CA Immo with continued good business development and strong earnings growth in the third quarter of 2022
- Slight increase in rental income (+2.5% to €158.1 m)  reflects recent portfolio additions and higher rental income from investment properties
- Consolidated net income of €267.5 m, up 40% year-on-year
- Recurring earnings (FFO I) increased by 2.4% to €102.5 m compared to previous year
- Increase in net asset value IFRS NAV by 9.0% since the beginning of the year (16.6% adjusted for dividends) to €35.61 per share and EPRA NTA by 5.5% since the beginning of the year (11.7% adjusted for dividends) to €42.25 per share
- Annual target for 2022 confirmed: recurring earnings (FFO I) of more than €125 m expected
- CEO Silvia Schmitten-Walgenbach: "We are making good progress in the consistent implementation of our strategic capital rotation programme. Despite the challenging market environment, we were able to successfully complete the announced sale of our Romanian platform."
Vienna, November 23 2022. CA Immo, the property group specialising in high-quality office space, can look back on a good third quarter. This continues the positive business development of the previous quarters. In a challenging market environment, CA Immo was able to increase its recurring earnings (FFO I) by 2.4% year-on-year to €102.5 m in the third quarter. Rental income rose by 2.5% to €158.1 m in the first nine months. The recent portfolio expansions and higher rental income from investment properties thus more than offset the effects from portfolio sales. Consolidated net income rose by 40% to €267.5 m, driven among other things by a strong revaluation result (€180.4 m). The positive development in the third quarter was mainly due to the good letting business and the takeover of two project completions into the own portfolio. Following the strong first nine months, CA Immo confirms its earnings forecast for 2022 and expects recurring earnings (FFO I) of more than €125 m.
Silvia Schmitten-Walgenbach, CEO of CA Immo: “We are making good progress in the consistent implementation of our strategic capital rotation programme. Despite the challenging market environment, we were able to successfully complete the announced sale of our Romanian platform. This not only advances our focus on our core market of Germany, but also increases the quality of our portfolio and significantly improves our liquidity position. This makes CA Immo even more resilient in times of rapidly changing conditions for the real estate sector.”
Robust demand for premium offices in central locations with positive trend1)
In the first nine months of 2022, CA Immo concluded or extended leases for a total of around 112,800 sqm of existing space, an increase of around 15% on the same period last year (excl. Romania). In addition, a total of around 10,500 sqm of usable space was pre-let in project developments. The economic occupancy rate was at 89,3% as of the reporting date (31.12.2021: 88,9%, excl. Romania: 88.5%). The property yield stood at 4.3% (31.12.2021: 4.6%, excl. Romania: 4.4%).
Slight increase in rental income despite sale of non-strategic properties1)
CA Immo recorded a slight increase in rental income by +2.5% to €158.1 m in the first nine months of 2022. This development is mainly related to the completion of project developments and the purchase of Kasernenstrasse 67 asset in Duesseldorf (+€7.7 m year-on-year) as well as higher rental income from investment properties (+€2.3 m year-on-year), which more than compensated for the decline in rental income from the sale of non-strategic properties as part of the strategic capital rotation program (€–6.2 m year-on-year).
Investing in portfolio quality and streamlining the project pipeline in the new construction segment
In summer, the Frankfurt high-rise project ONE with a total investment volume of around €430 m and a rentable floor space of around 68,500 m² was put in operation. This was followed in October by the commission of the Grasblau office building in Berlin (13,350 m² of lettable floor space). The spaces of both project completions will be successively handed over to the tenants. By taking over these two buildings into CA Immo´s own portfolio, the total investment volume of all projects under construction is reduced by around 50% compared to 31 December 2021. The remaining two Berlin office buildings under construction with a total project volume of around 58,000 m² are 100% pre-let.
Strategic capital rotation programme to further improve portfolio quality
In particular, CA Immo has made further progress in implementing the strategic capital rotation programme, with the sale of the Romanian platform, the signed sale of the Mechelgasse 1 hotel and office property in Vienna, and the planned sale of Hamburger Bahnhof and Rieckhallen in Berlin in connection with the acquisition of an attractive building plot in the immediate vicinity of Berlin's main railway station. The sale of the Romanian portfolio was completed shortly after the signing, the closing of the building complex in Vienna is expected in Q1 2023. CA Immo has thus further enhanced the quality of the portfolio in line with the strategy and significantly strengthened its liquidity position. CA Immo is thus very well positioned and – in a more difficult market environment – has significantly increased its stability and resilience as well as its further options for action.
