IMMORENT heightens business volume by 14.5% and initiates major real estate project in Romania

2008-05-13 17:25:34 - IMMORENT takes a hands-on approach to investment - the 2007 annual report shows a 14.5% rise in new lease financing in Austria, Central & Southeast Europe, and in cross-border business.

IMMORENT enjoys a special standing in the markets it serves, thanks to its in-house project development and construction services. This is clearly reflected in the 71% increase in project volumes to a total of EUR 1,434m.

Highlights 2007

• IMMORENT new leasing business in 2007 - New business in our CEE/SEE markets exceeds EUR 1bn for the first time
• IMMORENT Romania boosts its business volume by c.87% to EUR 53m, out of which EUR 36.7m from real estate leasing and EUR 16.3m from equipment leasing
• 2008 forecasts for IMMORENT Romania: 52% increase of business volume [ 65% in real estate leasing and 23% in equipment leasing]
• IMMORENT's new projects and new direction with office construction - Vienna Südbahnhof railway station and the Erste Campus, Futurama Business Park in Prague, major project in Northern Bucharest
• IMMORENT real estate projects - volumes up by 71%

Market development and growth
Ahead of the market - The latest market reports reflect the robustness of lease financing in times of turbulence: with the current mortgage lending crisis a case in point, it proves itself a dependable medium for growth. In 2007 the Austrian leasing market grew some 8.3% (GDP growth for 2007: 3.3%), while IMMORENT's new leasing agreements were up by 17.9%. IMMORENT is ahead of the market.

Special status in real estate leasing - IMMORENT has acquired special status in real estate leasing. As a one-stop property specialist, customer contact starts with leasing, and includes the full range of real estate project services, from planning and construction to property management. 'Leasing promotes the translation of ideas and visions into real-life projects and buildings,' explains IMMORENT's Management Board member, Gertrud Meisel-Ortner.

The value of leasing - Combining leasing products with capital investment gives our customers access to a form of financing that is tailored to their specific, practical needs and is directly linked to value growth and use. Leasing products continue to deliver growth - regardless of the turbulences in international financial markets.

Positive result - IMMORENT's comprehensive product portfolio and its expansion in CEE/SEE markets is reflected in the company's earnings in 2007. Profit before tax was up 18.6% to EUR 80.4m, compared with EUR 67.8m a year earlier.

IMMORENT in CEE/SEE countries
Dynamic markets - In Central and Southeast Europe, IMMORENT serves developing markets with a high potential for further growth in the future. IMMORENT has identified excellent growth opportunities in real estate leasing, especially in Ukraine, Serbia, and Romania.

Breaking the EUR 1bn threshold - In 2007, new leasing volumes of IMMORENT's 11 operating subsidiaries and the s Leasing companies (equipment leasing in partnership with Sparkassen) passed the EUR 1bn mark for the first time and accounted for over half of all IMMORENT's new business for the year.

Romania - leasing is on the up and up - With almost EUR 5bn leasing new deals, the leasing market in Romania is in 2007 on the biggest and fastest growing market amongst the other CEE/SEE markets where IMMORENT is active. The vehicles segment makes up the most significant part of the leasing deals, i.e 68% - this market thus approaches the glut.
Although real estate and equipment leasing held a share of 9%, respectively 23% of the new leasing business, these segments developed much faster than the market in 2007 (+260% and + 68%, respectively). In the equipment segment there is a strong demand on commercial movables, as well as a need for modernisation of the equipments and for financing of the machinery. At the same time, real estate leasing gains increasing importance: since its infancy in 2005, new business volumes have increased ten-fold. For 2008, IMMORENT forecasts a 30% hike of the real estate leasing market, up to EUR 600m.

IMMORENT in Romania
In its 3rd year of operations IMMORENT Romania boosted its business volume by 87% to EUR 53m, out of which EUR 36.7m from real estate leasing and EUR 16.3m from equipment leasing. The 2008 forecasts for IMMORENT Romania envisage a 52% increase of the business volume, consisting of both real estate and equipment leasing deals.

