IMMOFINANZ Bonds

Financing Strategy and Capital Structure

The objectives of IMMOFINANZ’s financing strategy are to ensure sufficient liquidity at all times, to achieve and maintain a balanced capital structure and maturity profile and to also optimise financing costs. The best possible structuring of debt financing is an important priority and, in addition to successful property management, represents a decisive factor for the results generated by the company’s business activities.

The 2019 Financial Year 

Financing with a total volume of EUR 1,298.1 million was concluded in 2019. That represents approximately 45.9% of the total financial liabilities as of 31 December 2019 and involves extensions as well as new financing.

In the area of property financing, the strategic combination of individual properties in a particular brand or asset class into specific portfolios also led to the realisation of more attractive conditions in 2019. Specific examples include the refinancing of the STOP SHOP portfolio in Hungary with a volume of EUR 120.0 million, acquisition financing for the Warsaw Spire in Poland at EUR 230.0 million and refinancing of EUR 120.0 million for the myhive location on Vienna’s Wienerberg with a 15-year term.

IMMOFINANZ AG received a long-term issuer rating of BBB- with stable outlook from S&P Global Ratings in January 2019. Based on this investment grade rating, a EUR 500 million corporate bond with a fixed coupon of 2.625% per year was issued. The net proceeds were used during the first quarter of 2019 to refinance existing collateralised financial liabilities and for general corporate purposes. S&P Global Ratings confirmed its initial rating as part of the annual review process in February 2020.

Financial liabilities (excluding lease liabilities of EUR 83.3 million in accordance with the application of IFRS 16; incl. IFRS 5) amounted to EUR 2.8 billion as of 31 December 2019 (31 December 2018: EUR 2.4 billion). Cash and cash equivalents, including cash held for sale, totalled EUR 345.1 million (31 December 2018: EUR 632.0 million), and net debt, i.e. debt after the deduction of cash and cash equivalents held by the Group, equalled EUR 2.5 billion (31 December 2018: EUR 1.8 billion). The decline in cash and cash equivalents resulted, among others, from the share buyback programme 2018/2019, which was concluded in August 2019, and from the acquisition of several standing investments, e. g. the Warsaw Spire and Palmovka Open Park office properties.

Robust balance sheet structure

IMMOFINANZ has a robust balance sheet structure with an equity ratio of 46.0% (31 December 2018: 48.0%) and a net loan-to-value ratio (net LTV) of 43.0% (31 December 2018: 37.3%).

The net LTV shows the carrying amount of financing less cash and cash equivalents in relation to the total carrying amount of the properties and the EPRA NAV for the roughly 19.5 million S IMMO AG (S IMMO) shares held by IMMOFINANZ.

Net LTV

Further reduction in financing costs

Financing costs declined to EUR -64.6 million in 2019 (2018: EUR -68.4 million). The average financing costs for IMMOFINANZ equalled 1.91% per year as of 31 December 2019, including the derivatives used for interest rate hedging (31 December 2018: 2.14% per year).

Financing costs (incl. hedging)

Unencumbered property

In addition to properties which carry external financing and are encumbered through standard market collateral (e.g. mortgages, pledge of company shares), EUR 1,434.0 million, or 27.3%, of the total property carrying amount was not externally financed and therefore unencumbered as of 31 December 2019 (31 December 2018: EUR 749.0 million or 17.0%). This year-on-year increase resulted primarily from the refinancing of collateralised financial liabilities through the net proceeds received from the corporate bond 2019-2023. Including the S IMMO shares (valued at the EPRA NAV), which are not encumbered by any financing, this value increases to EUR 1,949.8 million or 33.8% (31 December 2018: EUR 749.0 million or 15.6%).

Unencumbered property by asset class

Unencumbered property in total: MEUR 1,434.0