New Year’s greeting 2020
Dear business partners and friends of ARCADIA,
In the last few days, we all took the opportunity to let the old year come to an end and looked after family members and loved ones more intensively than the stressful everyday working life allows. We are now starting into a certainly no less exciting business year 2020.
Looking back, 2019 has caused considerable turbulences in the real estate market, despite stable market conditions. This has given us and many of our market participants food for thought. At the same time, discussions are so complex and unsorted that it is very difficult to develop a forward-looking strategy of action and implement it in our work processes. Again, and again we must keep in mind the importance of real estate in the everyday life for all social classes and many occupational groups. The construction and real estate industry represent a considerably big economic factor for Germany. In addition, a high degree of social responsibility lies in the creation of, for example, schools, day care centres, retirement homes and social housing. Discussions about stops of rent increases, rent control and social requirements for new building projects create the impression that the real estate industry only aims at maximising profits. However, the fact that the state is the biggest beneficiary of positive business results in the real estate industry – through substantial and recurring tax revenues – is often ignored in public discussions. After all, the state draws considerably more than half of the profits from the sale of owner-occupied flats through double land transfer tax, the turnover tax loss in construction work and taxation of profits. From our point of view, there is therefore no reason whatsoever to blame the real estate developers of this country who are at full risk.
The ever-stricter requirements for energy aspects in construction as well as requirements for customer protection such as fire prevention and noise prevention are also driving up costs and rents. On the other hand, they lengthen approval processes and complicate the rapid and very necessary constructional implementation of building projects. But already the way to implement development plans proves to be problematic: many of the specialist planners and decision-makers in the approval authorities, both at state and municipal level, have already retired in recent years or are about to retire. The next generation must first acquire the relevant experience and – supported by political disagreement – often shuns to make their own decisions. For this reason, approval processes sometimes prove to be incorrect, must be repeated or may not be brought to a positive completion. All these are circumstances and requirements that occupy real estate developers in 2020 and the following years and require a lot of attention.
Because of these unstoppable changes and challenges in the real estate industry we have substantially and qualitatively expanded our team in the last months and added new business units. Thus, in addition to our own legal department, we have been able to establish the IT department to secure important background work on the way to successful projects. The expansion of our newly founded interior construction company MARC Bau as well as the Wohnmacher Bau- und Investitions GmbH mark our next development steps in 2020. In order to be able to continuously grow, we are going to look for further suitable employees and integrate them into the team of ARCADIA Investment GmbH. In addition, promising negotiations with new capital partners are to be concluded in the first quarter of 2020 in order to secure the financial basis for the acquisition and implementation of new projects and, in return, to earn profitable interest rates.
Among other things, we want to start the construction of more than 1,000 terraced and single-family houses in Germany over the next five years, based on a modular building system. An extremely short construction period with high construction quality and a ready to move in fit-out standard, supported by energy savings for heating and hot water, as well as an attractive price structure are the main advantages of this investment product. Especially for young families for whom fitting living space is urgently needed throughout Germany.
Of course, we want to successfully complete our current projects – the new multi-storey car park at the BER airport in Berlin, the refurbishment of the “Otto Dix Passage” in Gera as well as the development of new residential quarters in Naunhof and Taucha. New acquisitions of retail and residential projects and car parks are already underway and will be completed by mid-year. Of course, we are always open for new ideas and concepts in 2020. As a real estate developer and service provider, we plan and construct suitable properties on plots that are already owned or still need to be purchased. Please do not hesitate to contact us if you have specific wishes and ideas. We will develop and implement solutions together with you.
For the months ahead, we wish you all the best. Best regards from the city centre of Leipzig
Your team of ARCADIA Investment GmbH