which all will continue to meet with motivation and tenacity. More
than ever before, Europe offers outstanding opportunities for those prepared to work hard. We will take
these opportunities together, so stay invested!
Yours sincerely,
Eckart John von Freyend
Bernd Kottmann
Dirk Matthey
01 Mission
06 Our Business
01 Mission Statement
36 Markets
72 Employees
Dr. Dirk Matthey (55)
Dr. Eckart John von Freyend (62)
Dr. Bernd Kottmann (46)
Chief Financial Officer
Chief Executive Officer
Chief Operating Officer
Born 1949, holds a business degree and
Born 1942, holds an economics degree
Born 1958, holds a business degree and
a doctorate. Chief Financial Officer to
and a doctorate. Chief Executive Officer
a doctorate. With the IVG Group since
IVG Immobilien AG since 1996. Previous-
to IVG Immobilien AG since 1995. Pre-
1997. Member of the Board of Manage-
ly Managing Director and Chief Financial
vious posts included Head of Division
ment of IVG Immobilien AG since July
Officer to subsidiaries of the VIAG group,
in the Federal Ministry of Finance and
2001. Formerly Member of the Board at
Munich; Director and Head of Business
Managing Partner at publishers Verlags-
Harpen AG, Managing Director of Deut-
Administration at VEBA, Düsseldorf; and
gruppe
sche Babcock Bau GmbH and Member
Executive Assistant and Department
John von Freyend GmbH. He began his
Manager in Finance and Accounting at
career with the Federation of German
RWE, Essen.
Industry (BDI) in 1970.
Deutscher
Wirtschaftsdienst
of the Board at GERMANIA-EPE AG.
6.7
Our Business
IVG business model:
Property and capital market integration
Banks
Institutional investors
Private investors
IVG shares
Open-end funds
Closed-end funds
Real estate
capital market
IVG corporate functions
Upgrading
Buying
Restructuring property portfolios
Individual properties
Developing land
Property portfolios
Improving building systems
Selling
Real estate market
Improving quality of tenancies
Branch offices
Service providers
Tenants
01 Mission
06 Our Business
07 Portfolio management
36 Markets
72 Employees
2003 was another dynamic year in portfolio management:
An 85% stake was acquired in POLAR, a Finnish listed real estate company.
134,000 m2 of lettable space – 78,000 m2 in Germany and 56,000 m2 elsewhere in Europe – was let
out in a hard business climate.
The effective occupancy rate at the end of 2003 was 91.5% – above the market average including
signed tenancies yet to enter into force, the occupancy rate was 93.9%.
Favourable European investment markets were used to make sales in Belgium, Finland, France,
Germany, Spain and the UK.
The market value of our own real estate portfolio was €3.3 billion as at 31 December 2003.
Segment turnover increased from €283.7 million in 2002 to €294.3 million in 2003. This figure includes
net rent revenues, which increased from €223.1 million to €230.2 million. This is primarily due to the
acquisition of POLAR.
Due to higher profits from property sales, segment earnings improved from €169.7 million to €196.2
million.
Rolf Moritz Webeler, Director Portfolio Management Germany
Michael Lipnik, Director Portfolio Management International
8.9
Acquisitions
Growing with
Our real estate acquisitions target long-term earning potential and sustained growth in value:
real estate
Acquisitions are concentrated in major European cities and growth centres whose economies and
real estate markets show good development prospects.
We primarily invest in office properties and business parks.
Investments are preferably made at locations where IVG already has an experienced management
team or can build one up in the medium term.
Acquisitions focus on properties which IVG can enhance in value by suitable upgrading measures.
Another key area comprises purchasing real estate packages, real estate companies and properties
under forced sale. Transactions of this kind offer attractive entry prices.
MEMBERS OF THE POLAR ACQUISITION TEAM
David Canals_Dr. Volker Hahn_Norbert Zube_Rolf Moritz Webeler_Stefan Schraut (left to right)
01 Mission
06 Our Business
08 Acquisitions
36 Markets
72 Employees
ACQUISITIONS: POLAR, HELSINKI
▲
▲
Tapiontuuli KOy
Kauppakeskus Jumbo
Location: Espoo, Type of use: Office
Location: Vantaa, Type of use: Shopping Centre
Site area: 6,900 m2, Occupancy rate: 100 %
Site area: 53,800 m2, Occupancy rate: 100 %
Tenants: Novo Nordisk Farma, Oy Niklashipping Ltd. u.a.
Tenants: Retail and services
IVG acquired the Helsinki-listed POLAR Real Estate Corporation in autumn 2003. IVG has since increased its stake, from 85% at the year-end to over 95% in March 2004.
The takeover opens up the emerging Finnish real estate market for IVG. The country is considered one
of the world’s best investment locations and has good growth prospects. Growth rates have topped the
EU average for several years. In contrast with many other EU member states, fiscal revenues exceed
government spending. Public debt is only some 40% of GDP. There are already signs that GDP is set
to rise in 2004. The positive economic and policy data combined with proximity to emerging Eastern
European markets bode well for renewed upward momentum in the Finnish real estate market.
At the time of IVG’s acquisition, POLAR commanded 38 properties with a total of 297,000 m2 of let-
Data (October 2003):
table space. The real estate portfolio worth some €350 million comprises 60% office buildings and
POLAR Real Estate Corp.
40% shopping centres, all well situated. POLAR also owns land in Helsinki with development reserves
Location: Helsinki, Finland
exceeding 56,000 m of gross floor area. About 80% of POLAR’s buildings are in Helsinki. POLAR’s
Properties: 38
experienced professional team contributes local expertise and a functioning network. This is one of the
Site area: 297,000 m2
keys to entering major regional markets for IVG.
Type of use:
2
60% Offices
The POLAR management had already sold two shopping centres in line with the IVG strategy by the
end of 2003. This increased the share of the POLAR portfolio consisting of office properties and thus
the Helsinki share to over 80%. A third such sale is already agreed for 2004.
40% Shopping centres
Delevopment reserve:
56,000 m2 GFA
10.11
Marketing and customer loyalty
Quality assures
High occupancy rates and long-term tenancies with companies of immaculate financial standing mean
customer loyalty
growth in value-in-use and realizable value – location and rental income being the key determinants of
the selling price of a commercial property.
One of the keys to our success in the letting business is actively looking after our tenants and properties. The combination of high-quality, functional and economic buildings with professional on-site customer service produces satisfied customers more likely to select an IVG property for their corporate
headquarters. Our most recent customer satisfaction survey, in autumn 2003, revealed that 95% of
our tenants are satisfied and 91% would recommend us as lessors of commercial premises. This is
the result of an active customer service programme in place since 1999, combining customer recruitment and service by branch offices with standardized, centrally administered quality assurance. Special
incentives are provided under the IVG Value Service offering a wide range of products and services at
outstanding value. These include office furniture and supplies, hotel accommodation, car rental, corporate image and communication consultancy, event marketing, business startup and financial advice,
and much more.
In total as at 31 December 2003, IVG controlled 1.7 million m2 of lettable space in its own portfolio
and looked after 2,150 tenants under 2,800 tenancy agreements. IVG realized 35% of net rent in 2003
with its ten largest tenants. In terms of industry affiliation, IVG tenants are evenly divided between
old-economy companies, public agencies and modern, financially well placed service and technology
firms.
Thomas Rücker, Director Communication/Marketing
01 Mission
06 Our Business
08 Acquisitions
10 Lettings
36 Markets
72 Employees
N E W L E T T I N G S I N E X C E S S O F 2 , 0 0 0 m 2, 2 0 0 3 :
Branch office
Property
Tenant
Brussels
Trèves
Etape
Lettable space in m2
Düsseldorf
Global Gate, Second construction phase
TQ3 Travel Solutions, Chubb
Type of use
3,400
offices
10,000
offices
17,100
offices/
Insurance Company, Metro,
Nowy Styl, Weight Watchers
Frankfurt
Airbizz
Thiel Logistik, Tradeport
London
Soho Square
Hill & Knowlton
Madrid
Alcampo office building
Alcampo
Madrid
Caje de la Palma
Johnson & Johnson
3,400
offices/logistics
Munich
IVG Businesspark vor München
Galileo Industries
2,400
offices
Munich
Nordostpark Nürnberg
Conti Temic, Demedis,
6,000
offices
10,600
offices
4,500
offices
warehousing
4,000
offices
10,300
offices
Huss Umwelttechnik
Paris
Boulevard Haussmann
L‘Immobilière du CMN
Paris
Rue d‘Aguesseau
Française des Jeux
TOP 10 TENANTS
Net rent, %
Régie des Bâtiments (BRU)
7.9
EBV Erdölbevorratungsverband (HAM)
6.9
European Union (BRU)
3.9
Kesko Qyj (HEL)
3.8
Lucent Technologies Network (MUC)
3.5
COVA Central Orgaan Voraadvorming (HAM)
2.0
EPCOS (MUC)
1.7
PwC (BRU)
1.6
Statoil Germany (HAM)
1.6
Segafredo Zanetti (HEL)
1.5
12.13
ALCAMPO, MADRID
The Alcampo office building in Madrid illustrates the close connection between purchase, letting and sale at IVG. The building immediately adjoins Spain’s second largest shopping centre, La Vaguada.
It serves as the headquarters of the Alcampo supermarket chain.
IVG acquired the property through a subsidiary in 2000. The tenancy
stipulated a rent adjustment to market rates as at 1 January 2003. To
secure the location, tenants Alcampo were prepared to extend the
▲
tenancy a further five years to a total of ten and to accept a significant
Alcampo
increase in rent. With effect from the end of the year, IVG sold the
Location: Madrid, Type of use: Office, Site area: 10,300 m2
property together with two logistics buildings to GE Capital.
Occupancy rate (sale): 100%
Sale: 12/2003, Tenants: Alcampo
B O U L E VA R D H A U S S M A N N , PA R I S
Boulevard Haussmann
Location: Paris
Type of use: Office
Site area:10,600 m2
Occupancy rate: 100%
▲
Tenants: L‘Immobilière du CMN
No. 173-175, Boulevard Haussmann in Paris is an example of a successful major letting at a low point on the economic cycle. The location is in the financial district near the Champs Elysées, an area known for its intricate assemblage of historical buildings. The classical
Boulevard Haussmann building has 10,600 m2 of lettable space and parking for 205 cars. IVG initially considered a full modernization
after the last tenants moved out in 2003. Instead, thanks to the strong market presence of IVG‘s Parisian office, the building was relet without standing empty for any length of time to L’Immobilière du CMN, a subsidiary of the major French bank Crédit Mutuel Nord
Europe; the new tenants are also undertaking the refurbishment.
01 Mission
06 Our Business
08 Acquisitions
10 Lettings
36 Markets
72 Employees
Logistics real estate represents the third main part of our portfolio alongside office properties and busi-
Logistics
ness parks.
real estate
IVG lets out storage space for petroleum, petroleum products and natural gas in caverns and tank farms
– our underground real estate. The tenants are companies in the energy sector and bodies responsible
for maintaining strategic oil reserves.
The largest storage facility operated by IVG is the Etzel caverns facility near Wilhelmshaven. Of the
39 caverns at Etzel, 33 belong to the German state and 6 to IVG. A seventh IVG cavern is currently
in development. In total, the caverns offer subterranean storage for some 13 million m3 of petroleum
and approximately 500 million m3 of working gas. The stored fuels represent a significant contribution
towards securing the German and Dutch energy supply. IVG also operates tank farms in Germany and
Poland with a total capacity of 218,000 m3.
Friedrich Foltas, Director Logistics
▲
Etzel, storage caverns
Location: Wilhelmshaven, Type of use: Storage, Volume: 13 million m3 petroleum, 500 million m3 (standard) working gas
Occupancy rate: 100%, Tenants: EBV, C.O.V.A.
14.15
Sales
Property sales are a major source of income for IVG and a key part of our business. Properties are mostly sold following significant recent value gains as a result of:
Modernization.
Exploiting development reserves.
Improving a building’s tenancy profile (higher occupancy rate, new tenants with better financial
standing, higher net rent per unit area, increasing the term on tenancies).
A general upturn in the local property market.
Using cyclical
An upturn in the property market cycle is a particularly good opportunity to realize gains in value. IVG
differences between
used the abating real estate market crisis of the 1990s to make purchases in Central and Western
markets lowers risk
Europe and has since resold many properties at a profit after several years of rising markets. Rather
than moving in lockstep, the markets in different cities and regions tend to peak and trough at different
times. Investing at multiple locations around Europe allows IVG to »ride the cycle« by exploiting such
asynchronies. This can be shown by correlation analysis of European prime office rents: weak or negative correlations are an opening to reduce risk by diversifying and exploiting cyclical differences, selling
in one city at the tail end of a boom and reinvesting the proceeds in another city about to embark on a
cyclic upturn.
In 2003, IVG took the opportunity to sell where demand was strong for quality real estate. Sales were
made by the IVG branch offices in Brussels, Düsseldorf, Frankfurt, Helsinki, London, Madrid, Munich
and Paris.
C O R R E L AT I O N O F E U R O P E A N P R I M E O F F I C E R E N T S ( 1 9 9 2 – 2 0 0 2 )
%
■ Negative correlation (-100–0%)
Berlin
BER
Brussels
72.8
BRU
Budapest
-9.6
-0.5
BUD
Düsseldorf
64.7
77.9
15.1
DUS
Frankfurt
64.6
79.8
-13.5
65.6
FRA
Hamburg
85.7
82.4
-3.0
73.9
68.8
HAM
Lisbon
38.1
73.0
-4.0
66.1
80.7
46.0
LIS
London
31.0
34.0
-39.9
31.2
47.9
17.3
47.6
LON
Madrid
62.1
65.6
-29.7
55.5
76.9
53.5
67.4
83.1
MAD
Milan
47.3
55.2
-7.1
51.7
69.6
37.6
69.9
34.3
53.5
MAI
Munich
50.8
75.9
-13.0
66.5
79.7
64.5
72.5
50.8
71.9
33.3
MUN
Paris
51.4
59.2
-22.6
60.3
76.6
41.9
69.5
80.4
86.8
71.7
66.4
PAR
Stockholm
32.9
22.7
-45.2
23.6
41.0
26.5
27.5
72.9
59.0
13.9
53.5
64.6
■ Low correlation (0–60%)
■ High correlation (60–100%)
Source: Cushman & Wakefield Healey & Baker / ICG European Research Group
STO
01 Mission
06 Our Business
08 Acquisitions
10 Lettings
14 Sales
36 Markets
72 Employees
A SELECTION OF SALES IN 2003:
Property
Buyer
Sweden House, Rue de Trèves, Brussels
DMI
IVG Immobilien AG headquarters, Bonn
EuroSelect 07
Office building, IVG Businesspark am Flughafen, Düsseldorf
Barmenia
Airbizz, Frankfurt
Private investor
Two shopping centres outside Helsinki
Citycon
16 Great Marlborough Street, London
Lazari
Alcampo office building and two logistics buildings, Madrid
GE Capital
Two office buildings, IVG Businesspark Nordost, Nuremberg
EuroSelect 07 and BIG – Berliner Immobilien Gesellschaft
Avenue Hoche and Rue de Bassano, Paris
DEFO Deutsche Fonds für Immobilienvermögen
SWEDEN HOUSE, BRUSSELS
Sweden House in Brussels is an example of the rapid and successful sale of a
high-quality office property by IVG. The 7,200 m2 building is located in Quartier
Léopold, the EU district and Brussels’ most sought-after office location. IVG acquired it in 2001 as part of a share deal. Minor conversion work was carried out
and a number of tenancies signed or extended over the ensuing months. 2003
saw a new tenant move in: the European Space Agency (ESA), which coordinates
its activities with EU institutions from the building. In the same year, IVG sold
Sweden House together with another building to Arab investors DMI. The sale
was effected by a share deal, which minimizes the high transfer costs that would
Sweden House
otherwise be incurred in Belgium.
Location: Brussels, Type of use: Office
▲
Site area: 7,200 m2
Occupancy rate (sale): 94.3%
Sale: 6/2003, Tenants: ESA, Microsoft
G R E AT M A R L B O R O U G H S T R E E T, L O N D O N
A sale in London exemplifies the profitable resale of a property acquired as part of
a larger package. When IVG took it over in 1999, the Swedish property group Asticus AB was nearing completion of a development comprising two office buildings
with a total lettable space of 14,900 m2 on Great Marlborough Street in London’s
West End. 4,800 m2 was sold in 2000 and the remaining 10,100 m2 went to a
Greek investor in 2003.
Great Marlborough
Location: London, Type of use: Office
▲
Sale: 06/2003, Tenants: Turner Broadcasting
16.17
Table of the Real estate portfolio
IVG share
Berlin
Brussels
Budapest
Düsseldorf
Frankfurt
Hamburg
London
Spreespeicher, Stralauer Allee 1–2, Berlin
Carossa Quartier, Streitstrasse 5–19, Berlin 3
Office building, Bundesallee 204–206, Berlin
Hafenplatz 6/7, Köthener Str. 29, Berlin
Leibniz Kolonnaden, Walter-Benjamin-Pl. 6, Leibnizstr. 53, Berlin
Airport Center Schönefeld, Mittelstrasse 5/5a, Berlin
Logistics centre, Montanstrasse 18–26, Berlin
Office building, Joachimstaler Str. 1–3, Berlin
Other Berlin
Berlin total
Dresden total
Berlin Office total
Form of
ownership
Added/last
refurbished
Type of use
89%
100%
95%
95%
50%
100%
100%
98%
Leasehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
1995/2002
1948/2002
1998
1998
1996/2001
2001
1948
2000/2003
Offices
Business park
Offices
Other
Offices
Offices
Comm./logistics
Offices
100%
Freehold
1992/2003
Business park
North Gate, Bd. Roi Albert II, 6, 8 and 16, Brussels
Office building, Square de Meuus 8, Brussels
Office building, Diegem, Rue Bessenveld 9, Brussels
Pléiade A–C, Avenue des Pléiades 11–15–19, Brussels
Louise Village, Avenue Louise 29–31/Rue Dejonker 34–36, Brussels
Tervuren Plaza, Rue Gribaumont 1, Brussels
Twin House, Rue Neerveld 105, Brussels
Le Croissant, Avenue Beaulieu 24–26, Brussels
Office building, Place St Lambert, Brussels
Office building, Chaussée de la Hulpe 154, Brussels
Oaktree, Drève de Bonne Odeur 20, Brussels
Madou Plaza, Brussels 3
Other Brussels
Brussels total
Ariane I-III, Route d‘Esch 400, Luxembourg
Thomas, Rue Thomas Edison 2, Luxembourg
Luxembourg total
Brussels Office total
100%
100%
71%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
1998
1996/1999
1998/2001
1999
1999
1999/2003
1999
1999
1999
1989/1999
1999
1999/2003
Offices
Offices
Offices
Offices
Other
Offices
Offices
Offices
Offices
Offices
Offices
Offices
94%
100%
Freehold
Freehold
1999
1999
Offices
Offices
Infopark Budapest, Infopark sétány 1 and 3, Budapest
Other Budapest
Budapest Office total
100%
Freehold
Freehold
2003
IVG Businesspark am Flughafen, Heltorfer Str. 1–22, Düsseldorf
Gotic-Haus, Westfalendamm 94–100, Dortmund
Office building, Stockholmer Allee 32, Dortmund
Fashion Plaza, Karl-Arnold-Platz 2, Düsseldorf
Global Gate, Grafenberger Allee 293–297, Düsseldorf 3
Other Düsseldorf
Düsseldorf Office total
100%
100%
100%
100%
100%
Freehold
Freehold
Freehold
Freehold
Freehold
Logistics centre, Cargo City Süd, Geb. 554, Frankfurt-Flughafen
Center am Ring, Otto-von-Guericke-Ring 13–15, Wiesbaden
Other Frankfurt
Frankfurt total
Logistics centre Lohfelden, Otto-Hahn-Str. 26, 28, 34, 36, Lohfelden
Logistics centre Waldau, Falderbaumstrasse 7–13, Kassel-Waldau
Other Kassel + Liebenau
Kassel total
Frankfurt Office total
100%
100%
Site area
Lettable
w/o parking
1,000 m2
1,000 m2
12.7
239.7
7.5
12.1
7.6
14.0
44.2
1.8
240.4
580.0
192.0
772.0
35.9
41.5
19.2
16.5
12.7
11.8
7.4
6.6
27.8
179.6
35.5
215.1
9.4
10.9
19.8
8.0
7.6
6.5
4.1
4.4
2.0
3.5
4.7
2.8
45.7
129.4
9.5
6.4
15.9
145.9
56.0
40.4
19.7
15.0
12.5
0.0
9.3
6.0
4.9
4.6
3.6
0.0
87.6
259.6
15.1
5.8
20.9
280.5
Business park
3.7
1.9
5.6
17.2
7.6
24.8
1999
1995/2002
2001
1998
2003
Business park
Offices
Offices
Offices
Offices
69.4
13.3
7.3
1.7
16.2
7.8
115.7
37.6
23.6
6.7
6.4
12.6
3.0
89.9
Leasehold
Freehold
1997/1999
1993/2002
Comm./logistics
Offices
100%
100%
Freehold
Freehold
1983/2001
1948/2000
Comm./logistics
Comm./logistics
17.7
9.8
343.4
370.9
75.8
91.0
42,486.6
42,653.4
43,024.3
11.7
9.1
16.0
36.8
25.7
22.2
66.9
114.8
151.6
IVG Businesspark Hamburg Nord, Essener Str. 89–99, Hamburg
Lilienthal-Center, Kugelfangtrift 4–8/Lilienthalstr. 300, Hanover
Office building, Habichtstrasse, Habichtstrasse 41, Hamburg
Other
Hamburg total
Tank storage 7
Oil storage caverns, Beim Postweg 2, Friedeburg
Gas storage caverns, Beim Postweg 3, Friedeburg
Cavern/tank storage total 7
Hamburg Office total
100%
100%
100%
Freehold
Freehold
Freehold
1948/2001
1948/1980/2002
1991/1995
Business park
Comm./logistics
Offices
133.9
54.1
3.0
65.9
256.9
100%
100%
100%
Freehold
Freehold 8
Freehold 8
1962/2003
1972/2003
1993/1998
Logistics
Logistics
Logistics
48.3
26.5
6.7
17.3
98.8
218.0
12,800.0
4,500.0
71 Lombard Street 71, London
20 Soho Square, London
20 St. James’s Street, London
40/41 Conduit Street, London
London Office total
100%
100%
100%
100%
Freehold
Freehold
Freehold
Freehold
2002/2003
1999/2003
1999
1999
Offices
Offices
Offices
Offices
1, 2
1, 4
2.4
1.1
0.8
0.7
5.0
0.0
5.6
5.1
2.6
13.3
9
9
6
01 Mission
06 Our Business
36 Markets
08 Acquisitions
10 Lettings
14 Sales
16 Real Estate Portfolio
In-building
parking
Occupancy at
31 Dec.
Spaces
%
Effective occupancy
at 31 Dec.
Jan.–Dec.
%
138
0
291
250
289
147
0
0
165
1,280
6
1,286
74.9%
55.2%
100.0%
96.7%
81.1%
9.5%
100.0%
99.9%
76.0%
71.3%
75.2%
91.8%
78.4%
90.9%
84.9%
82.7%
84.6%
1,003
491
480
228
204
0
114
133
69
72
88
0
2,560
5,442
273
246
519
5,961
100.0%
90.9%
100.0%
58.5%
99.1%
100.0%
100.0%
99.9%
68.4%
97.8%
100.0%
100.0%
95.7%
76.1%
87.9%
72.6%
100.0%
63.2%
100.0%
30.0%
68.0%
100.0%
93.3%
100.0%
32.7%
75.8%
100.0%
90.3%
100.0%
32.5%
94.6%
100.0%
100.0%
100.0%
92.7%
95.4%
100.0%
100.0%
100.0%
95.5%
90.8%
100.0%
100.0%
100.0%
91.8%
75.2%
77.3%
52.7%
77.2%
80.8%
62.1%
313
413
0
66
101
2
895
97.0%
88.0%
100.0%
93.1%
76.6%
99.0%
88.3%
100.0%
96.9%
63.2%
99.0%
84.8%
95.8%
98.3%
27.6%
90.1%
90.8%
88.9%
0
213
218
431
0
0
2
2
433
100.0%
93.3%
100.0%
96.6%
100.0%
84.1%
97.1%
100.0%
68.5%
98.2%
100.0%
86.5%
91.5%
100.0%
93.0%
92.3%
93.1%
93.8%
95.1%
96.8%
95.3%
326
9
124
0
459
100.0%
79.7%
100.0%
100.0%
70.8%
100.0%
100.0%
72.2%
90.7%
94.6%
93.4%
100.0%
100.0%
100.0%
100.0%
98.5%
92.9%
100.0%
100.0%
100.0%
100.0%
98.4%
58.5%
91.0%
100.0%
82.1%
0.0%
83.2%
100.0%
73.4%
219
0
219
0
0
0
0
0
72.2%
82.4%
100.0%
81.5%
75.3%
70.1%
100.0%
98.0%
91.1%
37.1%
100.0%
98.2%
%
69.4%
70.1%
100.0%
97.6%
86.4%
65.8%
100.0%
98.2%
Development
reserve
Market
value
1,000 m2
 ‘000
EBIT 2003
 ‘000
 ‘000
in T 
207
1,454
9,741
1,729
11,470
3,122
1,371
2,873
1,484
1,292
699
847
1,846
3,051
16,585
2,393
18,978
3,291
1,385
1,889
1,118
1,385
555
847
1,949
2,907
15,326
1,885
17,211
1,910
466
2,512
547
683
367
722
1,054
3,259
11,520
1,744
13,264
-256
41
2,250
547
682
204
624
567
2,473
7,132
756
7,888
16,469
9,041
2,900
2,031
1,746
146
1,396
1,605
873
587
163
0
7,516
44,473
3,696
1,691
5,387
49,860
16,511
9,172
3,038
2,183
2,044
127
1,217
1,617
497
640
187
76,100
834,787
645
18
227
0
6,539
12
4
539
753
426
29,130
15,624
53,917
0
12
12
53,929
7,355
44,588
2,812
1,030
3,842
48,430
16,160
8,804
2,992
836
1,003
19
1,202
1,516
629
270
-85
-57
6,032
39,321
3,280
1,246
4,526
43,847
14,127
6,985
2,593
416
537
-321
869
1,260
450
36
-176
-23
5,362
32,115
2,605
992
3,597
35,712
44,977
2,915
697
3,612
1,492
1,282
2,774
2,110
1,321
3,431
-450
564
114
-625
323
-302
199,240
149
963
0
0
6,841
0
7,953
5,499
2,768
902
1,449
247
254
11,119
5,424
3,097
934
1,333
1,720
147
12,655
4,711
2,314
780
1,188
-524
-1,570
6,899
3,335
1,700
601
978
-763
-1,599
4,252
0.0
0.0
0.0
0.0
5.5
34.5
4.5
44.5
44.5
82,702
111,477
56
496
0
552
45
18
364
427
979
1,222
1,170
1
2,393
1,799
1,013
3,494
6,306
8,699
1,250
1,429
0
2,679
592
885
3,487
4,964
7,643
765
924
-29
1,660
1,556
850
2,575
4,981
6,641
544
677
-29
1,192
1,172
664
1,879
3,715
4,907
74.0
20.0
0.0
0.0
94.0
104,420
508
907
11
0
1,426
4,992
1,161
830
202
7,185
5,034
1,197
869
184
7,284
4,115
793
526
158
5,592
2,521
472
339
82
3,414
165,000
269,420
6,137
7,563
26,286
33,471
26,468
33,752
18,168
23,760
13,567
16,981
0.0
0.0
0.0
0.0
168,093
16
1,441
0
0
1,457
908
8
3,286
1,693
5,895
0
2,191
3,289
1,645
7,125
795
-989
2,175
1,697
3,678
665
-1,504
1,109
1,431
1,701
 ‘000
119
324,551
758,687
36.0
0.0
0.0
0.0
13.5
1.3
50.8
Investment
Rental in- Income fore2003 come 1 2003
cast 1 2004
273
6,745
943
8.0
28.2
36.2
0.0
36.2
Cash flow
2003
182.0
13.0
49.8
281.0
26.8
307.8
72 Employees
28,775
 ‘000
18.19
Table of the Real estate portfolio
IVG share
Milan
Munich
Paris
Finland
Form of
ownership
Added/last
refurbished
Type of use
Piazzale Lodi 3, Milan
Palazzi Fermi & Galeno, Milan 3
Via Carducci 125, Sesto San Giovanni, Milan
Via Dione Cassio 13, Milan
Via Cascia 5, Milan
Via Gobetti 2, Cernusco sul Naviglio
Palazzo dei Cigni, Milan 3
Milan Office total
100%
93%
94%
94%
94%
100%
93%
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
2001
2000
1999
1999
2000
2001
2000
Offices
Offices
Offices
Offices
Offices
Offices
Retail
Nordostpark Nuremberg, Nordostpark 1–98, Nuremberg
IVG Businesspark MEDIA WORKS MUNICH, Rosenheimer-Str., Munich
IVG Businesspark vor München, Einsteinstrasse, Ottobrunn
Gewerbepark Dornach, Margaretha-Ley-Ring 1–14, Dornach
Businesspark Puchheim, Benzstr. 11, Siemensstr. 4, Puchheim
Other Munich
Munich Office total
100%
100%
100%
100%
95%
Freehold
Freehold
Freehold
Freehold
Freehold
1948/2003
1966
1960/2003
1974/2001
1977
Business park
Business park
Business park
Comm./logistics
Comm./logistics
7 Place Vendôme, Paris
173–175 Bd Haussmann, Paris
Office building, 121–123 Rue d‘Aguesseau, Boulogne Billancourt
21 Place de la Madeleine, Paris
Paris Office total
100%
100%
94%
100%
Freehold
Freehold
Freehold
Freehold
1999/2002
1997
2000
1997
85%
85%
85%
85%
85%
78%
75%
85%
85%
85%
85%
85%
85%
85%
85%
85%
85%
65%
85%
85%
85%
85%
85%
18%
Leasehold
Freehold
Leasehold
Freehold
Freehold
Leasehold
Freehold
Freehold
Leasehold
Freehold
Leasehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
Kornetintie 6 KOy, Helsinki
Kutomotie 6 KOy, Helsinki
Malmin Kauppatie 8 KOy, Helsinki
Munkkiniemen liiketalo, Helsinki
Niittylänpolku 16 KOy, Helsinki
Pasilanraitio 5 KOy, Helsinki
Satomalmi KOy, Helsinki
Sörnäisten Rantatie 25 KOy, Helsinki
Teerikukonkuja 5 KOy, Helsinki
Vallilan yhtiöt, Helsinki
Vanha Talvitie 11 KOy, Helsinki
Vilhonkatu 5 KOy, Helsinki
Vuorikatu 20 KOy, Helsinki
Kilon Helmi KOy, Espoo
Kilon Timantti KOy, Espoo
Lastupolku KOy, Espoo
Scifin Alfa KOy, Espoo
Sinimäentie 10 KOy, Espoo
Tapiontuuli KOy, Espoo
Plaza Forte KOy, Vantaa
Pakkalan Kartanonkoski 3 KOy, Vantaa
Pakkalan Kartanonkoski 12 KOy, Vantaa
Sisustaja KOy, Vantaa
Vantaan Liikeskus (Jumbo), Vantaa
Other
Finland total 10
Site area
Lettable
w/o parking
1,000 m2
1,000 m2
6.0
5.9
1.5
7.0
2.4
4.7
4.8
32.3
20.8
15.8
9.4
9.2
5.4
5.1
2.7
68.4
258.2
20.8
768.4
30.7
43.7
22.6
1,144.4
123.4
11.4
79.8
29.8
21.9
2.9
269.2
Offices
Offices
Offices
Offices
2.5
1.6
3.0
0.8
7.9
11.1
10.6
9.8
2.6
34.1
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Offices
Retail
Retail
2.0
3.6
4.1
6.0
2.7
2.1
2.3
3.4
8.8
10.0
2.8
1.6
1.7
3.7
3.9
1.5
7.8
23.4
3.1
4.0
9.5
4.0
25.3
28.6
87.4
253.3
3.3
7.7
4.7
6.7
3.0
7.7
4.8
6.5
4.1
34.8
6.7
5.8
6.7
3.8
4.0
1.2
5.3
12.6
6.9
6.1
7.8
3.3
15.9
53.8
74.0
297.2
144.9
147.6
594.3
45,313.3
45,907.6
865.9
824.6
1,609.5
Other total
Europe (except Germany)
Germany
IVG
1
Non-consolidated/provisional
4
Near completion
2
Stated amounts are IVG share of euro total
5
Includes tenancies signed up to 31 Dec. 2003
3
Space (partly) in development
01 Mission
06 Our Business
08 Acquisitions
10 Lettings
14 Sales
16 Real Estate Portfolio
In-building
parking
Occupancy at
31 Dec.
Spaces
%
150
178
84
53
40
150
36 Markets
Effective occupancy
at 31 Dec.
