CPI Property Group increases property portfolio value

Key highlights for the 2019 financial year include:

• Property portfolio increased to €9.1 billion (up €1.6 billion versus year-end 2018), driven by a combination of acquisitions, primarily offices in Warsaw, and positive revaluations reflecting the strong performance of core markets. 
• Total assets increased to €10.7 billion (up €2.4 billion versus year-end 2018), driven by increases to the property portfolio as well as a €0.7 billion increase in cash and cash equivalents following significant capital markets activity in 2019.
• Net rental income of €294 million (up 8.3% versus 2018), reflecting the combined effects of 4.4% like-for-like growth in gross rental income and acquisitions since the prior period. Occupancy stood at 94.3% at the end of 2019.
• In October 2019, the Group announced a plan to acquire more than €800 million of office properties in Warsaw between the fourth quarter of 2019 and first quarter of 2020. In Q4 2019, CPIPG acquired three properties for more than €560 million, with a total GLA exceeding 156,000 sqm and increasing the level of green certification in its property portfolio to 14% in terms of GLA and 20% by value.
• CPIPG signed a new €510 million 3-year revolving credit facility in March 2019, significantly enhancing the Group’s financial flexibility and liquidity.
• The Group further expanded its presence on the international capital markets and diversified its sources of funding in 2019. CPIPG issued over €1.2 billion equivalent of senior unsecured bonds under its EMTN programme across Euros (including its inaugural green bond of €750 million), Hong Kong Dollars and US Dollars. In March 2019, the Group also issued Schuldschein loans for €170 million, followed by the issuance of a further €550 million of subordinated “hybrid” notes in April. All foreign currency denominated bonds were swapped into Euros using cross-currency swaps.
• Together with the new revolving credit facility, CPIPG’s total available liquidity stood at €1.3 billion at the end of December 2019.
• CPIPG tightened its financial policies, in line with its aim to achieve high “BBB” ratings in future. CPIPG now targets a Net LTV below 40% and a Net ICR of 4x or above. The Group also clarified its future distribution policy: no dividends and the intention to retain and reinvest between 50% to 100% of annual FFO going forward.
• After the year-end, CPIPG gained access to new markets and investors by issuing a GBP 350 million senior unsecured green bond in Sterling (€411 million equivalent) and SGD 150 million additional hybrid capital in Singapore Dollars (€99 million equivalent). Proceeds were primarily used to acquire four more offices in the Warsaw acquisition pipeline, as well as repay a small tranche of Schuldschein. During the first quarter of 2020, CPIPG also became the largest shareholder in Globalworth, a leading owner of offices in Poland and Bucharest, through the acquisition of a 29.4% stake.

“All of the steps taken by CPIPG during 2019 prepared the Group well for the challenges and opportunities of 2020,” said David Greenbaum, CFO of CPIPG. “Our long-term horizon and focus on financial policy, credit ratings and ESG are unwavering.”