Plot & Source: Target groups on sale

Water sources are a sought-after commodity, so that’s one advantage you have as a vendor.

Quality water as a raw material: marketing

Water is the raw material of the future. Already today, the scarcity of resources is so extreme that cities like Cape Town are without a steady water supply for weeks in summer. Countries in Europe and parts of the USA are also affected by water shortages. A good time to sell. Because at the same time, water is the ultimate food. Virtually every other form of food contains this basic ingredient. Water is available in every supermarket, every gas station, every restaurant.

Springs do not dry up. In contrast to other raw material sources, no matter whether iron ore, coal or crude oil, water sources regenerate relatively quickly through the mechanisms of nature. This also plays a role in the valuation, or value determination. But more about this later, in the example calculation.

Direct sale with us: flow rate information

You want to sell your source, discreetly and with expertise:

• Drinking water from 1 million liters / year – waiting list available
• Preferred: drinking water from 1 billion liters / year – waiting list available
• Purchase throughout Europe
• Purchase throughout USA
• Contact

Valuation: Determine value

First of all: we cannot describe the value of a water spring with a simple formula. However, we want to give you an insight into how the property itself, but more importantly, the potential of the spring is valued, for those who have inherited such a water source and came into possession quite unexpectedly (said inheritance, divorce, donation and other design options).

Also important: The expert opinion is prepared by an expert. More about this in a moment.

Now to the question, how to calculate the value of a water source?

How to calculate the value of a water source?

For a first approximation of the evaluation, should be used, as a rule, the yield of the source, in conjunction with the quality.

Yield of the source + quality of soil / water + transport accessibility.

Of course, many more factors play a role, for example the famous location, location! Location always plays a role in the real estate industry, of course also here when it comes to transport links, i.e. infrastructure and proximity to sales markets.

Due to high demand: This is the ideal value (source to delivery [bottling to shipping at port]).

Calculation: Determine potential (offer price)

A high-yield source is of course always a good selling point. That is why capacity is also considered a central value factor.

If a water source in the calculation example yields 1.2 billion liters per year, these are calculated with 2 cents per liter, one moves already with a predictable turnover 3.6 million.

Annual potential + development

Annual potential as a basis:

• Annual yield: 1.2 billion
• Price per liter: 2.0 cents (max)
• Turnover: 3.6 million

A quite realistic offer price now would be 3.6 million. This can be justified by the current evidence of the production volumes, as well as the water quality and the forecast for the development of the area.

Offer price maximum: 3.6 million

Water source buyers: Creditworthiness, experience

States, investment funds, but also the big food giants are looking for good sources of water. So the timing is just right! Expertise in sales and an exclusive, international buyer network are important. Therefore here again the reference:

Who can you sell water sources to?

As previously mentioned, the circle of buyers of such a special object, extremely small. Firstly, you need to find the person who brings the necessary capital and at the same time has an interest in being able to have access to fresh water itself.

Off Market: Discreet, anonymous and direct

Therefore, the sale of such sources usually takes place through specialized brokers in off market area. Here only personal, these contacts are informed.

Advantages: Confirmation of financing is available, personal network, discretion and anonymity, fast process to KV and notary.

This task is not performed by traditional brokers, but by very specialized ones with direct access to family offices, investment funds and other institutions.

• Contact

In this high price segment, even 5% fluctuation is a big gamble for you, the seller. If you go into the sale without expertise, you will probably be eaten up in the negotiations – simply put. Then we are no longer talking about 5%, but 10%, 15% or even 20%.

Selling procedure: broker, appraisal, negotiations

What is the procedure in the sale? The sales phase can best be compared with the sale of a plot of land.

When selling land, it is not the development that matters, but the possible development, i.e. the potential, as previously described in the valuation. At the same time, special investigations have a very special significance for buyers of water sources, for example, soil surveys.

But before we get to topics like soil surveys, you need to start with step 1.

Broadly speaking, the sale of a water source involves 3 phases: Preparation, “marketing” and the closing of the sale at the notary.

Step 1 is therefore the preparation in the sale. Step 2 is then the marketing phase of the source, although the word “marketing” should not be misunderstood here. After all, in 99% of cases you sell off market. Step 3 is then the sales processing.

Mistakes can be made in all three fields. The earlier a mistake is made in the process, the greater the impact. You are probably familiar with the famous quote about the “flapping of the butterfly’s wings”.

