The operating results recorded by IMMOFINANZ were stable in year-on-year comparison at EUR 45.3 million in the first quarter of the abbreviated 2016 financial year (Q1 2015/16: EUR 46.9 million). Rental income fell from EUR 82.2 million to EUR 76.8 million due to temporary rent reductions in Moscow and the planned sale of properties. A like-for-like analysis (i.e. after an adjustment for new acquisitions, completions and sales to achieve comparability with the fourth quarter 2015/16) shows the stable development of rental income in total during the first quarter of 2016A. The results of asset management improved by 3.9% to EUR 54.5 million based on a decline in property expenses.
Erricsson’s new home in Hungary is being built on a site overlooking the Danube in an investment by Wing Zrt., in the first phase of the Hungarian Nobel Prize Winners Research & Development Park. The building, which has a total area of 24,000 square meters, will house the company’s largest research and development facility outside Sweden. The building, one of the most modern, most innovative headquarters in the country, will be constructed to the strict standards of the LEED Gold environmental awareness rating.
The time capsule of the first hotel in Hungary with direct terminal access was placed at Ferenc Liszt International Airport. The 145-room ibis Styles Budapest Airport Hotel also featuring conference facilities is scheduled for completion in 18 months.
With the last works completed in July, the new office building ”Buda Loft Offices” is ready to welcome its new tenants. The offices with its industrial feeling are especially very suitable for advertising, media and creative IT companies. Colliers International has been appointed as the exclusive letting agent on the building
Prime office yields in Berlin are currently very low at 3.85% , although products in major German cities such as Frankfurt are still providing higher returns than those located in London or Paris. At the same time Romania and Hungary are seeing new capital flowing into their respective commercial real estate markets. This is a consequence of a significant yield spread between Western and Eastern Europe, where prime office yields, for example in Bucharest, are currently at 7.5%.
Before the global economic crisis the financial sector dominated the Budapest office market, banks leased the greatest number of new offices, impressive new headquarters were built for them. By now the situation has changed: the biggest players are from the ICT (information and communication technology) sector in Budapest, leading companies are building new headquarters, and the globally influential Hungarian companies are moving into larger and larger offices.
In CEE investors may face scarcity of attractive products. Investment into Central and Eastern European (CEE) countries (excluding Russia) for H1 2016 registered a substantial increase (59%) compared to same period of last year, surpassing €5 billion.
IMMOFINANZ recorded net profit of EUR -390.4 million for the 2015/16 financial year (2014/15:EUR -376.6 million). The year-on-year decline resulted primarily from EUR -469.8 million of negative effects from the foreign exchange-adjusted valuation of the Russian portfolio and from a decrease in rental income to EUR 314.5 million (2014/15: EUR 385.6 million) which was caused by temporary rent reductions in Moscow and the planned sale of properties.
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