Jan.–Dec.
%
%
100.0%
100.0%
86.2%
100.0%
100.0%
100.0%
100.0%
98.1%
100.0%
100.0%
88.4%
100.0%
100.0%
100.0%
100.0%
97.7%
100.0%
100.0%
90.6%
100.0%
100.0%
100.0%
100.0%
98.6%
1,446
963
183
430
0
3
3,025
92.3%
80.9%
95.2%
100.0%
100.0%
93.8%
79.6%
95.7%
100.0%
100.0%
92.2%
100.0%
96.5%
100.0%
100.0%
94.3%
95.4%
95.4%
0
0
60
31
91
99.8%
100.0%
45.9%
100.0%
84.4%
100.0%
100.0%
39.1%
100.0%
88.9%
100.0%
78.0%
90.7%
97.9%
89.9%
11
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
86.9%
100.0%
100.0%
100.0%
89.1%
92.6%
100.0%
100.0%
100.0%
100.0%
100.0%
82.5%
100.0%
82.8%
100.0%
100.0%
100.0%
100.0%
100.0%
97.6%
100.0%
98.3%
100.0%
93.4%
62.6%
100.0%
100.0%
100.0%
93.9%
93.6%
100.0%
97.4%
100.0%
100.0%
100.0%
87.4%
100.0%
100.0%
100.0%
95.4%
100.0%
100.0%
100.0%
97.6%
100.0%
98.3%
100.0%
93.4%
62.6%
100.0%
100.0%
100.0%
93.9%
93.6%
100.0%
97.4%
100.0%
100.0%
100.0%
87.4%
100.0%
100.0%
100.0%
95.4%
100.0%
100.0%
96.1%
97.1%
97.1%
655
26
62
31
60
91
40
13
61
8
151
13
86
1,600
1,520
3,793
1,199
11,898
6,098
17,996
6
7
91.5%
88.6%
90.3%
93.4%
94.4%
93.9%
89.9%
93.3%
91.5%
Development
reserve
Market
value
1,000 m2
 ‘000
72 Employees
Investment
Rental in- Income fore2003 come 1 2003
cast 1 2004
Cash flow
2003
EBIT 2003
 ‘000
 ‘000
 ‘000
2,680
1,953
1,138
884
563
706
506
8,430
2,680
1,992
874
900
574
710
506
8,236
2,323
1,958
966
750
564
611
507
7,679
1,944
1,656
806
626
477
512
429
6,450
408,630
2,167
367
6,236
38
84
2
8,894
14,259
541
*7)
8,567
3,467
2,084
139
29,057
10,980
355
7,996
2,358
2,131
158
23,987
11,624
-28
*7)
4,979
3,121
1,992
3,769
25,457
8,755
-99
3,695
2,686
1,651
3,760
20,448
308,300
60
0
995
0
1,055
6,386
5,308
2,860
1,708
16,262
6,625
2,500
2,225
1,964
13,314
6,038
3,227
2,595
1,227
13,087
5,675
2,270
2,144
901
10,990
503
712
670
1,218
323
1,049
427
1,055
372
4,653
490
1,232
915
642
403
136
921
967
1,263
1,236
1,309
616
2,526
3,089
6,657
33,384
56
87
85
163
44
90
26
137
39
708
75
161
146
91
97
16
130
161
186
149
168
79
411
421
556
4,282
40
69
74
130
40
59
15
120
34
592
36
122
141
78
80
14
117
137
159
97
139
64
379
421
432
3,589
 ‘000
125,900
99.0
42.0
204.4
19.0
12.0
0.0
376.4
*7)
 ‘000
10.0
28.4
8.6
56.0
310,568
129
2,992
83
113
111
197
53
149
51
173
56
773
102
181
148
109
116
23
153
194
210
178
210
101
420
515
1,248
5,667
0.0
188,533
3,502
15,475
15,397
12,016
9,968
92,2
873,5
965,7
1,981,158
1,313,318
3,294,476
66,547
36,859
103,406
104,363
101,324
205,687
129,317
95,248
224,565
84,703
76,021
160,724
68,108
54,476
122,584
9.0
Geometrical volume in 1,000 m3; gas cavern storage capacity:
8
Partly held under trust for German government
500 million scm working gas
9
1,000 m3
IVG share only
10
Finland portfolio (net rental income, cash flow and operating earnings) stated at
2/12 of total (POLAR first consolidated 1 Nov. 2003)
20.21
Dr. Josef Zimmermann, Director Project Development Germany
Jorgen Svedin, Director Project Development International
Project development
IVG development projects were snapped up by tenants and buyers all over Europe in 2003, rewarding
IVG’s strategy of producing top-quality developments in line with market needs:
IVG total value:
1.1 billion
IVG worked with top-notch partners on development projects worth €2.1 billion in 2003; IVG accounted for €1.1 billion of this total while keeping its capital commitment below €400 million.
Lettings in 2003 totalled 51,000 m2, comprising 41,000 m2 in Germany and 10,000 m2 elsewhere in
Europe.
IVG project development activities in 2003 generated turnover of €87.0 million (2002: €160.6 million)
and operating earnings of €5.3 million (2002: €49.1 million). Turnover and earnings were down because
the 2002 figures had included the sale of Gresham Street, IVG’s biggest ever development project.
Accounts were not settled on any major projects in 2003. Factoring out Gresham Street, turnover and
operating earnings increased compared with 2002.
Development projects elsewhere in Europe are undertaken by IVG branch offices or experienced local
partners.
In Germany, IVG consolidated and reinforced its project development capabilities during the year under
review. Wert-Konzept Projektentwicklung and Tercon combined to form a single unit under the Tercon
name. As a result, various technical and commercial functions have been expanded and geared to pull
together.
01 Mission
06 Our Business
20 Project development
36 Markets
72 Employees
IVG generates attractive returns with project development while systematically minimizing risk. Clear
risk control principles are applied to this end:
The IVG share of development projects must not exceed around one third by value of the IVG real
estate portfolio.
The strict investment criteria applied to portfolio properties apply equally to development projects.
Project appraisal draws on IVG’s own pan-European research and the wealth of experience furnished
by branch office property experts.
IVG works with top-calibre contractors to minimize quality, cost and timing risk.
Margins between 10% and 20% must be attainable depending on the project’s location, type of use
and degree of advancement.
A global project controlling function monitors ongoing projects and performs risk assessment on a
continuous basis.
Selected development projects current in 2003
IVG is developing several projects in Berlin through Tercon, its project development subsidiary:
Berlin
Wert-Konzept developed Classicon, a combined commercial-residential building on Leipziger Platz, as
general project contractor for IVG. The eleven-storey building is part of an assemblage which restores
Leipziger Platz to its earlier octagonal form. IVG sold the project to an open-end real estate fund soon
after construction began. It is now used by Stinnes AG.
Classicon
Location: Berlin, Leipziger Platz 9
Type of use: Office
Tenants: Stinnes
Completed: 08/2003
▲
Sale: 08/2003 to CGI Commerzbank Grundinvest
22.23
Tercon Management Board_Horst Lieder_Dr. Dierk Ernst_Reinhard Müller (left to right)
Also on Leipziger Platz, Hannover Leasing engaged Tercon as general project contractor for KanadaHaus. About 6,500 m2 of the 19,000 m2 building will be used by the Canadian embassy. Tercon is also
commissioned with marketing the remainder.
In a joint venture with Rendata, Tercon is general project contractor for Stettiner Carrée – a development at Berlin’s Nordbahnhof rail station comprising four office buildings with a project value of €160
million. The ensemble is let to Deutsche Bahn – which is using it to bring together much of its corporate
headquarters – and has been sold to a company in the Deutsche Bank group.
Tercon has further Berlin projects in the planning or building stage at Salzufer, on Unter den Linden, in
Hackescher Markt and on the banks of the Spree in Kreuzberg.
Nordbahnhof
Location: Berlin
Type of use: 4 office buildings
Occupancy rate: 96%
Tenants: Deutsche Bahn
Completion: 2005
▲
Sale: 2003 to DB Real Estate
01 Mission
06 Our Business
36 Markets
72 Employees
Brussels is IVGs largest location. Besides management of the portfolio, activities in 2003 focused on
Brussels
two projects:
The complete overhaul and extension of Madou Plaza, which will largely be finished in 2004.
Refurbishment of the 10,000 m2 Tervueren Plaza office building, which began mid-2003 and was
completed in January 2004.
MADOU PLAZA, BRUSSELS
Madou Plaza
ernization and expansion of an existing building. The originally
Location: Brussels, Type of use: Office
32-storey office tower was completed in 1964 and came into
Site area: 40,000 m2, Completion: end of 2004
IVG’s hands when IVG took over Asticus in 1999. The property
is handily sited on the Brussels inner ring road, at the edge of
Quartier Léopold where the main EU institutions are found.
The new, rejuvenated Madou Plaza will be finished by the end
of 2004. The expanded tower is receiving an attractive glass
frontage, new utilities and a variable-floorplan interior layout. A
7,000 m2 extension featuring a generous atrium houses offices
and a conference centre. The 33-storey building will be the tallest structure in the European capital. Letting prospective: EU.
Dr. Jean Pierre Staelens, Cetim S.A., Brussels_IVG Project Manager
▲
Madou Plaza is a major IVG project comprising wholesale mod-
24.25
Budapest
IVG has been in Budapest since the late 1990s and has completed a number of projects in the city centre. Some 100,000 m2 of office space is currently being built in Infopark Budapest. Half of it is already
completed.
Infopark Budapest is a key IVG project in one of the new EU member states. IVG began developing the accessibly situated site near
the Technical University and the Danube in 1998. Three buildings are complete and mostly let; construction of a further office building with 13,400 m2 of lettable space commenced at the end of 2003. Infopark is designed to house branch offices of international
firms alongside local businesses. In addition to the office buildings, it also has a service centre with communication and catering
facilities. Major tenants in the first three buildings include Hewlett-Packard and Hungary’s market-leading telecoms and Internet
service providers Matáv and Axelero. Matáv has bought the building it uses. Onward development and completion of the Infopark
depends on demand and is looked after by the IVG branch office with the aid of locally experienced project developers.
Infopark Budapest
Location: Budapest, Type of use: Office
Site area: 42,100 m2 (IVG 17,200 m2), Occupancy rate: 77%
Tenants: Hewlett-Packard, Axelero
I N F O PA R K , B U D A P E S T
▲
Development reserve: 36,200 m2
01 Mission
06 Our Business
36 Markets
72 Employees
G L O B A L G AT E , D Ü S S E L D O R F
▲
Global Gate
Location: Düsseldorf, Type of use: Office
Site area: 33,600 m2 in three construction phases (phase 1: 10,000 m2 sold / phase 2: 12,600 m2 / phase 3 in preparation: 11,000 m2)
Occupancy rate: 63% (phase 2 only)
Global Gate – an IVG office development in Düsseldorf – shows that there are openings in the German office market even at difficult
times. It is located on Grafenberger Allee, between the city centre and leafy suburbs. A number of German household names have
taken up residence in the area, including including Deutsche Bank, Thyssen-Krupp, SMS and Metro with its corporate headquarters.
The first construction phase of Global Gate, completed by IVG in 2002, is let to a subsidiary of Deutsche Telekom and was sold to
an open-end real estate fund.
Almost all of the second phase was let in 2003 despite the difficult market situation. Tenants include international companies such
as the Finnish office chair manufacturers Nowy Styl, TUI subsidiary TQ 3 Travel Solutions, Metro, Weight Watchers and Chubb
Insurance. With these lettings, the complex has attained its eponymous status as Düsseldorf’s global business gateway.
The third phase will offer the tried and tested combination of high quality and commercial amenity.
26.27
Airrail
Location: Frankfurt
Type of use: Office,
retail, hotel
Occupancy rate: 32%
Tenants: Le Meridien
▲
Completion: 2007
Frankfurt
Preparations continue for construction of Airrail, a major development fully integrated with Frankfurt
Airport. Considerable progress has been made on planning work for the complex, which features 680
five-star hotel rooms and more than 70,000 m2 of office space. Le Meridien plans to create one of the
world’s most prestigious airport hotels with high-end interior appointment specially designed for Airrail.
As a result, 32% of the total space at Airrail is already let before construction even begins.
London
IVG has achieved promising further progress with its London activities following its highly successful
Gresham Street and Great Marlborough Street projects. IVG modernized 20 Soho Square and let some
4,000 m2 of the 5,600 m2 office building to Hill and Knowlton, an advertising agency. Preparations commenced for refurbishment of the former headquarters of Lloyds TSB Bank in Lombard Street.
Helsinki
IVG acquired a promising development project together with its majority stake in Finland’s POLAR. The
Jumbo shopping centre near the airport – the second largest in Finland, with a floor area of 53,800 m2
– is gaining another 28,400 m2 of retail space.
Milan
The 16,900 m2 Centro Marelli is finished and is now being let. A total of 4,100 m2 was let in 2003, some
of it to Xerox.
01 Mission
06 Our Business
36 Markets
72 Employees
In a joint venture with insurers and real estate specialists AXA, IVG has been involved in developing
Paris
various projects in Paris since 2001. The focus in 2003 was on letting, sales, and advancing construction
on ongoing projects:
A X A / I V G P R O J E C T D E V E L O P M E N T, PA R I S
▲
▲
Perisud
Colgate
Location: Paris, Type of use: Office
Location: Paris, Type of use: Office
Site area: 33,700 m , Occupancy rate: 100%
Site area: 9,100 m2, Occupancy rate: 100%
Tenants: Sanofi-Synthélabo
Tenants: Colgate
Sales: 05/2003 to CGICommerzbank Grundinvest
Sales: 12/2003 to KanAm
2
A joint venture between AXA and IVG is developing real estate projects worth some €800 million by 2008. With up-to-date products
on attractive terms, the joint venture has already fully let three large office buildings and sold two of them to German open-end real
estate funds: the Périsud building in Montrouge, Paris, has been completed and is now used by Sanofi-Synthélabo; an office building
in Bois-Colombes is let to Colgate. A further Bois-Colombes office complex, with 40,800 m2 of lettable space, is under construction
and has already been let to Aviva, a UK insurance group. The joint venture has also sold numerous owner-occupied apartments in
Issy-les-Moulineaux and Bois-Colombes.
28.29
PROJECT DEVELOPMENTS
Location
Project
Type of use
Lettable
Occup.
Realiza-
IVG
space m2
rate*
tion
share
Progress
Status
Berlin
Carossa Quartier phase 2
Office and retail
8,941
14%
2006
Berlin
Nordbahnhof Berlin
Office
61,347
96%
2005
50% Under const.
Sold
Berlin
Salzufer
Office, site dvlpmt.
48,556
31%
2005
50% Under const.
For sale
Brussels
Madou Plaza
Office
40,000
2%
2004
100% Under const. Portfolio
Brussels
Tervuren Plaza
Office
9,560
0%
2004
Budapest
Infopark building C
Office
13,376
0%
2005
Düsseldorf
Global Gate phase 2
Office
12,602
78%
2003
100%
Completed Portfolio
Düsseldorf
Global Gate phase 3
Office
10,917
0%
2006
100%
In planning Portfolio
Düsseldorf
Museumsmeile Parkhaus
Parking
Frankfurt
AIRRAIL
Office, retail and hotel
Helsinki
Jumbo 2
London
Lombard Street
Milan
100%
2003
100%
Completed
Let
114,823
32%
2007
47%
In planning
For sale
Retail
28,425
59%
2006
60%
In planning
For sale
Office and retail
16,512
0%
2008
100%
In planning
For sale
Centro Marelli
Office
16,871
28%
2004
45%
Completed
Sold
Munich
City Limit Fürth
Retail
20,768
75%
2004
94%
Completed
For sale
Munich
Ottobrunn Geb. 3 Modernization
Office
13,555
77%
2004
Paris
AXA – Bois Colombes Ilot 1
Office
9,090
100%
2003
30%
Completed
Sold
Paris
AXA – Bois Colombes Ilot 2, 3, 4
Office
40,840
100%
2005
30% Under const.
For sale
Paris
AXA – Bois Colombes Ilot 6, 7, 8
Residential
14,755
96%
2004
30% Under const.
Paris
AXA – M1 H Avenue de France
Office
12,612
0%
2006
30%
In planning
For sale
Paris
AXA – Neuilly sur Seine
Office
Paris
AXA – Oise Logistics Parc
Logistic
Paris
AXA – PERISUD
Office
Paris
AXA – PS Cluny
Paris
AXA – PS Soufflot
12,500
0%
2006
30%
In planning
For sale
0%
2005
30% Part complete
For sale
33,749
100%
2003
30%
Completed
Sold
Residential
3,764
100%
2005
13% Under const.
For sale
Residential
5,701
58%
2005
13% Under const.
For sale
690,080
Total value 100% ( m)
2,091
IVG share of total value ( m)
1,123
IVG share of total value (%)
54
Committed capital ( m)
< 400
Average economic occupancy rate (%)
42
* Percentage let/sold
PROJECT DEVELOPMENT BY REGION
Düsseldorf
Frankfurt
Munich
15%
Brussels
15%
Budapest
2%
6%
Helsinki
4%
23%
London
12%
4%
Sold
140,816
Total lettable space 100% in m2
Berlin
Milan
1%
Paris
18%
01 Mission
06 Our Business
29 Services
36 Markets
72 Employees
Project development services
IVG’s project development activities are not restricted to buildings in its own portfolio. The Group also
Service
offers project development as a service to other companies. IVG subsidiary Tercon undertakes projects
references,
as general project contractor and provides services ranging from project management and obtaining
Tercon 2003
planning permission to project financial control.
SELECTED SERVICE REFERENCES, TERCON 2003:
City
Name
Type of Use
Berlin
Kanada Haus
Embassy, offices,
m2 (GFA)
Construction as general project
80,000
General planning
residential
Darmstadt
TZ Darmstadt
Darmstadt
TZ Darmstadt (development
Office building
Service
19,000
contractor; partial marketing
(buildings for T-Online and T-Systems)
Telekom office park
284,000
Management of planning
105,000
Construction as general project
plan and planning permission)
application
Munich
St. Martin-Strasse
Siemens office building
Munich
Hannover-Leasing headquarters
Office building
contractor; marketing
9,500
Project management
S T. M A R T I N - S T R A S S E , M U N I C H
▲
St. Martin-Strasse
Tercon has been general project contractor for the new Siemens office park on
Location: Munich
St. Martin-Strasse – near Munich East Station – since 2001. The new park will
Type of use: Office
ultimately accommodate 5,500 workers. Five office buildings with a total of
Site area: 120,000 m
80,000 m2 and 450 parking spaces were handed over to Siemens in 2003. Plan-
Tenants: Siemens
ning work has begun on two further office buildings with 25,000 m2.
2
30.31
Investment funds
Growing funds
business leverages
Our funds complement IVG shares as a vehicle allowing private and institutional investors to tap into
our active presence and deep experience in European property markets.
IVGs expertise
German institutional investors are looking to buy into property abroad and – rather than buying outright
as they would do at home – prefer to invest indirectly through institutional real estate funds. With
property-based tax-saving strategies on the decline, private investors are increasingly turning to yieldoriented investments. Difficult property markets make an experienced guide with local presence a key
success factor.
IVG is well placed to serve institutional and private investors. Access to attractive investment products,
experience in active portfolio management and a network of branch offices in major European cities and
growth centres give a competitive edge. IVG projects a sharply defined market presence by its clear
focus on office and commercial property in Europe.
IVG actively exploited the strategic opportunities in 2003 to consolidate and expand funds activities for
institutional and private investors. In total, IVG manages a real estate portfolio worth €3 billion for third
parties.
Dr. Georg Reul, Director Funds
Fund team_Jan Dührkoop_Dr. Rüdiger von Stengel_Philipp Henkels (left to right)
01 Mission
06
07
20
30
Our Business
36 Markets
Project development
Investment funds
31 Open-end real estate funds
72 Employees
Open-end real estate funds
As of 2003, IVG is stepping up its involvement in the open-end real estate fund business. In spring,
New IVG
IVG Immobilien KAG gained approval to carry on investment business from BaFin, Germany’s Federal
investment company
Financial Supervisory Authority. IVG Immobilien Kapitalanlagegesellschaft mbH, to cite its full name,
is a specialized financial institution coming under Sec. 1 of the German Banking Act (KWG) and BaFin
supervision. Its activities consist of issuing and managing real estate funds as defined in the German
Investment Funds Act (KAGG) (which was superseded by the German Investment Act (InvG) on 1 January 2004). Known as open-end real estate funds, these are especially popular among investors due to
their transparency and security.
For the time being, IVG is concentrating on real estate funds for institutional investors such as insurance
companies and pension funds. Over €13 billion is currently invested in institutional real estate funds
in Germany. The flow of money into institutional real estate funds is expected to continue growing,
primarily due to the growth market in company pensions, investment strategies with greater emphasis
on real estate and a shift in investment patterns from direct to indirect vehicles.
Its risk spread and stability makes real estate an attractive buy for institutional investors. But professionally looking after property takes a lot of management effort and expert knowledge.
FUNDS INVESTED
m
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
Open-end real estate funds
0
Money market funds
- 10,000
Other security funds
- 20,000
Bond funds
1997
1998
Source: BVI (March 2003), IVG Immobilien AG
1999
2000
2001
2002
2003
Equity funds
32.33
Institutional
investors cautious
To make up for knowledge shortfalls above all regarding foreign markets, institutional investors prefer a
professional, experienced operator with direct access to the rental and investment markets.
in their investment
decisions
In December, IVG Immobilien KAG issued two real estate funds: IVG Europa Invest Nr. 1 and IVG
Europa Invest Nr. 2. The plans are for further investors to join these funds. In view of their systematic
pan-European investment policy resembling the buy-and-sell strategy successfully practised by IVG, we
anticipate that the funds will generate sustained, above-average returns.
I V G I M M O B I L I E N D E L P H I S T U D Y: I N V E S T M E N T B E H AV I O U R O F I N S T I T U T I O N A L I N V E S T O R S
A D VA N TA G E S O F I N V E S T I N G I N R E A L E S TAT E
Percentage of respondents
Broad diversification
97.4
Steady income
63.2
Independent of stock and bond markets
60.5
Protection from inflation
47.1
Strong potential for value growth
44.7
D I S A D VA N TA G E S O F I N V E S T I N G D I R E C T LY I N R E A L E S TAT E
Percentage of respondents
High administrative expense
81.6
Not readily fungible
73.5
Demands high level of expert knowledge
50.0
Low yields
28.9
High cluster risk
13.2
Source: Prognos AG – survey covering 50% of market value in investments
01 Mission
06
07
20
30
Our Business
36 Markets
Project development
Investment funds
33 Closed-end real estate funds
72 Employees
Closed-end real estate funds
Private investors have long favoured closed-end funds as a means of investing in property. A key advan-
IVG takes 100% of shares
tage is that investors are fully informed, before committing themselves, as to the properties that make
in investment fund
up the fund assets and the fund’s prognosticated performance over the next 10 to 15 years. This pro-
promoters Wert-Konzept
vides a sound basis on which to decide when it comes to certain kinds of mostly long-term investment
– bringing forecasting risk down to a low level unattainable for other indirect property investments.
As a result, closed-end real estate funds have kept a strong place among property investments, proving
wrong all predictions to the contrary. Some €4.5 billion in equity flowed into closed-end funds in 2003.
The total value of real estate assets held in closed-end funds exceeds €150 billion, well above the €85
billion assets of all open-end real estate funds.
IVG plans to place greater focus on closed-end real estate funds. We consider ourselves well placed to
expand this business in view of our Europe-wide branch office network and considerable experience in
the structuring, value-sustaining management and timely sale of real estate investments. Investment
products structured in this way will be promoted in future through an IVG-owned marketing management company. To this end, IVG has increased its stake in Wert-Konzept, a funds marketing company
of long standing, from 40% to 100%. After strengthening the workforce and structure of its marketing
arm, Wert-Konzept increased marketed equity in 2003 by 140% compared with the previous year, to
€46 million. The target for 2004 is further growth to €100 million.
Marketing in 2003 centred around two closed-end funds: »Ertragsfonds 5« and »EuroSelect 07«. The
first of these was issued in 2002 and all units were sold in 2003. The fund assets are two office buildings in Frankfurt am Main and Bonn. The two properties are let under long-term tenancies to Dresdner
Bank and Deutsche Telekom.
■ Total investment: €99.25 million
■ Equity sold: €46.65 million, plus €2.3 million premium (€31 million in 2003)
■ Prospectus dividend: 7%
■ Tax loss for investors in Year 1: 13%
Ertragsfonds 5
34.35
»EUROSELECT 07«
IVG and Wert-Konzept presented the »Euro-
The planning of »EuroSelect 07« is an early example of how the expertise of various
Select 07« fund in November 2003. The fund
IVG business operations is drawn upon in issuing closed-end funds. All IVG divisions
combines first-class office properties in
successfully contributed their experience, from the search for a suitable property by
Germany and the UK.
the London Branch Office to choices regarding legal and tax issues, financing and
ultimately marketing.
EMI House, London
Lettable space 8,000 m2
The »EuroSelect 07« investment company has acquired the London headquarters
Purchase price €51.0 million
of EMI. The property is in the London Borough of Hammersmith, between the City
Annual rent €3.6 million
(about 5 km away) and Heathrow Airport (12 km).
IVG Headquarters
The other two properties are the headquarters of IVG Immobilien AG in Bonn and an
Zanderstr. 5-7, Bonn
office building in the IVG business park at Nuremberg. The buildings are let on long-
(94% of the property management company)
term tenancies lasting to 2020.
Lettable space 9,300 m2
Purchase price €21.5 million (for 94%)
Under the double taxation treaty, income from the London property is only taxed in
Annual rent €1.5 million (for 94%)
the UK. In Germany, this income is tax-exempt (though it counts towards total income
when determining the tax rate applicable to income from other sources). The UK
Nordostpark Building 12-14,
grants each taxpayer a tax-free allowance equivalent to €6,500 a year. As a result,
Nuremberg
dividends payed out by the funds are virtually tax-free for German participants invest-
Lettable space 8,500 m
ing up to €115,000.
2
Purchase price €12.7 million
Annual rent €0.9 million
IVG provides investors in this fund with exit opportunities unusual for a closed-end
fund – for example redemption of units in the event of hardship and a right to sell to
Total value: €98.5 million
IVG in respect of the two German properties.
Equity, excluding premiums, approx.
€50 million
IVG will remain able to offer attractive European properties with tax benefits for pri-
Initial dividend 6.3% (tax free)
vate investors.
