vestor Level One files for insolvency - Intelligence Report - REFIRE

that he has set as he is, a partner who’s
got his own skin in the game. When you
as an investor have to stump up 25-30%
equity capital just to keep your existing
lines of credit open and not go bankrupt,
then you want to work with people who
put their own money on the line. That’s
what we do.
Can the recent popularity of investing in
retail continue?
Thousands of investors have piled into
this sector in the last couple of years, often
happy to buy a big box property with
a 20-year lease with Aldi, Lidl, or other
out-of-town retailers. But a lot of these
are in places where people wouldn’t build
any more, which may suffer from the trend
back into the cities. I think a lot of this kind
of retail investment is suspect, we won’t
see the same frantic building of these kind
of shopping centres again for a while.
What’ll happen with retail rents?
Take a leading retailer like H&M, whom you
might find in several locations in a city centre.
They’ll pay a higher price for their presence
on the top shopping streets and to invest in
their brand, but meanwhile they’ll shun 20year
lease contracts in favour of 5-year leases
with a option to extend, and an option to sublet.
On balance, in the larger cities, I don’t
think rents will fall significantly in the prime
shopping locations. In secondary cities and
smaller towns they may even rise, as retailers
shy away from moving into the bigger cities
until the economic storm clouds that threaten
us with doom and gloom slowly disappear.
You’re very outspoken on the issue of sustainability...
This is not just a passing fad, but a seriously
important aspect of our real estate investment.
America, and particularly Britain, are
Exclusively for commercial properties
Marketplace. Know-How. Europe.
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very much at the forefront of developments
here, while here in Germany there is a lack
of a unified approach in its application to the
residential sector. The recognised quality
certification in other markets is reflected directly
in prices, and our lack of this in Germany
can lead to confusion when informed
investors wonder if they will be hit with ecological
upgrading and improvement costs
later. But when have this certification in 5-10
years here, the burden will fall more on the
tenants than the investors, as the tenants will
favour the sustainable properties . The drastic
increases in charges over the last few years,
which every tenant has to pay in addition to
his ‘cold’ or basic rent, have led to sweeping
changes in tenants’ attitudes to their energy
charges, and this is proving to be the catalyst.
Remember, this is Germany and most
disputes in our social market economy are
resolved in favour of the tenant. Smart investors
take this into account and plan and
budget accordingly. (END)