Sebastian Nitsch of Austrian developer 6B47 is in upbeat mood on the second day of Expo Real, having just secured the financing for one of his projects with a banker.
‘My work for the day is done,’ he joked in a meeting with PropertyEU.
6B47 is based in Vienna, but also has offices in Germany (Düsseldorf) and Poland (Warsaw). The firm has 30 projects in development, representing an investment value of €1.8 bn.
Said Nitsch: ‘We only develop in big cities, because our goal is always to sell. We do not intend to be an accidental investor.’
One of the firm's most important projects at present is the Althan Quartier in central Vienna, a mixed development comprising 130,000 m² of offices, apartments, retail, a hotel and restaurants. ‘We have solid financing in place for this project until its completion in 2023,’ said Nitsch. ‘I don’t feel the need to sell yet.’
Although there is enough interest in the project, according to Nitsch, he is holding off selling it for now. ‘A while ago I had an investor come by with an offer,’ Nitsch said. ‘It boiled down to a yield of 3.2%. I said I wanted 2.8% and we could not come to a deal.’
Recently, that same investor returned with a slightly better offer, but Nitsch declined again. ‘I told him I wanted 2.8% and I suggested he come back in March.’
Nitsch expects the economy to be strong enough to prevent prices from going down. ‘Construction costs are going up now because of some supply chain problems and shortages. In time that will be resolved and meanwhile we can finish construction. By 2023 we will be able to sell for a higher price.’
According to a recent survey, German consumers have put about €300 bn into their savings accounts since the start of the pandemic, said Nitsch. Once Covid restrictions are fully lifted, people will start to spend and give the economy a boost. ‘The roaring twenties are coming,’ Nitsch quipped.
Nitsch is so confident about this that he is applying the same tactic with the residential portfolio 6B47 is developing in Poland, where the company is active in Warsaw, Wroclaw, Krakow and Gdansk. ‘Housing developments in Poland still offer a 6% prime yield,’ said Nitsch. ‘In a few years this will go to 4%, I am sure. Young Poles want to rent, habits have changed. So we are building a “resi-to-rent” portfolio and will sell maybe in 2024 or 2025.’