The German real estate investor CGI has decided not invest in the large-scale multifunctional project Lilien-CarrÃ© in Wiesbaden for its fund HausInvest Europa. The project is being developed by AM and is situated close to the central station of Wiesbaden. CGI will also not establish its headquarters there.
At first CGI had planned to use half of the planned office space (28,000 mÂ²) but ultimately they decided to move to Frankfurt. The project Lilien-CarrÃ© has an investment value of â¬160 mln and besides 28,000 mÂ² of office space will also have 20,000 mÂ² of retail space.
These decision follow shortly after the departure of the Dutch Arnold de Haan in the top of CGI. According to Dietmar MÃ¼ller, the spokesperson of CGI, CGI has come to these decisions following the current market situation of the European real estate markets which has made it necessary to change its investment strategy. MÃ¼ller: âWe currently have invested over â¬2.5 bln. in German real estate. We think that this volume is high enough to profit from new opportunities in the future when the German real estate market improves again. Now it would be more profitable to invest new money in European markets outside Germany. The returns there are 1 to 2 % higher than in Germany.â Michel Westbeek, spokesperson for AM, says that CGI took a position in the Lilien-CarrÃ© project at an early stage. This didnât mean a concrete commitment to acquire. âCGI has taken two decisions. They have decided against investing in Lilien-CarrÃ© following a change of investment strategy regarding retail. That change means that they would rather invest in foreign growth markets. Also CGI has decided to not use any office space in the project but rather in Frankfurt since the prices there are more favorable due empty standing of offices thereâ, according to Westbeek.
AM will continue to look for new investors, whilst the development (which started last year) continues. From the retail space, 40% has already been pre-let. With regard to the office space, AM is considering to place them in a lower quality segment in order to enlarge the lease chances.