Zanderstrasse
Location: Bonn
Type of use: Office
Site area: 9,300 m2
Tenants: IVG Immobilien AG
▲
01 Mission
06
07
20
30
Our Business
36 Markets
Project development
Investment funds
33 Closed-end real estate funds
D ATA
72 Employees
PROPERTIES
Volume € million
98.5
Equity capital € million
Borrowed capital (net) € million
London, EMI House,
m2 office space
50.0
43 Brook Green Hammersmith
parking spaces
45
48.5
Bonn, IVG headquarters,
m2 office space
9,300
6.3 *
Initial dividend in %
Minimum investment € (plus 5% premium)
»EuroSelect 07«
10,000
* from 2003; rising to approx. 8% by 2022
8,000
Zanderstrasse 5&7
parking spaces
109
Nuremberg,
m2 office space
8,500
Nordostpark 12–14
parking spaces
–
SELLING OPTIONS
Investors have right to sell units back
once after 10 years, at the then prevailing market
price with the applicable discount.
The investment fund company has options
to sell the German investment properties
(Bonn and Nuremberg) to IVG:
Initial purchase of units
▲
2004
2009
2015
2017
Up to year 10
90% of par
Investors have option to sell in event of hardship at any time
Source: IVG
EMI House
Location: London, Type of use: Office
Site area: 8,000 m2, Occupancy rate: 100%
▲
Tenants: EMI
Wert-Konzept_Bernd Wrobel_Dr. Klaus-Dieter Schmidt_Rainer Gieseke_Torsten Deutsch (v.l.n.r.)
▲
▲
Years 1–5
80% of par
2014
Data
36.37
Markets
Rather than following identical trends, the various
European real estate markets each have different
potential and growth rates.
Selling opportunities in one major city coincide with
buying opportunities in another.
Only a real estate company with local expertise is in
a position to exploit these market opportunities to full
effect.
01 Mission
06 Our Business
36 Markets
37 Economic environment
72 Employees
The European economy was generally feeble in 2003. Most European countries reported only slight
Varied economic
economic growth. The main cause besides structural problems was weak domestic demand. House-
picture across Europe
holds and businesses held back with spending due to the shaky outlook and governments were forced
to save by high levels of public debt.
A look at Europe’s countries and regions reveals a varied picture. Countries in Central Eastern Europe
have relatively high growth rates. Though not spared the effects of the weak global and Western European economy, these were through the worst of the recession and are now attractive investment locations in view of their impending EU accession. This region is expected to continue delivering Europe’s
top growth rates in the coming years. Among existing EU members, the UK and Spain turned the corner
and already saw their growth rates pick up in 2003.
Inflation in EU member states ranges between 1.2% and 2.9%. Combined with low interest rates this
makes for a good climate for business investment.
E U R O P E A N E C O N O M I C D ATA
in %
GDP growth
2002
Inflation
2003 2
2002
2003
0.2
-0.1
1.3
1.3
4.78
4.07
Finland
2.2
1.5
2.0
1.2
4.98
4.13
Sweden
1.9
1.4
2.0
2.0
5.30
4.64
Hungary
3.5
2.9
5.2
5.2
7.09
n.s.
Italy
0.4
0.3
2.6
2.8
5.03
4.25
Portugal
0.4
-0.8
3.7
2.3
5.01
4.18
Spain
2.0
2.3
3.6
2.9
4.96
4.12
Belgium
0.7
0.8
1.6
1.8
4.99
4.18
France
1.2
0.1
1.9
2.5
4.86
4.13
UK
1.7
2.0
1.3
1.3
4.91
4.58
EU (15 countries)
1.0
0.7
2.1
2.0
4.92
4.23
Euro zone (12 countries)
0.9
0.4
2.3
2.1
4.92
4.16
1
Provisional (except Germany)
2
Nov. 2002–Nov. 2003
3
Yield on 10-year government bonds
2002
3
Germany
Source: Eurostat
2003 1
Interest rates
38.39
European real estate market
Rental markets
Most European office property markets were dragged down with the economy in 2003: Top and aver-
hard, investment
age rents fell while vacancy rates increased. The causes were shrinking demand and growth in the
markets stable
supply of new space. Projects initiated at the height of the millennium boom were now coming onto
the market. Large amounts of space were also available for subletting.
Space turnover varied from city to city across Europe. While demand in London, Milan, Berlin and Barcelona dropped between 10% and 23%, Brussels saw demand growth of 96%, Prague 47% and Madrid 21% – after a weak preceding year – no less than 40%. Turnover remained at previous year’s levels
in the main German office locations except Berlin, and in Frankfurt was even up 21%. However, many
companies were taking advantage of the current market situation to let new units on better terms.
A total of 7.06 million m2 of office space was let in the 19 main cities in 2003. The 2002 figure had been
6.65 million. The weighted average relative growth rate in 16 key Western European office markets
was 5%. The three major cities of Central Eastern Europe saw growth of 14%, albeit from a far lower
starting point.
For property market research, IVG draws on the expertise of its own branch offices and of local specialist estate
agents, supplemented by a centrally managed cooperation with international real estate consultants Cushman &
Wakefield Healey & Baker (CWHB). This double-checking of market information is necessary because there are
no central clearing points for the real estate market.
M A R K E T D ATA
Location
Population1
Total space2 (m2 million)1
Space turnover (m2)1
Change
Change
2003
2003
2002
%
2003
2002
%
2003
2002
%
3,299,900
16.6
16.4
1.2
350,000
395,000
-11.4
21.50
26.00
-17.3
949,000
11.8
11.4
3.5
723,236
427,627
69.1
22.90
20.80
10.1
2,018,000
1.4
1.3
7.7
139,616
131,369
6.3
19.00
18.00
5.5
565,500
5.7
5.6
1.8
230,000
282,000
-18.4
21.00
23.00
-8.7
Frankfurt
664,000
10.9
10.5
3.8
526,500
435,000
21.0
35.00
42.00
-16.7
Hamburg
1,689,000
12.8
12.6
1.6
280,000
325,000
-13.8
20.00
22.50
-11.1
Helsinki
555,000
7.4
7.3
1.4 3)
350,000 3) 200,000 3)
23.50
24.00
-2.1
London
6,678,000
21.6
20.4
5.9
461,632
597,733
-22.8
82.75
92.90
-10.9
Madrid
3,101,000
9.4
8.9
5.6
531,000
440,000
20.7
27.00
30.50
-11.5
Milan
1,487,000
8.8
8.6
2.3
162,680
193,830
-16.1
39.60
41.70
-5.0
Munich
1,257,000
16.6
16.0
3.8
460,000
490,000
-6.1
28.00
28.00
–
Paris
9,200,000
44.8
44.0
1.8
1,580,948 1,450,860
9.0
52.25
58.30
-10.4
Berlin
Brussels
Budapest
Düsseldorf
1)
Top monthly rent (/m2)1
Change
Source: CWHB
2)
Source: IVG Research
3)
Source: Catella
01 Mission
06 Our Business
36 Markets
72 Employees
St. James‘s Street
Location: London
Type of use: Office
Site area: 5,100 m2
Occupancy rate: 91%
Tenants: BNP, Inter Gen
▲
▲
Leibniz Kolonnaden
Location: Berlin
Type of use: Office, Site area: 12,700 m2
Occupancy rate: 91%
Tenants: Lawyers, insurers, etc.
Average monthly rent (/m2)1
Vacancy rate (%)1
Change
Prime yield (%)1
Change
Average yield (%)1
Change
2003
2002
%
2003
2002
%
2003
2002
12.75
14.50
-12.1
9.2
7.3
1.9
6.00
17.00
15.80
7.6
9.4
8.6
0.8
6.25
14.00
14.00
–
20.5
20.9
-0.4
12.25
13.00
-5.8
12.3
7.2
5.1
13.50
16.00
-15.6
12.4
4.8
12.50
13.00
-3.8
7.8
4.7
14.50
15.00
0.6
6.9
54.08
69.75
-22.5
15.90
18.70
21.34
21.34
14.00
28.00
Change
%
2003
2002
%
5.50
0.50
7.00
6.50
0.50
6.75
-0.50
6.60
6.80
-0.20
8.50
8.75
-0.25
9.00
9.00
–
6.00
5.50
0.50
6.50
6.25
0.25
7.6
5.50
5.00
0.50
6.50
6.00
0.50
3.1
5.50
5.25
0.25
6.75
6.25
0.50
5.5
1.4
6.50
6.50
–
7.25
7.25 2)
11.7
8.1
3.6
6.00
6.25
-0.25
7.50
7.25
0.25
-15.0
9.4
7.3
2.1
6.00
6.00
–
6.25
6.60
-0.35
–
10.3
8.0
2.3
5.75
5.75
–
6.50
6.50
–
15.00
-6.7
8.1
4.8
3.3
5.25
4.75
0.50
6.75
6.00
0.75
25.00
12.0
6.9
6.1
0.8
6.00
6.25
-0.25
6.75
6.75
–
–
40.41
Office markets, fourth quarter 2003
(compared with previous year)
��
��
Prime rent (/m2)
��
Average rent (/m2)
Leased space 2003 (1,000 m2)
Vacancy rate
Yield in prime locations
Tendency prediction average rent
��
01 Mission
06 Our Business
36 Markets
40 IVG locations in Europe
72 Employees
��
2.5
��
��
��
��
��
��
42.43
Rental market
Western Europe rental market
Top rents down,
City centre oversupply caused another slight decrease in top rents in most office markets – by a weigh-
vacancy rates up
ted average of 11% in 16 key Western European cities, as against 9% in Central Eastern Europe. There
were exceptions in both West and East: In the West, Brussels saw rents climb 10.1% fuelled by strong
demand in the EU quarter, Quartier Léopold; rents in Budapest rose 5.5%.
A trend taking hold in many regions is a shift in the emphasis of demand away from city centres and
towards accessibly situated peripheral locations. This was especially plain in Paris. The main causal
factor is heightened cost awareness among tenants, who take advantage of lower rents and the wide
range of large modern units on offer in the banlieue. As a result, average office rents in Europe’s major
cities held up better than top rents: office rents fell in only 7 of 19 monitored cities, stayed level in 10
and rose in Brussels and Paris.
IVG Businesspark
vor München
Location: Munich
Type of use: Office
Occupancy rate: 96%
Tenants: BOSCH, MTU,
EADS, Astrium, Galileo
▲
Industries
01 Mission
06 Our Business
36
37
40
42
Markets
Rental Market
42 Western Europe
43 Central and Eastern Europe
72 Employees
With large quantities of new buildings still coming onto the market and many tenants still cutting back
on space, vacancy rates rose at all key Western European locations, with the strongest increase in
Lisbon, Frankfurt and Amsterdam. The latter’s 18% vacancy rate for office space was higher than any
other major European city.
Supply was further swelled by office users trying to part-sublet their premises. Endeavours of this kind
were most evident in the financial centres London and Frankfurt, each of which saw over 500,000 m2
or more than 5% of all downtown office space available for subletting. Few such offers were taken up,
however, as tenants usually prefer to deal with the actual owner of a property. This gives greater room
for manoeuvre and is less risky, avoiding dependence on a primary tenant.
Overall, most European property markets appear to have reached firmer ground in 2003, with top rents
falling less steeply and vacancy rates increasing far less sharply than the preceding year; the third quarter even saw average rents recover by 1.6%. With the economy livening up again, 2004 is seeing the
start of a new upturn. Yet with supply so strong, vacant space will fill up but most cities will not support
major rent increases in prime locations during 2004. These are not expected until vacancy rates are significantly lower. The conditions will then indeed be right for rents to rise again, at least for commercial
units combining high quality with good location and up-to-date amenities.
Central and Eastern Europe rental market
The real estate market cycles of Central and Eastern Europe are so far largely independent of those
Rents and demand on
of Western Europe. While the West boomed in the late 1990s, cities such as Budapest, Prague and
the increase
Warsaw saw rents take a dive and vacancy rates on the increase – the effect of a construction boom in
the preceding years. This was compounded by subdued macroeconomic growth towards the end of the
period. Today, with the exception of Warsaw, the office market crisis has been overcome. Accession
to the European Union is stimulating economic activity and demand for real estate. As was the case in
Western and Southern European countries after joining the EU, rents and demand are likely to rise in
the coming years.
Vacancy rates moved contrary to Western Europe. They had been extremely high in earlier years, attaining between 12.5% and 21%. But vacancies in Budapest, Prague and Warsaw began to fall during
2003 – clear evidence of gaining demand.
44.45
Investment markets
Healthy demand for
Demand on the European market for property investments stayed lively in 2003. According to Jones
property investments
Lang LaSalle, €80.6 billion was invested – 8% down on the 2002 record. Selling prices for commercial
property kept relatively stable as a result. Prime rental yields in key Western European real estate markets averaged 6.0% (2002: 6.1%) at the end of 2003. End-2003 prime yields in Central Europe stood at
8.8% (2002: 9.2%).
Investment activity was buoyed by very low interest rates, with equity yields keeping their edge on
other low-risk investments. Businesses financing activities with debt capital could take advantage of
the good terms. Mortgage rates often undercut rental yields, affording buyers positive cash flows from
the outset.
The most important investor groups Europe-wide were German open-end real estate funds – with cash
inflows still a high €13.7 billion in 2003 – together with private investors and institutional investors such
as pension funds. Investors from the USA also showed renewed interest in European property.
▲
Place Vendôme
Location: Paris, Type of use: Office , Site area: 11,000 m2,
Occupancy rate: 100%, Tenants: Cartier, BNP Paribas
01 Mission
06 Our Business
36
37
40
42
44
Markets
Rental market
Investment market
44 Western Europe
45 Central and Eastern Europe
72 Employees
Lombard Street
Location: London
Type of use: Office
Site area: 16,500 m2,
Total refurbishment of the former headquarters of
Lloyds TSB Bank
▲
Completion: 2008
Western Europe investment market
Average yields held steady in 2003 on almost all key markets outside Germany; prime yields fell in
London – still Europe‘s
London and Paris (both from 6.25% to 6.0%) and various other cities. The preferred investment target
leading investment target
was the UK, with a 50% market share according to Jones Lang LaSalle. Second place was taken by
Scandinavia with 12%, primarily because of the number of foreign investors active in Sweden. France
came third, with marked emphasis on Paris. The city was the investment location favoured by German
open-end funds.
There was a marked decline in buying interest in German property. According to a survey by Jones Lang
LaSalle, the transaction volume in the five key locations of Berlin, Düsseldorf, Frankfurt, Hamburg and
Munich fell by 37% in 2003 to about €5 billion.
2004 will probably see many institutional investors increasing the real estate share in their portfolio. The
general economic recovery heightens the attractiveness of property as a low-risk, high-yield asset class
with potential for value growth.
Central and Eastern Europe investment market
Central and Eastern Europe is becoming increasingly well established as an investment location. With
Good investment
EU accession in the background, contributing factors include increasing political and economic stability
opportunities in Central
and good growth prospects. 2003 was the fourth consecutive year of investment growth. For now,
and Eastern Europe
though, the markets remain far smaller, less predictable and more liable to fluctuate than those of
established Western European major cities. Investors are consequently only prepared to buy in at significantly higher yields. The latest weighted average yield figure for prime location office properties in Budapest, Prague and Warsaw was 9.0%, compared with 6.0% in Western Europe. Prices are noticeably
rising in Central and Eastern Europe, however, and yields are correspondingly reduced. Rising prices
and falling yields reflect international investors’ growing confidence in the maturing markets of Central
Eastern Europe.
46.47
European network of excellence
■ IVG locations
IVG headquarters
Stockholm
Hamburg
Berlin
London
Düsseldorf
Brussels
Bonn
Frankfur t
Paris
Munich
Budapest
Milan
Helsinki
01 Mission
36
37
40
42
44
46
06 Our Business
Markets
Rental market
Investment market
72 Employees
Brussels – Europe‘s rising market
»
Suite à l’élargissement de l’Union européenne, le marché du bureau connaît aujourd’hui
une grande expansion à Bruxelles. La demande se concentre sur le quartier Léopold où
siègent les principales institutions de l’UE, ainsi que sur le Centre, situé immédiatement
à l’ouest de celui-ci. Dans ces deux quartiers toutefois, les réserves en espaces et en
surfaces sont pratiquement épuisées. Bruxelles est un site de plus en plus prisé par les
«
investisseurs. Les loyers les plus élevés, dont le niveau était jusqu’à présent relativement
bas, se rapprochent aujourd’hui de ceux d’autres grandes villes européennes.
»Expansion of the European Union is giving the Brussels office market a strong push. Demand is concentrated in
Quartier Léopold, which is home to the main EU institutions, and in the city centre immediately to the west. Reserves are virtually exhausted in both parts of the city, both in terms of space within existing buildings and land for
development. Brussels is increasingly sought-after as an investment location. Top rents, relatively low in the past,
are approaching the levels of other major cities in Europe.«
Luc Delfosse, IVG Branch Manager, Brussels
R E A L E S TAT E P O R T F O L I O
OFFICE RENTS
 /m2
Number of properties
25
280.5
Total site area 1,000 m2
Total rental income € billion
49.9
Total market value € million
834.8
■ Top monthly rent
25.0
■ Average rent
22.9
20.8
R E A L E S TAT E D E V E L O P M E N T P R O J E C T S
18.1
18.6
19.1
17.0
Number of projects
2
49.6
13.6
13.6
4Q99
4Q00
14.5
185.5
Total value € million
IVG share of total value %
100
North Gate
Location: Brussels
Type of use: Office
▲
Tenants: Régie des Bâtiments
17.5
15.8
4Q01
4Q02
4Q03
4Q04e
48.49
Paris – attractive locus for development
«
Place de la Madeleine
Location: Paris
Type of use: Office
Site area: 2,600 m2
▲
Tenants: Hediard, Bati conseil, etc.
OFFICE RENTS
 /m2
4
34.1
16.3
■ Average rent
308.3
44.5
Number of projects
27.9
9
273.8
779.4
29
4Q99
»
63.5
63.5
31.8
31.8
4Q00
4Q01
58.3
52.3
25.0
28.0
4Q02
4Q03
58.3
30.0
4Q04e
La région parisienne est le plus grand marché européen de
l’immobilier d’entreprise, et l’un des plus porteurs en termes
d’avenir. Doté d’un potentiel de croissance énorme, c’est un site
très attractif pour les implantations de projets. Les immeubles
de standing bien situés sont souvent loués ou vendus bien avant
«
leur achèvement. Un redressement de l’économie et du marché
de l’immobilier se dessine actuellement dans la capitale.
»The region surrounding the Paris is Europe’s largest and one of its most promising office
markets with a lot of growth potential, making it a highly attractive location for project
development. High-quality, well-situated properties can in some cases be let and sold long
before completion. The French capital shows signs that its economy and property market
will soon recover.«
Frederic Heitz, IVG Project Development International_Tommy Karlsson, IVG Branch Manager, Paris
01 Mission
06 Our Business
36
37
40
42
44
46
Markets
Rental market
Investment market
72 Employees
Helsinki – strong growth prospects
»
Kansainväliset sijoittajat ovat löytämässä Suomen lupaavat markkinat.
Ajankohta sijoitustoiminnan aloittamiseen on erittäin suotuisa. Kiinteistöalan suhdanteet ovat ohittaneet aallonpohjan ja edessä on vakaa
nousukausi. Sijoitusten alkutuotot ylittävät vielä Euroopan keskiarvon.
Suomen markkinoiden erityispiirteiden vuoksi on ulkomaisten sijoitta-
«
jien kuitenkin syytä toimia tällä alueella vain mikäli he tuntevat olosuhteet hyvin tai mikäli heillä on tukenaan suomalainen alan osaaminen.
»International investors have now discovered the up-and-coming Finnish market. It is a good time to get in there:
the real estate cycle has obviously passed its lowest point and a robust upturn is now imminent. Initial yields so far
are still above the European average. Certain peculiarities of the Finnish market mean foreign investors would be
wise to go in only if they have good market knowledge themselves or can draw on local expertise.«
Risto Varpula, POLAR Real Estate CEO and IVG Branch Manager, Helsinki
OFFICE RENTS
 /m2
36
297.2
5.7*
310.6
*2/12 of total (POLAR first consolidated 1 Nov. 2003)
■ Average rent
28.3
27.0
26.1
24.0
1
28.4
93.9
60
18.9
17.5
4Q99
4Q00
18.1
4Q01
15.8
15.9
16.0
4Q02
4Q03
4Q04e
Vallila Companies
Location: Helsinki
Type of use: Office
Tenants: TeliaSonera,
Segafredo Zanetti, etc.
▲
Number of projects
25.0
23.5
50.51
London – market leads Europe in professionalism
Property: Soho Square
Location: London
Type of use: Office
Site area: 5,600 m2
Miete 2003: 8,000 
Completed: 12/2003
Occupancy rate: 59%
▲
Tenants: Hill & Knowlton
OFFICE RENTS
 /m2
4
13.3
5.9
168.1
■ Average rent
122.7
110.0
93.7
75.0
Number of projects
80.0
78.0
Total site area 1,000 m
82.8
84.6
54.1
54.1
4Q03
4Q04e
69.8
1
2
»
92.9
16.5
161.1
100
4Q99
4Q00
4Q01
4Q02
In spite of the recent problems on the London rental market, prime London
locations still bring in the highest rents in Europe. The most sought-after properties are in the West End, followed by the City. Tenants and investors are
now turning to other markets as well: for example Soho, which is a trendy
location for media and communications firms, and Hammersmith, handily
«
situated between the city centre and Heathrow. London retains its status as
the highest-liquidity and most professionally operating European market.
David Gibson, IVG Branch Manager, London
01 Mission
06 Our Business
36
37
40
42
44
46
Markets
Rental market
Investment market
72 Employees
Berlin – long-run potential
»
Als einzige Stadt in Deutschland konnte Berlin den Umsatz auf
dem Investmentmarkt im Jahr 2003 halten. Auffällig ist der hohe
Anteil an großen Transaktionen: Geschäfte mit einem Volumen
von über 50 Mio. € machten fast die Hälfte des Gesamtumsatzes
aus. Berlin bleibt aufgrund seiner Hauptstadtfunktion ein
interessanter Markt für zukünftige Projektentwicklungen.
(Frank Strothe)
«
»Berlin was the only German city to keep up investment market turnover in 2003. One thing that stands
out is the large share of high-value transactions: deals worth over €50 million made up almost half of total
turnover. Because of its role as a capital city, Berlin remains an attractive market for future project developments.«
Frank Strothe, IVG Branch Manager, Berlin_Dr. Harald Braun, Berlin-Konzept
OFFICE RENTS
 /m2
21
215.1
19.0
324.6
■ Average rent
30.7
28.1
Number of projects
3
118.4
332.8
52
Spreespeicher
Location: Berlin
Type of use: Office
Occupancy rate: 75%
Tenants: Universal,
▲
adidas-Salomon, Vitra, etc.
26.0
24.5
14.8
15.5
4Q99
4Q00
14.5
14.5
4Q01
4Q02
21.5
22.0
12.8
13.0
4Q03
4Q04e
52.53
Düsseldorf – demand set to rally
IVG Businesspark
am Flughafen
Location: Düsseldorf
Type of use: Office
Occupancy rate: 99%
Tenants: Nokia, Compass,
▲
Allianz-Immobilien, etc.
OFFICE RENTS
 /m2
7
89.9
11.2
■ Average rent
199.2
23.0
23.0
23.0
23.0
12.8
13.0
13.3
13.0
12.3
13.0
4Q99
4Q00
4Q01
4Q02
4Q03
4Q04e
Number of projects
3
23.5
72.5
100
2
»
21.0
23.0
Im Jahr 2003 stieg der Büroleerstand in Düsseldorf an; Umsätze und
Spitzenmieten gingen zurück. Doch gibt es nach wie vor Bereiche mit
einem lebhaften Marktgeschehen. Dazu zählen moderne und zugleich
preisgünstige Bürohäuser in gut erschlossenen Stadtlagen, nahe dem
Flughafen und der Grafenberger Allee, für die sich Mieter mit Kosten- und
«
Qualitätsbewusstsein entschieden. Erfreulich ist, dass die Leerstandsrate
zum Jahresende 2003 nicht mehr anstieg.
»Düsseldorf saw an increase in the vacancy rate as regards office units in 2003; turnover and top rents were down.
There are still some lively sectors of the market, such as modern but attractively priced office buildings in accessible
city locations, near the airport and Grafenberger Allee; these attract tenants with an eye to cost and quality. It is pleasing to note that the vacancy rate had stopped rising by the end of 2003.«
Roland Gottschling, IVG Branch Manager, Düsseldorf
01 Mission
36
37
40
42
44
46
06 Our Business
Markets
Rental market
Investment market
72 Employees
Munich – new perspectives
»
München hat nach wie vor einen geringeren Leerstand als andere
deutsche Büro-Metropolen. Bevorzugte Standorte sind vor allem nördliche,
östliche und südliche Stadtbereiche und Vororte mit ihrer Nähe zum
Flughafen, zur Messe und zu wichtigen Hightech-Unternehmen. Letztere
«
sind auch heute die wichtigste Mietergruppe. Ihr Flächenbedarf dürfte bei
anziehender Konjunktur wieder deutlich wachsen.
»Munich still has a lower vacancy rate than other major German office markets. The preferred locations are northerly,
easterly and southern urban and suburban districts close to the airport, the exhibition centre and the operating locations
of major high-tech firms. The latter are also the most important group of tenants at the moment. They should be needing significantly more space as the economy picks up.«
Lother Ruck, IVG Branch Manager, Munich
OFFICE RENTS
 /m2
17
269.2
29.1
408.6
■ Average rent
28.6
30.7
30.2
28.0
28.0
28.0
14.0
14.0
4Q03
4Q04e
Number of projects
2
34.3
42.6
95
IVG Businesspark
MEDIA WORKS MUNICH
Location: München
Type of use: Office
Occupancy rate: 80%
▲
Tenants: Epcos
15.5
16.1
16.2
4Q99
4Q00
4Q01
15.0
4Q02
54.55
Frankfurt – highest rents in Germany
Airbizz
Location: Frankfurt
Type of use: Office
Completed: 12/2003
Sale: 12/2003
▲
Tenants: Fraport AG, Thiel Logistik
OFFICE RENTS
 /m2
9
151.6
8.7
111.5
■ Average rent
53.7
40.9
46.0
42.0
Number of projects
1
114.8
576.3
»
16.0
47
4Q99
4Q00
18.0
16.0
4Q01
4Q02
35.0
33.0
13.5
13.0
4Q03
4Q04e
Der Miet- und Investmentmarkt wird sich Ende 2004 stabilisieren.
Deutlich festzustellen ist jedoch ein gestiegenes Kostenbewusstsein der
Nachfrager. In der Innenstadt war der Mietrückgang der letzten Jahre noch
gravierender als an dezentralen Locationen wie Niederrad, Rödelheim und
«
Heddernheim. Als dynamischer Immobilienstandort erwies sich erneut der
Frankfurter Flughafen, insbesondere die Cargo City Süd.
»The rental and investment market will stabilize by the end of 2004, though potential tenants are
visibly more cost-conscious. The decline in rents over the last few years was even sharper in the
city centre than in out-of-town locations like Niederrad, Rödelheim and Heddernheim. Frankfurt
Airport again proved a dynamic real estate location, especially Cargo City South.«
Friedhelm Hübers, IVG Branch Manager, Frankfurt
01 Mission
36
37
40
42
44
46
06 Our Business
Markets
Rental market
Investment market
72 Employees
Hamburg – crisis-proof sectoral mix
»
Hamburgs Büromarkt ist gekennzeichnet durch eine breite und daher
relativ krisenfeste Branchenmischung. Im nächsten Aufschwung dürfte
Hamburg stark von seiner vielfältigen Wirtschaftsstruktur profitieren. Dies
«
bringt nicht nur Impulse für die City, sondern auch für den Norden der
Stadt mit seiner guten Flughafenanbindung.
»Hamburg’s office market has a broad sectoral mix, which makes it fairly crisis-proof. Hamburg stands to benefit from
its diverse economy in the next upswing. This will bring stimulus not only for the city centre, but also for the north of
town with its easy accessibility to the airport.«
Gabriele Müller, IVG Branch Manager, Hamburg
OFFICE RENTS
 /m2
5*
98.8
33.5
■ Average rent
269.4
28.1
* Including caverns and tank storage
24.5
25.6
22.5
Number of projects
–
–
–
–
IVG Businesspark
Hamburg Nord, Essener Strasse
Location: Hamburg
Type of use: Office
Tenants: Hermes Versand,
Lilly Forschung, Yxlon International
▲
X-Ray
12.8
13.1
4Q99
4Q00
14.0
4Q01
20.0
20.5
13.0
12.5
12.5
4Q02
4Q03
4Q04e
56.57
Milan – consolidating after the boom
Via Carducci
Location: Milan
Type of use: Office
Site area: 9,400 m2
Occupancy rate: 88%
▲
Tenants: IVENSYS
OFFICE RENTS
 /m2
7
68.4
8.2
125.9
■ Average rent
23.7
1
16.9
40.9
2
»
45
41.7
21.3
21.3
21.3
4Q01
4Q02
4Q03
41.3
43.4
32.3
Number of projects
43.0
16.2
20.0
11.3
4Q99
4Q00
4Q04e
Milano è la capitale economica d’Italia ed è il più importante mercato immobiliare per quanto riguarda gli uffici. Sono richiesti soprattutto locali moderni di alto
livello qualitativo che però sono piuttosto rari in città. Per questo motivo spesso
il centro viene abbandonato a favore delle località dell’hinterland con ottimi
collegamenti con la metropoli, come ad esempio Sesto San Giovanni. La grande
«
crescita regionale e l’ottimo clima investivo fanno prevedere una ripresa a media
scadenza degli aumenti delle locazioni e del valore degli immobili.
