HSH Nordbank AG has provided finance amounting to €100 million for the 'Sky Office' office project in Düsseldorf. This is a project development for erecting an eye-catching high-rise office building on Kennedydamm, a prestigious office district to the north of Düsseldorf's Altstadt (old town). Sky Office is a project of Orco Germany and will be conducted by its subsidiary Viterra Development GmbH.
HSH Nordbank finances Sky Office.
The funds provided by HSH Nordbank are intended for purchasing the land and erecting the planned building. Completion is scheduled for September 2009. A prestigious anchor lessee for the Sky Office has already by found in McKinsey & Company, a global management consultancy.
"The plans suggest that this will not just be a highly visible landmark building, but also a very commercially viable office property. The project is characterized by the highly efficient use of space, a large number of parking spaces and rental areas that are suitable for flexible design. These points make the building particularly attractive for potential tenants," says Claudio Lagemann, Head of the Real Estate division at HSH Nordbank.
The total costs of the project amount to €175 million. According to plans, an 89-meter high, 23-story office building with gross floor space totaling 37,000 m² is to be built on a construction site of around 6,000 m². Each story will contain 1,450 m² of rentable floor space. In addition to this, the building will house a four-level underground parking facility with a total of 430 parking spaces for cars.
HSH Nordbank expects the Düsseldorf office market to benefit to an above-average extent from the economic upswing in Germany thanks to its service-oriented economic structure. The low level of construction activity is also regarded as a positive aspect. For instance, in fiscal 2007, as in the year before, some 40,000 m² of office space are likely to be added to the market, a figure that works out to only around one third of the average of the past ten years. By 2009, the vacancy rate is expected to decline further while rental charges should rise. Rental yields will probably fall again although an increase to 5% is projected again from fiscal 2008. In fiscal 2006 activities on the Düsseldorf investment real estate market were characterized by large transaction volumes totaling €850 million, considerably in excess of the average for the years since 2001 (€625 million p.a.). HSH Nordbank has noted a drop in market risks both on the rental market and on the investment market, a trend that can be expected to continue.
Source: HSH Nordbank