Founder and boss of the real estate developer Euroboden.
(Photo: Ulrike Myrzik)
Munich Stefan Höglmaier does not want to spend long dealing with things that he cannot change. “With the high purchase prices for land on the free market, it is impossible to get a good and at the same time cheap apartment,” says the head of Euroboden GmbH. In his real estate projects, he much prefers to focus on special architecture and furnishings, as he has been doing for 25 years.
A few years ago he extensively converted a bunker from the Nazi era in Munich-Schwabing into a residential and commercial building. The Derzbachhof, which is 270 years old and is the oldest surviving farm in Munich, has also become exclusive condominiums. And in the not very well-reputed Berlin district of Marzahn, too, an unconventional new building is currently being built next to all the sadness of the prefabricated building.
“Overall, a lot has happened in terms of the professionalism and quality of the industry,” says the 46-year-old, referring to his Euroboden GmbH. He founded it in 1999 when he was only 24 years old. With Martin Moll as another managing director, he runs the company from the Munich noble suburb of Grünwald.
Höglmaier earned the start-up capital in the 1990s by selling properties in the East, which at the time were particularly popular with investors for tax reasons. Höglmaier put those interested in a bus and showed them the objects. Nasty surprises, like those that always happened elsewhere, remained the exception.
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Today Höglmaier is firmly established in the business with high-quality condominiums. The magazine “AD”, which specializes in architecture and design, named him one of the top 100 creatives in the country this year. “For the Munich resident, creative boundaries are virtually wasted”, is the reason given there. But Höglmaier is not just about chic architecture. “The real estate industry bears a considerable ecological and social responsibility for our society,” he says.
Luxury real estate and social responsibility
At Euroboden they therefore consciously seek contact with the decision-makers. Together with the city of Munich, a wooden house has been built in the expensive Schwabing district in which the living space is rented for 9.99 euros per square meter. Customary for the location would be twice as much. An object on Billerberg in Inning am Ammersee, where young artists can rent studios, goes in a similar direction. Together with the Munich Art Association, this resulted in the joint artist residency program.
At the moment there are around 30 projects in development at Euroboden, the total value is around two billion euros. Around 70 employees work for this in Munich and the external offices in Frankfurt and Berlin, and there are also projects in Düsseldorf and Stuttgart.
The acquisition department reviews around 5000 projects every year. Five to 15 of them are bought. The crucial question is always: Is more possible here than a mere standard project?
When it comes to implementation, Euroboden founds a property company. There are currently around 50 of them. Above this stands Euroboden GmbH as the parent company. It handles the operative business and also ensures the necessary liquidity.
Financing by loan on the Frankfurt Stock Exchange
The company issued its first bond on the capital market in 2013, and three more have followed since then. The last two bonds with a total volume of 115 million euros are currently listed on the open market of the Frankfurt Stock Exchange, of which around 90 million euros are subscribed. In 2013, Euroboden had to offer a coupon of 7.375 percent for the first bond in order to convince investors. Most recently it was only 5.5 percent. The company repaid a six percent bond that would have had a term of one year ahead of schedule in August.
This type of financing should continue to exist at Euroboden in the future. For example, real estate is financed with a high proportion of equity when it is purchased. “Many in the industry work with mezzanine capital, so we are much more flexible with our bonds and also have a significant advantage in terms of terms,” says Stefan Höglmaier, differentiating himself from competitors. With the mezzanine mixed form of debt and equity, a company receives equity on the balance sheet, but does not grant investors any voting rights.
The offer of exclusive living space will remain the core business of Euroboden in the future. Höglmaier says: “The customer prefers to pay 17,000 euros for a square meter for an excellent product instead of 16,000 euros, where the concept and architectural quality do not fit.”
More: Why the real estate market in Germany’s most expensive residential city, Munich, is crisis-resistant