»Milan is Italy’s economic capital and its most important office market. Demand is strongest for high-quality
modern units, which are very rare in the city centre. Accordingly, potential tenants often look away from the centre to accessibly situated suburbs like Sesto San Giovanni. Strong regional growth and a good investment climate
mean that rents and property values may well grow again in the medium term.«
Sergio Villa, IVG Branch Manager, Milan
01 Mission
Markets
Rental market
Investment market
72 Employees
Budapest – new stimulus from joining EU
Magyarország fo
˝városa Európa egyik legélénkebben fejlo
˝do
˝ ingatlanpiaca, ahol
emelkednek a bérleti díjak és csökken az üresen álló helyiségek száma. A befekteto
˝k
egyre nagyobb bizalommal vannak a város iránt; a bevásárlóközpontok mellett az
irodaházak a favorizált befektetések. Nemcsak belvárosi helyeket választanak, hanem
olyanokat is, ahonnan könnyen elérheto
˝ a repülo
˝tér és egyéb más fontos helyi intézmény, mit például a Mo
˝szaki Egyetem. A kedvezo
˝ perspektívák alapján – az EU-hoz
«
történo
˝ csatlakozás miatt is – a budapesti ingatlanok árai az elkövetkezo
˝ években
várhatóan jelento
˝sen emelkednek.
»The Hungarian capital has one of Europe’s most rapidly emerging property markets with sharply rising rents and shrinking vacancy rates. Investors are showing more and more confidence in the place; office buildings are the favourite
investment target next to shopping centres. Choice locations include both the city and sites that are well connected
to the airport and important local institutions like the Technical University. The good outlook – especially with Hungary
joining the EU – means Budapest property prices should shoot up over the next few years.«
Kay-Uwe Blandow, IVG Branch Manager, Budapest
OFFICE RENTS
 /m2
4
24.8
2.8
45.0
■ Average rent
19.0
18.9
18.0
18.9
16.9
Number of projects
13.4
23.9
100
16.4
15.2
1
2
18.5
16.9
4Q99
4Q00
4Q01
14.0
14.0
14.0
4Q02
4Q03
4Q04e
Andrássy út
Location: Budapest
Type of use: Office
Site area: 2,000 m2
Occupancy rate: 73%
Tenants: SIL Interior, etc.
▲
»
36
37
40
42
44
46
06 Our Business
58.59
Investor Relations
Proactive investor and creditor relations are integral
to our value-driven corporate philosophy.
They secure transparency and trust.
01 Mission
06 Our Business
36 Markets
59 IVG shares
72 Employees
IVG shares
February 2004 saw a pivotal change in share ownership at IVG. The 49.9% stake held by Sirius – until
New ownership
then IVG’s largest shareholder – was taken over by Sal. Oppenheim Bank (25.1%), HSH Nordbank
structure
(11.16%), DZ-Bank, WGZ-Bank and IKB Deutsche Industriebank. IVG greets the new ownership structure: With their strong capital base and experience in real estate, the new shareholders can actively
support and secure IVG’s successful European strategy for the long term.
The stock markets recovered in 2003 after three weak years in succession. The main international share
Stock market recovery
indices gained overall, in some cases by a pronounced margin: The Dow Jones rose by 21.6%, the
Nikkei by 23.6% and the EuroStoxx 50 by 11.6%. The DAX, which had been among the world’s weakest indices in 2002, showed the strongest growth in Europe with an increase of 34.1%.
European property shares again proved an attractive investment in 2003: The EPRA Total Return Index,
European real estate
comprising Europe’s 70 main listed real estate companies, turned in growth of 19.7%, once again out-
shares performing well
performing the Euro Stoxx 50 (11.6%). This was the third consecutive year in which the EPRA index did
better than the market as a whole.
Dr. Wilhelm Breuer, Director Investor Relations
Norbert Zube, Director Finance
60.61
IVG shares set to
The IVG share price also showed its upside potential in 2003 and gained 11.7% on a dividend-adjusted
go on rising
basis over the year, though it did not quite keep pace with the EPRA index. Reasons included uncertainty about IVG’s ownership, a weak property market in Germany, and the introduction or expected
emergence of REIT vehicles in France and other European countries adding vigour to those markets.
After two weak years, the stock market performance of IVG shares fails to satisfy despite the positive
showing in 2003. The share price does not yet suitably reflect IVG’s underlying performance. IVG’s net
asset value, with reflects the inherent value of its shares, was €14.41 per share before deferred taxes
and transaction costs at the end of 2003. We expect that our share price will better follow the fundamental data now that the ownership structure has been resolved.
THE IVG EQUITY STORY
Factors operating in favour of IVG shares:
Major listed European real estate company
Dynamic portfolio management: market value €3.3 billion, net rents €233 billion
Quality project development with top-calibre partners, with the IVG share of projects totalling €1.1 billion
Reputable real estate investment funds for institutional and private clients, with a €3 billion portfolio under management for
third parties
Value-driven corporate philosophy
Clear strategic direction:
Rigorous and successful transformation from a national conglomerate to a sharply focused listed European real estate
company
Sectoral focus on office properties and business parks, unlocking synergies in terms of expertise
Regional focus on major European cities, targeting cyclical differences, stable cash flows and risk minimization
Knockdown purchases of property lots and property companies
Portfolio value growth by modernization, utilization of development reserves and improvement of tenancy structures
Rigorous policy of selling when markets mature or good offers received
Project development with attractive opportunity/risk profile
Development, management and sale of reputable fund products
Ongoing evolution into an investment house for indirect real estate investment products: a one-stop shop providing institutional and private clients with property investments to match their needs
Efficient structure:
IVG branch offices providing critical mass and local expertise
Balance of local expertise and central management policies
Quick decisions and action
Synergies from a European network
Teamwork across Europe
Good performance figures and dividends, even at difficult times
High stock market liquidity
Broad research coverage and inclusion in relevant indices
Active investor and creditor relations for maximum transparency and trust
01 Mission
06 Our Business
36 Markets
59 IVG shares
72 Employees
IVG’s market capitalization stood at €1.1 billion at the end of 2003, making it the largest German listed
High stock market
real estate company. Some 130,000 IVG shares were traded on each dealing day in 2003, a significant
liquidity
increase in stock market turnover compared with the previous year (75,000).
IVG holds 29th place in the 50-share MDAX index in terms of free-float market capitalization and 35th
IVG included in
place measured in turnover. IVG shares currently make up 1.3% of the index.
relevant share indices
In addition to the national MDAX, IVG is also included in all relevant international sectoral indices:
EPRA index
EPRA/NAREIT Index
GPR 250
Salomon Smith Barney World Property Index
Increasingly, these are used as a basis for index certificates and as benchmarks by real estate equity
funds and other institutional investors.
The Board of Management and the Supervisory Board will be proposing a dividend of €0.34 per share
Stable dividends
at the 2004 Annual General Meeting. This represents a total distribution of €39.4 million.
The attractiveness of IVG shares as an investment is shown by medium to long-term share price trends.
IVG share price
Since the end of 1997 – when IVG began systematically focusing on commercial property and the Eu-
medium-term
ropean markets – the dividend-adjusted share price has increased by over 50%; the MDAX has risen
attractive
22% and the DAX is 7% down.
IVG‘S SHARE PRICE
%
150
100
50
0
- 50
January 1998
■ IVG
■ DAX
January 1999
January 2000
■ EPRA Total Return Index
January 2001
January 2002
January 2003
January 2004
Source: Bloomberg, January 2004
62.63
Share options
IVG’s share options scheme creates performance incentives that are tied to gains in the value of the
enterprise. The Annual General Meeting of 23 May 2002 approved a new share options scheme.
The options scheme is open to the Board of Management, general managers of affiliated companies,
and other key managerial employees.
The share options are valid for five years ending on 29 June 2008. They cannot be exercised before
expiry of a two-year blocking period on 30 June 2005.
Active investor and
creditor relations
Active investor and creditor relations are integral to our value-driven corporate philosophy. They secure
transparency and trust.
As in previous years, IVG held large numbers of analysts’ conferences, roadshows and one-on-ones
both in Germany and elsewhere during 2003. The staging of the third annual conference of the Real
Estate Shares Initiative was very well received, attracting over 200 visitors.
IVG has long had a strong commitment to equity and capital market communication issues, with memberships including:
The German Investor Relations Association (DIRK)
Deutsches Aktieninstitut (DAI)
German Society of Investment Analysts and Asset Managers (DVFA)
The DVFA Efficient Communication Commission
The Real Estate Companies Subcommittee of the DVFA Methodology Commission.
01 Mission
06 Our Business
36 Markets
59 IVG shares
72 Employees
Active involvement in the European Public Real Estate Association (EPRA) is an important part of our
European Public
investor relations activities. EPRA brings together all forces of relevance to European property shares,
Real Estate Associa-
including the leading European listed real estate companies, financial analysts, investors, banks and
tion (EPRA)
auditors. IVG is active on the EPRA Management Board and in the Best Practices Committee, which
drafts uniform reporting and valuation standards for European real estate shares.
The EPRA Best Annual Report award was first presented in 2002, when IVG took first place out of over
IVG again in top three
60 European listed real estate companies. IVG was once again among the winners in 2003, taking third
for EPRA Award
prize.
The general conditions for real estate shares have improved markedly across Europe in recent years,
Advancing the REIT
particularly when it comes to tax regimes. Now France has followed the Belgian, Dutch and American
cause
example with the introduction of real estate investment trusts (REITs). These are not taxed as a corporate entity in their own right, allowing them to distribute their operating profits almost in full. Only
shareholders pay tax on the high dividends after these have been paid out. German listed real estate
companies are at a comparative disadvantage because both the companies themselves and their investors are taxed.
IFD – a joint initiative of Deutsche Börse, the Bundesbank, the German Finance Ministry and financial institutions promoting Germany as a financial centre – has now paved the way for the creation of German
REITs by putting forward detailed plans for a tax-transparent property investment vehicle. This would
give a marked boost to German real estate shares. IVG will take an active part in the debate.
64.65
I V G S H A R E D ATA
 per share
1995
1996
1997
1998
1999
2000
2001
2002
No. of shares at year end
 million
78
93
93
93
114
116
116
116
2003
116
Market cap. (based on year-end price)
 million
622
750
731
1,300
1,761
1,507
1,247
962
1,075
Year‘s highest price
9.52
9.47
10.65
15.08
18.86
15.35
15.80
12.99
9.50
Year‘s lowest price
7.23
6.98
7.68
7.35
12.94
12.55
9.40
8.00
5.75
Year‘s closing price
7.97
9.00
7.87
13.97
15.45
12.99
10.75
8.30
9.27
DVFA/SG earnings
0.39
0.32
0.45
0.52
0.62
0.73
0.55
0.58
0.52
DVFA/SG cash earnings
0.94
0.77
1.21
1.24
1.17
1.40
1.06
1.31
1.14
Dividend per share
0.24
0.26
0.27
0.29
0.31
*
0.33
0.34
0.34
0.34
*
 million
18.61
20.91
25.36
26.95
35.34
38.28
39.44
39.44
39.44
%
3.01
2.89
3.43
2.08
2.01
2.54
3.16
4.09
3.67
Price/earnings (P/E) ratio (year-end share price)
20.4
28.1
17.5
26.9
24.9
17.8
19.5
15.4
17.8
MDAX P/E
18.4
14.9
17.3
16.7
22.4
18.7
17.5
12.9
29.1
DAX P/E
16.0
15.6
17.2
20.9
30.2
20.4
30.0
16.4
22.4
Total dividend distribution
Dividend yields (year-end share price)
*
Excluding special dividend (€0.20 per share)
**
Proposed
R E C O N C I L I AT I O N O F D V F A / S G E A R N I N G S T O N E T I N C O M E
, 000
Consolidated net income for the year
Adjustments for consolidation
2003
2002
66,476
70,432
0
0
Adjustments to assets
Adjustments to depreciation periods or methods (claw-back effect)
Other adjustments
0
-2,356
3,162
-13,347
Adjustments to liabilities
Special tax-allowable reserves
0
0
Other adjustments
-2,435
12,771
DVFA/SG consolidated earnings for the entire Group
67,203
67,500
Minorities‘ share of earnings/losses
Share of parent company shareholders in DVFA/SG consolidated earnings
Number of shares outstanding (thousand)
DVFA/SG earnings per share (€)
STOCK SYMBOLS
Reuters
IVG F
Bloomberg
IVG GR
WKN
620 570
ISIN Code
DE 0006205701
7,139
566
60,064
66,934
116,000
116,000
0.52
0.58
**
01 Mission
06 Our Business
36 Markets
59 IVG shares
65 EPRA
a) Net Asset Value
72 Employees
EPRA
The European Public Real Estate Association (EPRA) is the European industry association of publicly
quoted real estate companies. Its members also include financial analysts, investors, banks, and auditing firms. To ensure the highest possible level of transparency for investors, IVG acts upon EPRA’s Best
Practices Recommendations for accounting and reporting. For details of the Best Practices Recommendations, please see www.epra.com.
IVG supports EPRA’s efforts to promote European harmonization of reporting standards in the publicly
quoted real estate sector. Most of the required information at IVG is already an integral part of the annual financial statements. Additional information required by EPRA is brought together on the pages
that follow, primarily relating to these topics:
a) Net asset value
b) EPRA income presentation
c) Financial risk management/other disclosures
d) Like-for-like rental growth
a) Net asset value (NAV)
IVG net asset value
Net asset value (NAV) is the company’s total assets at market prices minus total liabilities. It is a measure of net worth. NAV per share was up 1.8% at the end of 2003, to €14.41 per share. The increase
results from IVG’s acquisition of POLAR Real Estate Corporation on attractive terms and the renewed
strength of the European property markets.
The annual revaluation of the IVG property portfolio against the backdrop of a difficult market showed
a rise in market value of 1.5% or €37.5 million compared with the previous year. This figure demonstrates the benefits of IVG’s European strategy. A decrease in the market value of German property
due to the ongoing harsh macroeconomic and property market climate was countered by a gain across
the remainder of the European portfolio. London showed the strongest increase on revaluation at 2.5%,
followed by Milan with 2.2% and Stockholm with 2.0%.
Basis of computation
Save as otherwise stated below, all NAV figures draw on data from the consolidated financial statements. Portfolio properties are accounted for at market values estimated in the great majority of cases
by neutral appraisers instead of at the book values stated in the financial statements.
66.67
N E T A S S E T VA L U E
m
Market values of real estate portfolio
Project development
2003
2002
3,294.5
3,171.6
60.3
59.0
Current assets (own stakes excluded)
542.5
495.7
Financial assets
216.2
260.4
Other assets
21.3
11.9
Total assets
4,134.8
3,998.6
Liabilities
2,139.8
2,106.4
Other liabilities
Provisions
0
35.0
191.6
162.3
Deferred income
132.0
52.6
Total borrowing
2,463.4
2,356.3
Net asset value
1,671.4
1,642.3
14.41
14.16
Deferred taxes (going concern)
62.5
58.8
Transaction costs
48.7
47.6
1,560.2
1,535.9
13.45
13.24
NAV per share ()
EPRA net asset value (going concern):
NAV (going concern) ()
NAV per share (going concern) ()
Fair valuation of portfolio properties
The real estate portfolio was valued as at 31 December 2003 almost entirely by the following independent experts:
Germany: Jones Lang LaSalle
Belgium/Luxembourg: de Crombrugghe & Partners s.a.
Italy: REAG
United Kingdom: FPD Savills
Spain/Portugal: CB Richard Ellis
Hungary: CWHB Hungary
Sweden: DTZ Sweden
France: Alban Cooper
Switzerland: Colliers AMI (Suisse) SA
Finland: Kiinteistötaito Peltola & Pulkkanen Oy
01 Mission
06 Our Business
36 Markets
59 IVG shares
65 EPRA
65 a) Net Asset Value
72 Employees
In compliance with International Financial Reporting Standards (IFRS), IVG has all properties appraised
at fair value. Neutral appraisers value the great majority of the portfolio by the discounted cash flow
(DCF) method. The valuations generally comply with IFRS, including in particular IAS 40, which covers
accounting for investment properties. The valuations are performed on the basis of the International
Valuation Standards (IVS) and the RICS Appraisal and Valuation Manual (Red Book) published by the
Royal Institution of Chartered Surveyors.
Fair valuation by the DCF method
The DCF method is a net present value calculation that entails discounting a property’s future net operating income to a valuation date. The net operating income figures are the balance of receipts and
payments for each year of a ten-year detailed budget period. Receipts are mostly net rental income.
Payments comprise running costs met by the owner and not passed on to tenants. The net operating
incomes are discounted to the valuation date at a free market discount rate estimated for each property,
giving a net present value for each period’s net operating income.
A residual value is then estimated for the property as at the end of the ten-year detailed budget period.
This reflects the price most likely to be recovered at the end of the period. It is obtained by capitalizing
the net operating income for the eleventh year as a perpetuity at what is referred to as the capitalization rate. The net present value of this figure as at date of valuation is then found by applying the same
discount rate as is used for net operating income. The sum of discounted net operating income and
discounted residual value is the fair value of the property under appraisal.
Development projects
Development projects are recognized at their discounted contribution margin plus their carrying
amounts under financial assets and current assets. The discount rate used is 15%.
Financial assets, current assets and other assets
Financial assets and current assets are shown net of amounts already included in the market value of
real estate assets.
Deferred taxes on hidden reserves
The EPRA going-concern value incorporates deferred taxes discounted over 25 years at an 8% discount
rate. The tax loss carried forward in Finland with around € 240 million wasn’t considered. It is assumed
that book gains on sales of German properties can be transferred to newly acquired properties under
Sec. 6b of the German Income Tax Act.
Liabilities
Liabilities for non-consolidated properties are included in addition to Group liabilities.
68.69
b) EPRA income presentation
E P R A I N C O M E S TAT E M E N T
m
Notes
2003
2002
Group rental income
1
232.8
226.1
Gain on sales of real estate
2
60.4
43.0
Unrealized gain on revaluation of property investment
3
87.1
7.8
380.3
276.9
113.8
Earnings
Total revenues from property investments
Earnings from development activities
4
117.4
Earnings from funds business
5
14.1
1.1
Management fees
6
61.5
56.6
Earnings from other operating activities
7
Total revenues
68.9
71.0
642.2
519.4
Expenses
Loss on sale of investment property
8
0
0
Unrealized loss on revaluation of property investment
9
92.6
141.8
10
136.6
89.8
Property operating expenses
Personnel expenses
56.9
52.1
134.7
131.7
Total expenses
420.8
415.4
Net operating income according
221.4
104.0
Net financing costs
-89.8
-95.9
Net income before tax
131.6
8.1
Income tax
-20.8
-26.2
2.4
41.6
Other operating expenses
Deferred income tax on revaluation result
11
12
Net income (including unrealized gains and deferred income taxes)
113.2
23.5
Net income (excluding unrealized gains and deferred income taxes)
116.3
115.9
Net income per share (including unrealized gains and deferred income taxes) ()
0.98
0.20
Net income per share (excluding unrealized gains and deferred income taxes) ()
1.00
1.00
1. Gross rental income – Net rents excluding running costs that can be apportioned among tenants
2. Gains on sales of real estate – Capital gains on sales of properties as stated in the annual financial statements
3. Unrealized gains on revaluation of property investments – Gains in market value of properties on revaluation, adjusted for investments and
divestments, and including the »lucky buy« POLAR acquisition.
4. Earnings from development activities – Total operating performance of the Project Development segment as stated in the annual financial
statements
5. Earnings from investment fund activities – Total operating performance of the investment fund segment
6. Management fees – Includes ancillary letting costs recouped from tenants and management fees from the management of logistics assets
7. Earnings from other operating activities – Includes operating income from participating interests, corporate functions, non-core business
8. Loss on sale of investment property – Book losses on sales of properties as stated in the annual financial statements
9. Unrealized loss on revaluation of property investments – Loss in market value of properties on revaluation, adjusted for investments and
divestments
10. Property operating expenses – Material expenses and maintenance/upkeep
11. Other operating expenses – Other operating expenses (excluding maintenance/upkeep), and other taxes as stated in the annual financial
statements
12. Deferred income taxes on revaluation result for property investments – Deferred income taxes on revaluation gains and deferred income tax
assets on revaluation losses.
01 Mission
06 Our Business
36 Markets
72 Employees
59 IVG shares
65 EPRA
65 a) Net Asset Value
68 b) EPRA income presentation
69 c) Financial risk management and other disclosures
69 d) Like-for-like rental growth
EPRA net income after revaluation increased from €23.5 million in 2002 to €113.2 million in 2003, primarily due to lower unrealized losses on revaluation of property investments: net revaluation losses were
€5.5 million including the POLAR »lucky buy«. Net revaluation losses in 2002 had been €134.0 million.
EPRA net income differs from HGB (German Commercial Code) net income in that rather than depreciating buildings over estimated useful lives, the property portfolio is revalued on a yearly basis, where possible by outside appraisers, and reported with any deferred taxes arising on revaluation. Based on EPRA
net income per share after revaluation, IVG has an attractive price/earnings (p/e) ratio of nine.
c) Financial risk management and other disclosures
Derivatives
We make systematic use of derivative financial instruments to reduce risk due to exchange rate and
interest rate changes in the course of IVG’s Europe-wide activities. For this purpose, the Group Treasury
exclusively uses marketable instruments with adequate market liquidity. To ensure the lowest possible
risk of counterparty default, contracts involving derivative financial instruments are entered into solely
with major European banks of immaculate credit standing. The use of derivative instruments is subject
to uniform internal guidelines and strict controls. Regular valuations are performed and there is monthly
reporting. In accordance with internal Group directives, derivative financial instruments are used exclusively to hedge risks in connection with specific underlying transactions. Together with the corresponding hedged item they essentially form a valuation unit.
Currencies
Foreign currency exposures from investment in non-euro countries are broadly neutralized by refinancing in the same currency. Currency risks are thus countered at Group level by systematic currency
management.
Interest rate exposures, loan maturities and average cost of debt
Interest rate exposures and loan maturities are geared to the investment portfolio, reflecting the typical
duration of most investments in real estate. Portfolio management under our buy-and-sell strategy and
the resulting short-term, intra-year cash flows mean that a relatively small sum relative to the total is
deliberately financed on a variable short-term basis. At existing repayment terms, the earnings effect
of a 1% change in interest rates would be approximately €1.7 million. The weighted average cost of
debt is less than 5%.
d) Like-for-like rental growth
On a like-for-like basis adjusted for investments and divestments, rents stayed roughly level at
€169.5 million compared with €169.9 million the previous year.
70.71
Corporate governance refers to the entire system by which a company is managed and monitored, its
corporate principles and guidelines, and the system of internal and external controls and supervision to
which the company’s operations are subjected. Good, transparent corporate governance ensures that
our company will be managed and monitored in a responsible manner geared to value creation. This
fosters the confidence of investors, employees, business associates and the general public in IVG’s
management and supervision.
Declaration of compliance with the recommendations of the German Corporate Governance Code in
the version dated 21 May 2003 by the Board of Management and Supervisory Board of IVG Immobilien
AG pursuant to Sec. 161 of the German Stock Corporation Act (Aktiengesetz – AktG)
IVG welcomes the principles drawn up by the Government Commission on the German Corporate Governance Code (the ‘Cromme Commission’). Most of these principles have already formed an integral
part of our value-oriented corporate policies for some years. In September 2002, IVG also became a
founder member of a corporate governance organization for the German real estate industry, ‘Initiative
Corporate Governance der deutschen Immobilienwirtschaft e.V.’. Under the chairmanship of IVG Immobilien AG’s Chief Executive Officer Dr. Eckart John von Freyend, this organization drew up corporate
governance principles specifically for real estate companies which go beyond those recommended in
the Cromme Commission’s Code and which add real estate-specific requirements to that Code. IVG
follows the recommendations and suggestions from the Corporate Governance Code of the German
Real Estate Industry. This Code can be downloaded from http://www.immo-initiative.de.
IVG undertook numerous measures geared towards compliance with the German Corporate Governance Code during 2002 and pursued these measures in 2003 as a result of the modifications to the
Cromme Commission’s Code. These measures included reworking the Terms of Reference for the
Board of Management and the Supervisory Board. IVG complies with the recommendations of the
Code with the following specific exceptions:
4.2.4 Compensation of the members of the Board of Management shall be reported in the Notes to the
Consolidated Financial Statements, subdivided according to fixed, performance-related and long-term
incentive components. The figures should be individualized.
01 Mission
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36 Markets
58
59
65
70
Investor Relations
IVG shares
EPRA
72 Employees
IVG certainly intends to report the compensation paid to members of the Board of Management in the
Notes to the Consolidated Financial Statements, subdivided according to fixed, performance-related
and long-term incentive components. However, the figures are not yet individualized. We shall await
further developments in the publication of top executives’ pay on an individual basis.
5.4.5 (...) Compensation of the members of the Supervisory Board shall be reported in the Notes to the
Consolidated Financial Statements on an individualized basis and broken down into modules. (...)
Article 16 of the Memorandum and Articles of Association subdivides the compensation of the members of the Supervisory Board into fixed and performance-related components. However, the figures reported in the Notes to the Consolidated Financial Statements are not yet individualized. We shall await
further developments in the publication of compensation of Supervisory Boards on an individual basis.
5.3.2 The Supervisory Board shall set up an Audit Committee which, in particular, handles issues of accounting and risk management, the necessary independence required of the auditor, the issuing of the
audit mandate to the auditor, the determination of auditing focal points and the fee agreement.
It does not make sense to establish a separate Audit Committee since IVG’s Supervisory Board has
six members, meaning that all of the issues involved can be discussed and decided upon by the full
Supervisory Board with maximum efficiency.
7.1.1 (...) The Consolidated Financial Statements and interim reports shall be prepared under observance of internationally recognized accounting principles. (...)
IVG currently conducts its financial reporting according to German accounting laws and regulations,
and intends by 2005 at the latest, in accordance with statutory transitional rules, to switch to reporting in accordance with International Accounting Standards (IAS). To ensure maximum transparency for
investors, IVG already complies on a voluntary basis with the European Public Real Estate Association
(EPRA) Best Practices Recommendations on accounting, valuation and disclosure. In September 2002,
the company received the EPRA award for the best annual report by a listed public European real estate company. EPRA’s membership takes in Europe’s leading public real estate companies, financial
analysts, investors, banks and auditors.
Board of Management and Supervisory Board
IVG Immobilien AG
72.73
Employees
Motivated employees are an indispensable success factor.
With their commitment, skills, qualifications and passion for
real estate, IVG employees secure the positive performance
of our business and lay the foundations for further growth.
Employees in the Bonn headquarters and at branch offices
and IVG companies around Germany and the rest of Europe
contribute equally to the Group’s success.
01 Mission
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72 Employees
73 Employee numbers
73 Employee development
Employee numbers
The number of employees as at 31 December 2003 was 717, a decrease of 4.4% on the previous year.
This is due to non-core operations (126 employees in 2002) being partially excluded from the consolidated financial statements.
The acquisitions of the Wert-Konzept companies and POLAR added to the workforce in the strategic
core businesses of portfolio management, project development and funds.
Group personnel expenses increased by 9.2% to €56.9 million. This item includes expenditure for
severance pay and provisions for employee development and pension obligations.
EMPLOYEES BY SEGMENTS
E M P L O Y E E S B Y Q U A L I F I C AT I O N
%
Trainees
17 (+7)
Corporate Functions
133 (-3)
Funds
40 (+35)
Project development
150 (+25)
377 (+29)
Basic education
with additional skill
13%
University graduate
28%
Basic education
59%
( ) = Change relative to 2002
Employee development and training
IVG is firmly committed to advancing the professional expertise and training of its workforce. A ma-
Management trainee
nagement trainee programme was launched in 2003. The objective is timely identification and recruit-
programme launched
ment of ambitious management talent with an aptitude for the real estate business. Four graduates
with real estate training and appropriate placement experience joined a variety of business units for a
one-year programme in which they were soon taking on responsibility for projects and other tasks. A
new group of management trainees are to be taken on in 2004.
74.75
Trainees_Stephan Stollenwerk_Philipp Diederichs_Christian Beck_Jan Hendrik Goldbeck (left to right)
Targeted placements
The placements programme serves even earlier identification of management talent. Students are
given a chance to combine their theoretical knowledge with initial practical experience in a structured
series of placements. This can culminate in company support with a practice-based undergraduate
dissertation. IVG remains committed to the »agenda4« initiative, which initiates and promotes propertyrelated courses of further study.
Building specialist
IVG employees have access to personal development and further training. We support attendance of
skills
targeted further training courses at the European Business School Real Estate Academy in OestrichWinkel and, in a pilot scheme, a part-time real estate studies course at Mannheim University of Cooperative Education. Other programmes help improve language skills and acquire finance qualifications
such as Certified Credit Analyst, Chartered Financial Analyst, etc.
In March 2004, IVG and the EBS Real Estate Academy launched the IVG Graduate School – a personal
training programme for managers and specialists from Germany and other European countries. Over
a set of ten modules, employees are taught about new academic findings relevant to real estate and
introduced to practice-oriented application examples by experienced real estate experts.
Employee share
Employees with a vested share in Group success identify more closely with the firm and have a perfor-
ownership
mance incentive. Employees can purchase IVG Immobilien AG shares on preferential terms under the
IVG VALUE programme. The company grants an interest-free loan to cover 90% of the total purchase
price. Participating employees have full shareholder status for the two-year programme term, with full
dividend entitlement and all the opportunities and risks of movements in the share price.
