CPI Property Group, the largest property owner in the Czech Republic, Berlin, Warsaw and the region of Central and Eastern Europe, publishes an estimate of its financial results for the financial year ended 31 December 2020. Although the publication of audited financial results is scheduled for 31 March 2021, CPI states Property Group estimates its unaudited results now to provide its investors and partners with up-to-date information on the results of its business.
“In 2020, CPIPG demonstrated the quality and resilience of its diversified real estate portfolio. Although the Covid-19 pandemic will remain a short-term factor for some time to come, we expect a positive development in 2021 and beyond, ”said Martin Němeček, CEO.
For the financial year ended 31 December 2020, CPI Property Group expects the following preliminary financial and operating results:
– The value of the CPI Property Group’s real estate portfolio increased to EUR 10.3 billion (an increase of 13% compared to the end of 2019) after the company acquired acquisitions of income-generating real estate in excess of EUR 1 billion. Thanks to them, CPI Property Group has become, in particular, a leading lessor of office space in Warsaw and the largest shareholder in Globalworth Real Estate Investments Limited.
– The total value of assets increased to EUR 11.8 billion (an increase of 11% compared to the end of 2019), mainly due to an increase in the value of the real estate portfolio. Real estate valuations showed a slightly positive trend in the office real estate segment (especially in Berlin), a positive trend in the residential segment and a slightly negative trend in the retail and hotel segments.
– At the end of 2020, the share of office real estate in CPI Property Group’s portfolio increased to 53% and the share of retail real estate fell to 21%. Residential properties, hotels and resorts accounted for 8%, resp. 7% of the group’s real estate portfolio.
– Net rental income increased to EUR 338 million (an increase of 15% compared to 2019) due to acquisitions made in the last quarter of 2019 and in 2020, gross rental income from comparable properties (like-for-like ) increased by 0.8% (mainly due to growth in Berlin), occupancy remained high at 93.7%, while the impact of one-off rental discounts remained limited (less than 4% of the group’s net rental income).
– The Group collected 95% of the contractual rent before taking into account the effect of one-off discounts granted in connection with the impact of the Covid-19 pandemic, and 98% of the rent after taking into account discounts.
– Net business income amounted to EUR 344 million (comparable to 2019), which is due to higher net rental income partially offset by a decline in hotel operating income, which was the segment most affected by the pandemic.
– Consolidated adjusted EBITDA amounted to EUR 337 million (an increase of 16% compared to the end of 2019) due to growth in net rental income, the impact of the acquisition of a stake in Globalworth and strict cost management. Together, these factors were able to offset the decline in hotel revenues in 2020.
– Funds from operations (FFO) remained stable at EUR 219 million compared to 2019, mainly due to an increase in EBITDA on the one hand and higher interest costs due to higher debt volumes in 2019, and 2020 on the other hand.
– The net debt-to-value ratio of the real estate portfolio (Net LTV) of 40.7% and the net interest coverage ratio (net ICR) of 5.4 × are safely within the limits set by the CPI Property Group’s financial policy. The value of Net LTV increased temporarily from a ratio of 36.2% valid at the end of 2019, mainly in connection with the implementation of strategic acquisitions. These parameters are fully in line with the financial policy of the group, which aims to strengthen the size of the group, its sources of income and credit profile. At the end of the period under review, the CPIPG issued additional hybrid capital in early January 2021, leading to a further decline in the LTV ratio.
– The net asset value (NAV) according to EPRA was EUR 5.1 billion (unchanged compared to the end of 2019).
– At the end of 2020, the average cost of financing reached 1.7% p.a., compared to 1.6% p.a. at the end of 2019. This increase was mainly due to the issuance of longer-term debt instruments in 2020 and the repayment of liabilities with shorter maturities. During 2020, the Group repaid senior unsecured bonds, Schuldschein debt instruments and hybrid bonds in the total amount exceeding EUR 1.2 billion significantly before the maturity date. Since the beginning of 2021, the Group has also been able to refinance senior unsecured bonds and undated subordinated bonds worth almost EUR 700 million, callable or due between 2022 and 2024.
– The share of unencumbered assets in total assets remains
