EQS-News: CPI PROPERTY GROUP
/ Key word(s): 9 Month figures
CPI Property Group
In August 2022, CPIPG announced a €2 billion disposal pipeline. Since then, more than €1.5 billion of disposals have been signed, meaning that CPIPG is currently slightly ahead of schedule. On average, the Group's signed disposals have occurred at a premium to book value. November was a particularly active month for disposals. First, S IMMO completed the sale of 161 residential and nine commercial units at the "Adlerhof" in Vienna to Thalhof Immobilien. Second, CPIPG signed a binding agreement for the sale of Suncani Hvar Hotels to Eagle Hills for more than €200 million, a premium of more than 30% to book value. Finally, CPIPG announced today the signing of a binding agreement for the sale of our assets in Crans Montana, Switzerland to Vail Resorts for more than CHF 100 million, or about double the book value. CPIPG intends to exceed (and ideally, significantly exceed) our €2 billion target by August 2024. Assets in the disposal pipeline include residential, office, land bank and hotels in Germany, Austria, the Czech Republic, and the UK.
CPIPG signed nearly €1.2 billion of new secured and unsecured financing during 2023, including €187 million after the reporting period ending September 2023, reflecting our varied and long-standing banking relationships as well as the high quality of our properties. New loans have been drawn from Aareal Bank, Unicredit, CSOB, RBI, MUFG, Berlin Hyp, Deutsche Pfandbriefbank, Komercní banka, Erste Bank and Rothschild. On 30 November 2023, CPIPG drew a new €635 million 3-year bridge loan from Santander, Societe Generale/Komercní banka, RBI, SMBC, Barclays and Erste Bank. The loan replaces all previous bridge facilities related to the acquisitions of IMMOFINANZ and S IMMO. In total, CPIPG has repaid more than €2 billion of bridge financing since 2022, including €756 million since the end of June 2023. CPIPG has €1.2 billion of debt maturing in 2024 and 2025, relative to €1.7 billion of liquidity as of Q3 2023. The only significant debt maturity in the next 24 months is a €478 million loan secured against assets in Berlin, which matures in October 2024; CPIPG is in advanced negotiations and expects to achieve a 7-year prolongation of the loan before the end of 2023. In 2025, the largest maturities relate to secured bank financing in Poland, where refinancing conditions remain favourable. CPIPG Consolidated Debt Maturity Profile, 2024 to 2025
In addition to our active and successful disposal pipeline, CPIPG continues to explore equity and capital raising in multiple forms. Our shareholder, Radovan Vitek, is considering a meaningful contribution of assets and/or cash before year-end 2023. CPIPG is also in active, advanced discussions on potential sales of minority stakes in portfolios located in Poland and Germany. Annual share buyback CPIPG conducts annual share buybacks to provide liquidity to our shareholders. In May 2023, CPIPG reduced our distribution target from 65% to 25% of FFO1. This follows a reduction of our 2022 distribution target from 65% to 55%. On 20 November 2023, the Company announced our share buyback. Considering the progress made on debt repayment, and liquidity, CPIPG viewed the reduced share buyback as appropriate. At the closing of the offer period, shareholders of the Company presented a total of 85,327,468 shares for tender at a price of €0.932 per share for a total of about €79.5 million. Approximately 84.2 million shares were tendered by Clerius Properties (Apollo), with a small amount tendered by management. CPIPG's primary shareholder, Radovan Vitek, did not tender any shares. CPIPG understands the sensitivity of shareholder distributions in this environment and will continue to aim for a proper balance of stakeholder interests. Changes to the Board of Directors and Senior Management Team On 20 November 2023, David Greenbaum, CFO of the Group since 2018, was appointed CEO and managing director and was co-opted to CPIPG's Board of Directors. David replaces Martin Nemecek, who resigned from his role of CEO, managing director, and member of the Board of Directors. After a short break, Martin will remain with CPIPG in a newly created senior role focused on high-value projects. Zdenek Havelka, currently executive director, was appointed to the newly created position of Chief Operating Officer (COO). Pavel Mechura, Group Finance Director, will remain in his role and will become sole head of finance division. Tomáš Salajka, Head of Acquisitions, Asset Management and Sales, has been appointed as Managing Director (administrateur délégué) of CPIPG. His role and the role of Jan Kratina, Director of CPI Hotels, are otherwise unchanged.
