CA Immo International has always been strongly rep- resented in the Cee countries, with around 57 % of its total property assets located in the region. the asset and development portfolio in the Cee region represents a total value of € 432.0 m. on the basis of annualised annual rental income in 2008 (amounting to € 25.3 m), the asset portfolio has a yield of 7.0 %.
tHe InCoMe pRoDuCInG pRopeRty AReA
the company’s asset portfolio in the core market of
Poland includes two high quality office properties in
Warsaw: the Warsaw Financial Center (which is 50 % owned by CA Immo International) and another building in the capital’s central business district. these proper- ties, both of which are managed by one of the Group’s polish companies, are almost fully let (the vacancy rate for polish income producing properties was 0.6 % on key date 31st December 2008) and generate an outstanding rental level. taken together, the properties offer a total rentable effective area of 31,994 sqm and a book value of around € 118.8 m according to current valuations.
In the Czech Republic, the company owns a business hotel at prague Airport and a building housing the eng- lish International School.
In addition, a forward purchase deal was finalised in the Czech city of pilsen at the end of July 2008. the Diplomat Center, a Marriott Courtyard Hotel, was completed in the autumn of 2007 and acquired by CA Immo International on 31st July 2008 for a purchase price of € 31 m. Around 10,000 sqm of the building will be utilised as a hotel, with the remaining 4,000 sqm or so devoted to office space. the hotel will be let for 10 years, after which an operator contract will come into effect. taken together, these three properties have rentable effective area of 38,748 sqm, a book value of approximately € 91.2 m ac- cording to current valuations and a vacancy rate of 2.8 % as of key date 31st December 2008.
CA Immo International has one income producing pro- perty in Slovakia. the Bratislava Business Center, ac- quired in 1999, has a rentable effective area of 9,257 sqm and a book value of € 12.9 m. to maximise the utilisation of land reserves, an extension to the property that will enhance its overall value is currently being built.
Contributing five income-generating properties to the asset portfolio, Hungary remains CA Immo International’s biggest regional market. the office properties, which are
managed by a team of local experts, provide a rentable effective area of 59,832 sqm and have a book value of ap- proximately € 138.8 m under current valuations.
Sales
the Renaissance tower in Warsaw was sold during the first quarter of 2008 for a purchase price of approximately € 60 m, around 10 % above the last valuation carried out on 31st December 2007. the sale ensured compliance with the strategic objective by which 10–15 % of the port- folio value is sold off every year. the property, which was offered in a tender, was handed over to the buyer, a polish investor, on 8th February 2008.
tHe pRoJeCt DeVelopMent AReA
In the project development area, CA Immo International with its project development fund CA Immo new europe is involved in (or contractually committed to) the follow- ing projects in the Cee region:
Poleczki Business Park: poland’s largest business park –
it occupies a site of around 140,000 sqm – is a mixed-use property complex made up of offices, commercial space and storage facilities with excellent infrastructure links. the official laying of the foundation stone was celebrated on schedule in Warsaw on 25th September 2008. the project is being developed in multiple phases as a 50:50 joint venture between the project development fund, CA Immo new europe property fund and uBM. the planned total investment cost of the first phase is around € 120 m; a finance pledge of € 84 m has been given by Bank Austria, with the first payment of € 15 m already received. Completion of the first construction phase is scheduled for 2010; pre-letting agreements and letters of intent (loIs) have been obtained for over 20 % of the floor space.
Duna Center: A specialist retail centre with a total in-
vestment volume of € 18–20 m is being built in Györ, Hungary, under the terms of a 50:50 joint venture with a private investor group. All necessary planning permis- sion has been granted, and a finance agreement of € 11 m has been concluded with Bank Burgenland. the effective area is approximately 16,500 sqm; some 40 % of the total rentable space has already been pre-let to international chains, with negotiations in progress for a further 30 %. Construction work commenced early in october 2008, with completion and opening scheduled for September
2009. With a population of 130,000, Györ is the sixth larg- est city in Hungary. owing to its proximity to Austria and the presence of numerous foreign companies, the region boasts the second highest purchasing power in the coun- try (after Budapest).
projects initiated before the establishment of the CA Immo new europe fund, and which do not satisfy the criteria of the fund, are implemented directly by CA Immo International. these projects include:
BBC 1 plus: An office extension is being developed on
a site forming part of the Bratislava Business Center of- fice building (the BBC, an income producing property of CA Immo International). the annexe will provide an extra 14,000 sqm or so of floor space and around 300 underground parking spaces. negotiations over finance and construction costs are currently under way, with the project already delayed by several months owing to the tougher climate. the decision concerning the start of construction is about to be made in the first half of 2009. As regards the letting situation, tenants from BBC I have indicated a particular interest in acquiring additional space or relocating.
Sekyra Tower: In preparation for the realisation of the
Sekyra tower project in the Slovakian capital, Bratis- lava, a 50 % stake in a project development company was acquired in october 2008, and a 50:50 joint venture was agreed with project development firm Sekyra, the largest Czech/Slovak company of its kind. the plan is to build a class A multi-level mixed use (office, retail and resi- dential) building with a net effective area of 34,000 sqm
and an underground car park with around 500 spaces. the site of some 7,410 sqm is located close to the old town district and the national Bank of Slovakia in central Bratislava, and offers excellent public transport connec- tions. the procedure from now on depends on contractu- ally agreed preconditions regarding the scope of usage approval being met.
Capital Square (Forward purchase): this office building
is built by Hochtief Development Hungary and enjoys a prime location in Budapest: the future government quar- ter. the structural shell was completed in the third quar- ter of 2008. the first section of the edifice will be handed over in the spring of 2009, with the remainder to follow over the summer. the office project provides around 34,000 sqm of net rentable floor space on eight levels, along with around 630 parking spaces. CA Immo Interna- tional is expected to take full ownership of the structure in mid-2009 under the terms of a forward purchase agree- ment, with the purchase price depending on the level of letting.
CITY Deco (Forward purchase): the Czech CIty Deco
project is a CA Immo International project that is still in the early stages and involves real estate development in a fast-rising district of prague. the mixed-use project with a total span of around 18,000 sqm will incorporate of- fices, a health centre and multi-storey car park. Following completion in late 2009/early 2010, the property will be acquired at an agreed fixed yield. the purchase price has been calculated at approximately € 45 m. With planning permission yet to be obtained, however, realisation of the project is not yet secured.
MA n AG e M ent R epo R t