01 Mission
06 Our Business
36 Markets
72 Employees
IVG Group employees were again given the opportunity in 2003 to invest part of their net earnings in
Employee equity: A
the form of a loan under the German Employee Savings Act (Vermögensbildungsgesetz). A portion of
high-yield investment
personnel expenses thus remains in the firm as employee equity.
IVG tops up the employee loans with a tax-free supplement, repayable along with the employee-contributed portion with 4.5% interest on expiry of the six-year term. Including the tax-free supplement, employees stand to receive attractive overall returns. Depending on their personal income situation, certain
employees can additionally claim a government savings bonus. More than 50% of IVG employees took
part in the loan scheme in 2003, with employee equity totalling €1.76 million at the end of the year.
The need for additional individual pensions again featured large in public debate during 2003. IVG has
Attractive pension
implemented the statutory provisions in force since 2001 and has developed an attractive private pensi-
plans
on package for employees. Since 2002, IVG employees have been able to take advantage of a deferred
compensation option under which the equivalent of up to 4% of the state pension insurance contribution assessment ceiling (€2,448.00 in 2003) is paid into a pension plan. The deferred compensation is
tax-free for employees and neither they nor the employer need pay social insurance levies on it to 2008
inclusive. Many employees have taken up this pension option. A smaller number have signed up for
state-supplemented »Riester« pension arrangements, for which IVG has also made provision by setting
up an attractive group policy with a German life assurance company.
IVG Immobilien AG signed a collective agreement covering semiretirement in 2001. This extends the
Semiretirement
company’s employee development and human resources planning options. It allows older employees
the possibility of an early transition from working life into retirement. IVG has opted for a »block« arrangement, where semiretirement is divided into a full-time working phase and a non-working phase.
A total of 40 semiretirement agreements had been signed by December 2003. At the end of 2003 there
were already 10 employees in the non-working phase plus 27 in and 3 about to enter the working phase
of semiretirement.
IVG has put in place a share options scheme giving management a share in the company’s performance. Further information on the share options scheme is given on page 62 and in the Notes.
Share options
76.77
Group Management Report
Net income near last year’s high
POLAR takeover opens attractive Helsinki property market
European real estate markets neutral
Proposed dividend as 2002
76 Group Management Report
77 The economy
78 Real estate markets
79 Business performance
79 Segments
81 Financing
82 Consolidated value added statement
83 IVG Immobilien AG:
Annual Financial Statements
84 Dependent parties report
84 Risk management system
85 Events after the close
of the financial year
86 Outlook
87
88
90
92
93
112
114
116
117
Consolidated Balance Sheet
Consolidated Fixed Asset Schedule
Consolidated Income Statement
Notes to the IVG
Changes in shareholders’ equity
Summary of major shareholdings
122 Other information
123 Report of the Auditors of the
Consolidated Financial Statement
124 Report of the Supervisory Board
127 Supervisory Board/
Board of Management
131 Financial calender
IVG Immobilien AG Group Management Report for the 2003 financial year
GROUP PERFORMANCE
€m
2003
2002
Group total operating performance
545.7
637.8
Group turnover
411.5
471.2
EBITD
224.8
350.3
EBIT (operating earnings)
174.2
188.7
Consolidated net income for the year
Investments
Shareholders’ equity
Total assets
66.5
70.4
565.2
358.3
917.0
769.5
3,427.8
3,185.3
The European economy was again generally weak in 2003. Most European countries saw only slight
economic growth. The main cause besides structural problems was flimsy domestic demand. Households, businesses and governments struggling with budget deficits held back on spending.
Europe’s countries and regions paint a varied picture. Countries in Central Eastern Europe show relatively fast growth. These were through the worst of the recession and are now attractive investment
locations with EU membership close at hand. The region is set to keep up Europe’s top growth rates
in the coming years. Among card-carrying EU members, the UK and Spain turned the corner and saw
their growth rates pick up.
Inflation in EU member states ranged from 1.2% to 2.9%. Combined with the sharp fall in interest rates
across all EU countries during 2003, this raises businesses’ propensity to invest.
The economy
78.79
K E Y E C O N O M I C D ATA
in %
GDP growth
2002
Inflation
2003 1
2002
Interest rates
3
2003 2
2002
2003
Germany
0.2
-0.1
1.3
1.3
4.78
4.07
Finland
2.2
1.5
2.0
1.2
4.98
4.13
Sweden
1.9
1.4
2.0
2.0
5.30
4.64
Hungary
3.5
2.9
5.2
5.2
7.09
n.s.
Italy
0.4
0.3
2.6
2.8
5.03
4.25
Portugal
0.4
-0.8
3.7
2.3
5.01
4.18
Spain
2.0
2.3
3.6
2.9
4.96
4.12
Belgium
0.7
0.8
1.6
1.8
4.99
4.18
France
1.2
0.1
1.9
2.5
4.86
4.13
UK
1.7
2.0
1.3
1.3
4.91
4.58
Source: Eurostat, 1 Provisional (except Germany), 2 Numbers Nov. 2002–Nov. 2003, 3 Yield on 10-year government bonds
Real estate markets
Most European office markets were split in 2003: Rents in many places fell and vacancy rates increased.
Their investment markets, in contrast, remained stable as institutional investors had money to spend.
Total demand for office space in the 19 main cities increased, but many firms took advantage of the
market and moved head office to smaller units at reduced rents. The 19 main cities had seen a total of
6.65 million m² of office space re-let in 2002; the 2003 figure was 7.06 million. The weighted average
relative growth rate across 16 key Western European office markets was 5%. The three major cities of
Central Eastern Europe saw growth of 14%, though from a far lower starting point. Far from presenting
a consistent pattern across Europe, growth in space turnover varied strongly from city to city: While
demand in London, Milan, Berlin and Barcelona dropped by between 10% and 23%, Brussels saw
demand grow 69%, Prague 47%, and Madrid 20% after a weak preceding year.
City centre oversupply caused a drop in top rents on most office markets – by a weighted average of
9% in 16 key West-European cities, compared with 11% in Central Eastern Europe. There were positive exceptions in both West and East: In the West, Brussels in particular saw monthly rents driven
up 10% by strong demand in the EU quarter, Quartier Léopold, reaching an absolute high of €22.90
per m². In the East, Budapest stood out with an increase of 5.5%. Top monthly rents there at the end
of 2003 were €19.00/m².
77 The economy
79 Segments
87 Consolidated Financial Statements
Average vacancy rates in the 19 main European property markets swelled from 8.2% to 10.0%. The
reasons were again large quantities of new buildings coming onto the market and many companies
cutting back on space
Vacancy rates rose at all key Western European locations, with the strongest increase in Lisbon,
Frankfurt, Düsseldorf and Amsterdam. The latter’s 18% vacancy rate was higher than any other major
European city. In contrast, vacancy rates in Central Eastern Europe had already begun to shrink, falling
in Budapest, Prague and Warsaw to 20.5%, 13.6% and 14.7% respectively.
Business performance
Group net income, at 66.5 million, was just short of the previous year’s high despite the tough economic climate. The dip in turnover from €471.2 million to €411.5 million mostly reflects the 2002 sale
of Gresham Street – IVG’s biggest ever development project – which made for extra-high sales and
earnings figures that year. Factoring out Gresham Street, turnover increased in 2003. Due partly to the
POLAR takeover, net rents rose from €226.1 million to €232.8 million. Letting activity was on the up:
IVG trumped a hard market with a total of 185,000 m2 of new lettings in portfolio properties and project
developments during 2003.
IVG forged ahead with its successful buy-and-sell strategy and realized €64.8 million in book gains from
property sales in 2003.
Including acquired liabilities, IVG invested €565.2 million over the 2003 financial year. Most of this
came from the takeover of the POLAR group and ongoing development of IVG’s business parks. IVG’s
pan-European activities are partly financed in foreign currency. This resulted in a gain of €22.2 million
before taxes.
The earnings figures allow the Board of Management and Supervisory Board to propose a dividend at
the previous year’s high level of €0.34 per share.
The highlight of the year was the takeover of Helsinki-listed POLAR Real Estate Corporation. This
secured IVG’s entry into one of Europe’s upcoming real estate markets. IVG has since upped its stake
segment
to 95% of all shares in POLAR.
80.81
IVG again successfully played off cyclical differences between property markets across Europe, reaping
attractive gains on disposals under its active buy-and-sell strategy:
An office building on Great Marlborough Street, London
Properties on Rue de Trèves and Rue du Luxembourg, Brussels
Two office buildings in the Eighth Arrondissement of Paris, on Avenue Hoche and Rue de Bassano
Two logistics buildings and an office building in Madrid
The IVG headquarters in Bonn, under sale and leaseback with the EuroSelect 07 investment fund
The Airbizz office and logistics building at Frankfurt Airport
Two shopping centres in Helsinki.
Segment turnover gained from €283.7 million in 2002 to €294.3 million in 2003. This includes net
rent revenues, which jumped from €223.1 million to €230.2 million, primarily due to the takeover of
POLAR Real Estate Corporation. Due to higher profits from property sales, segment earnings rallied
from €169.7 million to €196.2 million. Tenancies were signed for 134,000 m2 of lettable space, despite
patchy demand in many European property markets. The effective occupancy rate at the end of the
year was 91.5%.
Project development
The project development year was dominated by the successful joint venture with AXA, refurbishment
segment
of the Madou Tower in Brussels, and settlement of accounts for the Glockengiesserwall project in Hamburg. Joint projects with AXA in Paris made especially good progress. Besides major lettings to prestigious international firms, the joint venture sold the Périsud project (with 33,500 m2 of lettable space)
to the property funds arm of Commerzbank. In Brussels, IVG pressed on with the complete overhaul of
Madou tower, the city’s tallest building.
After the successful sale of the Leipziger Platz and Dorotheenstrasse projects, IVG has begun a new
development in Berlin’s Mitte district. In a joint venture, IVG subsidiary Tercon is developing over
60,000 m2 of office space for tenants Deutsche Bahn. The project is worth some €160 million. The
office complex was sold to the Deutsche Bank Group before construction began. It is expected that
the Am Salzufer development in Berlin’s Charlottenburg will be successfully marketed once the current
weak market has been overcome.
IVG project development activities in 2003 generated turnover of €87.0 million (2002: €160.6 million)
and operating earnings of €5.3 million (2002: €49.1 million). Turnover and earnings were down because
the 2002 figures had included the sale of Gresham Street. Accounts were not settled on any major
projects in 2003. Development projects do not feature in the turnover and earnings until completed,
sold and handed over to the investor. Factoring out Gresham Street, turnover and earnings increased
compared with 2002. Development project lettings in the 2003 financial year totalled 51,000 m2.
77 The economy
79 Segments
81 Financing
After increasing its stake in the Wert-Konzept group to 100%, IVG combined the project development
activities of Tercon and Wert-Konzept under the Tercon name. As a result, the 2003 financial statements
include Wert-Konzept as a consolidated subsidiary for the first time.
In the second quarter of 2003, the public authorities abandoned the project of privatizing Berlin’s airports. The consortium led by IVG and Hochtief came to an acceptable final arrangement with the authorities, the terms of which are confidential. IVG regrets that the opportunity of an economically viable
solution for the privatization was not taken after eight years of intensive work.
To minimize interest rate risk, IVG has entered into interest rate swaps with a nominal value of €20 million and a 10-year term on the basis of existing loan agreements. IVG has thus secured the current low
level of interest rates for the long term and further reduced its risk exposure to interest rate changes.
The average interest rate on borrowed capital was 4.9% at the end of the year.
A loan was taken out, initially for nine months, to finance the POLAR takeover. This acquisition loan will
be rolled over into a long-term financing arrangement in the course of 2004.
€71 million has been borrowed on a long-term basis to 2012 in connection with a forfaiting transaction
in receivables from letting IVG-owned storage caverns. The tenants’ first-rate financial standing is carried over to the loan, a fact which is reflected in the credit terms.
IVG provides funding to Group companies through a central treasury function. This central funding network makes for optimum pooling of liquidity and so lowers the cost of capital throughout the Group. It
also guarantees the solvency of each of the companies involved and monitors interest, currency and
liquidity risks in the Group as a whole. Integrating the international subsidiaries into IVG’s electronic
cash pool further boosts efficiency.
C O N S O L I D AT E D C A S H F L O W S TAT E M E N T
m
Cash provided by operating activities
Cash provided by/used for investing activities
Cash used for financing activities
Net change in cash and cash equivalents
Cash and cash equivalents generated by consolidation changes
2003
2002
44.0
238.4
38.8
-42.0
-165.9
-85.3
-83.1
111.1
5.7
0.1
Cash and cash equivalents at the start of the period
131.4
20.2
Cash and cash equivalents at the end of the period
54.0
131.4
The full cash flow statement appears in the Notes.
Financing
82.83
Consolidated value
added statement
C O N S O L I D AT E D VA L U E A D D E D S TAT E M E N T
m
2003
2002
Turnover
411.5
471.2
Other income
143.6
171.5
Group performance
555.1
642.7
Source
Material expenses
-116.9
-72.8
-50.4
-161.6
Other expenses
-144.1
-153.1
Total expenses and depreciation
-311.4
-387.5
243.7
255.2
Shareholders
46.5
38.8
Employees
56.9
52.1
State
33.4
40.7
Creditors
87.0
92.1
Group
19.9
31.5
243.7
255.2
Depreciation
Value added
Distribution
Value added
Premises underlying
Preparation of consolidated financial statements and the requisite accounting valuations involve esti-
the consolidated
mates and assumptions that affect reported amounts and related disclosures. All estimates and as-
financial statements
sumptions are made to the best of our knowledge and belief so as to give a true and fair view of our net
assets, financial position and results of our operations. Such estimates and assumptions significantly
affect certain accounting policies, as detailed in the following.
Property, plant and equipment is reported at historical acquisition cost less depreciation. The market
value of the great majority of our properties is estimated annually by independent appraisers. Financial
assets are reported at the lesser of acquisition cost or fair value.
Under German commercial law, fixed assets may be written down to fair value to recognize impairment
losses of a temporary nature. We restrict use of this option to instances where the impairment is incapable of reversal for a reasonably long time (three years or longer).
Measuring write-downs for doubtful debts also entails estimates and assumptions for specific debts;
these estimates and assumptions are made to the best of our knowledge and belief.
Estimates are made in the measurement of provisions for risks arising from legal disputes and of anticipated losses due to project development and other risks contingent on future events. We carefully
weigh the opportunities and risks in each such case and recognize a provision for the risk where we
consider a loss to be likely.
77 The economy
79 Segments
81 Financing
IVG Immobilien AG:
IVG IMMOBILIEN AG: BALANCE SHEET
Annual Financial
m
31.12.2003
31.12.2002
Assets
Property, plant, equipment and intangible assets
3.2
0.5
Financial assets
1,802.3
1,916.3
Total fixed assets
1,805.5
1,916.8
Receivables from affiliated companies
620.7
446.9
Other assets/prepaid expenses
169.7
207.1
Total current assets
790.4
654.0
2,595.9
2,570.8
696.2
695.8
Total assets
Liabilities
Shareholders’ equity
Provisions
61.1
48.7
673.5
539.7
Other liabilities
1,165.1
1,286.6
Total liabilities and shareholders’ equity
2,595.9
2,570.8
Liabilities to affiliated companies
Receivables from affiliated companies and liabilities to affiliated companies increased due to investments in and divestments of subsidiaries. Other assets include bank credit balances.
I V G I M M O B I L I E N A G 2 0 0 3 : I N C O M E S TAT E M E N T
m
2003
2002
Net income from participating interests (including amortization of financial assets)
103.6
126.1
Net interest payable
-51.0
-41.2
Other income and expenses
-3.6
-34.2
Net income from ordinary activities
49.0
50.7
Taxation
-9.2
-7.8
Net income for the year
39.8
42.9
Withdrawal from reserve for own shares
0.1
0.9
Transfers to reserves
-0.5
-4.3
Net income available for distribution
39.4
39.4
We will propose a dividend of 0.34 per share at the Annual General Meeting on 27 May 2004.
The financial statements of IVG Immobilien AG, as issued with their clean auditors’ certificate by PwC
Deutsche Revision Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft of Düsseldorf, are published in
the Federal Bulletin (Bundesanzeiger) and deposited at Bonn Local Court under the registration number
HRB 4148.
Statements for 2003
84.85
Dependent parties
The Board of Management has issued a separate report on relations with affiliated companies, in ac-
report
cordance with Sec. 312 of the German Stock Corporation Act (AktG). This report includes the following
statement: »In the circumstances known to us at the time legal transactions were undertaken, our
company was appropriately remunerated for such transactions in all instances. We did not take or omit
to take any measures at the behest of or in the interests of WCM Beteiligungs- und Grundbesitz AG, of
Frankfurt am Main, or SIRIUS Beteiligungsgesellschaft mbH, of Wackerow.«
Risk management
IVG’s risk management system is integral to all business processes, Group-wide directives and IT sys-
system
tems. Integration of risk analysis into the planning and control process and into reporting to the Board of
Management and Supervisory Board ensures continuous review of the risk situation. The operation of
our risk management is monitored by our internal auditing function and scrutinized during independent
auditing of the annual financial statements.
IVG counters market risk with comprehensive central and local research. It works together with internationally recognized research institutes to this end. Quarterly studies investigate the economic, industry
and market situation.
IVG faces a wide range of tax, competition and environmental rules and regulations in its market environment. By obtaining legal and technical advice and by monitoring the competition, IVG is fully informed about any potential risks and ensures a fast response capability to negative developments in its
environment. Other legal risks – particularly litigation risks – are managed by a central legal department
in cooperation with top-calibre law firms throughout Europe.
Operating risks can arise in our portfolio management, project development and investment funds
activities.
Risks specific to portfolio management include vacancy risk, tenant credit risk and risk of a decline in
market rents. IVG monitors these with early warning indicators, including rent forecasts, vacancy rates,
tenancy terms to renewal and get-out clauses, regional market developments and reports on buying
and selling activities. This information is reported to the Board of Management on a continuous basis
using various analytical methods. Legacy risks were once again reviewed in 2003. The appraisal was
unchanged.
77 The economy
79 Segments
81 Financing
84 Dependent parties report
84 Risk management system
85 Events after the close
Major risks in project development are cost and schedule overruns during construction, and worsening
of the market situation. IVG secures its capability of responding to potential such risks with a tightly run
monthly reporting and control system covering all key management indicators.
Risks in the investment funds business primarily result from placement commitments given by IVG and
– depending on how each fund is set up – obligations under repurchase guarantees. Ongoing monitoring of placement progress and the operating performance of investment properties makes certain that
adverse trends are spotted early and action is quickly taken.
IVG is exposed to the normal interest rate and foreign exchange rate risks in its operating business
and counters them, among other things with derivative financial instruments. The instruments used to
hedge financial risks are described in the Notes.
There are currently no apparent risks from past or future developments that could threaten the continued existence of IVG. All identified risks are adequately covered by balance-sheet provisions.
February 2004 saw a pivotal change in share ownership at IVG. The 49.9% stake held by Sirius – until
Events of special im-
then IVG’s largest shareholder – was taken over by Sal. Oppenheim Bank (25.1%), HSH Nordbank
portance after the close
(11.16%), DZ-Bank, WGZ-Bank and IKB Deutsche Industriebank.
On 3 March 2004, IVG Immobilien AG acquired through a subsidiary a further 18.8 million shares in
POLAR Kiinteistöt Oyj, Helsinki, increasing its total shareholding to 95.5%.
86.87
Outlook
The world economy will be carried along in 2004 by forecast growth of over 5% in the USA and some
7% in Asia. The Euro zone stands to benefit only to a very limited extent, with forecast growth at 1.8%
(Deutsche Bank, Outlook, 30 January 2004). This is not enough to create new jobs in any quantity. A
similar outlook is given by the forecast change in service sector employment, which is an indicator of
future demand for office space.
We expect interest rates will stay level in 2004.
Overall, most European property markets appear to have reached firmer ground in 2003, with top rents
falling less steeply and vacancy rates increasing far less sharply than the preceding year; the third
quarter of 2003 even saw average rents recover by 1.6%. With the economy livening up again, 2004
is seeing the start of a new upturn. Yet with supply in many places so strong, vacant space may fill up
but most cities will only support minor rent increases in prime locations during 2004. We anticipate
that the property markets in Brussels, London, Paris and Budapest will initially continue to rally. With
some delay, an economic recovery with a positive effect on the property market should then follow in
Germany at the end of 2004.
Qualitative upgrading of our portfolio, rigorous pursuit of our active buy-and-sell strategy, realization of
proceeds from project development and expansion of our investment funds business will, we expect,
make 2004 another positive year for our business.
Bonn, 16 March 2004
Bernd Kottmann
Dirk Matthey
88.89
C O N S O L I D AT E D B A L A N C E S H E E T A S AT 3 1 D E C E M B E R 2 0 0 3
ASSETS
Notes
€ ‘000
31.12.2003
31.12.2002
€ ‘000
€ ‘000
A. Fixed assets
I. Intangible assets
1.
1. Patents, trademarks, licences and similar rights
10,516
6,192
2. Goodwill
15,596
5,601
3. Advance payments made
233
60
26,345
II. Property, plant and equipment
11,853
1.
1. Real estate (land, leasehold rights and buildings,
including buildings on land held by third parties)
2. Technical equipment, plant and machinery
3. Other fixtures and fittings, tools and equipment
4. Advance payments made and construction in progress
2,407,671
2,173,595
52,000
46,266
6,846
6,436
128,487
148,143
2,595,004
III. Financial assets
2,374,440
2.
1. Shares in affiliated companies
30,678
2. Long-term loans to affiliated companies
47,848
550
1,311
3.Shares in associated companies
23,294
24,572
4. Participating interests
33,323
38,082
5. Long-term loans to companies linked
via participating interests
6. Other long-term loans
66,055
68,961
64,477
108,395
218,377
289,169
2,839,726
2,675,462
B. Current assets
I. Inventories
3.
1. Raw materials and supplies
2. Work in progress
3. Finished goods and goods for resale
4. Advance payments made
235
3,163
139,266
32,508
7,960
0
78
55
147,539
II. Receivables and other assets
35,726
4.
1. Trade recevaibles
2. Receivables from affiliated companies
102,101
69,158
32,499
64,947
3. Receivables from companies linked via participating interests
100,249
47,604
4. Other assets
143,777
146,873
378,626
III. Securities available for sale
1. Own shares
5.1
329
2. Own securities
5.2
101
IV. Liquid assets
C. Prepaid expenses
328,582
5.
6.
438
0
430
438
53,975
131,426
580,570
496,172
7,486
13,638
Total assets
3,427,782
3,185,272
Trust assets
199,459
199,302
7.
LIABILITIES AND SHAREHOLDERS’ EQUITY
88 Consolidated Balance Sheet
Notes
€ ‘000
31.12.2003
31.12.2002
€ ‘000
€ ‘000
A. Shareholders’ equity
8.
I. Subscribed capital
8.1
116,000
116,000
8.2
458,897
458,897
II. Additional paid-in capital
III. Revenue reserves
8.3
1. Reserve required by law
2,556
2,556
2. Reserve for own shares
329
438
3. Other revenue reserves
222,257
144,233
225,142
147,227
IV. Negative consolidation difference
8.4
32,015
0
V. Consolidated net income available for distribution
8.5
39,440
39,440
VI. Minority interests
8.6
B. Special tax-allowable reserve
C. Provisions
9.
45,555
7,909
917,049
769,473
0
31,465
10.
1. Provisions for pensions and similar obligations
14,647
12,842
2. Provisions for taxes
69,642
53,482
3. Other provisions
117,606
95,941
201,895
D. Liabilities
162,265
11.
1. Bonds
8,450
0
1,881,553
1,906,083
3. Advance payments received for orders
73,070
15,290
4. Trade acccounts payable
33,406
23,959
5. Liabilities to affiliated companies
20,664
16,194
2. Bank loans
6. Liabilities to companies linked
via participating interests
7. Other liabilities
E. Deferred income
Total liabilities and shareholders’ equity
Trust liabilities
12.
7,287
12,909
101,270
131,991
2,125,700
2,106,426
183,138
115,643
3,427,782
3,185,272
199,459
199,302
90.91
C O N S O L I D AT E D F I X E D A S S E T S C H E D U L E O F I V G I M M O B I L I E N A G
€ ‘000
COST OF ACQUISITION AND CONSTRUCTION
Consolidation
I.
Additions
Re-
Reclassi-
Currency
valuations
fications
influences
01.01.03
changes
Disposals
31.12.03
16,916
6,749
348
19,063
-94
8,423
60
96
23,977
5,326
217
60
9,799
600
-60
1,447
32,501
8,952
36,039
16,454
9,371
5,326
1,760
65,430
2,834,923
340,956
60,605
117,270
8,526
25,965
-1,151
Intangible assets
1 . Patents, licences, trademarks
and similar rights
2 . Goodwill
3 . Advance payments
(Total intangible assets)
II.
Property, plant and equipment
1 . Real estate (land, leasehold rights
and buildings, including buildings
on land held by third parties)
-86,884
107,971
-17,213
273,043
2,967,315
2,938
1,185
-1,634
1,025
127,260
2,694
1,847
-72
4,860
24,423
2 . Technical equipment,
plant and machinery
3 . Other fixtures and fittings,
tools and equipment
4 . Advance payments made
and construction in progress
III.
149,321
-1,998
52,006
-66,176
-371
4,295
128,487
(Total property, plant and equipment)
3,127,479
346,333
118,243
-86,884
44,827
-19,290
283,223
3,247,485
Running total
3,163,518
362,787
127,614
-86,884
50,153
-19,290
284,983
3,312,915
49,060
33,381
30,986
-1,011
1
79,947
32,470
2,714
1,830
61
3 . Shares in associated companies
24,572
-2,868
6,916
-5,326
4 . Participating interests
44,731
12,217
33,407
1,011
Financial assets
1 . Shares in affiliated companies
2 . Long-term loans to affiliated companies
4,055
550
23,294
-2
47,805
43,559
15,155
66,163
5 . Long-term loans to companies
69,089
1,384
10,845
6 . Other long-term loans
linked via participating interests
108,485
7,756
25,183
-44,827
(Total financial assets)
298,651
53,700
107,398
-50,153
3,462,169
416,487
235,012
(Total fixed assets)
-86,884
31,209
65,388
-1
178,171
231,424
-19,291
463,154
3,544,339
88 Consolidated Balance Sheet
90 Consolidated Fixed Asset Schedule
DEPRECIATION, WRITE-UPS AND WRITE-DOWNS
Consolidation
01.01.03
changes
Additions
10,724
1,362
1,390
13,462
-38
3,698
9,403
159
24,186
10,727
5,247
661,328
54,562
35,268
71,004
677
19,529
BOOK VALUE
Write-
Re-
Reclassi-
Currency
ups
valuations
fications
influences
Disposals
31.12.03
31.12.03
31.12.02
3
13,461
10,516
6,192
217
16,905
15,596
5,601
843
8,719
233
60
-12
1,063
39,085
26,345
11,853
-728
-1,189
46,871
559,644
2,407,671
2,173,595
4,771
3
-179
1,016
75,260
52,000
46,266
-1,834
2,375
725
-54
3,164
17,577
6,846
6,436
128,487
148,143
753,039
53,405
42,414
-142,726
-1,422
52,229
652,481
2,595,004
2,374,440
777,225
64,132
47,661
-142,726
-1,434
53,292
691,566
2,621,349
2,386,293
1,212
8,954
538
8,912
1,792
30,678
47,848
132
1,535
-12
-142,726
1,178
1,178
1,403
6,649
1,780
128
5
90
1,179
4,000
3,372
550
1,311
23,294
24,572
10,236
33,323
38,082
25
108
66,055
68,961
823
2
911
64,477
108,395
9,482
10,739
2,672
27
4,000
786,707
74,871
50,333
27
-138,726
-1,434
13,819
13,047
218,377
289,169
67,111
704,613
2,839,726
2,675,462
92.93
C O N S O L I D AT E D I N C O M E S TAT E M E N T
1. Turnover
2003
2002
€ ‘000
€ ‘000
Notes
€ ‘000
1.
411,496
471,238
2.
6,044
-60,894
2. Net change in inventories of finished goods,
work in progress and work not yet billed
3. Other own work capitalized
4. Other operating income
3.
5. Material expenses
4.
857
1,599
127,266
225,878
545,663
637,821
a) Cost of raw materials, supplies and
acquired merchandise
b) Cost of acquired services
-3,682
-6,004
-113,237
-66,777
-116,919
6. Personnel expenses
-72,781
5.
a) Wages and salaries
-46,472
-43,238
b) Social security levies, and costs of retirement pensions
and other welfare benefits
-10,421
-8,882
-56,893
-52,120
7. Depreciation and write-downs on intangible assets
6.
-47,661
-157,810
8. Other operating expenses
and property, plant and equipment
7.
-144,123
-153,051
9. Income from participating interests
8.
9,416
4,915
10. Income from long-term loans
9.
4,247
14,223
11. Other interest and similar income
9.
31,439
21,420
12. Write-downs on financial assets and securities available for sale
9.
-2,672
-3,844
13. Interest and similar expenses
9.
-122,640
-127,717
99,857
111,056
15. Income taxes
10.
-20,784
-26,158
16. Other taxes
10.
-12,594
-14,466
17. Consolidated net income for the year
66,479
70,432
18. Minority interests
-7,139
-566
14. Net income from ordinary activities
19. Withdrawals from the reserve for own shares
20. Transfer to other revenue reserves
21. Consolidated net income available for distribution
109
903
-20,009
-31,329
39,440
39,440
87
88
90
92
93
Notes to the IVG
Notes to the IVG Consolidated Financial Statements for the 2003 financial year
I. General principles applied to the consolidated financial statements
As in previous financial years, the consolidated financial statements of the IVG Group are prepared in
accordance with the German Commercial Code (Handelsgesetzbuch – HGB), Stock Corporations Act
(Aktiengesetz – AktG), and Principles of Orderly Accounting (Grundsätze ordnungsmässiger Buchführung
– GoB), collectively also known as »German GAAP«.
