DGAP-News: ORCO Germany S.A. becomes the biggest private owner of commercial real estate in Berlin


ORCO Germany S.A. / Development of Sales

30.01.2008 

Release of a Corporate-announcement, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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ORCO Germany S.A. becomes the biggest private owner of commercial real
estate in Berlin

ORCO Germany S.A., a subsidiary of Orco Property Group, announces
non-audited 2007 turnover results. The turnover increased in 2007 by 10.7%
to € 81.6 Million compared to € 73.8 Million in 2006. This growth was
driven mainly by higher contribution of rental income.

Rental Income

Orco Germany’s investment portfolio generated € 24.9 Million of rental
income (compared to € 1.5 Million in 2006). GSG’s contribution,
consolidated over six months, was € 18 Million.
In 2007, Orco Germany’s investment portfolio grew to a total of 925,000 sqm
of leasable area, compared to 52 000 sqm in 2006. This significant
increase was mainly due to the acquisition of GSG in Berlin, which had a
portfolio of 825,000 sqm of commercial space.
Following this acquisition, the split between rental income from commercial
holdings versus rental income from other holdings significantly changed:
today, commercial properties represent 94% of Orco Germany’s rental income
(compared to 65% in 2006).

Residential Development

In 2007, the residential development turnover was € 56.7 Million and was
entirely realized in Germany. In 2006, the turnover was € 72.3 Million, of
which € 11 Million was realized by Viterra Czech Republic (sold to Orco
Prague at year end 2006).
In 2007, 143 units were delivered and 43 forward purchase contracts were
signed. The main contributors were Quarter West in Frankfurt (€ 24.1
Million), TaunusSide in Frankfurt (€ 7.8 Million) and Ottensen in Hamburg
(€ 8.7 Million).

Recent events

GSG (Berlin): a € 380 Million acquisition of 825,000 sqm with an immediate
gross yield of 10%

The major milestone of 2007 occurred in June with the € 380 Million
acquisition of GSG, the former state-owned property company with an 825,000
sqm portfolio of commercial real estate.
Thanks to the GSG acquisition, Orco Germany became the biggest private
owner of commercial real estate in the city of Berlin. The portfolio was
purchased for € 460 per sqm, or 25% of the replacement costs based on
insurance estimates, generating an immediate gross acquisition yield of
10%. Since July, active asset management of the portfolio has successfully
cut the vacancy rate by 2% (to 30%) and saved €1.3 Million in costs.
This transaction contributes to the strengthening of Orco Germany’s
investment business and offers further long-term growth value creation.

55% of 33,000 sqm Sky Office (Düsseldorf) pre-leased

Recently, the law firm Lovells entered into a lease agreement for 9000 sqm
in Dusseldorf’s Sky Office building, a modern, first class business
building offering a view of the Rhine River. Coupled with the lease already
agreed to with the internationally renowned consultancy firm McKinsey &
Company, Orco Germany has succeeded in leasing 55% of the building a year
and a half before its delivery.

Pier Eins (Duisburg) sold 8% above IFRS value

In December, the group sold the ‘Pier Eins’ office building in Duisburg for
€ 27 Million (€ 2,770 / sqm), or 8% above June IFRS value and 54% above HGB
book value. The transaction showed a 5.9% yield and the capacity of the
group to dispose of mature assets and realize capital gains. From a market
point of view, this deal illustrated investors’ appetites for well managed
assets.

Listing on the Prime Standard

In order to position itself as one of the leading listed property firms in
Germany, the listing of the stock was transferred in November 2007 from the
Open Market to the Prime Standard of Deutsche Börse.

€ 100 Million of bonds with warrants 

In May 2007, Orco Germany issued bonds with repayable subscription warrants
worth € 100 Million. The funds were raised to finance further growth of the
company.

