Successful 2015 financial year in all segments – new property company to launch in 2016
- IVG reports consolidated earnings of EUR 398 million
- Real Estate division significantly outperforms EBIT forecast
- TRIUVA enjoys record year – positive EBIT in cavern business
IVG Immobilien AG has had a successful 2015 financial year that ended with excellent consolidated EBIT of EUR 521.6 million as at 31 December 2015. The Real Estate division contributed around EUR 502 million to this figure while TRIUVA, which represents the Institutional Funds division, contributed around EUR 16 million with the Caverns segment adding approximately EUR 4 million. On this basis, the planned spin-off of the strategic property portfolio as a new company can go ahead as planned.
In particular, the development of the strategic core business in real estate is grounds for satisfaction and confirms the quality of the portfolio. Even before unrealised changes in fair value and extraordinary effects, the Real Estate division generated EBIT of EUR 144 million, significantly higher than the forecast figure of EUR 135 million. There were also positive effects from changes in fair value of around EUR 218 million, an increase of 6.8%. In addition to a better market environment, these changes were thanks in particular to the improved letting situation and the rise in rents. The properties assigned to the strategic core portfolio achieved an occupancy rate of 91.4%, representing a rise of 3.3%. The occupancy rate for the flagship property, THE SQUAIRE at Frankfurt Airport, increased by around 5% in the reporting period to 90.8% as at the end of the reporting period. Overall, IVG’s asset management team was able to renew leases for 123,400 m² and conclude new leases for a volume of more than 100,000 m² in the reporting year. Parallel to this, the sale of non-strategic properties progressed to full satisfaction in the context of portfolio streamlining. 33 properties were sold in total, together with a number of partial sales, by 31 December 2015, generating proceeds of EUR 227.6 million. The Real Estate division also performed acquisitions again. For example, the Kontorhaus in Berlin’s Friedrichstrasse was acquired for around EUR 40 million towards the end of the reporting period. The office building will be part of the strategic core portfolio. In addition to these property successes, segment results were ultimately also boosted by the derecognition in profit or loss of the residual obligation from the convertible bond at around EUR 140 million.
There was also a clear positive trend in the balance sheet situation. Primarily as a result of the net income for the year of around EUR 400 million, net assets of the company improved substantially. Equity climbed by EUR 391.2 million to EUR 1,436 million as at 31 December 2015 after EUR 1,045 million in the previous year, which allowed the equity ratio to improve from 25.8% to 34.5%. At the same time, borrowings were down by around EUR 283 million at EUR 2,723.4 million as at the end of the reporting period. This change mainly resulted from a decrease in liabilities to banks and the derecognition in profit or loss of the residual obligation from the convertible bond of around EUR 140 million. This caused the debt ratio (financial liabilities to total assets) to decline from 58.8% in the previous year to 49.9%. Total assets rose to EUR 4,159.7 million (as against EUR 4,050.8 million as at 31 December 2014).
The other divisions also provided grounds for satisfaction. TRIUVA Kapitalverwaltungsgesellschaft reported a record transaction volume of EUR 3,400 million in 2015 and contributed EBIT of EUR 16.2 million to consolidated earnings. Following the two pipeline breaks in February and November 2014, efforts in the Caverns segment have been directed towards risk minimisation and working through the repair plan. At the same time, however, work moved ahead on the completion of three of the four pre-sold caverns. With positive changes in fair value, the reduction of risk provisions thanks to the fast progress in repairs, lease renewals and positive supplementary agreements, the Caverns segment generated EBIT of EUR 4.2 million in the 2015 financial year.
“The efforts of the entire staff and the management team have paid off and are bearing fruit. We have further stabilised and considerably improved our financial position and performance,” declared Dietmar P. Binkowska, CEO of IVG Immobilien AG. “Developments in the 2015 financial year have also given us the confidence to take another step in the middle of this year, and to restore the capital market viability of our core business area by spinning off our strategic property portfolio,” said Binkowska of the tasks currently facing management.
During the 2015 financial year IVG Immobilien AG had decided to restore its core business area’s ability to operate on the capital market by spinning off its strategic property portfolio as a new company. This comprises around 100 properties with a total rental area of around 1.434 million m², 1.310 million m² of which is let. The properties expected to be hived off were valued at EUR 3,176 million as at 31 December 2015. “In the third quarter we will be represented on the market by a new and strong company,” said Oliver Priggemeyer, COO of IVG Immobilien AG. “The properties that we will be bundling in this company constitute a strategically clearly defined and high quality portfolio that will form the nucleus for the future operations of this company.”
In hiving off the strategic core portfolio, IVG Immobilien AG will be transferring the last of its remaining operations into a separate subsidiary. “From then IVG will operate solely as a financial holding company with management duties,” explained Dietmar P. Binkowska.
IVG Immobilien AG
The strategic core business of IVG Immobilien AG is the acquisition, management, purchase and sale of office properties in Germany. It is one of the largest office property companies in Germany with its own portfolio worth more than EUR 3 billion. Its operating business is geared towards profitable management and needs-driven optimisation in addition to active portfolio management, with the aim of achieving sustainable added value in its own property portfolio. In addition to this core business, IVG Immobilien AG has commercially independent equity investments in a service provider for structured property products for institutional investors (TRIUVA Kapitalverwaltungsgesellschaft mbH) and a company that builds, operates and leases subterranean oil and natural gas repositories (IVG Caverns GmbH).
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