The financial statements of all companies included in the consolidated financial statements are prepared
using uniform accounting and valuation principles.
The financial statements and the lists of participating interests of IVG Immobilien AG and the IVG Group are
deposited at Bonn Local Court (Amtsgericht), registered as HRB no. 4148, and are published in the Federal
Bulletin (Bundesanzeiger). German partnerships coming under Sec. 264a of the Commercial Code in which
IVG Immobilien AG is a limited partner and which are included in the consolidated financial statements are
generally exempt under Sec. 264b Para. 4 from the preparation, auditing and publication requirements applicable to limited companies.
The consolidated financial statements include the parent company, IVG Immobilien AG, together with all
Scope of
material subsidiaries. These are the companies that fall, directly or indirectly, under IVG’s uniform control. As
consolidation
a general rule, associated companies are accounted for by the equity method if IVG holds between a 20%
and 50% share and exerts a significant influence over them. Other participating interests are reported at the
lower of acquisition cost or fair value.
100 subsidiaries that are non-operating or conduct only a small volume of business are not consolidated either because they are not material to presentation of a true and fair view of the Group’s net assets, financial
position and the results of its operations, as provided by Sec. 296 (2) of the Commercial Code, or because
the shares in them are held solely for resale, as provided by Sec. 296 (1) 3.
In total, 103 domestic and 150 foreign-domiciled companies were consolidated in the 2003 financial year,
66 more than in the 2002 consolidated financial statements. Five associated companies are accounted for
by the equity method. One company accounted for by the equity method in 2002 is now fully consolidated
following the purchase of the remaining voting shares.
Number of fully consolidated companies
Number of participating interests accounted for by the equity method
Number of other affiliated companies
Number of other participating interests
Total number of companies
Total
Total
Domestic
Foreign
31.12.2003
31.12.2002
103
150
253
187
4
1
5
6
42
58
100
42
62
19
81
43
211
228
439
278
94.95
Comparability of the
In autumn 2003, IVG acquired over 85% of POLAR Kiinteistöt Oyj. POLAR, which is based in Hel-
2003 and 2002
sinki and listed on the Helsinki stock exchange, has a real estate portfolio consisting of approximately
consolidated financial
260,000 m2 of lettable space (60% offices, 40% shopping centres) plus development reserves with a
statements
gross floor area of 55,000 m2. A further 10% stake was purchased in early March 2004.
POLAR’s consolidated financial statements for 2003, prepared in accordance with Finnish law, report
turnover of €48.5 million (2002: €61.9 million) and net income of €37.5 million (2002: €28.9 million).
The asking price for the 85% stake was €116.6 million. 2003 earnings per share were €0.21.
The net asset position of IVG and the results of its operations are materially affected by consolidation
changes in the 2003 financial year, primarily due to the first-time inclusion of the POLAR group as from
1 November 2003, of the Wert-Konzept group and of XXTRA KG.
The changes are presented in the table below.
m
Position
Total consolidation
Group total
changes
for 2003
%
324.5
2,839.7
11.4
54.0
147.5
36.6
6.5
102.1
6.3
Other assets
18.4
143.8
12.8
Liquid funds
11.3
54.0
20.9
Provisions
21.2
201.9
10.5
Liabilities
234.6
2,125.7
11.0
Turnover
25.2
411.5
6.1
Other operating income
12.9
127.3
10.1
Assets
Inventories
Trade receivables
Personnel expenses
-6.6
-56.9
11.7
Material expenses
-15.2
-116.9
13.0
Other operating expenses
-14.5
-144.1
10.1
-0.8
-2.7
31.6
Write-downs on financial assets
Consolidation methods
Affiliated companies first consolidated up to 31 December 2000 were incorporated in the consolidated
financial statements by the book-value method, based on the difference between acquisition cost and
the Group’s interest in the equity of the subsidiaries when they were acquired or first consolidated.
Companies first consolidated on or after 1 January 2001 are incorporated into the consolidated financial
statements by the fair value purchase method as at the date of acquisition in accordance with GAS 4.
The same consolidation principles apply to shares in equity-accounted associated companies. No retrospective adjustment through reserves has been made in respect of comparative figures for earlier years.
Previously unrecognized gains and losses recognized on application of the fair purchase value method
are recorded in equity. Any positive consolidation difference is recognized as goodwill and amortized,
normally over an estimated useful life of 15 years. Any negative consolidation difference is recognized
separately in shareholders’ equity and released to income over the remaining estimated useful life of
the acquired non-monetary assets.
87
88
90
92
93
Notes to the IVG
For companies historically consolidated by the book-value method, the difference between acquisition
cost and the Group’s interest in the equity of the subsidiary is allocated to the subsidiary’s assets; any
unallocated amount is reported as goodwill and amortized, normally over an estimated useful life of 15
years. Negative consolidation differences are charged, according to type, to real estate, provisions, or
shareholders’ equity.
Intra-Group lending and all other receivables, liabilities, turnover, expenses and income arising within
the Group are eliminated.
Deferred taxes arising from temporary differences between carrying amounts recognized in singleentity financial statements and amounts attributed for tax purposes are grouped with deferred taxes
arising on consolidation and reported under provisions for taxes. Deferred taxes are measured at the tax
rates ruling or expected to rule in the country concerned at the balance sheet date. In all other respects,
the tax regulations in force or enacted on the balance sheet date are deemed to apply.
Other transactions between consolidated Group companies are eliminated in IVG’s consolidated financial statements, in accordance with Sec. 304 of the Commercial Code. All intra-Group trading of goods
and services is conducted at arm’s length.
Non-euro balance sheets of foreign subsidiaries are translated using the exchange rate ruling at the
balance sheet date; non-euro income statements of foreign subsidiaries are translated at the average
rate for the financial year. That is, assets, provisions and liabilities are valued using the middle rate of
exchange ruling at the balance sheet date. All income and expense items are translated at the average
rate for the year. Shareholders’ equity items are translated at the rates of exchange that applied at the
time of their initial measurement. Differences between such values and the values found by applying
the exchange rate at the balance sheet date are credited or debited to revenue reserves, with no effect
on income.
The exchange rates used for translation purposes are as follows:
C U R R E N C Y T R A N S L AT I O N S
Currency
1 GBP
Country
United Kingdom
Exchange rate
Average exchange
Exchange rate
on 31.12.2003
rate for 2003
on 2002
in €
in €
in €
1.4188
1.4455
1.5373
10.9256
100 SEK
Sweden
11.0132
11.0966
100 HUF
Hungary
0.3810
0.3946
0.4232
100 PLN
Poland
21.2680
22.7500
24.8694
Currency translation differences are credited or debited to revenue reserves without going through the
income statement.
Currency translation
96.97
Accounting and
Financial statements are prepared in accordance with the IVG Group’s accounting and valuation poli-
valuation policies
cies for each Group company included in the consolidated financial statements. Financial statements
prepared to other countries’ requirements are adapted where the requirements materially differ from
Group accounting and valuation policies.
The income statement is presented using the type-of-expenditure format.
Intangible assets are valued at acquisition cost less amortization. The maximum estimated useful life
of building and exploitation rights – reported under patents, trademarks, licences and similar rights – is
10 years. Salt rights have an unlimited useful life.
Property, plant and equipment is valued at the cost of acquisition or construction and, if depleting,
reported net of depreciation. Costs of producing self-constructed assets also include apportioned overheads.
Earlier write-downs allowed solely for tax purposes and temporary depreciation differences credited
to special tax-allowable reserves were reversed as from 1 January 2003 following partial repeal of
Sec. 308 of the German Commercial Code. The carrying amounts of the affected assets are now stated
in accordance with Commercial Code valuation rules. The resulting €56.7 million revaluation difference
was credited to reserves without going through the income statement. This matched a €51.9 million
increase in fixed assets, a €21.0 million increase in provisions for deferred taxes, and a €25.8 million
decrease in special tax-allowable reserves.
As a general rule, buildings throughout the Group are depreciated on a straight-line basis, assuming a
normal useful life of either 50 or 66.67 years.
Movable assets are normally depreciated over the shortest useful life permissible for tax purposes,
using either the straight-line method or else the declining-balance method subsequently switching to
straight-line; first-half-year additions are depreciated for a full year and second-half additions by half the
first-year depreciation allowance. Low-value assets are written off in the year of acquisition. They are
recorded as additions in the fixed assets movement schedule and normally recorded as disposals after
their assumed useful life of four years has elapsed.
Shares in affiliated companies and other participating interests are recorded on the balance sheet at the
lower of acquisition cost or fair value.
Shareholdings accounted for by the equity method are included in the consolidated financial statements
using the book-value method stipulated in Sec. 312 (1) 1 of the Commercial Code. As a general rule,
associated companies apply IVG’s accounting and valuation principles.
87
88
90
92
93
Notes to the IVG
Loans to employees – including interest-free and low-interest loans – are reported at nominal value.
Long-term loans to affiliated companies or to companies linked via participating interests are reported
less any impairment losses.
Inventories are valued at the lower of their cost of acquisition or construction required for tax purposes
or current market value. Raw materials and supplies are normally valued at average acquisition cost less
any write-downs. Finished goods, work in progress and work not yet billed are valued at cost of construction. In addition to unit material and production costs, cost of construction is normally also taken
to include apportioned material and production overheads and depreciation charges. The lower of cost
or net realizable value measurement principle is applied.
Specific allowances are recognized to account for identifiable risks in respect of receivables and other
assets. General bad-debt risk is adequately allowed for by means of a lump-sum write-down on receivables.
Own shares are reported at the lower of acquisition cost or fair value.
Provisions for pensions and similar obligations are reported at actuarial present value using a discount
rate of 6%, as stipulated by Sec. 6a of the German Income Tax Act (Einkommensteuergesetz). The
provisions are calculated using Prof. K. Heubeck’s 1998 actuarial tables.
Semiretirement pension obligations are reported at actuarial present value (applying a 5.5% discount
rate) in analogy to Sec. 6a of the German Income Tax Act; employees not having signed a semiretirement pension agreement are included in accordance with the estimated probability of semiretirement
being taken. The payroll backlog is reported at nominal value.
Provisions for taxes comprise deferred taxes as provided by Sec. 274 and net deferred taxes from
single-entity financial statements as provided by Sec. 306 of the Commercial Code.
All tax liabilities or assets arising during the financial year are fully accounted for in the consolidated
financial statements, based on the tax regulations applying to individual Group companies.
Other provisions account for all identifiable risks and uncertain obligations to the full extent necessary,
in line with prudent business judgement.
Liabilities are reported at the amount due.
Turnover is reported once supplies of goods and/or services have been completed and risk has passed
to the customer. Turnover in project development is not reported on the income statement until contractual performance is complete or a distinct part of the work already performed for, or delivered to,
the customer can be billed.
98.99
II. Notes to the Consolidated Balance Sheet and Income Statement for
the 2003 financial year
Movements in individual fixed asset categories (disclosed in the Consolidated Fixed Asset Schedule)
are accounted for on the basis of historical cost of acquisition or construction.
1. Intangible assets
Acquisition and production costs reported for intangible assets and property, plant and equipment are
and property, plant and
historical costs, in some cases originating from the deutschmark-denominated opening balance of
equipment
1948.
Intangible assets consist of goodwill and patents, trade marks, licences and similar rights.
Property, plant and equipment consists of real estate; technical equipment, plant and machinery; other
fixtures and fittings, tools and equipment; and advance payments made and construction in progress.
2. Financial assets
The decrease in shares in affiliated companies compared with the previous year is a result of previously
unconsolidated companies being reported as consolidated companies for the first time.
The changes in shares in associated companies are substantially due to reclassification of Wert-Konzept
Berlin Holding GmbH & Co. Beteiligungs KG, Berlin, as a fully consolidated company.
Shares in equity-accounted associated companies totalled €23.3 million at the balance sheet date and
included €9.3 million in amortized goodwill.
Other participating interests decreased due to repayment of the capital in BBPI Berlin Brandenburg
International Partner GmbH & Co. KG, Berlin.
The long-term loans to companies linked via participating interests chiefly relate to a loan granted to
TARDIS Verwaltungsgesellschaft mbH & Co. KG, Munich, in connection with the previous year’s saleand-leaseback transaction pertaining to MEDIA WORKS MUNICH.
Other long-term loans include a deposit lodged by IVG Logistik GmbH to finance property, plant and
equipment (€9.9 million), housing loans provided to employees, and a payment moratorium granted
to the purchaser in the sale of the Talis group (€6.2 million). In connection with the stake in FDV, loans
totalling €26.6 million were granted in 2003 to FDV Venture’s subsidiary. The sale-and-leaseback deal
with Tardis Verwaltungsgesellschaft mbH & Co. KG gave rise to a debt of €10.7 million.
87
88
90
92
93
Notes to the IVG
The raw materials and supplies item (€0.2 million) relates to operations such as tank farms. Most of the
3. Inventories
Group’s work in progress (€139.3 million) is in project development. The increase is due to the merging
of Tercon Bau GmbH (€73.7 million) and to first-time inclusion of XXTRA (€23.9 million) and IVG
Hungaria Kft. (€14.4 million). Finished goods (€8.0 million) primarily consist of land up for sale in Kleinmachnow.
4. Receivables and
R E C E I VA B L E S
other assets
m
31.12.2003
Trade receivables
(of which: amount not due for more than 1 year)
31.12.2002
102.1
69.2
(7.1)
(4.3)
Receivables from affiliated companies
32.5
64.9
(0.0)
(0.0)
Receivables from companies linked via participating interests
100.2
47.6
(8.1)
(19.0)
Other assets
143.8
146.9
(21.9)
(10.4)
378.6
328.6
Trade receivables primarily increased due to enlargement of the consolidated Group.
Most of the receivables from affiliated companies result from Group financial transactions.
The receivables from companies linked via participating interests are mainly short-term loans by IVG
Immobilien AG to the investment fund company Wert-Konzept Beteiligungs- und Verwaltungs GmbH
Euroselect Sieben KG (€48.9 million) and to Leibniz-Kolonnaden mbH & Co. KG (€25.5 million) for the
purposes of funding capital investment.
Other assets include indirect interests in Wohnen am Märchenviertel KG K.u.K. Grundverwaltungs
GmbH & Co. (€39.5 million).
This item also includes shares in affiliated unconsolidated companies (€89.9 million).
100.101
5. Securities
available for sale
5.1 Own shares
IVG Immobilien AG once again issued shares to employees to promote employee savings in 2003. The
IVG VALUE programme continues to be as well received as ever, with 61,600 no-par-value shares issued to employees in 2003. To this end, 50,800 no-par-value shares were purchased in several blocks
during 2003. 41,751 no-par-value shares (2002: 52,551), constituting 0.036% of capital stock, remained
in the Group’s ownership on 31 December 2003.
5.2 Other securities
These include units in two real estate funds (€0.1 million).
6. Liquid assets
These are mostly liquid funds of IVG Immobilien AG and of companies not yet included in the cash
clearing system.
7. Prepaid expenses
This item consists of payments made that will not be recognized as expense until later financial years.
It also contains deferred discounts on long-term bank loans (€0.7 million).
8. Shareholders’ equity
8.1 Subscribed capital
The capital stock of IVG Immobilien AG is €116,000,000.00, divided into 116 million no-par-value
shares.
Categories of authorized capital in existence at the balance sheet date:
Class I authorized capital for issue by 30 May 2005
as new no-par-value shares payable in cash
€24 milion by AGM resolution of 31 May 2000
Class II authorized capital for issue by 26 May 2004
as new shares payable in cash
€9 million by AGM resolution of 27 May 1999
Class III authorized capital for issue by 30 May 2005 as new registered
no-par-value shares payable in cash or in non-cash assets
€24 million by AGM resolution of 31 May 2000
IVG Immobilien AG also has by resolution of 23 May 2002 €30 million in conditional capital (to expire
on 22 May 2007) for the event of a convertible bond or warrant-linked bond issue and by resolution of
27 May 1999 and 23 May 2002 a total of €5,848,856 in conditional capital for rights issues under share
options schemes.
SIRIUS Beteiligungsgesellschaft mbH and WCM Beteiligungs- und Grundbesitz-AG have made all
disclosures required by the German Securities Trading Act (Wertpapierhandelsgesetz). A dependent
parties report in respect of WCM has been prepared in accordance with Sec. 312 of the German Stock
Corporations Act.
8.2 Additional paid-in capital
Additional paid-in capital remains unchanged at €458.9 million.
87
88
90
92
93
Notes to the IVG
8.3 Revenue reserves
€0.4 million was credited to other revenue reserves from IVG Immobilien AG’s net income for the year;
the reserve for own shares was reduced by €0.1 million to reflect the decrease in holdings of such
shares over the year to 31 December 2003.
The repeal of Sec. 308 (3) of the Commercial Code resulted in a €56.7 million increase in revenue reserves as from 1 January 2003 (see page 96/97). A further €19.5 million was transferred from consolidated net income to other revenue reserves.
8.4 Negative consolidation difference
First-time inclusion of companies acquired in the lucky buy of the POLAR group gave rise to a negative
consolidation difference of 36.4 million which is being released to income over the remaining estimated useful life of the acquired non-monetary assets. Amounts released to income for asset disposals
in 2003 added €4.4 million to other operating income.
8.5 Consolidated net income
IVG Immobilien AG’s consolidated net income available for distribution was €39.4 million in 2003. The
Board of Management and Supervisory Board will propose to the Annual General Meeting on 27 May
2004 that a dividend of €0.34 (2001: €0.34) per no-par-value share be distributed out of this sum.
8.6 Minority interests
Minority interests in the equity of consolidated subsidiaries total €45.6 million and mostly consist of
stakes in POLAR Kiinteistöt Oyj, Helsinki, Stodiek Europa Immobilien AG, Bonn, and K.u.K. Zweite
Grundverwaltungs-GmbH & Co. Spreespeicher KG, Berlin. The share of net income accruing to minority
shareholders is a positive €7.1 million.
Provisions for all pension commitments are measured in accordance with actuarial principles.
Provisions for taxes have primarily been recognized for the current year, earlier years, and deferred
taxes (€54.1 million).
Other provisions cover matters such as personnel expenses, outstanding suppliers’ invoices, omitted
maintenance work, anticipated losses on pending transactions, restructuring and potential litigation
costs.
€6.5 million is also included for land rehabilitation and other environmental measures.
Additional provisions of €10.2 million (2002: €12.3 million) are made for previously unrecognized losses
recognized on consolidation; €2.1 million of these provisions was reversed or used in the 2003 financial
year.
9. Provisions
102.103
10. Liabilities
LIABILITIES
m
Up to
Up to
More than
Total as at
1 year to
5 years to
5 years to
Total as at
31.12.03
maturity
maturity
maturity
31.12.02
8.5
8.5
1,881.5
415.2
883.1
583.2
1,906.1
Advance payments received for orders
73.1
69.5
3.0
0.6
15.3
Trade accounts payable
33.4
29.8
3.2
0.4
23.9
Liabilities to affiliated companies
20.7
20.7
Bonds
Bank loans
Liabilities to companies linked via participating interests
7.3
7.3
Other liabilities
101.2
97.1
(of which: tax liabilities)
(20.7)
(20.7)
(0.8)
(0.8)
2,125.7
648.1
(of which: for social security)
0.0
16.2
12.9
3.4
0.7
132.0
(37.9)
(0.7)
892.7
584.9
2,106.4
The nonconvertible bonds of POLAR Kiinteistöt Oyj, Helsinki, are interest-bearing (12 months Helibor
+2%; 2003: 4,772%; 2004: 4,307%). The bonds mature on 31 December 2004.
The bank loans are secured by mortgages on real estate of €594.8 million, pledged shares of €84.9
million and a pledged fixed-term deposit of €18.4 million.
11. Deferred income
This item is mostly earnings charged to future periods under a sale-and-leaseback transaction covering
the majority of MWM Businesspark, forfaited rents for storage caverns secured by title in IVG-owned
storage cavern sites, and advance rent payments.
12. Contingent
liabilities
CONTINGENT LIABILITIES
m
31.12.03
31.12.02
Guarantees
291.2
355.6
Other contingent liabilities
185.5
242.5
476.7
598.1
The guarantees consist of obligations IVG Immobilien AG has entered into with third parties on behalf of
affiliated companies. The other contingent liabilities include IVG’s share of joint-and-several debt obligations to leasing companies which IVG subsidiary undertakings use to finance some of their investment;
rent guarantees unlikely to be called up; letters of comfort; and longer-term contingent liabilities, discounted at 5.5%, comprising option-writer’s liabilities arising out of redemption rights for fund investors.
87
88
90
92
93
Notes to the IVG
13. Other financial
O T H E R F I N A N C I A L O B L I G AT I O N S
obligations
m
31.12.03
31.12.02
Due 2004 (31.12.02: 2003)
26.9
35.7
Due 2005 – 2008 (31.12.02: 2004 – 2007)
30.5
53.4
Due after 2008 (31.12.02: due after 2007)
32.8
14.0
90.2
103.1
18.5
16.5
Obligations from rental and leasing agreements
Undertaking to contribute capital
Loan obligation
0.0
25.9
108.7
145.5
Lease payments on longer-term obligations are discounted at 5.5%.
Besides the above, there is another financial obligation of €61.0 million (discounted at 5.5%; 11 years)
resulting from a letter of comfort issued by IVG Immobilien AG for the MWM tenancy.
The international focus of its operating business exposes IVG to interest rate and currency risk. These
14. Derivative financial
risks are hedged using derivative financial instruments. Risk of default and market risk were negligible
instruments
both in the year under review and the financial year preceding it.
The derivative financial instruments current as at the balance sheet date were as follows:
NOMINAL AMOUNT
m
31.12.03
31.12.02
Interest-rate swaps
629.4
432.5
Foreign exchange interest swaps
117.1
164.2
746.5
596.7
The nominal volume of the hedging contracts in the table is not netted out. It is the total of all buy and
sell amounts underlying the contracts.
104.105
1. Turnover
Turnover includes net rental income, prepayments of ancillary costs by tenants, and revenue from sales
of development projects. In accordance with the German Commercial Code, book gains on the sale of
portfolio properties are recognized not as turnover but as other operating income.
Turnover is deemed to have been realized when performance has been rendered and the risk passed
on. Turnover in project development is not reported in the income statement until contractual performance is complete or a distinct part of the work has been handed over to the customer.
A breakdown by divisions and regions is presented in the segment information.
2. Net increase in inven-
The changes in these inventories (€6.0 million) result from various domestic project developments.
tories of finished goods,
work in progress and
work not yet billed
3. Other operating
income
O T H E R O P E R AT I N G I N C O M E
m
Disposals of property, plant and equipment
2003
2002
64.8
191.6
(includes €4.3 million – nil in 2002 – from the release of
negative consolidation difference into income)
Foreign exchange gains
25.3
0.1
Release of provisions
12.1
13.7
Recovered personnel expenses
3.6
0.0
Transfers from special tax-allowable reserves
0.0
7.1
21.5
13.4
127.3
225.9
Other
Intra-Group book gains were neutralized in 2002 by applying special depreciation allowances (€112.4
million) and transfers to special tax-allowable reserves (€14.0 million) as provided by Sec. 273 of the
Commercial Code and Sec. 6b of the German Income Tax Act (EStG). Amortized accumulated intercompany profits were eliminated in 2003 as part of the adjustments made following the partial repeal
of Sec. 308 of the Commercial Code.
4. Material expenses
Material expenses (€116.9 million) are chiefly raw materials and supplies, production inputs for the completion of orders, and purchased services. They break down on a segmental basis to €34.8 million for
portfolio management, €81.8 million for project development and €0.3 million for non-core operations.
87
88
90
92
93
Notes to the IVG
5. Personnel expenses
PERSONNEL EXPENSES
m
2003
2002
Wages and salaries
46.5
43.2
Social insurance levies, and costs of retirement pensions and other benefits
10.4
8.9
(of which: for retirement pensions)
(3.3)
(3.1)
56.9
52.1
Personnel expenses primarily increased due to enlargement of the consolidated Group (see p. 93).
The wages and salaries item includes employer’s matching contributions to the employee-loan asset
participation model for employee wealth creation. The total cost in the 2003 financial year was €40,000
(2002: €42,000).
The costs of retirement pensions and other welfare benefits include the pension entitlements of employees whose contracts are with IVG Immobilien AG arising from a special contributory agreement
with the state pension agency Versorgungsanstalt des Bundes und der Länder (VBL). The contribution rate applicable in 2003 was 7.86% of the wages and salaries covered by this supplementary plan
(€16.57 million); 6.45% is payable by the employer and 1.41% by the compulsorily insured employees.
The employer must also pay an adjustment levy comprising 1.60% of wages and salaries covered by
the supplementary plan. According to VBL information, 645 former employees will be entitled to or are
already receiving supplementary pensions.
6. Depreciation and
D E P R E C I AT I O N
write-downs on intan-
m
Scheduled depreciation
Write-downs
Special depreciation allowances permitted by tax law
The write-downs include impairment losses recognized for goodwill.
2003
2002
gible assets, property,
45.4
43.1
2.3
1.2
plant and equipment
0.0
113.5
47.7
157.8
106.107
7. Other operating
Other operating expenses consist of these items:
expenses
O T H E R O P E R AT I N G E X P E N S E S
m
2003
2002
Lease rentals payable
20.1
13.6
Maintenance and upkeep
19.7
17.0
Auditing, consultancy and legal fees
18.2
13.3
Cost of external services
8.2
7.7
Ground rents or lease payments
7.4
3.9
Communication and marketing
6.3
5.3
Data processing
4.0
4.2
Transfer to special tax-allowable reserves
0.0
17.6
Other expenses*
60.2
70.5
144.1
153.1
2003
2002
* This sub-item includes allocations to provisions, write-downs on assets, foreign exchange losses,
losses on disposals of fixed assets, financial service charges, property levies, etc.
8. Income from
participating interests
I N C O M E F R O M PA R T I C I PAT I N G I N T E R E S T S
m
Income from non-consolidated affiliated companies
5.5
1.5
Income from associated companies
0.3
-5.7
Income from other participating interests
3.6
9.1
9.4
4.9
Income from non-consolidated affiliated companies includes income from project developments.
87
88
90
92
93
Consolidated fixed asset schedule
Notes to the IVG
9. Financial earnings
FINANCIAL EARNINGS
m
2003
Income from long-term loans
(of which: from affiliated companies)
2002
4.2
14.2
(0.0)
(0.2)
Other interest and similar income
31.4
21.4
(of which: from affiliated companies)
(2.3)
(2.1)
Write-downs on financial assets and securities available for sale
Interest and similar expenses
(of which: to affiliated companies)
-2.7
-3.8
-122.6
-127.7
(-1.3)
(-3.2)
-89.7
-95.9
10. Taxation
TA X AT I O N
m
2003
2002
Income taxes
20.8
26.1
Other taxes
12.6
14.5
33.4
40.6
The provision for deferred taxes was reversed in the amount of €0.8 million to account for changes in
accounting treatment in respect of subsidiary financial statements prepared for incorporation into the
consolidated accounts; €0.3 million of deferred taxes was attributable to consolidation.
Provisions for deferred taxes recognized in earlier years were reversed in the amount of €11.4 million.
108.109
V. Other information
Total remuneration of
The members of the Supervisory Board and the Board of Management are listed on pages 127 to 128.
the Supervisory Board
and Board of
The remuneration paid to members of the Board of Management of IVG Immobilien AG in the 2002
Management, and
financial year was €2,102,000, comprising €936,000 in salaries and €1,166,000 in performance-linked
loans granted
bonuses. Remuneration paid at IVG Immobilien AG to retired members of the Board of Management,
general managers and their surviving dependants was €560,000.
A provision of €5,345,000 has been made for pension obligations to former members of the Board of
Management, general managers and their surviving dependants.
Total remuneration paid to members of the Supervisory Board at IVG Immobilien AG amounted to
€141,800 in the 2003 financial year.
No advances or loans had been granted to members of the Board of Management or the Supervisory
Board as at 31 December 2003.
87
88
90
92
93
Notes to the IVG
Key data on share options schemes to date and the options issued under them are shown in the table
below.
IVG IMMOBILIEN AG SHARE OPTION SCHEMES AS APPROVED BY THE ANNUAL GENERAL MEETING
2003 scheme
2002 scheme
2001 scheme
2000 scheme
1999 scheme
30.06.2003
26.07.2002
14.06.2001
16.06.2000
10.06.1999
Valid for
5 years
5 years
7 years
7 years
7 years
Blocking period
2 years
2 years
3 years
3 years
3 years
€7.63
€10.28
€14.127
€14.696
€15.02
49
52
35
30
27
Number of options issued
749,250
766,350
410,497
377,298
403,256
of which: to members of the Board of Management
274,050
274,050
147,707
138,075
162,748
5%
5%
7.4%
6.5%
5%
–
–
outperform
outperform
outperform
EPIX
EPIX
EPIX
€1.42
€1.47
€3.33
€3.59
€2.63
2002 scheme
2001 scheme
2000 scheme
1999 scheme
Issue date
Base price (€)
Participants in year of issue
Performance threshold, absolute
(percentage share price gain per year)
Performance threshold, relative
Value of options at date of issue
IVG IMMOBILIEN AG SHARE OPTION SCHEMES
2003 scheme
as at 1 January 1999
–
Issued in 1999
403,256
Exercised in 1999
Expired in 1999
Number as at 31 December 1999
403,256
Issued in 2000
377,298
Exercised in 2000
Expired in 2000
18,083
377,298
Issued in 2001
385,173
410,497
Exercised in 2001
Expired in 2001
Issued in 2002
48,327
49,729
410,497
328,971
335,444
410,497
327,245
766,350
Exercised in 2002
Expired in 2002
1,726
Issued in 2003
766,350
335,444
749,250
Exercised in 2003
Expired in 2003
749,250
20,100
7,575
6,904
9,042
746,250
402,922
320,341
326,402
110.111
Corporate governance refers to the entire system by which a company is managed and monitored, its
corporate principles and guidelines, and the system of internal and external controls and supervision to
which the company’s operations are subjected. Good, transparent corporate governance ensures that
our company will be managed and monitored in a responsible manner geared towards value creation.
