ONE ROOF

The economic crisis will continue to cast a shadow
over the European office rental markets in 2010. It remains
to be seen how the broad economic recovery
forecast will affect employment figures in the relevant
segments.
The European real estate investment market turned
in a satisfactory performance in 2009. Although the first
two quarters were still noticeably dogged by uncertainty
on the financial markets, clear sales growth was reported
in the third and fourth quarters. The increase in
prime yield stabilized in most markets in the fiscal year.
On the buyer side, mainly institutional investors with
strong equity positions were active on the market. They
were particularly interested in well­situated properties
with long lease terms and tenants with good credit—the
kind of real estate which HOCHTIEF Projektentwicklung
focuses on developing. Investors mainly concentrated
on the core Western European markets of the
UK, France and Germany.
For 2010, the majority of industry experts forecast po­
tential growth of up to 35 percent in the transaction
volume of the European real estate investment market.
Demand for high­quality core real estate* will remain
strong while supply will be short. As a result, a moderate
increase in the purchase price level is expected in
this segment.
Construction
The construction markets of most significance to
HOCHTIEF showed a highly diverse pattern of development
in 2009. As in 2008, the continued weak trend
in residential construction affected the sector in Europe.
According to the eminent Euroconstruct group, a network
of research and consultancy institutes that analyzes
trends in the European construction industry on
an annual basis, construction activity in the residential
construction segment dropped sharply in 2009. In the
19 countries covered by Euroconstruct**, it fell by a
clear 12.3 percent. HOCHTIEF remained largely untouched
by this decline, however, thanks to its focus on
highly sought­after premium apartments. The Eurocon­
❘ Information for our Shareholders ❘ ❘ Management Report ❘ ❘ Financial Statements and Notes ❘
struct group forecasts a 2.1 percent decline for 2010. A
2.1 percent increase is not expected until 2011. Construction
activity as a whole fell by 8.4 percent in 2009.
The difficult economic environment also impacted on
commercial construction in the year under review. A
further decrease of 4.6 percent is anticipated for 2010.
The experts at Euroconstruct expect the market to
start recovering in 2011.
The civil engineering segment differs from the other
segments in the construction industry. Although the effects
of the economic crisis can be felt, they are considerably
less pronounced. The economic downturn
prompted many countries to issue economic stimulus
programs, which primarily make funds available for investments
in infrastructure. Because of this, civil engineering
grew by 1.7 percent in 2009. For 2010, growth
of 0.8 percent is forecast in the countries covered by
Euroconstruct. Because civil engineering contracts are
generally awarded by the public sector, further opportunities
will arise in the medium term for PPP (publicprivate
partnership)*** or BOT (build, operate, transfer)
projects. HOCHTIEF is also well positioned for these
projects and has many years’ experience to fall back on.
Industry experts expect a growth surge in the offshore
wind farms segment. In 2009, around EUR 1 billion
was invested in this segment; investments of EUR 3.3
billion are already expected for 2011. Accordingly, the
total capacity of these wind farms will increase in this
period from 1,900 megawatts to around 4,500 megawatts.
New economic opportunities also arise from sustain­
able construction, to which HOCHTIEF is committed:
The Deutsche Bank Research think tank forecasts, for
example, that construction work promoting climate
protection could generate additional construction activity
of EUR 200 billion in Germany by 2030.
The financial and economic crisis hit the US construc­
tion sector particularly hard. For this reason, the gov­
ernment launched an economic stimulus program worth
***See glossary on page 198.
*See glossary on page 197.
**See glossary on page 197.
Annual Report 2009 37