IMMOEAST Immobilien Anlagen AG achieved major successes in the first half year of 2005/06. The company expanded in scale with a large-scale capital increase at the beginning of the fiscal year. €1.3 billion flowed into the company and equity increased to more than €1.5 billion. Growth also entailed a considerable enhancement in the revenue situation. Thus, IMMOEAST made a significant contribution to the development of its parent company IMMOFINANZ Immobilien Anlagen AG, which owns 51 percent of the company.
Globe 3, Budapest, Hungary, one of the properties in the portfolio of IMMOEAST.
The real estate portfolio of IMMOEAST showed a marked upward trend: lettable space doubled in the first half year from 577,000 square metres to 1.147 million square metres, easily exceeding the threshold of one million square metres. At present (as of the end of December 2005) the fair value of the real estate portfolio is €1.64 billion. This means that in the current fiscal year approximately one billion euro of investments were made which are now reflected on the balance sheet.
Yet even this substantial increase fails by far to reflect the true extent of investment activity: in the first half year of 2005/06 investments were to a very large extent made in development projects whose current fair value is
sometimes not more than just the value of the acquired land. However, the contractually fixed investment volume for the overall (building) project is often many times this amount. In addition, more big investments are being made in which the extensive sales formalities are to be handled following conclusion of the agreement, leading to reflection of these projects on the balance sheet only one to two quarters later.
Together with the contractually fixed volume of investment the fair value of the real estate portfolio has already surpassed the two billion euro threshold. Including the investments about to be carried out (now in due diligence) the volume totals even 2.36 billion euro and is therefore twice as high as the 1.16 billion euro reported on the balance sheet at the end of the second quarter.
Among the most important investments contractually fixed as of the end of the second quarter but reflected only to a marginal extent on the balance sheet are the Silesia City Center in Katowice (total investment amount €170 million), seven shopping centres now in planning or construction which belong to the Stop Shop chain in Hungary (€100 million), the office complex IO-1 in Warsaw and the office and retail project Harbourside in the Romanian city of Constanta. Other building projects already acquired such as the Bucharest Corporate Center will be accounted for under real estate assets reported on the balance sheet only when transferred upon completion.
IMMOEAST's revenues rose by 177.6 percent to €27.4 million in the period between 1 May and 31 October 2005 and were therefore higher than during the overall 2004/05 fiscal year. Operating profit (EBIT) basically quadrupled, increasing by €11.9 million to €47.6 million. The consolidated result increased by 19 million to 51.8 million (plus 173 percent) while earnings before tax (EBT) rose nearly the same amount (plus 167.3 percent), reaching €66.2 million.