Financing for € 750 Million secured

Of the secured financing, which is hedged, € 634 Million has been drawn and
a further € 112 Million has been contractually secured to finance ongoing
development projects. The average cost of debt is 5.28%.
The main debt contracted concerns the GSG acquisition financed by a € 305
Million variable interest loan swapped against an interest fixed at 5.45 %
(margin included) signed in July 2007.

Message from Jean-François OTT, President of the Board 
and Rainer BORMANN, CEO of Orco Germany

2007 was a very successful and extremely important year for Orco Germany.
The company was able to continue its path of growth in the third year since
foundation to become number five in terms of market cap among all German
listed property companies by the end of 2007. The company bought GSG for €
380 Million and generated the highest turnover of its history (€ 81.6
Million).

In these challenging financial times, our confidence remains high in the
strong fundamentals of the German economy and in the Berlin real estate
market. The German economy is in a healthy condition. DIW (German Economic
Research Institute) is expecting a growth of 2.1% in 2007 and has
predicted a stable outlook for 2008.
Orco Germany is a Berlin player. The city represents 84% of the value of
group’s portfolio and the company’s pipeline is close to € 1 billion
(estimated Gross Development Value). The portfolio consists of 65% of
investment property and 35% of development.
The Berlin real estate market shows good prospects regarding the user
markets situation. Given the limited new supply of high quality office
space, the substantial demand for this space and consequent declining
vacancy rates are creating more upward pressure on prime rents. Berlin is a
prime location for high tech, modern service companies and the processing
industry. The city is set to become the place for industrial specialising
in intelligent products. The commercial landscape offers clear
opportunities to newcomers who want to make contact with growth industries
of the future. Some figures are self explanatory: Berlin-Brandenburg is
home to 11 universities, 21 colleges and polytechnics, 250 research
institutes and 160 biotech companies. Consequently, we think that the
capital region‘s economy should take advantage of development, production
and marketing of modern technologies.
In the upcoming six months, Orco Germany will focus on the ongoing
restructuring and integration process of GSG in order to accelerate
efficiency gains that will improve occupancy rates and net earnings.
The teams will also concentrate on the execution of major development
projects by obtaining the permits, respecting sustainable requests and
realizing active pre-rentals. Today, Orco Germany is developing four major
projects: Sky Office in Düsseldorf, Cumberland, Leipziger Platz and
Fehrbelliner in Berlin.
Finally, we will provide the market with a high level of transparency and
communication regarding our strategy and results.

ORCO Germany is a property company that is listed in the Prime Standard on
the Regulated Market at Frankfurt Stock Exchange. The company has been
operating in Germany since 2004 and concentrates on residential and
commercial property as well as on asset management and project
development. ORCO currently has about 210 employees in Germany.
ORCO Projektentwicklung GmbH (former Viterra Development GmbH) is one of
the leading project developers and investors in the commercial and
residential property field in the core German markets of Berlin,
Düsseldorf, Frankfurt, Hamburg and Munich.
ORCO Germany is a subsidiary of ORCO Property Group, which is one of the
leading Central European property companies with a property portfolio of
EUR 2.5 billion on 30.06.07. The company was established in 1991, is based
in Luxembourg and has Euronext, Prague, Budapest and Warsaw Stock Exchange
listings. It operates mainly in the Czech Republic, Hungary, Poland,
Russia, Croatia, the Slovak Republic and Germany.



Contact 
Sabrina Eilers 
Head of Marketing & Communications 
ORCO Germany 
Tel. +49. 30. 440 123 190 
E-mail seilers@orcogroup.com 
www.orcogermany.de
DGAP 30.01.2008 
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Language:     English
Issuer:       ORCO Germany S.A.
              48, Bld. Grande-Duchesse Charlotte
              1330 Luxembourg
              Luxemburg
Phone:        +49 (0)30-440 123 0
Fax:          +49 (0)30-440 123 299
E-mail:       contact@orcogroup.com
Internet:     www.orcogroup.com
ISIN:         LU0251710041
WKN:          A0JL4D
Listed:       Regulierter Markt in Frankfurt (Prime Standard)
End of News                                     DGAP News-Service
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