- Contract for sale of Terra Homes project development in Erkner cancelled
- The contract was cancelled by mutual agreement at the buyer’s request
- Project implementation continues unchanged and on schedule by The Grounds
- Successful project development activities for the year as a whole
- Updated guidance for 2023 will be announced in January 2024
Berlin, 28 December 2023 – Today, The Grounds Real Estate Development AG (The Grounds / ISIN: DE000A2GSVV5) cancelled the contract for the sale of the Terra Homes project in Erkner that was concluded on 18 March 2022. The project, with a sales volume of EUR 18.5 million, comprises the construction of 17 semi-detached houses, equivalent to 34 halves of semi-detached houses, in Erkner-Hohenbinde in the neighbourhood of the Tesla factory in Grünheide.
The contract was cancelled by mutual agreement at the buyer’s request. An integral part of the agreement is a compensation payment of the amount of EUR 5.55 million to The Grounds. Due to the cancellation of sales proceeds, the sales volume of The Grounds in the current financial year will be reduced compared to previous planning to the extent that the construction progress achieved would have been recognised in the balance sheet as at 31 December 2023 according to the percentage of completion method. An amount of around EUR 9.2 million was recognised for this in the balance sheet for the first half of the year as at 30 June 2023. However, the compensation payment will increase earnings. As previously announced, updated guidance for 2023 will be announced in January 2024.
Project implementation continues unchanged and on schedule by The Grounds
Jacopo Mingazzini, Management Board of The Grounds, says: “Cancellation of the purchase contract at the buyer’s request has no impact on further progress of the project, which is being continued by The Grounds as planned. We have currently already reached a construction status of 48 per cent and an award status of 90 per cent. The first houses are expected to be ready for occupancy in summer 2024. Renewed marketing of the project will begin on 8 January 2024. Due to the attractive location and strong demand for residential units in the neighbourhood of the Tesla factory, we anticipate lively interest from potential buyers and expect notarisation to take place in the second quarter of 2024 at the latest.”
Successful project development activities for the year as a whole
The Grounds also looks back on successful development in the other current projects as the year draws to a close. For example, the LennéQuartier accommodation in Magdeburg has already been fully completed and handed over; the Property Garden project, which is also located in Magdeburg, is almost 70 per cent complete and is scheduled for completion in April 2024. As Mingazzini explains: “Both projects were already fully sold before construction began. It is also particularly pleasing that we were able to realise these two projects below the calculated budget. We are also very satisfied with the construction status of our Maggie project in Berlin-Lichtenberg, which has reached 65 per cent and 95 per cent of contracts awarded to date. Marketing started here after construction work began, and 22 of the 27 new residential units under construction have already found a buyer. A sales rate of around 82 per cent within one year is a pleasing result – and not just in the current market environment.”
