Poland
CA Immo International owns three properties in Poland with a total market value of € 147.1 m and a lettable surface area (incl. car parking spaces) of 62,200 sqm. The average economic vacancy rate in this portfolio in 2006 was 8.6%, which is significantly better than the rate for the market as a whole. The vacancies exist above all in the Warsaw Financial Center, which was acquired in 2005. New tenants are being recruited following the departure of a large tenant. In view of the premises‘ high quality and outstanding location, utilisation is expected to improve further and the increase in rental income is likely to exceed the index figure in 2007.
Czech Republic
In the Czech Republic at the end of 2006 CA Immo International held a 50%- interest in Jungmannova Plaza, a property in the immediate centre of Prague. The market value of the building, which was completed in 2004 and is now almost entirely let, was € 40.6 m (100%) at the end of 2006.
The 50% share in the ECM Airport Center development project at Prague airport also forms part of the portfolio. This represents a forward purchase for a hotel project with 235 rooms. The hotel operator is the Marriott Group. The overall project also includes retail space and car parking. Once the project is completed early in 2007, CA Immo International is to acquire ownership of the second 50% share as well.
The Diplomat hotel project in Pilsen represents CA Immo International‘s first investment in a regional capital. This 195-room hotel is also to be operated by the international Marriott Group; together with office and retail space the usable area will be about 17,100 sqm. CA Immo International acquired the property as a forward purchase. It is scheduled for completion in summer 2007.
Slovakia
CA Immo International owns one property in Slovakia. It is the Bratislava Business Center, which has a usable area of about
17,700 sqm (incl. car parking spaces) and a market value of € 21.8 m. Several fixed-term leases in this property recently expired, which temporarily raised the vacancy rate to more than 20%. The utilisation rate has since returned to about 90%. It is planned to extend the building complex by about 22,000 sqm on a spare piece of land, for which purpose an older part of the building with a usable area of
2,200 sqm is being demolished. Building work is scheduled to start in mid-2007 the total investment cost is estimated at € 32 m.
Hungary
With five properties having a total usable area of some 93,900 sqm and a market value of approx. € 146 m, the Hungarian portfolio is the largest one of CA Immo International. At the end of the year the utilisation rate was high, at 92%. Three of the office buildings – the Vězivŕros Office Center, Buda Business Center and Canada Square – are situated in the Buda district, in which the demand for office space is high because of its vicinity to attractive residential areas.
Portfolio strategy for CEE countries
Given that the ratio of net rental income to net purchase price has dropped significantly in the recent past, to about 5.5% in individual cases, a more selective investment policy is being pursued as regards office buildings in the capital cities in this region. CA Immo International believes that opportunities exist, in particular, in other types of use, such as logistics centres and hotels, as well as in project development and secondary metropolises.