CPI Property Group
(société anonyme)
40, rue de la Vallée
L-2661 Luxembourg
R.C.S. Luxembourg: B 102 254
Press Release - Corporate News
Luxembourg, 31 March 2023
CPI PROPERTY GROUP publishes financial results for 2022
CPI PROPERTY GROUP (hereinafter CPIPG, the Company or together with its subsidiaries the Group) hereby publishes audited financial results for the financial year ended 31 December 2022.
2022 was an exceptional year of change for CPIPG, said Martin Nmeek, CEO. Through our acquisitions of IMMOFINANZ and S IMMO, the Group became one of Europes largest landlords. In 2023 we will focus on integration, optimisation, and reducing leverage.
The Group fully consolidates the assets, liabilities, and equity of IMMOFINANZ and S IMMO. Income-related measures are reported proportionately, reflecting the acquisition timing during 2022.
Highlights of the 2022 financial year include:
- CPIPGs property portfolio reached 20.9 billion (versus 13.1 billion at year-end 2021) as the Group consolidated IMMOFINANZ (5.3 billion) and S IMMO (3.4 billion) and made nearly 900 million of disposals during 2022. Disposals continued in 2023, with about 400m signed in Q1.
- Total assets reached 23.5 billion, and EPRA NRV (NAV) grew to 8.0 billion.
- Contracted gross rent was 906 million.
- Net rental income increased to 632 million and net business income rose to 676 million.
- Hotels reported net income of 46 million, reflecting the recovery of travel across Europe in 2022.
- Consolidated adjusted EBITDA was 608 million, while FFO1 was 355 million.
- Rental income grew 7.6% on a like-for-like basis. Rental growth was primarily organic. A high proportion of the Groups rents are indexed; based on early data, Inflation may have an 8%+ positive effect on rents in 2023.
- Net Loan-to-Value (LTV) increased to 50.9% at year-end 2022, outside of the Groups financial policy targets. CPIPGs top priority is to reduce leverage through disposals and other measures and we expect a Net LTV of 45-49% by year-end 2023.
- Total available liquidity was 2 billion, including 910 million of undrawn revolving credit facilities, the majority of which mature in early 2026.
- Unencumbered assets decreased to 54%, reflecting the high proportion of secured debt at IMMOFINANZ and S IMMO. CPIPG prefers senior unsecured borrowings, but in the current environment secured loan pricing is substantially more attractive. Like CPIPG, IMMOFINANZ and S IMMO have well-established relationships with a broad range of international and regional secured lenders, which we see as an advantage.
- Net ICR was 3.2x. The Group has a low-cost, long-dated debt maturity profile and sees strong potential to improve the ICR through deleveraging and the expectation of higher rents over time.
Notable events occurring after the end of 2022
Financing activity
On 6 March 2023, the Group signed a 100 million unsecured term loan with MUFG with a five-year maturity. In keeping with CPIPGs commitment to reduce the greenhouse gas (GHG) emissions intensity of our property portfolio by 32.4% through 2030 versus the 2019 baseline, the loans margin will step up or step down on an annual basis from 2023 onwards.
On 31 March 2023, the Group signed a £35 million five-year secured loan with Rothschild & Co. against a portion
of our UK assets.
CPIPG remains in active discussion with banks about secured loans in Germany, the Czech Republic, Poland, the UK and other geographies.
Disposals
In January 2023, our subsidiary S IMMO sold a commercial park near Munich. In March 2023, S IMMO sold a large residential portfolio in Berlin. In March 2023, IMMOFINANZ sold an office property in Vienna.
In total, the Group signed disposals in Q1 2023 of about 400 million.
Therefore, the Group has achieved over 750 million of gross disposal proceeds since August 2022, when CPIPG announced a disposal pipeline exceeding 2 billion to be executed over the following 12 to 24 months.
CPIPG still has more than 30 disposal projects in execution, with about 1 billion of letters of intent signed.
