Colonia Real Estate AG / Miscellaneous
24.10.2007
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
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Colonia Real Estate AG - Outlook 2012 - Perspectives of CRE's Residential
Real Estate Portfolio
Vacancy rate in parts of Berlin portfolio decreases from 15,7% to 11,8%
Cologne, 24 October 2007 - In the last three months Colonia Real Estate AG
(ISIN DE0006338007; WKN 633 800) was able to significantly reduce the
vacancy in major parts of its residential portfolio.
As result of new letting activities started in early summer 2007, the
vacancy rate of the Portfolio Berlin-Marzahn which comprises 2,488
residential apartments showed a significant decrease in the months from
July to September from 15.7% to 11.8% (including new letting contracs).
After Colonia Real Estate took over the portfolio at 01.10.2006 they
achieved to reduce the initial 22.4% vacancy in the last 12 months by
almost 50%.
At the same time the other Berlin portfolio (Nauen) with a total of 2,072
apartments could show a more then 50% decrease of the vacancy rate from
9.1% to 4.4%. This emphasizes impressively the asset management expertise
of the CRE Group to manage portfolios which are ment to be difficult at the
acquisition to a successful investment.
Caused by this excellent and above expectations success in new lettings the
board prepared a detailed forecast analysis of the entire Colonia Real
Estate AG residential portfolio for the next five years. This analysis
includes solely the prediction on the current 19,778 unit residential
portfolio. This is a pure stand-alone view and does not comprise any
further acquisitions or partial disposals after improving the vacancy and
cash flows like it is assumed in CRE´s business plan. The analysis shows a
conservative and a optimistic scenario.
Thus, the annualized net cold rental income of the current portfolio will
sharply increase from EUR 56.7mn in 2007 to at least EUR 65.9mn (+16.4%)
end of 2012 in the conservative and to EUR 73.4mn (+22.8%) in the
optimistic scenario. The net operating income after administration, third
party and maintenance costs before interest and tax (therefore equivalent
to EBIT) will increase from expected EUR 44.3mn in 2007 to EUR 52.5mn
(+20.5%) respectively to EUR 59.9mn (+37.5%). Therefore the running costs
will decrease in relation to the achieved rental income from 21.5% end of
2007 to 19.6% in the conservative and 17.6% in the optimistic scenario at
the end of 2012.
The conservative scenario assumes an annual average increase in rents of
only 1.44%. The optimistic one assumes in the light of a positive
environment annual increases of 3.66%. This equates a rise from EUR 4.61 to
EUR 4.95 per square metre in the conservative and to EUR 5.51 per square
metre in the optimistic scenario. The strong increase of the operating cash
flow is mostly based on the reduction of the vacancy from currently 15.7%
to 6.8% in the conservative and 7.3% in the optimistic assumption. The
reduction in the optimist scenario is expected to be slightly lower due to
expected more then compensating higher average rents per months and square
metre. Main driver of the vacancy reduction is, besides the active letting
management, the planed modernisation measures over the next years. The
current modernisation cost is at EUR 4.88 per year and square metre. We
assume, future modernisations costs for a sustainable appreciation of the
entire portfolio will include a total of EUR 110mn or EUR 9.1 per square
metre until 2012. Those measures include predominantly energy saving
activities like thermal insulating facades and windows. Thus, the living
quality of the tenants will be improved long-term with the positive effect
of a decrease of their side costs by up to 70%. From those investment funds
CRE got already a first EUR 40mn loan tranche of subsidised, low interest
rate money approved by the KfW Bank. This money can be called in progress
of the construction work.
In our view, the modernisation measures in the amount of up to EUR 9.10 per
square metre per year will lead to an increase in rental income by EUR 0.90
per square metre and month in the positive case. This investment (before
depreciaton) will return the capital after 10 months which equals ca. 100%
yield on investment. Compared to current acquisition multiples of between
11.5x to 13.5x we have chosen a very efficient capital allocation.
Besides this stand alone view on the current residential portfolio the
management board accentuates the growth target, to acquire additional small
and mid sized residential portfolios with high appreciation potential in
the number of 5,000 to 10,000 units per annum. Considering partial
portfolio disposals to realize profits in the course of the active
portfolio management, the CRE Group aims for at least 50,000 residential
apartments by the year 2012.
The overview of the business plan can be downloaded under
http://www.cre.ag/index.php?id=318&L=0 . The full report can be requested
by email under ir@cre.ag from 24 October 2007 on.
Contact:
Christoph D. Kauter
Head of Corporate Finance and Investor Relations
Colonia Real Estate AG
Zeppelinstr. 4-8
50667 Köln
Telefon: +49 (0)221 71 60 71 0
Fax: +49 (0) 221 71 60 71 99
E-Mail: ir@cre.ag
PR and Press Contact:
edicto GmbH
Axel Mühlhaus
Tel.: +49 (0) 69 9055055-2
amuehlhaus@edicto.de
Contact:
Christoph D. Kauter
Head of Corporate Finance and Investor Relations
Colonia Real Estate AG
Zeppelinstr. 4-8
50667 Köln
Telefon: +49 (0)221 71 60 71 0
Fax: +49 (0) 221 71 60 71 99
E-Mail: ir@cre.ag
PR and Press Contact:
edicto GmbH
Axel Mühlhaus
Tel.: +49 (0) 69 9055055-2
amuehlhaus@edicto.de
24.10.2007 Financial News transmitted by DGAP
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Language: English
Issuer: Colonia Real Estate AG
Zeppelinstr. 4 - 8
50667 Köln
Deutschland
Phone: +49 221-716071-0
Fax: +49 221-716071-99
E-mail: info@cre.ag
Internet: www.cre.ag
ISIN: DE0006338007
WKN: 633800
Indices: SDAX, GPR 250, MSCI Germany Small Cap Index, FTSE EPRA/
NAREIT, E&G DIMAX
Listed: Amtlicher Markt in Berlin, Frankfurt (Prime Standard),
Düsseldorf; Freiverkehr in Hamburg, München, Stuttgart
End of News DGAP News-Service
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