Real estate leasing
Compared to 2006, when the volume of new deals was EUR 21.7m, the volume in 2007 was boosted by c.70%, to EUR 36.7m. The estate leasing assets accounted for c.45% of IMMORENT Romania's lease portfolio at the end of 2007.
'As of 2008, we will increasingly concentrate on real estate leasing. For the first time since the inception of our activity in Romania, working assets related to this business segment are expected to surpass by the end of the year the equipment leasing assets' stated Mr. Bogdan Cernescu, IMMORENT Romania General Manager, pointing to one of the company's main strategic directions. Accordingly, real estate leasing is estimated to increase by 65% in 2008.

Equipment leasing
With a substantial build-up of the new business from EUR 6.6m in 2006 to EUR 16.3m in 2007, an impressive y-o-y 147% jump has been registered. For 2008, new business is forecasted to advance by 23%. Thus, IMMORENT Romania intends not only to capitalize on its already established industry expert position for sectors as printing and construction in Romania, but also to approach the financing of other asset types which require specialized lease financing knowledge, already developed within IMMORENT (i.e. rolling stock, green assets, etc).

Project development
The buoyant real estate market opportunities in Romania were not missed by IMMORENT: the end of 2007 witnessed the signing of a joint venture with a Romanian partner for the development of c.150.000 m2 gross built area with an overall investment volume expected to exceed EUR 300 mln. The project is a 'micro-city' comprising a landmark office-tower, other mid-rise offices, as well as a retail and residential space developed on a 4.4 hectare area. The office areas will benefit from using renewable energy and will constitute a milestone in Bucharest, reflecting a futuristic project, both architecturally and from a services perspective. The micro-city as a whole is projected as an environment-friendly space, providing retail, leisure and service amenities meant to satisfy everyday needs and thus reduce the need to travel by car. The go for the project implementation of this huge complex is to proceed in the upcoming period.

Construction services
A strategic and consistent component of IMMORENT's business model, construction services has been established as a standalone business line of IMMORENT Romania as well. Revenues in the vicinity of EUR 0.5m were booked in 2007 from services in the nature of valuations of properties as well as monitoring and supervision of the projects financed or developed by IMMORENT and Erste Bank Group, respectively, by Sparkassen Immobillien . For 2008, IMMORENT Romania plans to reinforce its construction services capabilities and team to cater services to other Group entities and third parties.

Expansion strategy continues with Poland - After opening up Serbia and Ukraine, the next phase in the expansion will focus on Poland. IMMORENT Management Board member Gertrud Meisel-Ortner explains 'Establishing an IMMORENT subsidiary in Poland is part of our core strategy of investing in profitable markets. Strong, sustainable growth of the economy and purchasing power combined with the need to catch up with EU 15 countries - it all speaks in Poland's favour. Existing partnerships in Poland and previous cross-border business mean that we can make the most of local knowledge.'

Real estate projects - highly visible profitability
Market positioning - The strategic relaunch of the IMMORENT brand in April 2008 centres on profitability as the hallmark of success and customer satisfaction, and places the emphasis on IMMORENT's all-inclusive property expertise as its unique attraction.

IMMORENT Management Board member Gertrud Meisel-Ortner comments 'IMMORENT's projects are literally worth looking at - many of them are landmarks, and are recognised as milestones for their particular industry or region. With our wealth of experience at each stage in the real estate value chain, we bring our extensive skills and expertise to bear on every development or construction project and this is reflected in the results.'

Flagship projects - Current examples include the Erste Campus project, which was launched with the acquisition of a 3.2 hectare city centre plot on the site of what is currently Vienna Südbahnhof railway station, followed by an architecture competition; the Futurama Business Park in Prague, where seven buildings comprising 48,000 m2 of office space and 500 parking spaces are being constructed; and major project in Northern Bucharest.

IMMORENT is highly gratified by 2007's 71% increase in project volumes to EUR 1,434m (projects under development).

Management of 1.7 million m2: IMMORENT is also a byword for profitability at the end of the value chain: the property management team's portfolio expanded by some 743,000 m2 in 2007. At 31 December 2007, IMMORENT's property management portfolio included usable space amounting to some 1,700,000m2.

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