Following the successful completion of its direct financial restructuring, IVG continues to report stable operating business in the third quarter of 2009 and is now turning its attention to its further strategic and operational development.
The third quarter saw the continued stabilization of the economy as a whole and the property investment markets in particular. In October, IVG achieved its aim of divesting properties with a volume of more than 1 billion in 2009 alone. This marked the successful completion of its phase of direct financial structuring, allowing the company to turn its full attention to its further strategic and operational development.
Accordingly, IVG managed to let total space of around 238,000 m² in the third quarter in its own and managed properties despite the difficult rental market environment triggered by the economic crisis. The occupancy rate in the company's own property portfolio remained essentially unchanged at 91.4%, while the advance rental ratio for its development projects increased from 57.3% in the previous quarter to 64.4% at the end of October.
Accordingly, the gross yield for the investment portfolio was stable as of September 30, 2009 at 6.6% (Q2 09: 6.6%), while the NRI (net rental income) yield amounted to 5.4% (Q2 09: 5.5%) and the NOI (net operating income) yield was 5.1% (Q2 09: 5.1%).
IVG's results reflect the further signs of stabilization in its business. The operating result for the third quarter of 2009 was 51.8 million (Q2 09: 20.0 million).
Unrealized negative changes in value amounting to -28.4 million in the real estate segment (Q2 09: -53.0 million) and +2.9 million in the development projects (Q2 09: -90.9 million) had a significantly less pronounced impact on earnings than in the previous quarters, and were almost fully offset by unrealized positive changes in the fair value of caverns totaling 22.7 million. Realized changes in market value (sales revenues below fair value for the generation of liquidity) amounted to -11.8 million in Q3 2009 after -53.7 million in Q2 2009. The figure for the first nine months of 2009, which totaled -63.3 million, together with the sales program with a volume in excess of 1 billion thereby only reflect negative realized changes in value of around 6%.
Based on a largely unchanged financial result compared with the previous quarter of -64.0 million (Q2 09: -62.6 million), IVG essentially broke even in the third quarter of 2009 with a consolidated net loss of just -2.2 million (Q2 09: -54.5 million). As of September 30, 2009, adjusted net asset value (NAV adj.) remained largely stable at 10.25 per share (30 June 2009: 10.31 per share).
Dr. Gerhard Niesslein, CEO of IVG Immobilien AG, commented: "IVG is now entering a phase of improvement in its operating performance and the active, selective exploitation of market opportunities as planned. We intend to achieve this operational improvement through cost reductions and process optimization. This is expected to have a significant positive effect between now and 2012."