PATRIZIA remains on track to become Europe's leading fully integrated real-estate investment company. For instance, international presence on the European real-estate markets has been intensified by opening further locations in London, Paris and Copenhagen to complement the existing PATRIZIA locations in Luxembourg and Stockholm.
In the reporting quarter, a residential facility in Copenhagen was also acquired for around 30 million for the "Euro City Residential Fund I" launched by PATRIZIA. This increased the capital invested in Scandinavia by this fund to 180 million.
The co-investment "WohnModul I" launched last September, in which a notable pension fund is participating with equity of 100 million alongside PATRIZIA, is fully invested with a planned investment volume of 250 million. This co-investment has now been increased by further equity contributions of 100 million and 10 million from the same investor and PATRIZIA respectively.
With the new building project Baumkirchen Mitte (Munich), the first major purchase has already been notarized. A new area is being developed here in conjunction with CA Immo on a site of around 29,000 m². It will feature approx. 45,500 m² of floor space for apartments and approx. 18,500 m² of floor space for offices.
In addition to its strategic advances, PATRIZIA has also made substantial progress in operating terms. Overall, the number of apartments sold increased by 7.6% to 563 in the first half of 2012 (H1/11: 523). In the Residential Property Resale segment, 396 units were sold from our own investments (H1/11: 293), 71 units from co-investments (H1/12: 0) and eight units as a service provider (H1/11: 45).
In the Asset Repositioning segment, sales were notarized in the second quarter, but they will not be recognized in income until the third quarter. Overall, in block sales in the first six months of 2012, 32 units were notarized from our own investments (H1/11: 132), nine units from co-investments (H1/12: 0) and 47 units as a service provider (H1/11: 53).
Around 88% of the loans payable by PATRIZIA are hedged by way of interest rate hedging instruments. Depending on the change to the interest rate level, their measurement is reflected in the financing result as income or expense and causes sharp result fluctuations. In the first half of 2012, they amounted to +2.9 million (H1/2011: +10.6 million).
As these changes in the fair value of interest rate hedges do not impact liquidity and have no effect on operating earnings power, PATRIZIA posts operating earnings adjusted for these effects for the assessment of earnings power. Accordingly, operating EBT adjusted for effects not impacting liquidity in the first half of 2012 of 7.2 million significantly exceeded the figure for the same period of the previous year (1.1 million).
PATRIZIA's financing structure has continued to improve since the end of 2011. Bank loans decreased by a further 61.7 million to 631.6 million (-8.9%) due to apartment sales. The equity ratio increased to 30.3% (December 31, 2011: 28.1%), thus already exceeding the target range of 25-30% set by PATRIZIA.
"In view of the positive business performance in the first half-year, we still expect to increase our operating earnings by 20% to 20 million as against 2011," says Wolfgang Egger, CEO of PATRIZIA Immobilien AG.
"We will continue to expand our service activities in the second half of 2012. We expect our Services segment to attain a share of around half of our consolidated profit by as early as this year. Our further development towards becoming a real-estate investment house is therefore also reflected in our company's earnings structure."