A solid foundation

October 2018 – A continuing positive economic situation, favorable financing conditions and the federal government's newly discovered role in housing construction are driving the German real estate market from one record to the next. But even against this backdrop, not every business plan is a guaranteed success. The thing that counts most is a builder's experience – and a close relationship with their financial backers. This is the case with the Hamburg real estate group TAS KG.

Five years is a long time to wait. But this is a view that's worth waiting for. If everything goes according to plan, the residents of the 350 apartments of all sizes, the approximately 100 subsidized apartments for students, as well as the tenants of the 6,000 square meters of commercial space and the children and educators of the in-house kindergarten will be able to move into to "Kiel Gaarden" in 2023 and enjoy an unrivaled view of the Kieler Förde inlet. Construction on the project is set to begin in late 2019.

With the project's panoramic view of the blue Baltic Sea in Kiel, TAS is more than living up to its own corporate slogan: "Creating value with vision." Founded in Hamburg by Marcus and father Thomas A. Schwarz, the company has been doing just that since 2003. In the meantime, its structure has grown and TAS KG today acts as a common umbrella for an entire group of companies. Over the last few years TAS has grown at a particularly fast clip. The figures since 2012 speak louder than words: 200,000 square meters of developed gross floor area, 130,000 square meters of letting capacity, 45,000 square meters of land under development, 350 million euros in transaction volume.

Versatility as a principle of success

TAS is active throughout Germany as an investor and project developer. Current projects range from the conversion of a former granary in Oranienburg near Berlin into a residential building, to the revitalization of the Allianz House in Hamburg's City Nord, to sophisticated new office buildings such as Quartier 111 in Cologne's Braunsfeld district. Versatility with a simultaneous focus on certain segments of the real estate market is above all the hallmark of TAS. "We build company headquarters, hotels and entire residential districts. With our projects, we strive to create sustainable value by achieving a balance between architectural accomplishment, construction quality, commercial calculation and long-term usability. This is the formula for our successful letting results," is how shareholder Marcus Schwarz sums up TAS’s unique selling proposition.

Despite all the prophecies of doom, the German real estate market remains balanced. Exactly ten years after the outbreak of the financial crisis, confidence in the industry is high. This is confirmed by the mood barometer published by the organizers of the leading EXPO REAL trade fair in Munich. The fair's organizers surveyed almost 1,400 real estate professionals on the state of the industry. "65.9 percent of respondents expect the situation to remain positive in 2018 and 2019. 62 percent believe that the sums invested in German real estate will increase," says Klaus Dittrich, CEO of Messe München.

„65.9 percent of respondents expect the situation to remain positive in 2018 and 2019. 62 percent believe that the sums invested in German real estate will increase.“

Klaus Dittrich, CEO of Messe München

Nevertheless – and this is the hallmark of mature, successful markets – momentum in some areas is declining while risks are increasing. This is illustrated by the latest figures from the independent market analysts at bulwiengesa AG in Frankfurt. According to their 2018 project development study, "whereas last year saw an additional increase in real estate developments, current analysis clearly indicates that the market is stagnating."

Project developer market comes to a halt

Area volume in trading development of German A-cities 2008 to 2018 in million square meters

Area volume in trading development of German A-cities 2008 to 2018 in million square meters comes to a halt


Source: "Project development study 2018," bulwiengesa AG

But a closer examination of bulwiengesa's findings reveals very distinct trends in individual regions and cities. It quickly becomes clear that there is no ONE single real estate market. Everything depends on the niche and thus also on the niche competence of a developer. The TAS Group, for example, has been focusing on the hotel market for some time now. And for good reason, as the statisticians at bulwiengesa confirm: According to their 2018 project development study, project volume in the hotel segment is growing for the third year in a row.

„We proceed with caution, particularly in an increasingly mature market – at the same time, we ensure a balanced mix in our loan portfolio.“

Peter Axmann, Head of Real Estate Clients at HSH Nordbank AG

Booming hotel market

TAS specializes in hotels. One of its latest projects is the construction of a landmark new Holiday Inn Business Hotel in the City Nord district of Hamburg. The 60-meter-high, 19-floor hotel is being built on the site of the former BP headquarters.

According to EXPO REAL, the total investment volume of Germany's hotel industry is currently 1.9 billion euros: "The reasons for this are brisk construction activity, expansion and new hotel brands where domestic and foreign buyers balance each other out." But another reason is the booming tourism in Germany's cities, now in its ninth record year in a row. In the first half of 2018, the number of overnight stays by domestic and foreign guests rose by four percent to 214 million, according to calculations by the Federal Statistical Office. "Germany has never been more attractive as a travel destination and a convention and conference location," says Guido Zöllick, President of the German Hotel and Restaurant Association.

Whether it's for hotel projects like the one in City Nord or stylish digital concepts for the future like on the waterfront of Kiel, ambitious real estate projects require capital – and a financier who can provide expert advice in a challenging market environment. Managing Director Marcus Schwarz values trustworthy cooperation, specifically when it comes to choosing a financing bank: "We can rely one hundred percent on HSH Nordbank. Not only do our contacts have excellent expertise, they also fit in well with our company and our values."

Significant interest in niche segments

Types of use for which real estate professionals in Germany expect an increase in 2018/2019

Significant interest in niche segments: Types of use for which real estate professionals in Germany expect an increase in 2018/2019


Source: EXPO REAL, Trend indicator 2018, 1,380 exhibition visitors, inquiry in July 2018

During the ambitious new building project at Überseering 2 in City Nord, cooperation between TAS and HSH Nordbank was completely seamless. The task was enormous: German telecommunications giant Deutsche Telekom moved in as a tenant with 2,150 employees – a clear signal of its commitment to Hamburg as a business location. The nine-story office tower was completed on schedule after a construction period of only 15 months. Construction was financed by HSH Nordbank. "We accompanied this project from start to finish," says Relationship Manager Thomas Wente, who has worked with TAS for years. HSH Nordbank is one of Germany's most important real estate financiers. "We listen to our customers concerns, understand their business plans and work with them to develop individual solutions, from classic mortgage loans to complex structured financing," says Peter Axmann, Head of Real Estate Clients. Of course, this also includes knowing the risks and keeping them under control. "We proceed with caution, particularly in an increasingly mature market – at the same time, we ensure a balanced mix in our loan portfolio. Residential real estate, offices and retail properties are all part of our portfolio," says Axmann.

Awarded project

Immobilienmanager Award 2018
The award since 2009 annually honors the best real estate projects, deals, services and heads of the real estate business in Germany, Austria and Switzerland. A jury cast with renownend representatives from the real estate sector chooses the winners in 14 categories. The project Woodies, the dormitory built in a modular wooden concept in Hamburg Wilhelmsburg this year received one of the coveted awards.

Wohnbau Preis Hamburg 2017
The quality of living decisively determines the identity of a city. Therefore, the Architektur Centrum honors projects with a special architectural or design quality with the Wohnbau Preis Hamburg. Patron is Dr. Dorothee Stapelfeld, Senator for Urban Development and Housing. The dorm Woodie was awarded first prize.