As in previous financial years, IMMOFINANZ Group was also able to arrange all necessary refinancing and extensions for standing investments and development projects as scheduled during 2014/15. Acquisitions made during the reporting year were financed with newly contracted borrowings. The Group also secured additional liquidity through an increase in existing loans.
Scheduled and premature repayments
In connection with the sale of a large credit portfolio by Volksbank Romania, an agreement was reached with the buyer for the premature repayment of a former land loan at an attractive discount. This represents one of the last pure land loans for a pipeline project in Bucharest, Romania, which will be refinanced during the project development stage. A financing portfolio for standing investments in Poland and the Czech Republic was also repurchased substantially below the nominal value during the fourth quar- ter of the reporting year; binding refinancing commitments have already been received for all of the portfolio properties and will be implemented in 2015/16.
IMMOFINANZ also repaid EUR 150.0 million of bank financing based on treasury shares shortly before the end of the reporting year. This transaction involved the sale of approx. 9% of treasury shares by IMMOFINANZ AG to the financing banks with a commitment to repurchase these shares at the end of the financing term at the same price.
Restructuring, rescheduling & pre-funding
Large-volume development and standing investment financing for the Gerling Quartier, currently IMMOFINANZ Group’s major urban quarter development project in Cologne, Germany, was also restructured and extended during 2014/15. The external financing required for this mixed use project up to the completion of the final building section was secured at more favourable conditions. The current liquidation of a financing bank led to the restructuring of standing investment financing for the Crown Point office property in Warsaw, Poland. In connection with the change in lenders, the volume of the loan was also increased.
In order to utilise the currently favourable market environment, IMMOFINANZ Group regularly evaluates opportunities for so-called “pre-funding“ as a means of optimising financing costs. This form of restructuring represents the refinancing of financial liabilities during their term. The financing for three office buildings in Vienna was arranged in this manner during the reporting period with an increase in the volume and a substantial extension of the term.
Acquisition and new financing
Long-term financing for four previously unencumbered retail parks in Slovenia, which were acquired in 2013/14, was successfully arranged during the first quarter of the reporting year. These retail parks are located in Celje, Velenje, Domžale and Postojna and expand IMMOFINANZ Group’s STOP.SHOP. portfolio by roughly 13,000 sqm.
A further highlight was the arrangement of long-term standing investment financing for the first shopping center under the VIVO! brand, which is located in Piła, Poland. The shopping center was opened in October 2014 and has approx. 24,000 sqm of selling space; the investment costs totalled approx. EUR 32.0 million.
Long-term standing investment financing was also concluded for a previously unencumbered logistics property in Dunaharaszti, Hungary.
Refinancing, extensions and additional borrowings
The STOP.SHOP. retail park chain represented one of the refinancing focal points in the retail segment: long-term standing invest- ment financing with an increase in the loan volume was also arranged for properties in Vienna-Simmering, Vienna-Stadlau and Tulln, Austria, and for STOP.SHOP.s in Ružomberok, Nové Zámky, Lučenec, Zvolen und Trenčín, Slovakia.
Three long-term financing arrangements for logistics properties in Düsseldorf, Oberhausen and Hamburg, Germany, were concluded or extended during the reporting year.
Numerous, in part large-volume extensions to maturing standing investment financing for office properties were arranged in 2014/15. One focal point was Prague, Czech Republic, where maturing loans for the BB Centrum A, BB Centrum B and Atlas were extended, as was the financing for the now completed Jindřišská 16 development project at a central location in Prague’s inner city. Other nota- ble transactions were the refinancing of the Crown Point office building in Warsaw, Poland, and the Victoria Park in Bucharest, Roma- nia, as well as the increase in the financing volume for the Vienna Twin Tower in Vienna, Austria, which also houses the IMMOFINANZ Group headquarters.
The bank financing for the Evocasa Orizont and Evocasa Viva, two condominium projects realised by the IMMOFINANZ subsidiary Adama in Ploiesti and Brasov, Romania, was extended by a local bank to cover the sale phase for the apartments.
Another important step was the conclusion of follow-up financing with a German-Austrian bank consortium before the end of the 2014/15 financial year for the Forest Finance CBMS (Commercial Mortgage Backed Securities) bond, which was scheduled to mature soon after 30 April 2015. This portfolio financing represents one of the largest transactions of this kind concluded in Austria during recent years and covered the provision of EUR 300.0 million in financing for IMMOFINANZ Group by Bank Austria together with pbb Deutsche Pfandbriefbank. The loans were used to refinance an Austrian portfolio of 38 properties with approx. 218,000 sqm of space. This mixed use portfolio consists primarily of office and retail properties, most of which are located in Vienna.
Development financing
Development loans were also arranged for numerous projects during the construction phase in 2014/15. Of special note is the large-volume financing for the Tarasy Zamkowe project in Lublin, Poland. This transaction was concluded in Euros, whereby a foreign exchange forward ensures the timely availability of Polish Zloty. Other examples of development financing concluded or in place dur- ing the reporting year are the office projects Jungmannova 15 in Prague, Czech Republic, and Carlsquartier in Düsseldorf, Germany. The latter also includes an additional VAT tranche and follow-up long-term standing investment financing.
In the residential segment, a project financing agreement was concluded with a local bank for the Riverpark residential project in Posen, Poland. It also includes an additional VAT tranche to provide interim financing for VAT on construction costs until reimburse- ment is received from the tax authorities.
In autumn 2014 IMMOFINANZ Group took over the Cluster Produktionstechnik development project, which is under construction as part of the Campus Melaten at RWTH Aachen University (Rheinisch-Westfälischen Technischen Hochschule) in Germany. This project has 28,000 sqm of rentable space and is scheduled for completion in autumn 2016. The acquisition includes all relevant planning contracts required for the project realisation as well as a development financing agreement, which will be restructured and adapted to meet IMMOFINANZ standards.
