Immofinanz Group generated strong growth in rental income during the 2023 financial year. This development was based primarily on the full consolidation of S Immo, the purchase of retail properties, and solid growth in like-for-like rental income. However, due to revaluation effects, the company recorded a decline in net profit to €-229.5 million in 2023.
Key figures:
- Rental income rose by 77.8% to €533.6 million
- 8.5% improvement in like-for-like rental income
- Results of asset management increased by 85.1% to €418.5 million
- Substantial growth of 84.7% in results of operations to €285.1 million
- FFO 1 rose by 88.4% to €275.3 million
- Cash and cash equivalents high at €697.1 million
- Robust financial base with an equity ratio of 47.3% and net LTV of 42.1%
“We achieved above-average operating results in 2023 in spite of the difficult macroeconomic environment. This performance underscores the success of our strategy to invest in higher-yielding properties to strengthen our earning power,” explained Radka Doehring, Member of the Executive Board of Immofinanz.
Revaluations (including development projects and property sales) totalled €-376.8 million in 2023, compared with €-105.7 million in the previous year. They reflect the challenging market environment, which was heavily influenced by the sharp rise in interest rates and the resulting negative impact on property values. Financial results fell to €-246.1 million (2022: €-72.6 million). The main underlying reasons were the absence of positive non-cash valuation effects and the earnings contribution from S Immo, which no longer represents part of the financial results due to the full consolidation. These effects led to a decline in net profit for Immofinanz Group to €-229.5 million and to earnings per share of €-1.31 in 2023.
High occupancy rate and high rental income
Immofinanz Group’s property portfolio covered 518 properties with a total value of €8.2 billion as of 31 December 2023. Of this total, €7.8 billion is attributable to standing investments with 3.6 million sqm of rentable space and a gross return of 7.2%. The occupancy rate remained high at 92.2% (31 December 2022: 92.9%).
Like-for-like rental income (adjusted for new acquisitions, completions and sales, excluding S Immo) rose by a substantial 8.5% in 2023.
The strategic sales programme to optimise the portfolio was successfully continued in spite of the weak transaction market. Property sales totalling €751.1 million (incl. S Immo) were concluded in 2023.
Outlook
Experts foresee a continuation of the challenging market environment in 2024 due to the current macroeconomic and geopolitical conditions. The market is generally not expected to recover before the second half of 2024.
Immofinanz Group remains optimistic concerning the future despite these challenges. “A number of important strategic steps were taken in recent months and we can now see the first successful results. Our course will remain unchanged, whereby we will benefit from our cooperation with CPI Property Group. We intend to consequently develop our core business as a growth-oriented property owner and work to optimise the portfolio further. As seen from today’s perspective, we are optimally positioned to continue our growth course over the medium- to long-term“, Immofinanz Executive Board member Radka Doehring concluded.