If you want to learn more about the subject of land sale, for example, because you have never dealt with the subject of sale of land, or land with sources, then here is the basic procedure, explained simply and in detail:

• Sell land expiry

Taxes on sale

As a rule, we also always give you information here about the taxes incurred when selling real estate. For example, if you want to sell a typical condominium in Berlin. Already knew: Profits are tax-free if you have lived in the ETW yourself for 2 years… but it is not that simple with a water source!

The parameters for the sale of a water source are clearly more individual. Here it is no longer “just” about a plot of land of 1,000 square meters that lies fallow. Therefore, we would like to refer you to our general article on the subject.

• Selling property / land: taxes

If you need accurate tax information, contact us.

• Contact

Immobilien AG: activities, stock exchange, conditions & advantages

A real estate stock corporation – or real estate AG for short – is a real estate company that has the legal form of a regular stock corporation (AG) and whose core business is primarily focused on the real estate sector. The company’s assets are thus used primarily – or exclusively – for real estate investments, or they consist of the construction of real estate and the subsequent sale of the same.

The largest German listed companies for residential real estate (as of 31.12.2o19):

• Vonovia
• German Housing
• LEG
• DAY
• Grand City Properties
• Adler Real Estate
• GAG

Business Activities Real Estate AG – Construction, Trading, Management & Co.

The range of activities of real estate stock corporations focuses, for example, on project development and the construction of real estate. The management and sale of real estate are also not uncommon focal points of this type of company. All in all, public limited companies can be involved in real estate trading, the brokerage of real estate as well as the holding and management of their own portfolios or offer corresponding services for non-corporate investment portfolios. Real estate stock corporations are a particularly popular choice for leasing.

Possible activities at a glance:

• Project development
  • Building
• Real Estate Trading
  • Acquisition
  • Distribution
• Real estate management
  • Hold
  • Farm
  • Rent
• Third-party services
  • Brokerage of real estate not owned by the company

Real estate company on the stock exchange – legal requirements & advantages

Real estate stock corporations can choose whether or not they want to be listed on the stock exchange. If you are a shareholder of a real estate stock corporation and decide to list your company on the stock exchange, you are subject to the German Real Estate Investment Trust Act (REIT Act). The REIT Act specifies which general regulations apply to your company and which qualifications your company must have in order to be admitted as a REIT stock corporation, as well as which tax regulations must be taken into account.

Many family businesses wishing to operate in the real estate sector as a public limited company (AG) deliberately decide against such a stock exchange listing, as the shareholders of their company are to be restricted to their own family circle of contacts and no share trading in public is envisaged.

Exchange-traded real estate stock corporation / REIT-AG

The REIT corporation is originally based on a US corporate form, namely the “Real Estate Investment Trust” – REIT for short – which gave the listed real estate corporation its name. Since its beginnings, the trust has experienced a considerable upswing. Little known in 1960, the corporate legal form slowly but steadily conquered the world in the 1990s and gained international renown. With the enactment of the REIT Act in 2007, the legal form of the REIT-AG was also introduced in Germany.

To make it easier to distinguish between them, German REITs are also often referred to as G-REITs, with the “G” standing for “Germany”. Sometimes REITs are also incorrectly translated as real estate funds in this country – however, there are some legal and economic peculiarities compared to the German legal form of the real estate fund.

Legal requirements according to REITG – stock exchange listing, quota & Co

In order for real estate stock corporations to be recognized as REIT corporations and to enjoy the corresponding advantages and benefits, they must meet a number of requirements defined in the German Real Estate Stock Corporations with Listed Shares Act (REITG). One of these rules requires that the real estate stock corporation be mandatorily listed on the stock exchange. Other restrictions relate to the company’s permitted free float – i.e. all company shares distributed among several, smaller investors – as well as the participation by shareholders together with per capita distribution of the shares. Other conditions regulate the equity capital, the fixed assets and also the turnover generated by the management of real estate.

Legal requirements for a REIT-AG:

• Headquarters & Management within Germany
• Listing on the market obligatory
• Free float at the time of listing: at least 25%.
• Free float after listing: at least 15%.
• Equity ratio: at least 45
• Real estate investments (immovable assets): at least 75%.
• Income from real estate: at least 75
• REIT participation per shareholder: max. 10%.
• Distribution ratio (net profit): at least 90%.

Small tip: For real estate stock corporations shortly before listing, a time window of two years is granted in order to fulfil all necessary requirements. Until all requirements under the REITG have been fulfilled, such a company is considered a pre-REIT.

Advantages for REIT stock corporations – tax exemption, competitive advantage & Co.

