CPI Property Group published results for the financial year ended 31 December 2019. “2019 was a year of many achievements for CPIPG. We grew our office portfolio, tightened our financial policy and strengthened our liquidity,” said Martin Nemecek, CEO of CPIPG.
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.”
