Munich sells old town real estate: 173 million for the city treasury!

Munich sells old town real estate: 173 million for the city treasury!

The city of Munich is up to its neck in water, and this is now clearly evident in the planned real estate deal with Stadtwerke München (SWM). The city wants to sell two properties in the old town for an impressive 173 million euros: Blumenstrasse 28 and Unteren Anger 2. A brave step or just a “sleight of hand by the treasurer”? This is how ÖDP boss Tobias Ruff describes the deal, which is up for vote in the city council's local committee today.

The background to the discussion is that the municipal utilities once owned these properties themselves and sold them to the city in 2015 for economic reasons. At that time, they needed the reserves for the dismantling of the Isar 2 nuclear power plant. But times have changed: the municipal utilities have stabilized economically, while the city of Munich is suffering from a tense financial situation. So are the 173 million euros just a brief ray of hope in a bleak financial landscape? Ruff fears that the sale will only provide short-term relief and could lead to tough austerity measures after the next local elections.

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The properties are not just stones. Blumenstraße 28, a listed building from the 1920s, has a sales price of almost 82.5 million euros. Four tenants currently live here, generating annual rental income of around 2.3 million euros. The Untere Anger 2 also has its advantages. With a value of around 90.5 million euros and ten tenants who bring in around three million euros annually, this building is also a real asset for the municipal utilities, which originally used it as an administrative headquarters.

But the city council's proposal raises several questions. CSU city councilor Andreas Babor warns that the city will face additional millions in real estate transfer tax and notary costs, which could quickly reduce short-term profits. In the long term, the CSU also fears a loss of rental income of around five million euros, which could further burden the already strained budget balance.

Criticism from the town hall and beyond

It's not just the ÖDP leader and the CSU who are expressing concerns. Other factions in town hall are also skeptical about the deal. They are reminiscent of the controversial sale of the thermal power plant in 2007, which has now resulted in luxurious apartments. Is this a foretaste of possible consequences of the current sale? The opposition is thinking and wondering whether the city might be thinking too short-sightedly.

In order to finally conclude the deal, it remains to be seen how the local committee decides. The city hopes that the city's revenue will develop positively by 2026 without causing any disadvantages. The municipal utilities, on the other hand, expect the acquired buildings to retain or even increase in value. How things will develop remains exciting. One thing is certain: a good hand in real estate policy is required given the circumstances.

For further information about the municipal utilities, those interested can visit the website swm.de visit. Current developments can be found on the website of Mercury and Evening newspaper to pursue.