IMMOFINANZ Bonds

Financing Strategy and Capital Structure

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

First Three Quarters of 2018 Financial liabilities totalled EUR 2.4 billion as of 30 September 2018 (31 December 2017: EUR 2.6 billion). Cash and cash equivalents rose to EUR 685.4 million (31 December 2017: EUR 477.9 million). Net debt, i.e. debt after the deduction of cash and cash equivalents held by the Group, equalled EUR 1.7 billion (31 December 2017: EUR 2.1 billion).

Robust balance sheet structure

IMMOFINANZ has a robust balance sheet structure with an equity ratio of 48.2% (31 December 2017: 46.3%) and a net loan-to-value ratio (net LTV) of 35.9% (31 December 2017: 40.8%).

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 29% investment in S IMMO AG (S IMMO). The closing for the acquisition of this investment took place in the third quarter of 2018 for a purchase price of approximately EUR 390.0 million. The package sale of the roughly 26% investment plus four registered shares in CA Immo for a total price of EUR 757.9 million also closed during the third quarter of 2018.

Further reduction in financing costs

Financing costs declined to EUR -51.3 million in the first three quarters of 2018 (Q1-3 2017: EUR -75.0 million). The average financing costs for IMMOFINANZ equalled 2.17% per year as of 30 September 2018 including the derivatives used for interest rate hedging (31 December 2017: 2.31% per year) and 1.80% per year excluding the derivatives used for interest rate hedging (31 December 2017: 1.97% per year).

Unencumbered properties

In addition to properties which carry external financing and are encumbered through standard market collateral (e.g. mortgages, pledge of company shares), EUR 750.7 million, or 17.3%, of the total property carrying amount was not externally financed and therefore unencumbered as of 30 September 2018 (31 December 2017: EUR 846.1 million or 19.0%). The unencumbered standing investments have a combined carrying amount of EUR 522.4 million or 12.1% (31 December 2017: EUR 566.7 million or 16.1%).