New owner CPI’s strategy sees S Immo selling all German residential assets
Listed Austrian real estate company S Immo is putting its entire portfolio of German residential housing on the market in a reversal of its strategy to date. In an announcement, the company said the "adjusted portfolio strategy" would use the liquidity freed up to invest in "other core markets", primarily in offices in Austria and Hungary.
The increased value in its German residential holdings will be "realised promptly", said the company's CIO Herwig Teufelsdorfer, which will lead to "significantly positive effects on its earnings ratios" from 2023.
S Immo puts the book value of its German residential portfolio at €846.1 million at end-June 2022. Most of its apartment holdings are in Kiel, Rostock, Leipzig and the Berlin area. The German holdings make up 93% of S Immo's residential holdings of €901m, with the rest being in Austria.
The strategy change comes about after S Immo's takeover by acquisitive Czech-based CPI Property Group, which owns 82.67% of S Immo, including shares held by fellow Vienna-listed Immofinanz AG, which CPI also took over this year. S Immo said it hope to "benefit from operational synergies and close co-operation with CPI, which already owns offices in Hungary.
S Immo boosted its turnover in Q1 this year by 33% to €57m, compared to last year. EBIT improved by 28% to €29.8m, and a bottom line result of €24.1m is well up on last year's €9.9m in the same period. This was due to increased rental income and higher revenues from hotel management, along with more favourable tax treatment.
Teufelsdorfer will be taking over the reins as S Immo CEO following the departure of Bruno Ettenauer, as part of CPI's tightening in its grip on the company following its majority takeover. The Luxembourg-listed CPI, ledby Czech billionaire Radovan Vitek, is streamlining its existing industrial property holdings Germany, mainly Berlin GSG Group (See REFIRE 214), and sell off non-core assets in its €20bn European portfolio to pay down debt.