Since the increase in the investment in S IMMO to 50% plus one share took place at year-end 2022, the assets and liabilities of S IMMO represent an integral part of the consolidation as of 31 December 2022 and the income statement positions were not included.
IMMOFINANZ Group delivered very good operating performance in 2022 in spite of the challenging environment. Sustainable FFO 1 from the standing investment business rose by 21.7%. Rental income increased by 5.4% to EUR 300.2 million and the results of asset management by 7.2% to EUR 226.1 million. The Group also has a very solid capital base with an equity ratio of 47.9% and conservative debt with a net LTV of 40.7%.
This strong operating performance was, however, contrasted by the negative effect on valuation results caused by current market trends. Results from the valuation of standing investments therefore amounted to EUR -110.5 million. This was contrasted by a positive net effect of EUR 55.6 million from the initial full consolidation of S IMMO following an increase in the investment to 50% plus one share. In total, IMMOFINANZ generated net profit of EUR 142.0 million, or earnings per share of EUR 1.04, in the 2022 financial year.
“The quality of our properties and steady rental income again proved to be stable pillars in a volatile environment. All in all, we performed very well and demonstrated the strength of our business model. Like-for-like rental income improved by more than 8% and sustainable FFO 1 by roughly 22%. We took further important steps to grow our business during the past year and substantially strengthened our position as an international provider of resilient retail properties and innovative office solutions. Our portfolio volume increased by more than 60% to nearly EUR 8.4 billion as a result of acquisitions and completions, especially in the retail sector, as well as an increase in our S IMMO investment to 50% plus one share at year-end and the resulting full consolidation“, explained Radka Doehring, Executive Chairwoman of IMMOFINANZ. “We made very good progress on our programme to sell properties with a total value of approximately one billion euros and closed profitable sales of nearly 166 million euros during the past year. Further transactions are also in preparation.“
Like-for-like rental income (adjusted for acquisitions, sales and completions) rose by a sound 12.9% in the fourth quarter of 2022 (versus Q4 2021) and by 8.1% in year-on-year comparison. Sustainable FFO 1 from the standing investment business improved substantially by 21.7% to EUR 146.1 million, above all due to an increase in rental income and a decline in financing costs. That represents FFO 1 per share of EUR 1.07.
Strong portfolio growth
The IMMOFINANZ portfolio grew by 61.8% to EUR 8.4 billion and to 627 properties in 2022. This growth was supported, above all, by the full consolidation of S IMMO and by the acquisition and completion of retail properties. Of this total, EUR 7.9 billion represent standing investments with 3.5 million sqm of rentable space. The overall occupancy rate for the portfolio (incl. S IMMO) equalled 92.9%. The gross return on the IMMOFINANZ standing investment portfolio (excl. S IMMO) equalled 6.5% based on IFRS rental income and 6.7% based on invoiced rents.
Robust balance sheet structure
The IMMOFINANZ Group had a robust balance sheet structure with an equity ratio of 47.9% as of 31 December 2022 (31 December 2021: 48.1%) and a solid net loan-to-value ratio (net LTV) of 40.7% (31 December 2021: 36.7%). Cash and cash equivalents amounted to EUR 684.7 million. Roughly 87% of financial liabilities are hedged against interest rate increases.
EPRA per share indicators strengthened
The EPRA NTA per share rose by 5.3% from EUR 29.19 at the end of December 2021 to EUR 30.74 as of 31 December 2022. The IFRS book value per share improved to EUR 27.47 despite an increase in the number of shares (31 December 2021: EUR 27.44).
Outlook and annual general meeting
IMMOFINANZ’s portfolio strategy remains focused on resilient and cost-efficient retail properties and innovative office solutions. Plans include the expansion of this offering in the core countries over the medium term. The sale pipeline, which is an integral part of the company’s active portfolio management, includes the successful transactions completed in 2022 as well as an additional roughly EUR 830 million. Further closings are expected in the coming months despite the volatile market environment. The proceeds will be used to repay debt or for reinvestment in real estate.
In line with this strategy, the Executive Board and the Supervisory Board of IMMOFINANZ will ask the annual general meeting to waive the dividend for the 2022 financial year and use the funds to strengthen the balance sheet. The annual general meeting of IMMOFINANZ is scheduled to take place on 3rd May 2023 as a virtual meeting in accordance with the Covid-19 Company Law Directive.
Further synergies and opportunities for improvement will be identified together with S IMMO and with the support of CPIPG in 2023 to increase transparency and profitability for all stakeholders.
As central banks’ interest rate hikes have not yet peaked and geopolitical uncertainty continues, the resulting effects – among others on the development of financing costs and the market prices of real estate – cannot be reliably estimated. IMMOFINANZ – with its flexible and resilient real estate products – believes it is well positioned for the future, also in an environment that is characterised by greater uncertainty.
