Vienna-listed CA Immo has embarked on a major refocusing of its business, which it calls “redimensioning” and which is expected to last for at least two years. The new strategy involves hefty reductions in assets and staff, designed to boost cash-flow and improve shareholder returns.
CA Immo saw its real estate holding soar from €2bn in 2006 to over €5bn in 2011, in part due to the takeover of Germany’s Vivico Real Estate in 2007 and Europolis in 2011, doubling its staff in that time to nearly 400 – of which about half are in Germany. One in seven of these jobs are now being cut, with about 30 going in Germany.
A spokeswoman for CA Immo said the company would be selling hotel, logistics and residential assets – in other words, office is the new core product. It will also exit markets in south-eastern Europe such as the Ukraine and Serbia which lack economies of scale. “We also intend to divest large assets, or shares of these asset, to avoid cluster risk”, she added. Germany and Austria, and a small number of countries in eastern Europe remain core to the company’s plans, she said.
The company is currently invested in and develops large projects and urban quarters, for example Berlin’s Europacity, Frankfurt’s new European Quarter (Europaviertel), Munich’s Arnulfpark and Düsseldorf’s Belsen-Park. It also completed the 100,000 sqm Tower 185 office high-rise for €450m in Frankfurt last year, the largest office complex in the city, and put this up for sale.
CA Immo has become increasingly nervous about what it feels is an underperforming share price, still trading at a discount of 50 to net asset value. The new restructuring is intended to pay down loans and boost its own equity capital, as well as returning to a more shareholder-friendly dividend policy.