As CA Immo streamlined its portfolio in 2013, around 25 % of the company’s property assets were sold above book value. The strategic objective of raising the equity ratio from 31 % to around 40 % was thus achieved early in 2014 – sooner than planned. The trading income will mainly be used to repay loans and other liabilities. The strategic programme to 2015 envisages further streamlining of the portfolio, the utilisation of available land reserves for profitable development projects or sales and a reduction in financing costs. This is likely to improve the valuation of the CA Immo share on the capital market (following a one-year rate performance of 23 %) while increasing the company’s profitability and upholding a long-term capacity to pay dividends.

According to Dr. Bruno Ettenauer, CEO of CA Immo, “We have a strong track record for 2013, and we kept all the promises we made at the start of the year. This operating performance was rewarded with a share price rise of some 23 % and a good deal of positive feedback from the capital market. We have thus laid the foundations for future earnings growth and a continued capacity to pay a dividend in the long term; thanks to healthy underlying data, the company and our share price are well placed to carry on performing strongly.”

Funds used to repay financial liabilities
Funds of approximately € 1.5 bn generated through trading income will specifically be used to repay loans and other financial liabilities and to support the buy-out of minority shareholders linked to joint ventures in the CEE. Florian Nowotny, Chief Financial Officer at CA Immo, said that, “By repaying costly loans, we can achieve significant cost savings and increase remaining terms, thereby cutting the risk level. We can also raise our operating efficiency and improve transparency by buying out joint venture partners in Eastern Europe – and this includes the recently finalised acquisition of AXA shares connected to the P1 Portfolio in Warsaw.”

Sales of non-core properties, balancing in CEE and Germany from 2014
Most of the properties offered for sale in 2014 and the years ahead will be those not connected with the company’s core markets or its core field of expertise (the office sector). The streamlining initiative will be aimed at raising the capacity utilisation of the asset portfolio and thus boosting recurring rental revenue. The sale of ‘seasoned’ properties with limited upside potential at appropriate points of the cycle will generate additional revenue that will be reinvested in the project pipeline. Sales linked to development projects in the CEE and Germany will serve to balance the spread of the regional portfolio over the next two years and ensure an equal weighting of the proportions in Eastern Europe and Germany.

German project development business: a profitable and stable source of revenue
In 2013, CA Immo fully exploited the excellent demand levels on the German market from both tenants and investors. This will continue to provide momentum in 2014. As Ettenauer comments, “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.” In 2014, approximately € 150-200 m will be devoted to construction projects, according to market demand; one reason will be to consolidate the German asset portfolio, which has contracted recently as a result of sales. Berlin will remain the focus of investment activity. 

The financing environment: refinancing volume of over € 800 mn in 2013
In recent years, lower levels of lending rising cost of loan capital have combined to restrict and regulate the property investment market as well as project development business. During 2013, CA Immo managed to (re)finance an approximate volume of over € 800 mn, equivalent to one third of total loan capital. Florian Nowotny reveals that, “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.”

Outlook
As Ettenauer comments, “Having followed up a positive result in the first nine months by successfully concluding sales in the final quarter, we expect the result for business year 2013 to be positive overall. The goal of paying a dividend of 2 % of NAV for 2013 remains unchanged. This year, the strategic focus will be on raising the profitability of CA Immo, achieving further NAV growth and thereby ensuring we continue to pay a dividend.” 

About CA Immo
CA Immo is one of the foremost real estate organisations in Central Europe. The company, which is listed on the benchmark ATX index of the Vienna Stock Exchange, specialises in the letting and development of commercial real estate, especially in the office segment. Founded in 1987, CA Immo currently controls property assets of around € 5.4 bn in Germany, Austria and Eastern Europe (correct as of 30 September 2013).

Download:
Presentation "Strategy and Outlook 2014"

Please address any questions to:
CA Immobilien Anlagen AG
Susanne Steinböck
Tel.: +43/1/532 59 07-533
eMail: susanne.steinboeck@caimmo.com
www.caimmo.com