ESG rating upgrade
On 24 February 2023, CPIPG announced that the Group had received a rating of BBB (on a scale of AAA CCC) in the MSCI ESG Ratings assessment, an improvement from the previous rating of BB. Key drivers for the higher rating were the larger share of certified green buildings, green leases, and enhanced corporate governance.
Annual results webcast
CPIPG will host a webcast in relation to its financial results for 2022. The webcast will be held on Thursday, 6 April 2023 at 11:00 am CET / 10:00 am UK.
Please register for the webcast in advance via the link below:
https://edge.media-server.com/mmc/p/2e5qbxvh
FINANCIAL HIGHLIGHTS
| Performance |
|
2022 |
2021 |
Change |
| |
|
|
|
|
| Total revenues |
million |
1,282 |
664 |
93.1% |
| Gross rental income (GRI) |
million |
749 |
402 |
86.3% |
| Net rental income (NRI) |
million |
632 |
363 |
74.1% |
| Net hotel income |
million |
46 |
14 |
230.0% |
| Net business income (NBI) |
million |
676 |
385 |
75.3% |
| |
|
|
|
|
| Consolidated adjusted EBITDA |
million |
608 |
368 |
64.9% |
| Funds from operations (FFO) |
million |
355 |
254 |
40.1% |
| |
|
|
|
|
| Net profit for the period |
million |
557 |
1,292 |
(56.9%) |
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
|
| Assets |
|
31-Dec-2022 |
31-Dec-2021 |
Change |
| |
|
|
|
|
| Total assets |
million |
23,521 |
14,369 |
63.7% |
| Property portfolio |
million |
20,855 |
13,119 |
59.0% |
| Gross leasable area |
sqm |
6,784,000 |
3,667,000 |
85.0% |
| Share of green certified buildings* |
% |
32.1 |
24.2 |
7.9 p.p. |
| Occupancy |
% |
92.8 |
93.8 |
(1.0 p.p.) |
| Like-for-like gross rental growth** |
% |
7.6 |
3.3 |
4.3 p.p. |
| |
|
|
|
|
| Total number of properties*** |
No. |
855 |
367 |
133.0% |
| Total number of residential units |
No. |
16,767 |
11,755 |
42.6% |
| Total number of hotel rooms**** |
No. |
7,810 |
7,025 |
11.2% |
| |
|
|
|
|
* According to GLA
** Based on gross rent, excluding one-time discounts in 2021, CPIPG standalone
*** Excluding residential properties in the Czech Republic
**** Including hotels operated, but not owned by the Group
|
|
|
| |
|
|
|
|
|
| Financing structure |
|
31-Dec-2022 |
31-Dec-2021 |
Change |
| |
|
|
|
|
| Total equity |
million |
9,263 |
7,695 |
20.4% |
| EPRA NRV (NAV) |
million |
8,005 |
7,039 |
13.7% |
| |
|
|
|
|
| Net debt |
million |
10,625 |
4,682 |
127.0% |
| Net Loan-to-value ratio (Net LTV) |
% |
50.9 |
35.7 |
15.2 p.p. |
| Net debt/EBITDA |
x |
17.5x |
12.7x |
4.8x |
| Secured consolidated leverage ratio |
% |
19.5 |
9.8 |
9.7 p.p. |
| Secured debt to total debt |
% |
38.9 |
27.0 |
11.9 p.p. |
| Unencumbered assets to total assets |
% |
54.4 |
70.4 |
(16.0 p.p.) |
| Unencumbered assets to unsecured debt |
% |
179% |
267% |
(88.0 p.p.) |
| Net ICR |
x |
3.2x |
4.6x |
(1.4x) |
| |
| |
|
|
|
|
|
|
|
|
CONSOLIDATED INCOME STATEMENT
| |
Twelve-month period ended |
| ( million) |