This fosters the confidence of investors, employees, business associates and the general public in
IVG’s management and supervision.
The Board of Management and the Supervisory Board of IVG Immobilien AG jointly issued, in accordance with Sec. 161 of the German Stock Corporations Act, a new declaration of conformity with the
recommendations of the German Corporate Governance Code. The declaration is published on the IVG
website, www.ivg.de, where shareholders can access it at any time.
Board of Management
The Board of Management of IVG Immobilien AG is responsible for the preparation, completeness and
declaration
integrity of the consolidated financial statements, the Group Management Report and other information
provided in the annual report.
The consolidated financial statements of the IVG Group were prepared in accordance with the German
Commercial Code (Handelsgesetzbuch – HGB), Stock Corporations Act (Aktiengesetz – AktG), and
Principles of Orderly Accounting (Grundsätze ordnungsmässiger Buchführung – GoB), collectively also
known as »German GAAP«.
The Group Management Report contains an analysis of the Group’s net asset position, financial position and the results of its operations, and further disclosures required by the German Commercial Code
(Sec. 315).
An effective internal management and control system ensures the completeness and reliability of data
for consolidated financial statements and internal reporting. This includes Group-wide financial reporting directives, a risk management system as required by the German Control and Transparency Act
(Gesetz zur Kontrolle und Transparenz im Unternehmensbereich – KonTraG), an integrated approach to
financial control as part of value-oriented management, plus internal audits. The Board of Management
is thus able to identify material risks at an early stage and to take timely action as needed.
Acting by resolution of the IVG Immobilien AG Annual General Meeting of 27 May 2003, the Supervisory Board appointed PwC Deutsche Revision Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft,
Düsseldorf, to audit the annual financial statements of IVG Immobilien AG for the 2003 financial year.
PwC have audited, confirmed and issued a clean auditors’ certificate in respect of the consolidated financial statements prepared by the Board of Management in accordance with German requirements.
The consolidated financial statements, Group Management Report, audit report and risk management
system were discussed in detail with the chief auditor by the full Supervisory Board at its meeting to
approve the financial statements.
87
88
90
92
93
Notes to the IVG
Related parties are the Supervisory Board, the Board of Management, managerial employees, close relatives of the foregoing three groups, Sirius GmbH of Wackerow and its subsidiaries, WCM AG of Frankfurt and its subsidiaries, unconsolidated subsidiaries of IVG and equity-accounted IVG companies.
A dependent parties report has been prepared in respect of the relationship with Sirius GmbH and
WCM AG (see Group Management Report). There were no business dealings with either company or
any of their subsidiaries.
Information on related party dealings with members of the Supervisory Board and Board of Management is provided in the section on total remuneration, above. There were no business dealings with
close relatives of members of the Supervisory Board or Board of Management.
Business dealings with managerial employees and their close relatives were not materially significant.
All business dealings with unconsolidated subsidiaries and equity-accounted entities (inclusion in global
cash management, general project contracts, etc.) were conducted at arm’s length. They comprised
€10.2 million in services rendered (income) and €12.1 million in services received (expense).
Bonn, 16 March 2004
Bernd Kottmann
Dirk Matthey
Related party dealings
112.113
The cash flow statement is based on information from the accounting records and from the balance
sheet and income statement derived from them in accordance with the German Commercial Code
(HGB). It is presented in vertical format and reports cash flows classified by operating, investing and
financing activities; comparative figures from the previous period are included. On the grounds of materiality, purchases of and proceeds from disposals of intangible assets are not reported separately from
purchases of and proceeds from disposals of property, plant and equipment.
Cash used for or provided by operating activities is quantified indirectly; that is, based on consolidated
net income for the year. The figures for cash used for or provided by investing and financing activities
are quantified by the direct method. All consolidated enterprises are included in the cash flow statement using the same consolidation method by which they are included in the consolidated financial
statements. For enterprises accounted for using the equity method, the cash flow statement includes
only (a) cash flows between such enterprises and the Group and (b) cash flows from the acquisition or
disposal of investments in such enterprises.
All cash flows are disclosed without netting. Cash and cash equivalents consist of liquid funds (cash
in hand and short-term deposits at banks). €18.4 million of cash and cash equivalents is pledged as
security.
Effects of consolidation changes are eliminated; their effect on cash and cash equivalents is shown
separately.
E F F E C T O N C A S H A N D C A S H E Q U I VA L E N T S
€m
Cash and cash equivalents
Acquisitions of
Disposals of
consolidated
consolidated
companies
companies
4.2
0.0
Other assets
603.4
23.6
Debts
534.2
20.5
Interest received was €33.6 million (2002: €25.6 million). Interest paid was €118.3 million (2002:
€114.5 million).
87
88
90
92
93
Notes to the IVG
112 Consolidated Cash Flow Statement
C O N S O L I D AT E D C A S H F L O W S TAT E M E N T
€m
2003
2002
Net income for the period. before extraordinary items
66.5
70.4
+/– Depreciation and write-ups/write-downs on fixed assets
50.3
161.5
+/– Other non-cash items
-34.7
22.2
-62.9
-180.7
-3.4
-12.3
+/– Inventories (decrease/increase)
34.1
60.4
+/– Receivables and other assets (decrease/increase)
93.9
8.8
-99.8
108.1
44.0
238.4
–
Profits from the disposal of fixed assets
+/– Increase/decrease in provisions
Changes in current assets and liabilities
+/– Trade accounts payable/other liabilities (increase/decrease)
Cash provided by operating activities
Proceeds from the disposal of property, plant and equipment/intangible fixed assets
236.9
283.3
Cash used for investments in property, plant and equipment/intangible fixed assets
-119.2
-217.0
Proceeds from the disposal of financial assets
150.2
38.6
Cash used for investments in financial assets
-107.5
-128.1
Proceeds from the disposal of consolidated companies
Cash used for investments in consolidated companies
Cash provided by/used for investing activities
3.1
0.6
-124.7
-19.4
38.8
-42.0
Payments made to IVG shareholders and other equity partners
-39.4
-39.4
Proceeds from new borrowing
160.8
104.9
Proceeds from other financial operations
71.0
0.0
Payments to service existing loans
-358.3
-150.8
Cash used for financing activities
-165.9
-85.3
-83.1
111.1
Net change in cash and cash equivalents
Cash and cash equivalents generated by consolidation changes
5.7
0.1
Cash and cash equivalents at the start of the period
131.4
20.2
Cash and cash equivalents at the end of the period
54.0
131.4
114.115
SEGMENTS
€m
Intersegmental
External
Total operating
Operating
Assets
turnover
turnover
performance
earnings
(at book value)
2003
2002
2003
2002
2003
2002
2003
2002
2003
2002
business parks
0.9
1.6
246.1
236.8
339.4
427.6
180.4
152.8
2,752.9
2,448.8
Logistics real estate
0.0
0.0
48.2
46.9
48.4
47.2
15.8
16.9
60.8
62.4
ment total
0.9
1.6
294.3
283.7
387.8
474.8
196.2
169.7
2,813.7
2,511.2
Project Development
1.3
2.6
87.0
160.6
117.4
113.9
5.3
49.1
373.5
310.0
Investment Funds
0.3
0.0
11.9
0.0
14.1
0.0
1.0
0.5
14.0
9.4
Non-core business
0.0
0.0
17.4
25.4
21.0
59.1
-7.4
23.9
27.4
34.2
-2.5
-4.2
0.9
1.5
5.4
-10.0
-20.9
-54.5
112.2
122.8
0.0
0.0
411.5
471.2
545.7
637.8
174.2
188.7
3,340.8
2,987.6
Office properties/
Portfolio Manage-
Corporate functions/
consolidation
Group
The activities of the IVG Group are Portfolio Management, Project Development and Investment Funds.
Other segment information is reported under Non-Core Operations and Corporate Functions/Consolidation.
The Portfolio Management segment contains the mainstream real estate portfolio management business. In addition to office properties and business parks, this also includes the logistics properties segment (storage caverns and tank farms).
The Project Development segment comprises property developments for IVG and third parties.
The Investment Funds segment is reported separately for the first time in 2003. IVG will expand this
segment over the coming years. Comparative figures for the other segments have been adjusted to
account for it.
The Non-Core Operations segment mainly incorporates the remaining operations of the former Rail
business sector.
The figures reported under Corporate Functions/Consolidation cover Group level activities (such as
Legal, Tax, Finance, Corporate Development) plus consolidation effects.
Liabilities
87
88
90
92
93
Notes to the IVG
112 Consolidated Cash Flow Statement
114 Key figures by segment
Depreciation
Income from asso-
Income from other
and write-downs
ciated companies
participating interests
Investment
Employees
2003
2002
2003
2002
2003
2002
2003
2002
2003
2002
2003
2002
1,078.0
936.6
39.0
147.0
0.0
-0.3
0.0
4.2
474.2
189.6
377
348
72.0
7.9
4.2
4.7
0.0
0.0
0.0
0.0
6.2
3.0
1,150.0
944.5
43.2
151.7
0.0
-0.3
0.0
4.2
480.4
192.6
377
348
126.6
93.4
3.9
4.5
-2.2
-1.7
6.4
6.4
46.6
79.4
150
125
4.1
0.0
0.4
0.0
0.7
0.6
0.0
0.0
2.5
1.2
40
5
10.4
14.1
0.7
2.8
1.8
-4.6
0.0
0.0
0.9
12.4
40
126
1,129.3
1,262.7
2.2
2.6
0.0
0.3
2.7
0.0
34.8
72.7
110
146
2,420.4
2,314.7
50.4
161.6
0.3
-5.7
9.1
10.6
565.2
358.3
717
750
The operating earnings item is net income from ordinary activities excluding net interest, minus other
taxes. The assets item is total assets less loans to affiliated companies, receivables from affiliated
companies, and liquid funds. The liabilities item includes, without liabilities to affiliated companies,
provisions for pensions, other provisions, and deferred income. The investment item also includes
investments in financial assets.
The average number of employees in 2003 was 717. The IVG Group had 33 trainees as at 31 December
2003 (31 December 2002: 33).
Regions
GEOGRAPHICAL SEGMENTS
€m
Other
External turnover
Assets (at book value)
Investment
Operating earnings
UK
France
Benelux
Germany
Finland
countries
9.6
19.8
57.6
280.4
7.6*
36.5
Group
411.5
134.9
252.4
719.5
1,501.1
345.3
387.6
3,340.8
1.5
1.1
45.7
173.5
333.0
10.5
565.3
25.1
23.1
35.8
54.3
12.5
23.4
174.2
* 1.11. – 31.12.2003
The segmental breakdown into regions reflects the geographical location of IVG’s real estate holdings.
116.117
Changes in the capital of the IVG Group are shown below in the Statement of Changes in Shareholders’
Equity.
S TAT E M E N T O F C H A N G E S I N S H A R E H O L D E R S ’ E Q U I T Y
€m
Currency
Reserve for
Use of
translation
Other
own shares
net income
differences
changes
31.12.2003
Subscribed capital
116.0
Additional paid-in capital
458.9
Revenue reserves
225.1
Changes during the financial year
31.12.2002
116.0
458.9
-0.1
0.5
-6.4
83.9
147.2
32.0
0.0
Negative consolidation
difference
32.0
Consolidated net income
available for distribution*
39.4
Minority interests
39.1
30.6
8.5
6.5
7.1
-0.6
Minority share in net income
Total minority capital
Total shareholders’ equity
39.4
45.6
917.0
-0.1
0.5
-6.4
37.7
7.9
153.6
769.4
* All net income available for distribution was distributed in 2002.
Reserve for own shares:
Issues of shares to Group employees under the IVG VALUE programme have reduced the number of own
shares held and with it the reserve for own shares.
Use of net income:
€0.5 million of IVG Immobilien AG net income was credited to other revenue reserves.
Currency translation differences:
Currency translation differences arise, among other things, on the translation of the shareholders’ equity
of foreign subsidiaries at historical exchange rates.
Other changes in revenue reserves:
These mostly represent adjustments following the repeal of Sec. 308(3) of the German Commercial Code
(HGB) plus consolidated net income from subsidiaries credited to revenue reserves to bring IVG Group net
income available for distribution into line with IVG AG net income available for distribution.
87
88
90
92
93
112
114
116
117
Notes to the IVG
Summary of majors shareholdings
S U M M A R Y O F M A J O R S H A R E H O L D I N G S A S AT 3 1 . 1 2 . 2 0 0 3
5
ShareCompany
Proportion
Voting
holders’
Net
of capital
rights
equity
income
held in %
in %
Country
in €,000
in €,000
I. Affiliated companies (consolidated as per German Commercial Code Sec. 271(2))
Kouvolan valtakatu 28 Koy, Kuovola
100.00
100.00
Fi
1,032
-4
3
POLAR Kiinteistöt Oyj, Helsinki
85.07
85.07
Fi
185,724
46,091
3
IVG Beteiligungs GmbH, Bonn
100.00
100.00
D
-40
-140
Ferenda Oy, Helsinki
100.00
100.00
Fi
3
0
3
Oululn Myllykiinteistöt Oy, Oulu
100.00
100.00
Fi
862
-23
3
Suomen Osakaskiinteistöt Oy, Helsinki
100.00
100.00
Fi
16,140
-447
3
POLAR-Rakennus Oy, Helsinki
100.00
100.00
Fi
-2,938
-80
3
Helsingin Vuorikatu 20 Koy, Helsinki
100.00
100.00
Fi
1,078
-40
3
Hollolan Ostospaikka Koy, Hollola
100,00
100.00
Fi
5,049
-299
3
54.30
54.30
Fi
1,834
-1
3
Järvenpään Helsinginportti Koy, Jarvenpää
100.00
100.00
Fi
188
-55
3
Kalustaja Koy, Vantaa
100.00
100.00
Fi
-2,080
-1
3
Kilometri Koy, Espoo
100.00
100.00
Fi
119
-6
3
Kilon Helmi Koy, Espoo
100.00
100.00
Fi
5,461
-141
3
Kilon Timantti Koy, Espoo
100.00
100.00
Fi
5,141
-154
3
Kivikukkaro Koy, Turku
100.00
100.00
Fi
15,127
-361
3
Kornetintie 6 Koy, Helsinki
100.00
100.00
Fi
-351
-220
3
Kuopion Satama 4 Koy, Kuopio
100.00
100.00
Fi
1,570
-105
3
Kutomotie 6 Koy, Helsinki
100.00
100.00
Fi
3,377
-220
3
Lappeenrannan Lentäjäntie 17-19 Koy, Lappeentranta
100.00
100.00
Fi
1,164
-192
3
Larvalankatu 13 Koy, Kokkola
100.00
100.00
Fi
3,593
-266
3
Lastupolku Koy, Espoo
100.00
100.00
Fi
1,048
-61
3
Malmin Kauppatie 8 Koy, Helsinki
100.00
100.00
Fi
5,309
-196
3
Nittylänpolku 16 Koy, Helsinki
100.00
100.00
Fi
2,831
-74
3
Nova Koy, Turku
100.00
100.00
Fi
-240
-23
3
Pakkalan Kartannkoski 12 Koy (Leija), Vantaa
100.00
100.00
Fi
-196
-322
3
Pakkalan Kartannkoski 3 Koy, Vantaa
100.00
100.00
Fi
12,029
-390
3
Jamsän Forum Koy, Jämsä
Pasilanraitio 5 Koy, Helsinki
91.60
91.60
Fi
9,447
114
3
Plaza Forte Koy, Vantaa
100.00
100.00
Fi
13,522
-261
3
Pitkänsillankatu 1-3 Koy, Kokkola
100.00
100.00
Fi
1,411
-190
3
87.90
87.90
Fi
3,545
-12
3
Satomalmi Koy, Helsinki
Scifin Alfa Koy, Espoo
100.00
100.00
Fi
7,275
-155
3
Seinäjoen Kino Koy, Seinäjoki
89.90
89.90
Fi
3,457
-54
3
Sinimäentie 10 Koy, Espoo
76.90
76.90
Fi
1,082
-53
3
Sisustaja Koy, Vantaa
100.00
100.00
Fi
10,337
-45
3
Solartalo 2001 Koy, Helsinki
100.00
100.00
Fi
4,516
-169
3
100.00
100.00
Fi
4,516
-169
3
100.00
100.00
Fi
4,516
-169
3
100.00
100.00
Fi
4,516
-169
3
100.00
100.00
Fi
4,516
-169
3
Sörnäisten Rantatie 25 Koy, Helsinki
100.00
100.00
Fi
8,482
-281
3
Tapiontuuli Koy, Espoo
100.00
100.00
Fi
3,823
-201
3
Teerikukonkuja 5 Koy, Espoo
100.00
100.00
Fi
2,442
-114
3
Turun Kalevantie 25 Koy, Turku
100.00
100.00
Fi
968
-91
3
Vallilan Solar 1 Koy, Helsinki
100.00
100.00
Fi
1,599
0
3
100.00
100.00
Fi
1,599
0
3
100.00
100.00
Fi
1,599
0
3
100.00
100.00
Fi
1,599
0
3
Vanha Talvitie 11 Koy, Helsinki
100.00
100.00
Fi
1,367
-182
3
60.00
60.00
Fi
5,614
18
3
Vilhonkatu 5 Koy, Helsinki
100.00
100.00
Fi
-2,196
-138
3
Ässätalo Koy, Helsinki
100.00
100.00
Fi
1,599
0
3
22.30
22.30
Fi
4,053
-71
3
Vantaanportin Liiketilat Oy, Vantaa
F-Medi Koy
118.119
5
( C O N T I N U AT I O N )
Share-
Company
Vantaanportin Liikekskus Koy
Proportion
Voting
holders’
Net
of capital
rights
equity
income
in €,000
held in %
in %
Country
in €,000
21.40
21.40
Fi
30,432
204
D
696,192
39,820
IVG Immobilien AG , Bonn
TERCON Immobilien Projektentwicklungsgesellschaft mbH, Munich
3
80.00
80.00
D
10,458
4,636
IVG Management GmbH Bonn
100.00
100.00
D
59,869
4,657
MMD Bauträgergesellschaft mbH, Bonn
100.00
100.00
D
961
-208
100.00
100.00
D
-4,144
-5,323
94.59
94.59
D
-4,676
2,098
4
IVG Immobilien GmbH & Co. Bonn XIV – Objekt Heltorfer Strasse – KG, Bonn
100.00
100.00
D
3,730
3,377
4
IVG Immobilienentwicklungsgesellschaft mbH & Co.
100.00
100.00
D
1,481
185
4
IVG Management GmbH & Co. Liebenau VIII – Objekt Bornlitz – KG
100.00
100.00
D
774
151
4
Liebenau II – Objekt Dörverden – KG, Liebenau
100.00
100.00
D
102
7
4
Liebenau III – Objekt Liebenau – KG, Liebenau
100.00
100.00
D
1,188
-10
4
IVG Management GmbH & Co. Liebenau IX – Objekt Clausthal – KG
100.00
100.00
D
138
25
4
Bonn XIII – Objekt Düsseldorf Karl-Arnold-Platz KG, Bonn
100.00
100.00
D
51
1,160
4
Liebenau IV – Objekt Dragahn-KG, Liebenau
100.00
100.00
D
-191
-40
4
Liebenau V – Objekt Bremen-Blumenthal-KG, Liebenau
100.00
100.00
D
-126
-26
4
Bonn II – Objekt Bad Godesberg-KG, Bonn
100.00
100.00
D
390
82
4
Liebenau VI – Objekt Leese-KG, Liebenau
100.00
100.00
D
80
-6
4
München II – Objekt Unterpfaffenhofen-KG
100.00
100.00
D
157
37
4
München XII – Objekt Rosenheim-KG
100.00
100.00
D
1,239
29
4
München III – Objekt Ottobrunn-KG
100.00
100.00
D
15,505
2,210
4
München IV – Objekt Dornach-KG
100.00
100.00
D
3,000
2,645
4
– Objekt Hamburg Raboisen 6 – KG, Hamburg
100.00
100.00
D
48
428
4
IVG-Immobilien-GmbH & Co. München VI – Objekt Puchheim-KG, Munich
100.00
100.00
D
10,456
1,611
4
München VIII – Obj. Rosenh./Anz.Str.-KG
100.00
100.00
D
1,000
5,550
4
IVG Nordostpark I GmbH & Co. KG, Munich
100.00
100.00
D
2,940
-57
4
IVG Nordostpark II GmbH & Co. KG, Munich
100.00
100.00
D
5,000
116
4
IVG Nordostpark III GmbH & Co. KG, Munich
100.00
100.00
D
3,535
-142
4
IVG Nordostpark IV GmbH & Co. KG, Munich
100.00
100.00
D
3,150
-62
4
IVG Businesspark Media Works Munich I GmbH & Co. KG, Munich
100.00
100.00
D
4,819
-167
4
München X – Objekt Nürnberg-KG, Munich
100.00
100.00
D
26,523
8,937
4
IVG Businesspark Media Works Munich II GmbH & Co. KG
100.00
100.00
D
14,653
-347
4
IVG Businesspark vor München I GmbH & Co. KG
100.00
100.00
D
16,591
-585
4
IVG Businesspark vor München II GmbH & Co. KG
100.00
100.00
D
24,222
-778
4
IVG Businesspark vor München III GmbH & Co. KG
100.00
100.00
D
6,688
-281
4
IVG Businesspark vor München IV GmbH & Co. KG
100.00
100.00
D
8,394
1,026
4
IVG Businesspark vor München V GmbH & Co. KG
100.00
100.00
D
14,361
444
4
IVG Management GmbH & Co. Liebenau X – Objekt Hessisch-Lichtenau-KG
100.00
100.00
D
-530
-20
4
IVG Management GmbH & Co. Liebenau XI – Objekt Lippoldsberg-KG
100.00
100.00
D
43
95
4
IVG Immobilienverwaltung Bonn GmbH & Co. – Objekt Langen KG, Bonn
100.00
100.00
D
373
-2,447
4
Frankfurt Flughafen KG, Bonn
100.00
100.00
D
51
504
4
Bremerhaven KG
100.00
100.00
D
1,607
-709
4
IVG Management GmbH & Co. Liebenau XII – Objekt Fienerode-KG, Liebenau
100.00
100.00
D
1,608
18
4
Bonn XII – Objekt Dortmund Westfalendamm-KG, Bonn
100.00
100.00
D
34,345
771
4
Bonn VII – Objekt Dortmund, Stockholmer Allee-KG, Bonn
100.00
100.00
D
337
742
4
Bonn VI – Objekt Düsseldorf – Grafenberg-KG, Bonn
100.00
100.00
D
5,362
-1,717
4
Bonn IV – Objekt Düsseldorf, Hohenzollernwerk-KG, Bonn
100.00
100.00
D
-91
-133
4
Bonn V – Objekt Homburg/Saar-KG, Bonn
100.00
100.00
D
26
-37
4
Kassel VII – Objekt Hannover-KG
100.00
100.00
D
3,611
-110
4
Hamburg I – Objekt Essener Str.-KG
100.00
100.00
D
4,729
1,299
4
Tercon Bau, formerly JOBAU Immobilienmanagement GmbH, Jena
(formerly JENOPTIK Bauentwicklung GmbH, Jena )
BURG Grundstücksverwaltung GmbH & Co. Ristamos KG, Berlin
– Objekt Hamburg Glinde – KG, Hamburg
IVG Immobilienentwicklungsgesellschaft mbH & Co.
