INNO Gesellschaft: Value of listed buildings adjusted downwards

A devaluation of 6.9 million euros is a relevant sum and justifiably raises questions. The decisive factor is what it means and what it does not mean: it is a commercially prescribed revaluation of a difficult sub-area: the four listed existing buildings with a high need for investment and refurbishment. However, it must be viewed completely independently of the strategy for developing the Innovation Campus.

Why now? The simple commercial answer is: because annual financial statements must reflect the current market situation - not the assumptions from previous appraisals. If the market changes significantly, book values must be reviewed and, if necessary, corrected. Since 2020, corona, the Russian invasion of Ukraine, other global conflicts, supply chain problems, the energy crisis, inflation, a sharp rise in construction costs, higher interest rates and a much more cautious demand for complex commercial properties have changed the underlying conditions. As a result, a difficult part of the project is now being revalued commercially - transparently and according to the "strict lower of cost or market principle", as it is technically known. This devaluation in the 2025 annual financial statements will not lead to a loss of liquidity for the city. In other words, it will only be reported in the INNO company's balance sheet and does not have to be offset by a payment from the municipal budget before 2031 - and only if the market situation does not change by then. But it is precisely for this eventuality that serious accounting must take precautions and form a provision in the municipal budget.

Lord Mayor and Head of Economic Affairs Dr. Felix Schwenke explains: "This devaluation is unpleasant and it is right to inform the public about it. What is important for the people of Offenbach is that they can already see that the strategy is working. An industrial wasteland that has long been closed off has become the city's most important economic project. We have attracted new companies. Companies with modern, future-proof jobs, and in many cases completely new jobs. Jobs in industry and biotechnology. In training, research and production. And this will also generate business tax revenue. This approach was confirmed just last week when the renowned IW Consult institute confirmed that we are providing our "own impetus" and that the positive development of our city is not just the result of the effects of the surrounding area, but is based on its active use. And the hard figure of "jobs subject to social insurance contributions" already proves this today: Offenbach has a future again, is coming out of its valley. This is exactly why we need this area. The value of the INNO Quarter is therefore not measured solely by individual existing buildings and their development potential, but by whether value is created here in Offenbach in the long term."

Offenbach has not simply taken over the former Clariant site, but a task: contaminated sites, old industrial buildings, monument protection, development and marketing must be brought together. Such projects are never risk-free. For this reason, a letter of comfort from the city was agreed at the time of purchase to ensure INNO's ability to act even in times of crisis. With this letter of comfort, the City of Offenbach am Main undertakes to support the INNO company and provide it with the necessary financial resources to enable it to remain economically viable at all times.

INNO Gesellschaft has now reported the utilization of this letter of comfort due to the devaluation. The city has confirmed this and is creating a corresponding provision for risk provisioning in the 2025 annual financial statements. This has a negative impact on the financial statements - but it also creates clarity and prevents risks from being concealed or postponed.

The Managing Directors of INNO-Innovationscampus GmbH & Co KG Bozica Niermann and Peter Walther explain: "We take this devaluation seriously. It is unpleasant, but we are taking stock transparently because the markets have changed massively since 2020. At the same time, we are working with the Economic Development Agency and the Lord Mayor to develop the Innovation Campus into an area that can strengthen Offenbach's economy for decades to come. So that the goal of the project can be achieved: new companies, new jobs and new revenue for our city."