News Article CPIPG Czech Republic financial report Immofinanz S Immo
by Property Forum | Report

CPI Property Group's real estate portfolio increased to €20.9 billion in the first half of 2022. It was the result of two large acquisitions of Immofinanz and S Immo and therefore also the net rental income reached the level of €263 million and net business income went up to €276 million, CPIPG reported in the latest press release on half-year financial results for 2022.

“CPIPG has been positively transformed through the acquisitions of Immofinanz and S Immo,” said Martin Němeček, CEO of CPIPG. “The Group is now one of Europe’s largest landlords and owns the best real estate platforms in Central and Eastern Europe.”

Highlights for H1 2022 include:

  • CPIPG’s property portfolio increased to €20.9 billion (versus €13.1 billion at year-end 2021) as the Group consolidated the property portfolios of Immofinanz (€5.4 billion) and S Immo (€3.1 billion). Total assets reached €23.7 billion. EPRA NRV (NAV) grew by 21% to €8.5 billion.
  • Net rental income increased to €263 million (versus €175 million for H1 2021) and net business income rose to €276 million because of acquisitions, CPIPG’s 7.7% like-for-like growth in gross rental income and steady occupancy at 93.4%.
  • Hotels reported a net income of €8 million (versus a loss of €4 million in H1 2021) reflecting the gradual post-COVID travel recovery and CPIPG’s effective cost management as an owner-operator.
  • Consolidated adjusted EBITDA was €261 million (+52% from H1 2021), while FFO was €171 million (+32% from H1 2021).
  • Due to the timing of CPIPG’s acquisitions, Net Loan-to-Value (LTV) increased to 44.8%, at the upper end of the Group’s financial policy target range. LTV is expected to peak temporarily in Q3, followed by a sharp reduction in coming quarters as the Group executes our €2 billion+ disposal pipeline.
  • Total liquidity was €2.5 billion, including €915 million of undrawn revolving credit facilities, the majority of which mature in early 2026.
  • Unencumbered assets decreased to 55% (vs. 70% at the end of 2021) reflecting the high proportion of secured debt at Immofinanz and S Immo. CPIPG will continue to closely monitor the level of unencumbered assets and expects to repay secured debt when unsecured pricing becomes attractive.
  • Net ICR stood at 3.5x. The Group has a low-cost, long-dated debt maturity profile and a high degree of indexation in our rental contracts (90%+) which should support ICR going forward, particularly as deleveraging targets are achieved.

“CPIPG’s commitment to our capital structure and credit ratings is unchanged,” said David Greenbaum, CFO. “Deleveraging will take slightly longer than initially expected, but we are fully confident to deliver.”

Mandatory takeover offer for S Immo

On 15 July 2022, CPIPG published a mandatory offer for S Immo. Upon the conclusion of the initial acceptance period on 12 August 2022, CPIPG purchased an additional 36.66% stake, bringing the total shareholding stake to 79.20% (direct and indirectly through Immofinanz). The additional acceptance period will close on 18 November 2022. The offer price represents a discount of 19% to book value.

Financing and bridge extension

In 2021 and 2022, CPIPG signed €3.75 billion of 2-year bridge loans for the acquisitions of Immofinanz and S Immo. In total, €3.4 billion has been spent on the acquisitions, funded by equity, cash and €2.5 billion of bridge drawings. About €900 million of the bridge loans have already been repaid, with €1.6 billion currently outstanding. On 31 August 2022, the CPIPG signed a facility which extended the maturity of all bridge loans until H1 2025. Also in August 2022, S Immo repaid €104 million of senior unsecured bonds maturing in 2027 and 2028 due to the embedded change of control provision. The repayment was funded from S Immo´s ample cash balances. In July 2022, CPIPG repaid a secured bank loan of €123 million maturing in December 2022 and raised a new 7-year secured bank loan of €275 million. The underlying assets were located in the Czech Republic and pricing was highly attractive.

Expansion of CPIPG’s disposal pipeline

In June 2022, CPIPG completed (on time) a disposal program initiated in August 2021, with gross proceeds of €1 billion. Disposals were executed across the Group’s portfolio, targeting non-core or highly mature assets. Currently, CPIPG has a disposal pipeline exceeding €2 billion. The pipeline includes about 30 assets/transactions across offices, retail, hotels, residential and landbank in multiple geographies. Disposal plans were also confirmed by Immofinanz (€1 billion) and S Immo (€200 million). Overall, the consolidated Group is well-positioned to dispose of substantially more than €2 billion of assets over the next 12 to 24 months.A high degree of diversification, along with significant granularity (pipeline disposals range in size from €10 million to €200 million+) is a significant advantage for the Group. CPIPG does not depend on any asset, market, sector, investor, or trend in order to achieve our disposals.