Munich under pressure: real estate sale for 173 million causes a stir!

Munich under pressure: real estate sale for 173 million causes a stir!

The city of Munich is planning to sell two properties to Stadtwerke München (SWM) for a total of 173 million euros. The affected properties are located at Blumenstrasse 28 and Unterer Anger 2 and are intended to represent a significant source of financing for future urban projects. The upcoming deal is set to be decided by the municipal committee on Thursday, and the revenue is expected to improve the city's strained finances through 2026 without incurring any downside, reports Mercury.

Blumenstraße 28, a listed building from the 1920s, is being sold for almost 82.5 million euros and has four tenancies with annual rental income of around 2.3 million euros. The Unterer Anger 2 building, which was built in 1913, generates annual income of around three million euros with ten tenants. Until 2015, both properties belonged to the municipal utilities, which sold them to the city during a financial crisis in order to build up reserves for the dismantling of the Isar 2 nuclear power plant, as the evening newspaper Munich reports.

Criticism from politics

Despite the possible financial relief, the real estate deal has met with considerable criticism from various political sides. The ÖDP leader Tobias Ruff described the sale as a “sleight of hand of the treasurer” and expressed concerns that it only offers short-term financial advantages, for example, while strict austerity measures could be necessary in the long term. The CSU has also made an inquiry about the deal and criticizes the intention to improve the budget balance through this sale. CSU city councilor Andreas Babor also warns of high costs for real estate transfer tax and notary fees that could arise from the transaction.

The political objections also relate to the long-term loss of rental income of around five million euros per year for the city. This raises the question of whether the short-term financial improvement is actually a sustainable solution to the city's fiscal problems. There is similar resistance to urban real estate sales, particularly in the Free State, which is also met with criticism.

Developments at the municipal utilities

Stadtwerke München has stabilized economically since the property was sold in 2015. However, the opposition is concerned about potential risks and recalls previous sales, such as the thermal power plant on Müllerstrasse, which has now been converted into luxury apartments. These past developments raise questions about the management of city assets and the possible consequences of future decisions.

The municipal utilities expect the acquisition of the two properties to increase the long-term value and potentially use the office buildings themselves. Although both properties could remain owned by a municipal subsidiary, the city of Munich is still entrusted with the assessment and management of these important urban resources.

In addition, Stadtwerke München is able to offer support services with planning and management information to ensure that supply is not disrupted during possible construction work. Detailed information can be provided on the Stadtwerke's website, where planning information can also be requested SWM clear.