CA Immo tartgeting up to €200m on new German projects
Listed Austrian investor and developer CA Immo said that its recent spate of heavy disposals, primarily in Germany, have helped it to improve its equity ratio from 31% in 2012 to 40% at the beginning of 2014. Last year the group sold a quarter of all its real estate assets, currently totalling €5.4bn, at what it said was above book value. However, investments of between €150m and €200m are still planned for German in 2014.
For this year the plan is to re-weight its portfolio equally between Germany and the group’s traditional hinterland of eastern Europe, primarily by continuing divestments, developing more of its existing land reserves, and to further reduce financing costs. Proceeds will be used to further pay down debt and to buy out minority partners in eastern European projects.
CEO Bruno Ettenauer said in a recent statement, “It is our specialist development expertise that guarantees organic growth, generates regular contributions to earnings and stands as the main driver of valuation increases. We are not reliant on costly acquisitions: instead, we utilise centrally located land reserves and build high quality, high-yielding office properties in high-demand markets.”
However, the group is still planning to invest €150-200m in project developments, particularly in Berlin. Other projects include the Kontorhaus in Munich, the Belmundo in Düsseldorf, the John F. Kennedy Haus in Berlin and the Monnet 4 project near Berlin’s main train station.
According to Florian Nowotny, the group’s finance director, “Having come through some difficult years for financing, we are now seeing excellent credit availability in Germany under attractive conditions – a situation from which we can benefit enormously while drawing attention to our development activities in the country.”
In 2013 CA Immo was primarily in the headlines for its high-profile disposals, selling the “Leo II” portfolio in the state of Hesse for €800m to a consortium led by Augsburg-based Patrizia Immobilien, and 67% of Frankfurt high rise Tower 185 to two pension funds, including that of PwC - which occupies around 60% of the tower’s space – for about €330m.
The disposal programme continued through December, with the sale of carmaker Mercedes-Benz’s German headquarters in the Mediaspree area of Berlin to giant real estate fund manager Union Investment for €88m. The fund manager is transferring the building into one of its major open-ended property funds UniImmo:Deutschland, and leasing the entire property back to Mercedes Benz on a ten-year lease.
Meanwhile, CA Immo has bought back a financing portfolio from fellow Austrian Volksbanken AG with a nominal valuation of €480m. The amount is made up of equal parts of both secured real estate loans in eastern Europe and unsecured financing at the holding company level. The actual price paid was not disclosed. Florian Nowotny, CA Immo’s finance director, merely said the deal would strengthen the structure of its balance sheet and allow the group to rapidly utilise funds from its property sales over the past weeks.