CA Immo has reported a solid operating performance for the 2023 business year. The results show, among other things, a significant increase in rental income (+8%) and high income from the sale of non-strategic properties (sales result of €179 million, FFO II +102%), which led to an increase in the operating result (EBITDA) of 115% compared to the previous year´s figure. Although the company had to record a market-driven non-cash revaluation loss of €532 million in 2023, the EBITDA of €322 million offsets a large part of the full-year revaluation loss, resulting in a consolidated net income of €–224.5 million for financial year 2023.
Key figures:
- Increased rental income (+8% to €231.4 million) reflects project completions in 2022 and higher rental income in the portfolio.
- The operating result (EBITDA) increased primarily due to the higher sales result by 115% to €322.1 million (31.12.2022: €149.5 million).
- Consolidated net profit of €–224.5 million (€–2.28 per share), mainly driven by a non-cash negative revaluation result.
- With recurring earnings (FFO I) of €113.8 million, the financial target defined for the 2023 financial year (recurring earnings of over €105 million) was exceeded.
- FFO II (incl. property sales result) climbed to €244.7 million (+102% yoy).
- Dividend: In line with the Group´s dividend policy to pay out around 70% of recurring earnings (FFO I), the Management Board will propose a dividend payment of €0.80 per share at the Annual General Meeting to be held on May 2, 2024.
- Strong liquidity, a robust balance sheet with balanced maturity profile of long-term liabilities and continued access to capital (unused €300 million revolving credit facility) ensure stability and resilience even in this uncertain market situation and increase the Group´s scope for active portfolio management.
Keegan Viscius, CEO of CA Immo said: "In recent years, we have maintained a proactive, disciplined approach to our activities as an investor, manager, and developer of modern prime office, and focused early on divesting non-core assets, simplifying the business model, increasing economies of scale in our core markets, and accretive reinvestment, while maintaining a strong balance sheet and returning surplus capital to shareholders. Thanks to this forward-looking approach, we were also able to operate from a position of strength in 2023, remain competitive in an uncertain market environment, and are well prepared for future growth when the real estate markets recover again.”
Capital rotation program as a strategic priority
CA Immo has been pursuing a course of consolidation and portfolio optimization for several years to continuously improve the Group´s portfolio quality and organizational structures. Thanks to various measures taken in recent years, e.g. early exit from weaker and peripheral locations and assets and de-risking of the development pipeline, the company has actively minimised the impact of the current challenging real estate market environment on its business activities. Despite low transaction activity, the Group was able to continue the strategic value-accretive capital rotation programme in 2023.
In 2023, the Group concluded a total of ten sales transactions with a total value of around €580 million. Five non-strategic investment properties and five German plots of land that are not primarily suitable for prime office use were sold above book values. This has further strengthened the portfolio focus on modern, large Class A office buildings (94% office share in the portfolio) in Germany´s most attractive and established metropolitan cities (66% portfolio share in Germany).
Outlook
The weakening of real estate investment markets and declining property values as a result of high inflation and the rapid rise of interest rates present challenges to the industry as a whole. CA Immo continues to operate in an uncertain market environment, with still more or less illiquid transaction markets, longer decision-making lead times, and shifting preferences across occupiers, investors, and lenders, all impacting the performance of our, and our competitors´, businesses. At the same time, prime office assets in central locations have shown a comparatively stable performance in recent months, with a significantly lower increase in vacancies and continued prime rental growth in almost all CA Immo markets. In addition, the current sharp reduction in new construction activity is expected to have a positive impact on future demand for prime office assets in central locations and create opportunities for premium office landlords in the coming years.
