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MUNICH-The Bonn-based IVG Immobilien, Germany’s largest listed commercial property company, posted a net loss of €54.5 million for the first half of 2009, mainly as a result of a further 10% depreciation on the portfolio, taking net asset value down to €10.31 per share from €12.11 at the end of March. Its common stock was last trading in Frankfurt at €5.57.

Despite the difficult market environment, IVG said it continued to realign its corporate and financing policies in the first half 2009 as planned. The performance of the Asset Management division, for instance, was remarkable: it let 190,000 square meters in for the Investment division and 139,000 square meters for properties managed in the Funds division. This meant the occupancy rate in IVG’s own properties held stable at 91.7% relative to the first quarter, while the occupancy rate in development projects even increased to more than 57% from 48%.

In the first half all loan maturities were settled or extended as planned, IVG said. Its performance was still affected by the international financial market crisis, and the difficult market situation in the investment market caused markdowns in the portfolio of another 10%. Unrealized non-cash changes in market value improved in Q209 however, to €97.9 million from a -€33.7 million in the first. This was due to two opposite effects: write-down of €52.8 million on investment property due to smaller yield expansion and a lower inflation forecast, and the first-time valuation–€150.7 million–of 10 caverns under construction. For the investment portfolio, Gross Rental Income yield was 6.6%, and NOI yield was 5.1%.

In the first half, IVG already delivered on more than half of the sales program of more than €1 billion, initiated to provide supplementary internal financing resources for 2009-2010. The program was achieved in equal measure through direct sales and contributions to funds for institutional investors, in particular the IVG Protect Fund.

In addition, IVG Private Funds started placing two new closed-end funds. EuroSelect 17 invests in KPMG’s new headquarters in Amsterdam, while EuroSelect 18 provides a portfolio of five attractive properties from IVG’s own portfolio in three German cities. Another fund project for private investors is currently being prepared.

“We are convinced that the ongoing realignment will put IVG into a very good starting position for the next upswing,” commented IVG CEO Gerhard Niesslein. “This realignment is focused on generating stable, recurring income from our investment and funds businesses as well as on reducing our risk exposure by reducing the project development pipeline. Another goal is to improve our cost structure and to simplify the organizational structure. Once markets begin to move up again, IVG will stand out particularly due to the market proximity created by our own branches at the most important European real estate locations.”

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