Real estate stock corporations with a stock exchange listing are particularly popular for financiers and large investors, as they are exempt from both corporation tax and trade tax, provided they meet the legal requirements in accordance with the REITG. As real estate is a particularly safe investment opportunity, it offers the chance to cushion inflationary fluctuations and risks. Furthermore, the purchase and sale of shares is simple thanks to market access, and transfers of ownership can be carried out quickly and flexibly.

Access to the capital market enables a real estate stock corporation to skilfully generate equity capital, which can then finance the investment in real estate. As a result, real estate stock corporations have a clear advantage in terms of the speed of growth of their equity, which means greater competitiveness in the market as a whole. Other legal forms of companies, on the other hand, are dependent on retaining their profits – that is, leaving the profits in the company instead of distributing them and accumulating them there – in order to increase their company’s equity capital or have no legal claim to a distribution of profits. The legal form also offers a considerable degree of security, as the equity capital accounts for just under half of the stock corporation’s total capital.

Advantages for listed real estate companies:

• No corporate income tax
• No trade tax
• Secure investment through tangible assets (real estate)
• Chance to offset inflation
• Quick & easy purchase/sale of shares
• Flexible share transfer
• Simple equity procurement
• Competitive advantage due to high growth rate
• High security due to equity ratio

Advantages for investors – Stable cash flow, growth & 90 % dividend

Another plus: the REIT corporation also offers a lucrative business for investors. Public limited companies are generally established for the long term, which means that the company can offer investors the prospect of a stable cash flow and long-term growth without exposing them to increased risk. The dividend payout is also very attractive for shareholders, with a statutory minimum requirement of 90 percent of the net profit for the year under commercial law.

Advantages for real estate AG investors:

• Stable cash flow
• Long-term corporate growth
• Low risk
• Attractive dividend payout

However, the application of the half-income method is not possible for shareholders with regard to the distribution of profits. Their profits must be fully taxed.

Real estate stock corporation / REIT-AG – For whom is it worthwhile?

Are you thinking about founding a real estate company or investing in an existing real estate company? For construction companies and development companies, this is often a lucrative venture, but also as a financier or shareholder of a real estate holding company, the formation of a real estate corporation can be quite worthwhile. Furthermore, the economic occurrence of real estate stock corporations extends to housing associations, property management companies and large brokerage firms.

Ownership of the real estate portfolio may be held either by the real estate company itself as a direct investment or by another real estate company whose shares are acquired by the real estate company by means of a participation. A mixture of direct investments and third-party investments is often used to acquire, hold or sell real estate. Due to the wide range of residential and commercial properties, the stock exchange listing is an attractive model for real estate companies.

AG: foundation, legal form, real estate shares (list)

1. Stock corporation (AG)
2. Real estate shares: List of companies
3. Real estate company
4. Alternatives to the REIT: Legal forms in Germany

Stock corporation (AG): Formation, liability, legal form & Co.

Aktiengesellschaft (AG) – The stock corporation is a German legal form founded by at least one person and organized by different bodies. Instead of a managing director, the company is managed by a board of directors consisting of at least one person. As the name already indicates, this legal form of a company primarily stands for stock trading. You would like to start a company alone or together with other people and learn more about company law forms in advance? Then you’ve come to the right place!

• Stock corporation (AG)

Real estate shares: List of companies

Real Estate Shares – Not everyone can afford real estate as a capital investment. Through real estate shares, however, everyone can participate in the real estate market and invest money. The share prices of the big players are rising year after year. Vonovia, Deutsche Wohnen, Dream Global, CBRE and Patrizia are a few of the best known active companies in Germany. In addition, there are more than 25 other companies. We have an overview of the most popular real estate stocks for you as an investor. But first a look at the risks of a stock, the stock market, for beginners and beginners. Now to the list and more on the real estate market, your investment options and all prices at a glance, here in the article on real estate stocks.

• Real Estate Stocks

Real Estate GmbH & Asset Management GmbH

Alternative – In this article you will learn the basics about real estate companies. Briefly explained, a real estate company is a company that has the purpose of leasing, developing, financing, realizing and/or marketing. It doesn’t matter if it is one or more properties. The management of residential and commercial real estate – in its own interest or as a service offered to third parties – is also a popular focus for real estate companies and asset management GmbHs. Find out more about the main advantages and disadvantages of buying real estate and the expected costs.

• Real estate company

Alternatives to the REIT: Legal forms in Germany

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Societas Europaea (SE)
• Foundation / Family Foundation