Immoeast has opted to proceed cautiously in the currently ambiguous market situation, Immoeast officials told Reuters.
Immoeast, a subsidiary of the Austrian-based property group Immofinanz, reported that the company’s earnings before interest and tax fell to 123.6 million euro in the nine months to the end of December 2007, although earnings before tax for the same period rose by nine per cent to 221.9 million euro, Reuters reported.
Immoeast, which has its core property markets in Hungary, Poland, Romania, Bulgaria and the Czech Republic, said its markets continued to command rising rent levels and sliding vacancy rates. Development activity was beginning to cool off, however, as project financing has become more difficult. This, in turn, was likely to reduce the supply of new buildings, Reuters wrote.
The company said it sold four properties or stakes in properties totalling 200 million euro during the current financial year. They said that advanced negotiations on the sale of other properties, with a market value of around 300 million euro, were underway, Reuters said.
Net asset value per share rose by 12.7 percent to 10.13 euro in the nine months leading to the end of December last year. Immoeast shares have fallen about 20 per cent this year, roughly in line with the decline in the Austrian blue chip index ATX.
Immoeast was founded in 1999 as a subsidiary of Immofinanz to manage the parent company's activities in Central Europe. Immoeast has traded on the Vienna Stock Exchange since December 2003 and advanced to the Prime Market segment in March 2005. A 54 per cent stake is still held by Immoeast, the European property company with the broadest diversification.
Immoeast follows a successful strategy for diversification. The company is now present in Romania, Czech Republic, Russia, Poland, Hungary, Slovakia, Bulgaria, Ukraine, Bosnia, Croatia, Serbia, Slovenia and Lithuania. The Immoeast property portfolio includes 460 objects with 5.99 million sq m of usable space. The portfolio covers all sectors of the property market – including offices, commercial space, garages and logistical space. New markets are generally entered through the acquisition of stakes in established local partners. Direct investments are made after market entry has proven successful.
In terms of regional distribution, Bulgaria’s share in Immoeast’s property portfolio stands at 4.4 per cent. Immoeast is a strategic investor in Prime Property BG REIT, which is the first public investment vehicle licensed by the Bulgarian Financial Supervisory Board in January 2004. Its strategy is to invest in the development of residential and office buildings near Sofia and other major metropolitan areas in Bulgaria.