Group financing
BUWOG AG issued a EUR 260.0 million convertible bond in April 2014, which was subscribed in full by IMMOFINANZ AG. IMMOFINANZ AG funded the purchase of this convertible bond with loan financing of EUR 260.0 million provided by several banks, which was drawn during the reporting year and had a maximum term of two and one-half years. The BUWOG convertible bond and a block of BUWOG shares served as collateral for the financing. BUWOG used the funds to acquire the DGAG portfolio with 18,000 residential units in northern Germany. This financing was repaid in full during the second quarter of 2014/15.
On 11 September 2014, IMMOFINANZ AG issued an exchangeable bond for shares of BUWOG AG. The exchangeable bond (ISIN XS1108672988) has a volume of EUR 375.0 million, a coupon of 1.5% per year and an initial exchange price of EUR 17.03. The divi- dend of EUR 0.69 per share paid by BUWOG AG led to the adjustment of the exchange price to EUR 16.26 as of 15 October 2014. The exchangeable bond was “in the money” as of 30 April 2015. The closing price of the BUWOG share on the Vienna Stock Exchange equalled EUR 18.09 on 30 April 2015, which is 11.3% over the exchange price of EUR 16.26.
These successful arrangements demonstrate that financing is still available for attractive projects by high-equity companies, even in volatile markets. IMMOFINANZ Group is able to obtain financing for its standing investment portfolio, acquisitions and development projects in all segments at favourable conditions. The company also benefits from two other factors: long-standing business relation- ships with over 70 banks and financial institutions in Austria and other countries and widely diversified financing which opens access to a wide variety of financing sources and eliminates the dependence on individual lenders.
Reduction in financing costs
The average financing costs for IMMOFINANZ Group declined continuously in 2014/15 and equalled 3.94% per year, including deriva- tives used for interest rate hedging (3.44% per year excluding derivatives) as of 30 April 2015. The deduction of the significant com- ponent of financing arranged in Russia results in average financing costs of 3.24% per year including and 2.62% per year excluding derivatives.
Refinancing arranged after the end of the reporting year leads to expectations of a further reduction in financing costs during 2015/16. This is due, on the one hand, to the sharp drop in reference interest rates (EURIBOR, LIBOR) and, on the other hand, to the declining financing margins in the increasingly competitive environment in the IMMOFINANZ core markets.
The total volume of refinancing, long-term extensions and new financing in 2014/15 amounted to approx. EUR 1,561.4 million. Of this total, EUR 994.1 million had been received as of 30 April 2015.
Financing bank groups – as of 30 April 2015
Raiffeisen Group: 18.78%
Sberbank: 18.51%
UniCredit Group: 13.22% Sparkasse KölnBonn: 8.33% Erste Group: 9.81% Forest Finance: 6.37% Nordea: 3.75% : 2.78% Commerzbank Group: 2.38% Other: 12.62% Volksbanken Group: 1.25% Group: 2.20%
The financing concluded by IMMOFINANZ Group is not only widely diversified by source, but also by country origin. The Group works directly and selectively with international and, in recent times, increasingly with local financing partners. For example, the external financing for the properties in Russia was obtained exclusively from Russian banks.
20% 40% 60% 80% 100%
Financing national/international ■ national
■ international
Germany
Austria Czech Republic Hungary Poland Romania Russia Slovakia Non-core countries IMMOFINANZ Group
100% 100% 69.42% 10.36% 4.19% 24.46% 54.79% 18.09% 63.23% 0% 0% 0% 30.58% 89.64% 95.81% 75.54% 45.21% 81.91% 100% 36.77%
The major financial liabilities of IMMOFINANZ Group comprise liabilities from convertible, corporate and exchangeable bonds and amounts due to financial institutions. The weighted average remaining term equals 4¼ years and the individual positions as of 30 April 2015 are as follows:
Weighted average interest rate
of the major financial liabilities Outstanding liability1 in TEUR as of 30 April 2015
Weighted average
interest rate Share of fixed interest in % Share of floating interest in % Fixed interest rate in % Floating interest rate in %
Convertible bonds in EUR 529,853.7 4.23% 100.00% 0.00% 4.23% n.a.
Corporate bond in EUR 100,000.0 5.25% 100.00% 0.00% 5.25% n.a.
Exchangeable bond in EUR 374,900.0 1.50% 100.00% 0.00% 1.50% n.a.
Bank liabilities in EUR 2,345,282.9 2.31% 11.07% 88.93% 3.49% 2.17%
Bank liabilities in CHF 270.5 0.25% 0.00% 100.00% n.a. 0.25%
Bank liabilities in USD 737,435.1 7.16% 0.00% 100.00% n.a. 7.16%
Bank liabilities in PLN 8,573.2 4.53% 0.00% 100.00% n.a. 4.53%
IMMOFINANZ Group 4,096,315.4 3.44% 30.87% 69.13% 3.35% 3.48%
1 Actual remaining debt (nominal amount). excl. IFRS 5
The remaining balance of the major financial liabilities held by IMMOFINANZ Group totalled EUR 4.1 billion as of 30 April 2015. As of that date, 81.78% of the major financial liabilities were denominated in Euros, 18.00% in US Dollars and 0.22% in other currencies (Swiss Francs, Polish Zloty).
Financial liabilities by currency – as of 30 April 2015
Financial liabilities in : 81.8% Financial liabilities in : 18.0%
Financial liabilities in other currencies: 0.2%