87
88
90
92
93
112
114
116
117
Notes to the IVG
5
Share-
Company
Proportion
Voting
holders’
Net
of capital
rights
equity
income
held in %
in %
Country
in €,000
in €,000
Hamburg II – Objekt Tarpen-KG
100.00
100.00
D
-294
-361
4
Hamburg V – Objekt Habichtstr.-KG
100.00
100.00
D
6,740
42
4
100.00
100.00
D
696
2,820
4
– Objekt Hamburg Ferdinandstraße 18 KG, Hamburg
100.00
100.00
D
-535
-118
4
IVG Schönefeld Mittelstraße GmbH & Co KG
100.00
100.00
D
7,000
77
4
IVG Schönefeld Entwicklungs GmbH & Co. KG
100.00
100.00
D
473
-24
4
IVG Businesspark Micropolis Ost Verwaltungs GmbH & Co. KG
100.00
100.00
D
7,980
-1
4
IVG Businesspark Micropolis Ost Grundstücks GmbH & Co. KG
100.00
100.00
D
2,048
-32
4
IVG Management GmbH & Co. Berlin IX – Objekt Wohnpark Lückstraße-KG
100.00
100.00
D
8,400
134
4
IVG Management GmbH & Co. Bonn XV – Objekt Zanderstr. 1 und 3 KG, Bonn
100.00
100.00
D
144
-6
4
IVG Management GmbH & Co. Berlin X – Objekt Wohnpark Roonstraße-KG, Berlin
100.00
100.00
D
12,375
227
4
Kassel VIII – Objekt Fuldabr.-Ostr.-KG
100.00
100.00
D
1,433
468
4
Kassel IX – Objekt Waldau-KG
100.00
100.00
D
3,032
668
4
Kassel XI – Obj. Lohfeld./Forstbachweg-KG
100.00
100.00
D
2,022
380
4
Kassel X – Objekt Lohfeld./Otto-H.Str.-KG
100.00
100.00
D
5,430
1,097
4
Dresden I – Objekt Klotzsche West-KG
100.00
100.00
D
6,966
-1,158
4
Dresden II – Objekt Klotzsche Ost-KG
100.00
100.00
D
1,159
95
4
Kassel XII – Obj.Fuldabr./-Crumb.Str.-KG
100.00
100.00
D
3,107
506
4
Kassel XIII – Objekt Falderbaumstr.-KG
100.00
100.00
D
791
8
4
Berlin II – Objekt Streitstraße-KG
100.00
100.00
D
2,676
-4,464
4
Bonn X – Objekt Wiesbaden-KG, Bonn
100.00
100.00
D
35
714
4
Berlin IV – Objekt Montanstr.-KG
100.00
100.00
D
1,130
619
4
Berlin V – Objekt Freiheit-KG
100.00
100.00
D
294
358
4
Berlin VI – Objekt Hallerstr.-KG
100.00
100.00
D
11
-8
4
Berlin VII – Objekt Haller./Morsestr.-KG
100.00
100.00
D
13,415
-304
4
IVG Immobilien Kapitalanlagegesellschaft mbH, Bonn
100.00
100.00
D
4,368
-624
4
IVG Immobilienentwicklungsgesellschaft mbH & Co. – Glockengießerwall 19 KG, Hamburg
100.00
100.00
D
50
1,558
4
94.70
94.70
D
8,978
484
4
Párizs 2000 Investitions und Immobilien – Vertriebs GmbH, Budapest
100.00
100.00
HU
2,961
-112
3
IVG Promotion SARL, Paris
100.00
100.00
F
-281
-291
3
IVG Logistik GmbH, Bonn
100.00
100.00
D
100,196
IVG Objekt Museumsmeile Bonn GmbH, Bonn (formerly IVG Flugtanklager Service GmbH)
100.00
100.00
D
132
-132
IVG InfoTec GmbH & Co KG, Bonn
100.00
100.00
D
3,072
90
4
IVG Schienenfahrzeuge GmbH & Co Güterwagen KG, Bonn
100.00
100.00
D
2,555
205
4
IVG Schienenfahrzeuge GmbH & Co Kesselwagen KG, Bonn
100.00
100.00
D
1,022
119
4
IVG Tanklager Silesia, Radzionków, Polen
100.00
100.00
Pl
1,954
-2,049
Berlin VIII - Objekt Neue Spreespeicher Cuvryhof KG, Schönefeld
(formerly Hamburg III -Objekt Lübeck- KG), Bonn
IVG Immobilienentwicklungsgesellschaft mbH & Co
XXTRA Liegenschaften GmbH & Co. KG, Nuremberg
Stodiek Europa Immobilien AG, Bonn
94.43
94.43
D
90,582
6,307
Property Security Belgium SA, Brussels
100.00
100.00
B
13,504
770
Stodiek Immobilien- und Verwaltungs GmbH, Bonn
100.00
100.00
D
26
-
Stodiek Wohnpark Kaarst GmbH & Co KG, Bonn
100.00
100.00
D
-389
38
4
Stodiek Ariane I S.A., Luxembourg
100.00
100.00
Lux
3,790
168
3
Stodiek Ariane II S.A., Luxembourg
100.00
100.00
Lux
3,501
148
3
Stodiek Ariane III S.A., Luxembourg
100.00
100.00
Lux
2,764
79
3
Stodiek ESPANA S.A., Madrid, Spain
100.00
100.00
E
10,663
545
3
Stodiek Immobilien GmbH & Co. – Objekt München I-KG, Bonn
100.00
100.00
D
51
443
4
Stodiek Italia S.r.l., Mailand
100.00
100.00
I
8,596
356
3
Stodiek Lisboa – Promocao e Construcao de Imóveis, S.A., Lisboa
100.00
100.00
P
537
302
3
Stodiek France SAS, Paris
100.00
100.00
F
-626
-425
3
Stodiek Immobiliare S.r.l., Milan
100.00
100.00
I
15,119
2,283
3
SCI 121/123 Rue D‘ Aguesseau, Paris
100.00
100.00
F
1,126
1,910
3
Stodiek Inmobiliaria, S.A., Madrid
100.00
100.00
E
9,226
4,534
3
Stodiek Portugal – Sociedade Imobiliaria, S.A., Lisbon
100.00
100.00
P
2,577
105
3
12.76
15.00
Fi
0
0
3
Tamperen Koskenranta
120.121
5
Share-
Company
Proportion
Voting
holders’
Net
of capital
rights
equity
income
in €,000
held in %
in %
Country
in €,000
IVG European Real Estate S.A., Brussels
100.00
100.00
B
67,731
-189
3
IVG European Properties AB, Göteborg
100.00
100.00
S
10,991
-1,945
3
Asticus AB, Göteborg (S)
100.00
100.00
S
136,676
-375
3
Ada SA, Brussels
100.00
100.00
B
7,690
-2,442
3
Asticus Belgium II SA, Brussels
100.00
100.00
B
524,509
14,698
3
Asticus Belgium SA, Brussels
100.00
100.00
B
395,590
-15
3
Asticus Europe GIE, Brussels
100.00
100.00
B
0
0
3
Beaulieu SPV SA, Brussels
100.00
100.00
B
-760
-807
3
Beeda SA, Brussels
100.00
100.00
B
5,683
-45
3
Bolet SA, Brussels
100.00
100.00
B
3,101
-58
3
Bonne Odeur SA, Brussels
100.00
100.00
B
34,191
-33
3
Bosquet Immobilière SA, Brussels
100.00
100.00
B
45,260
988
3
Ceda SA, Brussels
100.00
100.00
B
5,697
-45
3
Demot SPV SA, Brussels
100.00
100.00
B
88
-3
3
Ekster SA, Brussels
100.00
100.00
B
54,836
4,686
3
Gertrud SA, Brussels
100.00
100.00
B
21,010
568
3
Groenhoek SA, Brussels
100.00
100.00
B
25,118
308
3
Hibou SA, Brussels
100.00
100.00
B
55,642
630
3
Immobilière Groenveld SA, Brussels
100.00
100.00
B
13,384
565
3
IVG Brusssels SA, Brussels
100.00
100.00
B
112,619
1,050
3
Kobben SA, Brussels
100.00
100.00
B
36,206
1,640
3
Kolla SA, Brussels
100.00
100.00
B
24,358
825
3
Korpen SA, Brussels
100.00
100.00
B
221,520
959
3
Madou Plaza SA, Brussels
100.00
100.00
B
27,595
-1,707
3
Praten SA, Brussels
100.00
100.00
B
2,767
3,518
3
Slot SA, Brussels
100.00
100.00
B
16,075
721
3
Spannen SA i.L., Brussels
100.00
100.00
B
59,464
-37
3
Spoor SA, Brussels
100.00
100.00
B
11,365
525
3
Storken SA i.L., Brussels
100.00
100.00
B
Svanen SA, Brussels
100.00
100.00
B
-6,438
-298
3
Valen SA, Brussels
100.00
100.00
B
140,120
95
3
Varla SA, Brussels
100.00
100.00
B
1,725
32
3
Zesmeer SA, Brussels
100.00
100.00
B
39,090
-1,919
3
Cabrera SA, Luxembourg
100.00
100.00
Lux
-8,672
-408
3
Edison SA, Luxembourg
100.00
100.00
Lux
-1,464
-86
3
Morella SA, Luxembourg
100.00
100.00
Lux
-7,328
-308
3
Sanara SA, Luxembourg
100.00
100.00
Lux
3,810
315
3
Serenade SA, Luxembourg
100.00
100.00
Lux
0
0
3
Sierra SA, Luxembourg
100.00
100.00
Lux
-2,799
65
3
Thomas SA, Luxembourg
100.00
100.00
Lux
1,415
353
3
Aranäs International NV, Amsterdam
100.00
100.00
NL
23,104
-127,955
3
Auletta BV, Amsterdam
100.00
100.00
NL
0
0
3
Bygg Bouw BV, Amsterdam
100.00
100.00
NL
0
0
3
Daler BV, Amsterdam
100.00
100.00
NL
0
0
3
Sophia Antipolis BV, Amsterdam
100.00
100.00
NL
0
0
3
Stockned Holding BV, Amsterdam
100.00
100.00
NL
60,144
67,182
3
Swedium BV, Amsterdam
100.00
100.00
NL
0
0
3
Zevenazur BV, Amsterdam
100.00
100.00
NL
0
0
3
Zevenhaven BV, Amsterdam
100.00
100.00
NL
0
0
3
Zevenshop BV, Amsterdam
100.00
100.00
NL
0
0
3
Zevenspant BV, Amsterdam
100.00
100.00
NL
0
0
3
IVG Immobilière SAS, Paris (formerly Asticus International SAS)
100.00
100.00
F
115,734
29,732
3
C:ie Foncière Chaveaux Lagarde, Paris
100.00
100.00
F
11
-4
3
C:ie Foncière De Bassano, Paris
100.00
100.00
F
-2,781
-5,169
3
C:ie Foncière Etoile, Paris
100.00
100.00
F
15
-2,447
3
3
87
88
90
92
93
112
114
116
117
Notes to the IVG
5
Share-
Company
Proportion
Voting
holders’
Net
of capital
rights
equity
income
in €,000
held in %
in %
Country
in €,000
C:ie Foncière Malesherbes 14, Paris
100.00
100.00
F
11
-4
3
C:ie Foncière Malesherbes 16, Paris
100.00
100.00
F
35
20
3
C:ie Foncière Vendôme, Paris
100.00
100.00
F
5,241
560
3
IVG Asticus (GMS) Ltd, London
100.00
100.00
UK
23,974
24,553
3
Asticus (Marlborough) Ltd, London
100.00
100.00
UK
283
0
3
Asticus (Mayfair) Ltd, London
100.00
100.00
UK
25,851
0
3
IVG Asticus Real Estate Limited, London
100.00
100.00
UK
54,355
-3,323
3
Brooksave Ltd, London
100.00
100.00
UK
0
0
3
IVG Asticus (Lombard) Limited
100.00
100.00
UK
-875
-1,132
3
Asticus International AB, Göteborg
100.00
100.00
S
89,836
707
3
IVG Real Estate Stockholm AB, Göteborg
100.00
100.00
S
530
1,011
3
Bürohaus Schönefeld GRISO Verwaltungsgesellschaft mbH & Co. KG, Munich
100.00
100.00
D
-3,823
3
4
Infopark RT (Hungary)
100.00
100.00
HU
15,123
86
3
IVG Hungária Ingatlanfejlesztesi KFT Budapest
100.00
100.00
HU
1,390
-3,070
3
Infopark B Épitési Terület Kft, Budapest
100.00
100.00
HU
5,453
-1,721
3
Infopark I Épitési Terület Kft, Budapest
100.00
100.00
HU
436
390
3
IHC Immobilien AG, Luxembourg
100.00
100.00
Lux
698
-470
3
Société Immobilière de la place de la Madeleine S.A.S, Paris
100.00
100.00
F
8,541
-117
3
Société Immobilière 173–175 Boulevard Haussmann S.A.S, Paris
100.00
100.00
F
42,151
-203
3
IVG Real Estate Belgium, Brussels
100.00
100.00
B
74,912
-3,679
3
Batipromo S.A., Brussels
100.00
100.00
B
84,150
4,996
3
Bonn Kft. , Budapest (Hungary)
100.00
100.00
HU
1,370
-318
3
88.46
88.46
D
10,778
-7,598
4
IVG Media Works Munich Vermietgesellschaft mbH (vorm.UN Ulrich Nack GmbH, Bonn)
100.00
100.00
D
219
182
Wert-Konzept-Berlin Holding GmbH & Co. Beteiligungs KG, Berlin
100.00
100.00
D
2,700
781
4
IVG Italia S.r.l., Milan
100.00
100.00
I
11,078
777
3
FORSET Verwaltungsgesellschaft mbH & Co. Vermietungs KG, Munich
100.00
100.00
D
26
2,960
4
REM Gesellschaft für Stadtbildpflege und Denkmalschutz mbH, Berlin
100.00
100.00
D
137
0
Berlin Konzept Immobilien Verwaltungs GmbH, Berlin
100.00
100.00
D
21
0
Wert-Konzept ImmobilienFonds GmbH, Cologna
100.00
100.00
D
2,483
20
Architekturbüro Reinhard Müller GmbH, Berlin
100.00
100.00
D
157
0
Wert-Konzept Immobilienfonds Verwaltungsgesellschaft mbH, Berlin
100.00
100.00
D
18
-7
BOTAGRUND Verwaltungs GmbH, Berlin
100.00
100.00
D
1,163
147
98.13
98.13
D
5,680
746
4
IVG Service GmbH & Co. Berlin – Objekt Potsdam-KG, Bonn
100.00
100.00
D
5,000
43
4
IVG Service GmbH & Co. Berlin – Objekt Teltow-KG, Bonn
100.00
100.00
D
5,000
295
4
IVG Service GmbH & Co. Berlin – Objekt Großziethen-KG, Bonn
100.00
100.00
D
4,000
215
4
92.50
92.50
D
2,278
531
4
CI Projektmanagement GmbH, Cologne
50.00
50.00
D
515
328
FDV Venture S.A., Luxembourg
30.00
30.00
Lux
24,878
-6,026
Fernleitungs-Betriebsgesellschaft mbH, Bonn
49.00
49.00
D
29
3
HANNOVER HL Leasing GmbH & Co KG, Munich
25.00
25.00
D
2
Hannover HL Leasing Verwaltungs-GmbH, Munich
25.00
25.00
D
2
K.u.K. Zweite Grundverwaltungs-GmbH & Co. Spree- Speicher KG, Berlin
FvH Grundstücksverwaltungs-GmbH & Co. Hardenbergstraße 26 KG, Berlin
Johs. Uckermann GmbH & Co. Grundstücksentwicklung KG
II. Associated companies (valued by the equity method, German Commercial Code Sec. 311/312)
1
Net income as at 31.12.2002
2
Results not disclosed, as per Sec. 286 (3) 2 of the German Commercial Code
3
As disclosed in the financial statements prepared for consolidation purposes
4
Sec. 264b HGB
5
The complete summary of major shareholdings will be deposited at the German Commercial Registry
1
122.123
Other information
Report of the Auditors of the Consolidated Financial Statements
»We have audited the consolidated financial statements presented by IVG Immobilien AG, Bonn (comprising the consolidated balance sheet, consolidated income statement, notes to the consolidated financial
statements, consolidated cash flow statement, segment information and statement of changes in shareholders’ equity) and the group management report for the business year from 1 January to 31 December
2003. The preparation of the consolidated financial statements and the group management report in accordance with German commercial law are the responsibility of the company’s Board of Management.
Our responsibility is to express an opinion on the consolidated financial statements and the group management report based on our audit.
We conducted our audit of the consolidated annual financial statements in accordance with Sec. 317 of
the German Commercial Code (HGB) and German generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan
and perform the audit such that misstatements materially affecting the presentation of the net assets,
financial position and results of operations in the consolidated financial statements in accordance with
German principles of proper accounting and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the
company and evaluations of possible misstatements are taken into account in the determination of audit
procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual
financial statements of the companies included in consolidation, the determination of the companies to be
included in consolidation, the accounting and consolidation principles used and significant estimates made
by the company’s Board of Management, as well as evaluating the overall presentation of the consolidated
financial statements and the group management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial
position and results of operations of the group in accordance with German principles of proper accounting.
On the whole the group management report provides a suitable understanding of the group’s position and
suitably presents the risks of future development.«
Düsseldorf, 16 March 2004
PwC Deutsche Revision Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Brebeck
ppa. Leifels
(German Chatered Accountant)
(German Chatered Accountant)
124.125
Report of the Supervisory Board
Dear Reader,
On this and the following pages, the Supervisory Board reports on its activities in the 2003 financial year,
describing its constant communication with the Board of Management and the focal points of Supervisory
Board meetings including its scrutiny of the annual and consolidated financial statements.
The Supervisory Board performed its duties over the 2003 financial year as stipulated by law and by the
IVG Articles of Association. It monitored the Board of Management in managing the company and followed the running of the company’s affairs. The Supervisory Board was directly involved in all fundamental
decisions.
The Board of Management has provided the Supervisory Board with full, regular, timely, written reporting
on all matters relating to the company’s business, covering in particular corporate, personnel and financial
planning, the Group’s situation including appraisal of the risk position and risk management, and progress
on investment projects. The Board of Management explained all significant current transactions with reference to reports at Supervisory Board meetings.
The Chairman of the Supervisory Board was also kept informed of significant transactions by the Board of
Management outside of Supervisory Board meetings.
Supervisory Board and
In accordance with the Industrial Constitution Act (Betriebsverfassungsgesetz) of 1952, the Supervi-
committee meetings
sory Board is composed of four shareholder representatives and two employee representatives. The
Supervisory Board’s Personnel Committee is empowered to take decisions affecting the contracts of the
members of the Board of Management of IVG Immobilien AG, and regarding all other personnel matters
referred to the Supervisory Board by statutory requirement. No other committees have been formed.
Six Supervisory Board meetings were held in the 2003 financial year, with one member unable to attend
at four meetings. An occasion for the Personnel Committee to meet did not arise.
Main topics
discussed by the
At each of its meetings, the Supervisory Board discussed the turnover, earnings and financial position
together with personnel changes within the Group and the various segments.
Supervisory Board
At its 13 November 2003 meeting, the Supervisory Board covered the amended German Corporate Governance Code and the guidelines of the German Real Estate Industry Corporate Governance Initiative. The
Supervisory Board and the Board of Management broadly agree with the recommendations and suggestions and have adapted the Terms of Reference of both the Supervisory Board and Board of Management
accordingly. The Declaration of Conformity with the Code is published on the IVG website, www.ivg.de.
The Supervisory Board plans to consider the Code’s recommendation regarding regular examination of the
efficiency of its activities during the course of 2004.
At its November meeting, the Supervisory Board dealt in detail with the medium-term plans for the years
2004 to 2006, the investment, finance and human resources plans derived from them, and the long-term
corporate strategy.
New additions and acquisitions in the portfolio were discussed at several meetings. The acquisition of approximately 85% of shares in POLAR Kiinteistöt Oyj (Helsinki, Finland) was successfully completed.
The Supervisory Board also approved developments in Munich, Berlin and Budapest. The Board of Management provided information at Supervisory Board meetings on the progress and abandonment of negotiations to privatize Berlin’s airports system and the building of the new Berlin-Brandenburg International
airport (BBI).
Opportunities to sell and realize value gains were taken in various regional markets. The Supervisory Board
approved the sale of properties or business interests in Barcelona, Brussels, Dornach, Frankfurt, Lisbon,
Madrid, Stockholm and Wroclaw.
The Supervisory Board held in-depth discussions at its meeting on 28 March 2003 regarding the company’s authorization to purchase its own shares. The proposed resolution was adopted with a large majority
at the 17th Annual General Meeting on 27 May 2003.
The Supervisory Board adopted further resolutions relating to the 2003 share options plan based on the
resolution of the Annual General Meeting of 23 May 2002 and on the appointment of executive officers
and holders of Prokura, or registered power of attorney under German commercial law.
The annual financial statements of IVG Immobilien AG and the consolidated financial statements for the
Annual financial
year ended 31 December 2003 as submitted by the Board of Management have been duly audited, to-
statements
gether with the Company Management Report and the Group Management Report for the 2003 financial
year, by PwC Deutsche Revision Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, of Düsseldorf, who
have awarded a clean auditors’ certificate in each case. The chief auditor was present at our meeting to
discuss the company’s and the consolidated financial statements on 26 March 2004. He gave an extensive
account of the conduct and findings of the audit, and was available to provide additional information.
The Supervisory Board has scrutinized the two sets of financial statements, the Management Report and
the proposed appropriation of net income. It concurs with the findings of the audit and, following the conclusive findings of its own examination, it has no objections to any of these documents and reports.
The report on relations with affiliated companies prepared by the Board of Management for the year 2003
in compliance with Sec. 312 of the German Stock Corporations Act (AktG) was supplied to the Supervisory
Board along with the auditor’s appraisal of it. The Supervisory Board has itself examined the Board of
Management’s report, and has approved it together with the auditor’s findings. The auditor’s certificate for
the Board of Management’s dependent company report reads as follows:
126.127
»Having examined and appraised this report as by duty bound, we hereby confirm that the facts stated in
the report are correctand the Company did not render unduly high remuneration in any of the legal transactions documented in the report.«
In its conclusive findings from its own examination, the Supervisory Board has no objections to make to
the Board of Management’s declaration on relations with affiliated companies covering the financial year
2003.
At its meeting on 26 March 2004, the Supervisory Board issued its approval of the financial statements
prepared by the Board of Management, which are therefore deemed final. It also concurred with the Board
of Management’s proposed appropriation of net income, and finalized the motions to be put to the Annual
General Meeting.
Composition of the
On the shareholders’ side, Franz-Josef Seipelt resigned his seat on the Supervisory Board with effect from
Supervisory Board
31 January 2003. He was succeeded as shareholder representative by Dr Michael Albertz, appointed by
court order effective 1 February 2003. The Supervisory Board would like to express its gratitude to the
retiring member for his constructive and authoritative input.
The Supervisory Board wishes also to thank the Board of Management, the Group’s employees and their
employee representatives for their work in the 2003 financial year.
Bonn, 26 March 2004
On behalf of the Supervisory Board
Roland Flach
Chairman
Board of Management
Supervisory Board/Board of Management
Roland Flach
MATERNUS-Kliniken AG
Chairman
NB Beteiligungs AG*
Chief Executive Officer of WCM Beteiligungs-
RSE Grundbesitz und Beteiligungs-AG*
und Grundbesitz-AG
WCM Beteiligungs- und Grundbesitz-AG
Kronberg im Taunus
(in abeyance from 4.6.2003 under Sec. 105 (2)
of the German Stock Corporations Act)
Notification of seats on other supervisory boards as
per Sec. 285 (10) of the German Commercial Code:
Dr. Michael Albertz (from 1 February 2003)
Gladbacher Aktienbaugesellschaft AG*
Deputy Chairman of the Executive Board, Corpus
GEHAG GmbH*
Immobiliengruppe GmbH & Co. KG
Gemeinnützige Eisenbahn-Wohnungsbau-Gesell-
Cologne
schaft mbH Wuppertal* (Chairman)
KHS Maschinen- und Anlagenbau AG* (Chairman)
KHS Inc.* (Chairman)
Klöckner-Werke AG* (Chairman)
DGAG Deutsche Grundbesitz AG
MAAG Holding AG (Vice President of the
Advisory Board)
Rainer Antons
Mechanical engineering master craftsman
NB Beteiligungs AG* (Chairman)
IVG Logistik GmbH, Etzel Office
RSE Grundbesitz und Beteiligungs-AG*
Friedeburg
RSE Projektmanagement AG* (Chairman)
YMOS AG* (Chairman)
* WCM Group companies
None
Karl-Ernst Schweikert
Stellv. Vorsitzender
Wilhelm Friedrich Corneli
Deputy Chairman
Salaried corporate lawyer
Member of the Board of Management of WCM
IVG Immobilien AG
Beteiligungs- und Grundbesitz-AG under
Bonn
Sec. 105 (2) of the German Stock Corporations
Act, Männedorf (Switzerland)
None
BHE Beteiligungs-AG*
Dr. Manfred Lennings
Bremische Gesellschaft für Stadterneuerung,
Industrial consultant
Stadtentwicklung und Wohnungsbau mbH*
Essen
(Chairman)
(Chairman)
Gemeinnützige Eisenbahn-Wohnungsbau-
Bauunternehmung E. Heitkamp GmbH
Gesellschaft mbH Wuppertal*
Deilmann-Haniel GmbH
KHS Maschinen- und Anlagenbau AG*
Deutsche Post AG
Kieler Wohnungsbaugesellschaft mbH*
ENRO AG
Klöckner-Werke AG*
Gildemeister AG (Chairman)
MAAG Holding AG
Heitkamp-Deilmann-Haniel GmbH (Chairman)
Supervisory Board
128.129
Franz-Josef Seipelt
Member of the Board of Management of WCM
(Chairman)
Beteiligungs- und Grundbesitz-AG
KHS Maschinen- und Anlagenbau AG*
Frankfurt (until 31 January 2003)
Klöckner KHS Inc., Waukesha, USA*
MPI International Inc., Rochester Hill, USA*
per Sec. 285 (10) of the German Commercial Code
YMOS AG*
(until 31 January 2003):
Allboden Allgemeine Grundstücks-AG*
* WCM Group companies
Bartelt Inc., Sarasota, USA
Board of Management
Dr. Eckart John von Freyend
Dr. Bernd Kottmann
Chief Executive Officer
Portfolio Management
Bad Honnef
Pech, Wachtberg
BONN-INNOVA GmbH & Co. Venture Beteili-
Bonn Kft.*
gungs KG
Infopark Fejlesztési Rt.*
Gerling Konzern Lebensversicherungs AG
IT Immobilien Beteiligungsgesellschaft mbH*
HANNOVER HL Leasing GmbH & Co. KG
Parisz Kft.*
IABG Industrieanlagen-Betriebsgesellschaft mbH
POLAR Kiinteistöt Oyj, Helsinki*
(Chairman)
TERCON Immobilien Projektentwicklungs
Infopark Fejlesztési Rt.*
GmbH*
IVG Immobilien Kapitalanlagegesellschaft mbH*
POLAR Kiinteistöt Oyj, Helsinki* (Chairman)
* IVG Group companies
SIBRA Beteiligungs AG* (Chairman)
Stodiek Europa Immobilien AG* (Chairman)
Dr. Dirk Matthey
GmbH* (Chairman)
Bad Godesberg, Bonn
UTH United Technologies Holding GmbH
VNR Verlag für die Deutsche Wirtschaft AG
HANNOVER HL Leasing GmbH & Co. KG
POLAR Kiinteistöt Oyj, Helsinki*
SIBRA Beteiligungs AG*
Stodiek Europa Immobilien AG*
GmbH*
Dr. Klaus Asche
Chief Executive, LIBRA Unternehmensberatung
GmbH, Hamburg
Dr. Ralf Bethke
Chairman of the Board of Executive Directors,
K + S Aktiengesellschaft, Kassel
Dr. Hans-Georg Brodach
Senior Vice President ABB Europe Ltd., Brussels
Board of Management
Dr. Gert Haller
Retired State Secretary,
Chairman of the Management Board,
Wüstenrot + Württembergische AG, Stuttgart
Dr. Volker Hassemer
Member of the Berlin Landtag, former Managing
Director, Partner für Berlin – Gesellschaft für
Hauptstadtmarketing mbH, Berlin
Dr. Gerold Bezzenberger
Lawyer and notary, Berlin
Dr. Karl Kauermann
Chairman of the Board of Management,
Berliner Volksbank eG, Berlin
Udo Cahn von Seelen
Former Chairman of the Board of Management,
Energie-Aktiengesellschaft Mitteldeutschland,
Kassel
Peter Kobiela
Member of the Board of Managing Directors,
Landesbank Hessen-Thüringen, Frankfurt am
Main
Karl-Hans Caprano
Managing Director, Technoform Caprano +
Brunnhofer GmbH & Co. KG, Fuldabrück
Thies J. Korsmeier
Former Member of the Board of Management,
Deutsche Shell AG, Hamburg
Chairman of the Board, Verband SchmierstoffIndustrie e.V., Hamburg
Dr. Karl-Joachim Dreyer
Spokesman of the Board of Management,
Hamburger Sparkasse, Hamburg
Wolfgang Egger
Patrizia Immobilien AG, Augsburg
Dr. Dierk Ernst
Managing Partner, TERCON Immobilien
Projektentwicklungs GmbH, Munich
Dipl.-Volkswirt Wolfgang Fink
Allianz Immobilien GmbH, Stuttgart
Dr. Roland Fleck
Nonelected councillor and Deputy Mayor for
Economic Affairs, Nuremberg
Dr. Christoph Franz
Former CEO and Chairman of the Management
Board, DB Reise & Touristik Aktiengesellschaft,
Frankfurt
Dr. Heinrich Kraft
Chairman of the Advisory Board, ECE
Projektmanagement GmbH, Hamburg
Jorma Laakkonen
Former Senior Executive, Nordea Bank,
Espoo (Finland)
Dr. Thomas Kurze
Chairman of the Advisory Board of
VBV Vermögens-Beratungs- und
Verwaltungsgesellschaft mbH, Berlin
Jan-Henrik Kulp
Former CFO, UPM-Kymmene Group, Helsinki
Klaus Laminet
Managing Partner, INVESTA Projektentwicklungsund Verwaltungs-GmbH, Munich
Georg Lewandowski
Lord Mayor of the City of Kassel, Kassel
Werner Gegenbauer
President, Berlin Chamber of
Industry and Commerce, Berlin
Dr. Walter Lohmeier
Chief Executive Manager, Kassel
Chamber of Industry and Commerce, Kassel
Dr. Joachim Grünewald
Retired Parliamentary State Secretary, Olpe
Dr. Johannes Ludewig
Executive Director, GEB – Gemeinschaft der
Europäischen Bahnen; retired State Secretary,
Brussels
Advisory Committee
130
Dr. Klaus Lukas
Chairman of the Executive Board,
Kasseler Sparkasse, Kassel
Paul Marcuse
Chief Executive Officer, AXA Real Estate
Investment Managers Limited, London
Dr. Werner Martin
Lawyer, Berlin
Dr. Lutz Mellinger
Former Member of the Corporates and
Real Estate Group Divisional Executive,
Deutsche Bank AG, Frankfurt am Main
Prof Peter Niehaus
Former spokesman of the Management Board,
Siemens Real Estate, Munich
Dr. Gerhard Niesslein
Chairman of the Managing board,
DeTeImmobilien
Deutsche Telekom Immobilien und Service
GmbH, Frankfurt am Main
Dr. Claus Nolting
Former Member of the Board of Managing
Directors, Bayerische Hypo- und
Vereinsbank AG, Munich
Dr. Klaus Riebschläger
Lawyer, Berlin
Dr. Jochen Scharpe
Member of the Executive Management,
Siemens Real Estate GmbH & Co. OHG, Munich
Dipl.-Kfm. Fried Scharpenack
IVG Immobilien AG, Essen
Dr. Udo Schlitzberger
Chief Executive of the Council of the
Administrative District of Kassel, Kassel
Alfred Schmidt
Retired Minister of State, Kassel
Dr. Manfred Schmidt
Chairman of the Supervisory Board,
Philips GmbH, Hamburg
Prof Dr Karl-Werner Schulte
Head of Department,
ebs European Business School, Oestrich-Winkel
Erich K. Schulthess
Schulthess Holding AG, Zurich
Lars G. Öberg
Chairman of the Board, AB Rännilen, Stockholm
Klaus-Werner Sebbel
Managing Partner, Inventis GmbH & Co. KG,
Munich
Dr. Andreas Odefey
Managing Partner, BPE Capital Partners GmbH,
Hamburg
Thilo von Trott zu Solz
Chief Executive, Wirtschaftsförderung
Region Kassel GmbH, Kassel
Dr. Jens Odewald
Chairman of the Administrative Board, Odewald
& Compagnie GmbH, Berlin
Dr. Henning Voscherau
Notary, Retired Mayor and President of the
Senate of the Free Hansa City of Hamburg,
Hamburg
Dr. Karl Ohl
Lawyer, Kronberg im Taunus
Paul Orchard-Lisle
Former Chairman and CEO, Healey & Baker
Investment Advisors, Cushman & Wakefield,
London
Dr. Klaus Rauscher
Vattenfall Europe AG, Berlin
Dr. Theo Waigel
Lawyer and Former Federal Minister of Finance,
Munich
Claus Wisser
Member of the Supervisory Board,
AVECO Holding AG, Frankfurt am Main
Eckhard Ziegert
Esso AG, Hamburg
Organizational Structure
Dr. Eckart John von Freyend
Chief Excecutive Officer
Dr. Bernd Kottmann
Chief Operating Officer
Dr. Dirk Matthey
Fund Management
Portfolio Management
Finance
Project Development
Project Development
Investor Relations
Affiliates and Associates
Portfolio
Group Controlling
Corporate Development/IT
Customer Relationship
Accounting/Taxes
Communication/Marketing
Management
Legal/Insurance
Organization/Internal Audit
Branch Offices
Personnel
Berlin
Budapest
Frankfurt
Helsinki
Milan
Paris
Brussels
Düsseldorf
Hamburg
London
Munich
Stockholm
Imprint
Published by
Financial calendar
31 March 2004
Analysts’ conference
IVG Immobilien AG
Zanderstrasse 5/7
13 May 2004
Interim report, 1 January–31 March 2004
27 May 2004
Annual general meeting fiscal year 2003
11 August 2004
Interim report, 1 January–30 June 2004
53177 Bonn
Germany
Concept and Design
Kirchhoff Consult AG, Hamburg
16 November 2004
Interim report, 1 January–31 September 2004
16 November 2004
Analysts’ conference fiscal year 2004
Printing
Mediahaus Biering GmbH, Munich
Photographers
Gerd Rettinghaus, Düsseldorf (Properties)
Gaby Gerster, Frankfurt (People)
Horst Kløver, Berlin (Titel)
This annual report is also available in German.
31 May 2005
Annual general meeting fiscal year 2004
ANNAUL REPORT 2003
IVG Immobilien AG
Zanderstrasse 5/7
53177 Bonn
Germany
Phone:
+49 (0)228 / 844-137
Fax:
+49 (0)228 / 844-372
Email:
investor.relations@ivg.de
Public Relations
Phone:
+49 (0)228 / 844-300
Fax:
+49 (0)228 / 844-338
Email:
info@ivg.de
Internet: www.ivg.de
IVG IMMOBILIEN AG
Investor Relations

Annual Report 2003 - IVG Immobilien AG

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