31 December 2022 |
31 December 2021 |
| Gross rental income |
748.5 |
401.8 |
| Service charge and other income |
315.1 |
139.1 |
| Cost of service and other charges |
(281.8) |
(116.2) |
| Property operating expenses |
(150.0) |
(61.8) |
Net rental income
|
631.8 |
362.9 |
| Development sales |
- |
12.9 |
| Development operating expenses |
- |
(9.4) |
| Net development income |
- |
3.5 |
| Hotel revenue |
165.1 |
66.4 |
| Hotel operating expenses |
(119.6) |
(52.6) |
Net hotel income
Revenues from other business operations |
45.5 |
13.8 |
| Other business revenue |
53.2 |
43.6 |
| Other business operating expenses |
(54.8) |
(38.4) |
| Net other business income |
(1.6) |
5.2 |
| Total revenues |
1,281.9 |
663.8 |
| Total direct business operating expenses |
(606.2) |
(278.4) |
| Net business income |
675.7 |
385.4 |
| Net valuation gain/(loss) |
(88.8) |
1,275.8 |
| Net gain on disposal of investment property and subsidiaries |
35.9 |
34.5 |
| Amortization, depreciation and impairment |
(99.5) |
(52.0) |
| Administrative expenses |
(128.7) |
(58.4) |
| Other operating income |
331.8 |
6.5 |
| Other operating expenses |
(24.9) |
(5.8) |
| Operating result |
701.5 |
1,586.0 |
| Interest income |
20.3 |
17.9 |
| Interest expense |
(210.2) |
(97.3) |
| Other net financial result |
151.3 |
39.3 |
| Net finance costs |
(38.6) |
(40.1) |
| Share of gain of equity-accounted investees (net of tax) |
19.1 |
15.1 |
| Profit before income tax |
682.0 |
1,561.0 |
| Income tax expense |
(124.8) |
(269.4) |
| Net profit from continuing operations |
557.2 |
1,291.6 |
Net rental income
Net rental income increased by 269.0 million (74.1%) to 631.8 million in 2022 primarily due to the acquisitions of IMMOFINANZ and S IMMO (191.8 million and 58.2 million, respectively).
Net hotel income
In 2022, net hotel income improved to 45.6 million, an increase of 31.8 million (230%) due to the recovery of travel demand across Europe.
Net valuation gain
In 2022, the net valuation loss of 88.8 million, primarily due to the acquisitions of IMMOFINANZ and S IMMO generated losses of 111.8 million and 107.4 million, respectively. On the other hand, valuation gains were generated mainly by the Czech residential portfolio (107.0 million)
The moderate decline in valuations of less than 1% reflects the Groups diverse portfolio of higher-yielding assets coupled with CPIPGs ability to increase rents as an offset against higher yield requirements.
Other operating income
In 2022, the Group realized other operating income of 331.8 million. Of the amount, bargain purchase related to acquisition of IMMOFINANZ and S IMMO was 189.3 million and 129.1 million, respectively.
Interest expense
Interest expense increased by 112.9 million to 210.2 million in 2022 due to the acquisition of IMMOFINANZ (64.4 million) and S IMMO (15.9 million) and overall increase of bank loans and bonds issued.
