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Germany-based European real estate giant IVG Immobilien AG has announced a 2009 second quarter loss of 62.9 million euros or 49 cents a share. The figure, nearly $89 million, is significantly higher than estimated by industry experts and analysts and is a stark contrast to the profit of 22.4 million euros or 19 cents a share for the same period last year.

The company has indicated that the losses have primarily been due to the drop in office space rental in the current slowdown. The company has also taken a hit with the down grading of five of its developments. However, the company is optimistic of a turnaround based on the current deskspace rental market scenario, where signs of an upswing are evident.

IVG Immobilien has significant real estate interests in all the major European cities, and co-owns the Gherkin Tower in London among others. Since the recession, the company has been struggling to stay afloat, and has sought a 300 million government loan guarantee to meet its obligations. It has also extended 1.3 billion euros worth of credit lines to 2012 and failed to announce a dividend last year, with losses mounting to 453 million euros in the year 2008.

In the current scenario, the company has been working on several cost-cutting initiatives, especially after the loss of revenues from the sale of its storage caverns and the 99.5 million euros loss from the Airrail office project. In effecting a turnaround, the company has steadily gained in the last six months, and is today worth nearly 700 million euros based on the share price.