Results of the first nine months 20221)
Earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by –18.8% to €117.0 m (1-3Q 2021: €144.1 m). This decline compared to the previous year is mainly due to an exceptionally high sales result in the previous year. In the first nine months of 2022, CA Immo recorded a revaluation result of €180.4 m (previous year: €185.6 m). This positive development was primarily driven by revaluations of some investment properties on the basis of property-specific factors as well as ongoing development projects and land reserves, mostly in Berlin. The reclassification of the ONE project development in Frankfurt and Grasblau project development in Berlin to the investment portfolio and the associated revaluation uplift contributed to the valuation gain in the amount of above €80 m. At €319.7 m, the operating result (EBIT) was below the comparable value of the previous year (30.9.2021: €328.7 m), mainly due to the lower sales results. The consolidated net income of €267.5 m was significantly above the previous year's value of €190.8 m, mainly driven by a significantly improved financial result (positive derivative valuation). Earnings per share amounted to €2.66 (30.9.2021: €1.96 per share).
The value of total property assets increased by around 5% compared to the end of 2021 to €6.5 bn as at the reporting date 30.9.2022; around 80% of this is accounted for by investment properties (€5.3 bn) and around 11% by investment properties under development (€0.7 bn), the remaining 9% is intended for trading or sale (short-term property assets, incl. discontinued operation Romania). Around 62% of the total property assets are attributable to Germany, the largest single market (31.12.2021: around 60%).
Balance sheet strength, high liquidity and further increase in asset value
CA Immo continues to have an extremely robust balance sheet with a solid equity ratio of 48.0% (31.12.2021: 46.3%) and cash and cash equivalents of €442.5 m (31.12.2021: €633.1 m). The loan-to-value ratio (LTV) based on balance sheet values was 34.7% (net, taking into account the Group's cash and cash equivalents) as at 30.9.2022 compared to 31.1% at the end of 2021. IFRS NAV was at €35.61 per share, 9.0% above the value as at 31 December 2021. Adjusted for the dividend payment in the first quarter of 2022, this has risen by 16.6% since the beginning of the year. EPRA NTA was at €42.25 per share, 5.5% above the value as at 31 December 2021 (+11.7% adjusted for dividends). As at 30.9.2022 CA Immo has delivered a 5 year total shareholder return of around 65%. The interest rate hedge ratio, at around 92% as at the reporting date, is to be maintained at a high level in order to continue to be able to largely cushion the risk of interest rate increases.
Challenging and uncertain environment changes framework conditions for real estate sector
High energy prices as a result of the Russian war of aggression against Ukraine, rapidly rising construction costs and the significant interest rate increases by the central banks to combat inflation are currently significantly changing the framework conditions for the real estate sector. A recession is generally expected in Europe in the coming months. In addition, tenants are placing increasing demands on office space against the backdrop of hybrid working environments and the transition to a sustainable economy. CA Immo is responding to these changes from a position of strength and sees them as an opportunity: as a leading prime office player with Germany as its anchor market, CA Immo is meeting the demand for high-quality, energy-efficient and innovative offices in prime locations.
Ongoing review and further development of the strategy
In order to further enhance its competitiveness, future viability and resilience, CA Immo is sharpening its strategy in an ongoing process. In doing so, it is essentially pursuing three thrusts: Firstly, a further increase in the quality of the portfolio through a clear focus on the core market of Germany and the gradual sale of properties that do not or no longer meet the strategic requirement profile. In the medium term, the share of German properties in the portfolio is to be increased from currently 62% to over 75%. Secondly, the transformation to a sustainable company is to be accelerated. And thirdly, CA Immo is pursuing the consistent optimisation of organisational and cost structures in order to generate value for all stakeholders.
Annual target for 2022 confirmed
Against the backdrop of the positive business development in the first nine months, CA Immo remains confident for the remainder of the business year despite the fundamentally changing environment. The communicated target for 2022 of achieving recurring earnings (FFO I) of more than €125 m (FFO I 2021: € 128.3 m) is confirmed.
The Q3 2022 Interim Financial Report of CA Immobilien Anlagen AG is available at:
 The seven Romanian real estate companies and the associated management company ("Romania") are presented separately as discontinued operations in accordance with IFRS 5 as of 30 September 2022 and are therefore excluded from all profit and loss figures (including the previous year's figures). The consolidated net income and balance sheet figures are shown including Romania. The Romanian real estate portfolio is classified as short-term property assets as of the reporting date.