31.08.2016

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Feedback: CA Immo Roadshow in London: Strong standalone growth story

Our conclusion

    Yesterday we were on a roadshow in London with the CFO Florian Nowotny and Head of Capital Markets Christoph Thurnberger. Together saw various investors during the day and received very positive feedback on the operational progress and outlook of the company. On the negative side issues regarding the merger process and the current corporate government situations were mentioned, which we share. Nonetheless the company has a great standalone story and will show strong growth momentum due it’s a) disciplined investment approach, b) strong EUR 2bn development pipeline andc) efficient management platforms in the CEE markets. We stick to our positive view on the company and confirm our Buy rating.

Facts & Analysis

    The company is currently in negotiations about a land plot/redevelopment project in Berlin. The development is expected to take around 5 years.

    The company expects to reduce its average cost of debt from current 2.8% to 2.5% at YE. A bond is due to be refinanced in September with a volume of EUR 180mn and an interest rate of around 5%.

    As CAI regards direct property acquisitions in Germany as non-accretive, the company targets to invest ~EUR 200mn in the CEE regions within the next 12 months. Due to the development projects in Germany the 50/50 balance of Austria/Germany and CEE of the portfolio will remain intact. There is currently one larger CEE property acquisition in the pipeline, which was not further described.

    The construction costs for its development business amount to ~EUR 150mn per year. Of the EUR 300mn land banks already 2/3 are prepared to be developed and secure the EUR 2bn development pipeline of CAI for the next 5-10 years.

    The merger with IMMOFINANZ (IIA) is still “not in a hot phase yet”. According to CAI the merger has to be finished within the initially by IIA announced 12 months (with the FY15/16 results IIA indicated a 12-18 months period). Otherwise the risk of a changing market sentiment could hinder the portfolio restructuring of the new merged entity. Also the slow progress could increase the uncertainties among the investors base and lead to a failing vote next year.

    Corporate governance is still a critical topic according to investors. Even after the closing of the 26% stake by IIA, the supervisory board members by the former main shareholder O1 are still in the board and did not step down. Yet no EGM was requested at CAI to change this current setting. Additionally the CEO and CFO of IIA used the “golden shares” to appoint themselves to the board. All these negative corporate government issues are a major burden for the CAI shares to show a stronger performance, which would be reasonable at the current operational success.

Company im Artikel

Beste Austro-Aktien-Konferenz im Ausland: Baader Bank © photaq/Martina Draper

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