Other net financial result
The other net financial result reflects primarily a change in fair value on derivative instruments (163.1 million).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| ( million) |
31 December 2022 |
31 December 2021 |
| NON-CURRENT ASSETS |
|
|
| Intangible assets and goodwill |
126.7 |
114.0 |
| Investment property |
18,486.2 |
10,275.8 |
| Property, plant and equipment |
1,100.0 |
854.6 |
| Deferred tax assets |
176.8 |
164.1 |
| Equity accounted investees |
732.3 |
1,216.1 |
| Other non-current assets |
668.5 |
338.0 |
| Total non-current assets |
21,290.5 |
12,962.6 |
| CURRENT ASSETS |
|
|
| Inventories |
23.5 |
11.8 |
| Trade receivables |
197.8 |
105.7 |
| Cash and cash equivalents |
1,033.2 |
501.8 |
| Assets linked to assets held for sale |
596.5 |
588.5 |
| Other current assets |
379.7 |
198.6 |
| Total current assets |
2,230.7 |
1,406.4 |
| TOTAL ASSETS |
23,521.2 |
14,369.0 |
| EQUITY |
|
|
| Equity attributable to owners of the Company |
6,579.8 |
5,991.8 |
| Perpetual notes |
1,584.4 |
1,611.6 |
| Non-controlling interests |
1,098.8 |
91.2 |
| Total equity |
9,263.0 |
7,694.6 |
| NON-CURRENT LIABILITIES |
|
|
| Bonds issued |
4,680.4 |
3,693.7 |
| Financial debts |
6,165.6 |
1,164.4 |
| Deferred tax liabilities |
1,727.9 |
1,082.4 |
| Other non-current liabilities |
208.2 |
96.2 |
| Total non-current liabilities |
12,782.1 |
6,036.7 |
| CURRENT LIABILITIES |
|
|
| Bonds issued |
405.8 |
41.1 |
| Financial debts |
360.4 |
233.5 |
| Trade payables |
232.2 |
116.2 |
| Other current liabilities |
477.7 |
246.9 |
| Total current liabilities |
1,476.1 |
637.7 |
| TOTAL EQUITY AND LIABILITIES |
23,521.2 |
14,369.0 |
Total assets
Total assets increased by 9,152.2 million (64.7%) to 23,521.2 million at 31 December 2022 compared to 31 December 2021. The increase was driven primarily by investment property acquisitions, development costs and other additions (8,669.6 million) and increase of cash and cash equivalents due to IMMOFINANZ and S IMMO (660.3 million).
Total liabilities
Total liabilities increased by 7,583.8 million (113.6%) to 14,258.2 million at 31 December 2022 compared to 31 December 2021, largely due to incremental debt issuance (2,215.7 million) and IMMOFINANZ and S IMMO acquisitions (2,246.0 million and 988.1 million, respectively).
The increase of deferred tax liability was primarily due to acquisitions of IMMOFINANZ and S IMMO (318.7 million and 262.2 million, respectively).
EQUITY AND EPRA NRV
Total equity increased by 1,568.3 million to 9,262.9 million as at 31 December 2022. The movements of equity components were mainly as follows:
- Increase due to the profit for the period of 557.2 million (profit to the owners of 457.0 million);
- Decrease due to share buy-back 190.3 million;
- Increase in revaluation and hedging reserve in total of 56.1 million;
- Increase in translation reserve of 64.5 million;
- Increase from transactions with NCI in total of 1,184.2 million
- Decrease due to issuance and repayment of perpetual notes net of 102.3 million.
EPRA NRV was 8,005 million as at 31 December 2022, representing increase of 13.7% compared to 31 December 2021. The increase of EPRA NRV was driven by the above changes in the Groups equity attributable to the owners (increase of retained earnings and other reserves).
| |
31 December 2022 |
31 December 2021 |
| |
|
|
| Equity attributable to the owners (NAV) |
6,580 |
5,992 |
| Effect of exercise of options, convertibles and other equity interests |
- |
- |
| Diluted NAV |
6,580 |
5,992 |
| Fair value of financial instruments |
(243) |
- |
| Deferred tax on revaluations |
1,711 |
1,090 |
| Goodwill as a result of deferred tax |
(43) |
(43) |
| EPRA NRV ( million) |
8,005 |
7,039 |
For disclosures regarding Alternative Performance Measures used in this press release please refer to our Annual Management Report 2022, chapters Glossary of terms, Key ratio reconciliations and EPRA performance; accessible at https://cpipg.com/reports-presentations-en.
Audited documents will be available tonight at the following link:
https://www.cpipg.com/reports-presentations-en
2022 audited financial report
2022 audited management report
For further information please contact:
Investor Relations
David Greenbaum
Chief Financial Officer
d.greenbaum@cpipg.com
Moritz Mayer
Manager, Capital Markets
m.mayer@cpipg.com
For more on CPI Property Group, visit our website: www.cpipg.com
Follow us on Twitter (CPIPG_SA) and LinkedIn
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