DTZ and Deutsche RealCorp (DRC) GmbH & Co KG have set up a joint venture under the name of DTZ RealCorp GmbH. The two companies each have a 50% stake in the joint venture. The managing directors are Matthias Gehrmann of DRC and Raffaele Lino of DTZ.
The aim of the joint venture is to advise business companies on the disposal of their property assets using DRC's sale-and-lease-back model, while at the same time creating an investment product for institutional investors. "Cooperation with DTZ increases the scope of the sale-and-lease-back model and gives business companies access to the capital markets," says Matthias Gehrmann.
DTZ will incorporate its fund-raising expertise and handle the foundation and structuring of the fund and the placement of equity to institutional investors. "In the new company we will assume responsibility for the entire transaction process, including bidding and due diligence procedures," says Raffaele Lino, who heads the business area Corporate Finance, Frankfurt, at DTZ as Managing Director.
The potential for sale-and-lease-back operations in the German real estate sector is substantial. On average, 70% of large German companies own the properties they occupy. This is twice the international average, especially in comparison with American and Asian companies. The real estate assets owned by DAX-listed companies alone are valued at around €170 billion.
In the present situation, with banks reticent about granting loans and the increasing difficulty of raising capital on the stock exchange, the sale of property assets offers companies an alternative means of obtaining liquidity. "Our sale-and-lease-back model places the emphasis on the interests of the companies concerned, since it offers them the decisive advantage that they retain control of their properties," says Matthias Gehrmann. Before joining DRC, Gehrmann was in charge of property sales at DaimlerChrysler and is thus totally familiar with the demands which business companies place on their real estate.