All they need is retail and offices

Currently, logistics properties represent app. 8 pct of the group’s portfolio. Most of the assets are located in Germany, while the rest are situated in Poland, Hungary, Slovakia, Romania and Russia. After the sell-off, its retail assets will account for almost 49 pct of the company’s portfolio, with office properties making up 44 pct of the total. The Vienna-based developer, which is currently in talks on selling the portfolio, said that it now plans to concentrate its activities solely on the retail and office sectors and growing through acquisitions and development projects across the German, Austrian and Polish markets. According to its preliminary results, Immofinanz suffered a EUR 361.4 mln loss in the 2014/2015 financial year, partly due to the Russian economic turmoil. “We are very pleased with the development of our logistics segment. However, our major competitors are nearly ten-times as large and this prevents us from gaining a leading position in our core region. The market is now seeing a strong shift in investor interest to logistics properties, a development that is also reflected in attractive price levels,” claims Oliver Schumy, the CEO of Immofinanz. As has been previously announced, Immofinanz is also set to sell its Buwog shares in the 2015/16 fiscal year. The money raised in all these planned transactions is to be invested in the company’s acquisitions and development projects in the retail and office sectors, mostly in Austria, Germany and Poland. Around a third of Immofinanz’s assets are currently located in Austria and Germany, with the rest in Central and Eastern Europe. In the office segment, Immofinanz will focus only on the capital cities in the core countries and on the so-called Big-7 cities in Germany. In the retail segment, the company is interested in expanding both in capital cities, where it plans to invest in prime shopping centre projects, as well as secondary and tertiary cities (the Vivo! and Stop.Shop retail concepts). The planned average investment volume is estimated at app. EUR 300 mln per year. Immofinanz completions scheduled for 2015/16 include the first section of the Metroffice complex in Bucharest and the Vivo! shopping centre in Stalowa Wola in Poland.

Russian burden

The company puts the blame for its poor financial performance in the 2014/2015 financial year, compared to a EUR 72 mln profit made in the previous year, mostly on the current economic conditions in Russia. “[These] were reflected in the valuations of the Moscow shopping centres, and to the write-down of a number of office properties in Eastern Europe because of the competitive market environment or pending modernisation projects,” reads a company announcement.

… and Polish hopes

Recently Immofinanz, which holds a 50 pct stake in Warsaw’s Empark Mokotów Business Park, has acquired the remaining 50 pct stake from an affiliate of Heitman in order to become the 117,000 sqm complex’s sole owner. The value of the transaction, which has been approved by the Polish antitrust authorities, has not been disclosed. JLL advised Heitman on the sale. The nine-building Empark complex houses a number of international companies from different sectors. “The full takeover of Empark will strengthen our standing investment portfolio and sustainable cash flow in Poland, which is one of our growth markets,“ said Oliver Schumy, the CEO of Immofinanz, which now holds 19 Warsaw office projects with around 270,000 sqm of leasable space. “Empark is located on one of the most valuable investment plots in Poland, and this fact helped us to make the decision on the transaction,” added Magdalena Kowalewska, the Poland country manager for office and logistics asset management at Immofinanz. The developer aims to actively manage the property, which is set to undergo renovations.