On 21 November 2023, notorious short-seller Muddy Waters published a flashy, engaging, but erroneous report specifically designed to discredit CPIPG's reputation and disrupt the Group's efforts to support our investment-grade credit ratings. CPIPG takes the allegations raised by Muddy Waters seriously and understands that a second report will be released soon. As a first step, CPIPG engaged global law firm White & Case to review the Group's governance procedures, compliance policies, and the allegations raised by Muddy Waters. CPIPG also commenced an internal audit. Jonathan Lewis, a well-known UK/European real estate solicitor serving on CPIPG's board as independent director since 2020, has agreed to supervise the process. We understand why CPIPG is an easy target for short sellers. The real estate sector is experiencing challenges, rating agencies are nervous, and CPIPG operates in a region which is unfamiliar to many foreign investors. However, we believe Muddy Waters has an imperfect understanding of real estate transactions, particularly in the CEE region, and made significant errors and false claims due to incomplete research and lack of local knowledge. CPIPG is a proud family-owned company and never obscured our relationship with Radovan Vítek or his family. Disclosures on share buybacks, shareholder loans and related party transactions are extensive and easy to find. On principle, Radovan Vítek cannot "cream," "squeeze" or "brazenly loot" his family company, as alleged by Muddy Waters. CPIPG's primary stakeholders are bondholders and banks, who frequently ask questions about CPIPG's relationship with Mr. Vitek and his family. We always answer openly. Even Muddy Waters, which contacted CPIPG last month via a fake name and e-mail address, got fast, accurate, and detailed responses to their questions. The timing of Muddy Waters' report was particularly unpleasant, as it was timed (and obviously rushed) to coincide with a change to our senior management team. All stakeholders should be reassured that the resignation of our CEO, Martin Nemecek, was completely unrelated and CPIPG had no advance knowledge of any report. Martin Nemecek remains a vital member of our team. Since the Muddy Waters report was released, CPIPG has been preparing a detailed response focused on facts and details. The report is expected to be published next week. Of course, CPIPG recognizes that our investors want answers quickly. On the other hand, we want to be entirely accurate and as detailed as possible.
For the second allegation (CPI Hotels), we will demonstrate that all transactions took place on an arms-length basis and had a clear business rationale and valuation. CPI Hotels remains an important part of the Group and delivers significant income annually. Notably, the first and second allegations took place in the period from 2009 to 2017, before CPIPG was an international bond issuer and before many of the Group's current governance practices were enacted. Even so, CPIPG is confident that everything was disclosed accurately with a clear rationale. For the third allegation (WXZ1), the transaction was properly disclosed and discussed openly. CPIPG is simply committed to treating investors fairly and equally, particularly when the Group acquires other listed companies. For the fourth allegation, we will demonstrate that the acquisition of Polma was a complex restructuring transaction involving 10 assets acquired for more than €330 million, including Maximo Shopping Center in Rome. In total, the assets acquired are currently worth more than €420 million. CPIPG does not own any boats, and Radovan Vitek's yacht does not have a golden hull. We realize our stakeholders (and Muddy Waters) want more information, and we look forward to publishing our detailed response next week.
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34 Net rental income increased by €168.0 million (38%) to €609.4 million in 1-3Q 2023 primarily due to the acquisitions of IMMOFINANZ and S IMMO and continuous like-for-like rental growth. Net hotel income Net hotel income increased from €34.0 million in 1-3Q 2022 to €58.4 million in 1-3Q 2023 due to the acquisition of S IMMO (€13.8 million) and higher overall travel demand across Europe. Net valuation loss Net valuation loss of €202.6 million in 1-3Q 2023 primarily related to IMMOFINANZ (€138.8 million) and S IMMO (€86 million), mainly lower-yielding office and residential portfolios in Germany and an office portfolio in Austria. Other operating income Other operating income decreased in 1-3Q 2023 due to one-off bargain purchase from the acquisition of IMMOFINANZ and S IMMO of €285.9 million in 1-3Q 2022. Interest expense Interest expense increased by €121.0 million in 1-3Q 2023 compared to 1-3Q 2022 primarily due to the acquisition of IMMOFINANZ (€23.8 million) and S IMMO (€36.4 million), the overall increase of the cost of new financing and the relatively higher cost of the Group's temporary bridge financing.
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34
Total assets decreased by €344.1 million (1.5%) to €23,177.1 million as at 30 September 2023 compared to 31 December 2022. The decrease was driven primarily by negative revaluations of investment property (€202.6 million) and property disposals. Total liabilities Total liabilities decreased by €397.6 million (2.8%) to €13,860.6 million as at 30 September 2023 compared to EQUITY AND EPRA NRV Total equity increased by €53.5 million to €9,316.5 million as at 30 September 2023 compared to 31 December 2022. The movements of equity components were primarily as follows:
EPRA NRV was €8,071 million as of 30 September 2023, representing an increase of 0.8% compared to 31 December 2022. The increase of EPRA NRV was driven by the above changes in the Group's equity attributable to the owners (revaluation reserve).
* Totals might not sum exactly due to rounding differences.
* Includes pro-rata EBITDA/FFO of Equity accounted investees.
*Annualised.
Moritz Mayer For more on CPI Property Group, visit our website: www.cpipg.com
30.11.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. |
Language: | English |
Company: | CPI PROPERTY GROUP |
40, rue de la Vallée | |
L-2661 Luxembourg | |
Luxemburg | |
Phone: | +352 264 767 1 |
Fax: | +352 264 767 67 |
E-mail: | contact@cpipg.com |
Internet: | www.cpipg.com |
ISIN: | LU0251710041 |
WKN: | A0JL4D |
Listed: | Regulated Market in Frankfurt (General Standard); Regulated Unofficial Market in Dusseldorf, Stuttgart |
EQS News ID: | 1787027 |
End of News | EQS News Service |
1787027 30.11.2023 CET/CEST