CPI Property Group’s net rental income increased to €175 million in H1 2021 (up 7% versus H1 2020) and its consolidated adjusted EBITDA rose to €172 million (up 5% versus H1 2020). The company published its unaudited financial results for the six-month period ended 30 June 2021.
“CPIPG’s property portfolio clearly passed the ultimate stress test of COVID-19,” said Martin Nemecek, CEO. “Once again, the Group proved the resilience of our diversified portfolio and reported record levels of income, a strong capital structure and several important investments for the future.”
Highlights for the first half of 2021 include:
- CPIPG’s property portfolio increased to €11.2 billion (up 9% versus 2020) as the Group completed €580 million of acquisitions and benefited from a €317 million increase in the fair value of residential, landbank and office assets along with FX movements.
- Total assets reached €12.6 billion (up 7% versus 2020), driven by increases to the property portfolio, offset by a slight reduction in cash and cash equivalents.
- The Group collected 95% of contracted rent in H1 2021 before the impact of one-time COVID-19 discounts, which amounted to about 4% of gross rental income. Office and residential collections were close to 100%.
- Net rental income increased to €175 million (up 7% versus H1 2020) and consolidated adjusted EBITDA rose to €172 million (up 5% versus H1 2020) due to the contribution from recent acquisitions and developments, broadly stable occupancy at 92.6%, limited COVID-19 rent discounts and 1.9% like-for-like growth in gross rental income.
- Because of effective cost control, the hotel segment reported only a small net loss (-€4 million) despite hotels being closed for much of the period. As the COVID-19 situation improved across its portfolio from April/May 2021, the Group has seen a strong increase in hotel bookings.
- Net business income (up 6% versus H1 2020 to €178 million) and FFO (up 10% versus H1 2020 to €127 million) show the benefits of CPIPG’s stable business performance, diversified sources of income, and contribution from recent acquisitions.
“CPIPG’s H1 results reflect some temporary effects of COVID-19, but our business continues to grow,” said David Greenbaum, CFO. “We are excited to move on from COVID-19 and see a bright future ahead.”
Joint venture with Aroundtown
On 14 April 2021, CPIPG formed a consortium with Aroundtown SA and announced a cash offer through Zakiono Enterprises Limited for the entire issued share capital of Globalworth Real Estate Investments Limited. CPIPG and Aroundtown together held more than 51% of Globalworth’s issued share capital prior to the launch of the tender offer. The offer closed on 23 July 2021, at which point Zakiono had received valid acceptances in respect of approximately 9.24% of Globalworth. Therefore, upon conclusion of the offer, the consortium owned 60.63% of Globalworth shares.
Actions to support CPIPIG’s financial policy
CPIPG intends to take actions immediately and in the future to preserve and recharge its financial strength after periods of acquisition activity. Near-term actions include:
Radovan Vitek, the Group’s majority shareholder, has agreed to participate in an intended issuance of new ordinary shares by CPIPG for up to €500 million, with the first €100 million expected in September.
The Group has received offers well above book value for certain high-quality properties. Considering CPIPG’s strategic vision and long-term priorities, the board of directors recently approved an intention by CPIPG to complete up to €1 billion of disposals in the next 6 to 12 months, subject to pricing. Sale proceeds would be redeployed via new strategic acquisitions and debt repayment.
In Q4 2021 or early 2022, CPIPG intends to complete the primary offering of €1 billion by Nova RE, its listed Italian subsidiary, in partnership with DeA Capital, a leading Italian asset manager.
CPIPG recognises that improving its “BBB” credit ratings will require the Group to follow through on these actions while continuing to deliver strong business performance. At the appropriate times, CPIPG will also continue to support its capital structure and debt maturity profile through selective debt refinancing and utilisation of hybrid capital.
