Portfolio Strategy

Portfolio Strategy
Focus on countries with an established CA Immo presence
Key asset class: office properties
Urban district development adds high value
Solid stock, strong development expertise
Markets of the CA Immo Group

Portfolio Strategy

Raising the corporate value of the Group is the main aim of the portfolio strategy and thus the key criterion on which each new investment decision is based.

CA Immo pursues this aim by positioning itself clearly as an investor in commercial real estate, focusing on the Central European region through the twin business areas of investment properties and investment properties under development. In doing so, the company can draw on over 20 years’ experience, the local presence of qualified employees and a wealth of project development expertise generated through the subsidiary CA Immo Deutschland GmbH.

The Group’s portfolio strategy passes through a constant process of evaluation and a measure of adjustment to specific market conditions and the general economic circumstances. Regardless of region or asset class, however, the central objectives are to secure the earning power of investment properties whilst realising development projects with the maximum efficiency.

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Focus on countries with an established CA Immo presence

In regional terms, CA Immo restricted its activities to the existing markets of Austria, Germany and (South)Eastern Europe during 2009; no further expansion took place. In 2010, consolidation in those countries where a presence is already established will continue to take priority over entry into new markets, the aim being to achieve a balanced portfolio mix of established and developing markets.

In the company’s core regions of Austria, Germany, Poland, Hungary and the Czech Republic, the objectives will be to secure investment properties for the long term and organic asset accumulation. In Austria and Germany in particular, the Group has its own teams to oversee progress on project development and manage investment properties locally; this proficiency can also be called on as required in other regions. Beyond maintaining current stock, there are no immediate plans to expand in the fringe markets, and exit strategies will be deployed if necessary. Although current development projects in the CIS region (and especially Russia) will continue, no new projects will be initiated in the short to medium term. Investment opportunities will be evaluated as they arise and entered into on a case-by-case basis.

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Key asset class: office properties

CA Immo has always positioned itself as an office specialist. In this segment, the company can point to considerable expertise acquired over years of experience. The operational focus is on the business area of investment properties as well as project development in connection with high grade office properties (with a strong emphasis on prime locations). As regards stock, much of the organic asset accumulation envisaged for the years ahead will take place in this segment. Hotel and residential properties will be developed as the opportunities arise, mainly in the field of urban district development and in connection with specific projects; in the hotel segment, the company will utilise the expertise of Group subsidiary Viador, which specialises in hotel building. So far, too little attention has been paid to the retail sector in the Group’s portfolio as a whole; efforts will be made to redress the balance by means of selective development and collaborations with specialist project partners.

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Urban district development adds high value

Thanks to its subsidiary CA Immo Deutschland GmbH, CA Immo controls valuable reserves of real estate in prime locations in Germany. Development projects linked to these extensive sites, which include substantial stocks of residential property, are at varying stages of completion. Over the next few years, the sites will be made ready for building as fast as possible, whereupon they will either be sold to property developers, developed by CA Immo for investors or absorbed into the company’s asset portfolio following completion. This urban district development programme covers various usage types and incorporates all asset classes, which will ensure the creation of functioning infrastructure that is integrated into the wider environment. This type of urban development – turning brownfield sites without development schemes into completed urban districts – has high potential for added value and ideally complements the more stable core business of managing investment properties.

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Solid stock, strong development expertise

CA Immo will aim to establish a business ratio of 2:1 with a view to negating the volatility of project development to a large degree (two thirds investment properties to secure a stable cash flow, one third investment properties under development (based on total investment costs) to generate higher yield). It is a combination with advantages to both business areas: the business of investment properties benefits from access to high quality new real estate, whilst the steady income from property management supports project business. To release additional capital resources to implement projects in the pipeline, up to 10 % of established investment properties or completed developments are sold each year (according to market conditions and the receptiveness of the investment market).

The risks of project development are mitigated by means of scrupulous risk management: new projects are only launched where financing is fixed, a high level of pre-letting is assured or an end result is guaranteed in the shape of an investor.

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Markets of the CA Immo Group

Markets of the CA Immo Group (.pdf)

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