Sonar Real Estate GmbH (Sonar) succeeded in expanding the volume of its assets under management to EUR 3.0 bn in 2022, an increase of 20%. In response to this positive trend, staff numbers in the company’s five offices grew from 34 to a total of 44 in the same period.
During 2022, Sonar facilitated seven major transactions, with a total volume of EUR 444 million, for its joint-venture partners and clients. These included around EUR 176 million of acquisitions and EUR 268 million of sales. The largest single deal was the sale of parts of a logistics portfolio from the holding of a private equity client.
Another major transaction was the acquisition of “PRISMA” in Frankfurt in a joint venture, with a vehicle advised by Patron Capital Advisers. The planning phase for the repositioning of the property has now been largely completed and work on the ESG-compliant modernisation of the 42,450 square metre lettable area is to start soon.
Sonar also received new asset management instructions for five office properties, with a total lettable area of around 150,000 square metres, from different investors. Some of the properties are in major need of re-reletting and repositioning.
During 2022, Sonar concluded leases on around 76,600 square metres of letteable area (2021: 55,300 square metres). and a total of EUR 26.9 million was invested into revitalisation, tenant improvements and maintenance.
2022 was marked by Further strategic decisions made by Sonar in 2022 included founding its affiliated company, Sonar Development GmbH, headed by Steffen Wittwer. As well as its own projects, the new company is entering into joint ventures with German and foreign institutional investors and family offices. Projects include undertaking new developments, revitalisation projects and, increasingly important, redensification of existing buildings.
One of the first projects implemented by Sonar Development involves extensions to “LAN 131”, in Landsberger Allee, Berlin. Sonar acquired the property, which provided 13,000 square metres of lettable area, in iia joint venture with Angelo Gordon at the beginning of 2022. It plans to construct a new six-storey building, with a gross floor area of around 3,200 square metres, on the 5,900 square metre site. In addition, in Spring 2023, work is to begin on the construction of a new 175-room hotel building in the Rhine-Main region.
In order to further optimise and digitalise processes, both in the managed properties and internally, 2022 saw Sonar finalise cooperation agreements with various PropTech companies, including assetbird and Evana.
Last year also saw energy-saving and CO2-emission-avoiding solutions, from Westbridge Advisory and DABBEL – Automation Intelligence, being integrated into Sonar’s workflow. A further innovation in 2022was the installation of MeteoViva’s smart data building control system in “THE SQUAIRE”, Frankfurt, while in a Düsseldorf property, aedifion’s cloud platform is helping to reduce energy consumption and CO2 emissions.
During past year, Sonar joined the German Corporate Energy Efficiency Initiative “DENEFF” and its practice forum “Immo2.Zero” which has the objective of reducing CO2 emissions in the building sector.
“2022 was marked by geopolitical events that have not been without impact on the real estate industry. It was clear to us that the low interest rates and low inflation were not going to persist. But we did not anticipate the momentum that has now been triggered. Although the resulting adjustment phase is painful, it still presents opportunities. In this respect, we were not too unsettled by the situation. Rather, we are motivated to focus even more intensively on the existing portfolio and to take the initiative, in order to position ourselves appropriately for this new era in transaction and asset management. Particularly in the areas of ESG and digitalisation, we took decisive steps to position and future-proof ourselves as a company and the properties we manage, including THE SQUAIRE on Frankfurt Airport, last year. The focus of the asset classes is still on the office sector, although investments in the logistics and light industrial sectors are being significantly expanded. We also want to make the most of selected opportunities in the retail and hotel sectors,” comments Christoph Wittkop, Managing Director and CEO of Sonar.
Holger Hosang, Managing Director and Co-Head Transaction and Asset Management, adds: “As difficult as the current situation might be, due to inflation, persistently high energy costs and uncertainty in pricing, it also offers numerous opportunities for active investors – primarily in the value-add sector. I’m sure we will be able to identify and take advantage of interesting opportunities in the coming months. We also expect to see an increase in the interchange of investment and asset managers between German and international investors, which also creates potential for us.”
