Immo heads farther east
Quietly and methodically, Vienna-based investment manager Immoeast has positioned itself to continue its success investing in emerging European real estate. The firm is completing the purchase of Constantia Privatbank’s real estate division for €219 million and has embarked on a strategic push into southeastern Europe and the CIS. With nearly €11 billion under management, Immoeast topped the Liquid Real Estate poll in the emerging Europe investment management category and the Constantia transaction should reinforce its dominant position. The purchase brings a number of additional businesses under the direct management of Immoeast and Immofinanz, its parent company. Previously, Immoeast had managed Constantia’s real estate business on a contract basis.
“The acquisition of Constantia Privatbank’s real estate division is a huge step forward for Immoeast,” says Karl Petrikovics, chief executive. “Immoeast is taking over highly efficient company structures and completely new business areas providing attractive growth, profit and diversification opportunities.”
Now, in addition to real estate investment, its core business, Immoeast will offer a wider range of real estate services, including real estate asset management for private and institutional investors, real estate fund management, real estate development, real estate brokerage and, finally, property and facility management.
“This will be a boost for our position as a leading player on the real estate market in the east of Europe,” says Petrikovics, who is also the chief executive of Immofinanz. “Immoeast will be in the rare position among large real estate companies active in central and eastern Europe and southeastern Europe with full coverage of all aspects of the real estate business. This will, on the one hand, open up new sources of income and, on the other hand, make our own investments more profitable.”
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“The acquisition of Constantia Privatbank’s real estate division is a huge step forward for Immoeast”
Karl Petrikovics |
One area in particular that Immoeast is planning to grow immediately is its newly acquired fund management business. The firm has already finished the legal preparations for a new open-ended real estate fund centred on central and eastern Europe, which will hit the markets in the autumn. In future, however, the emphasis will be on closed-end funds. “Our most important activity in this field will be closed-end funds for institutional investors,” says Petrikovics. “We are convinced that we will face high demand for funds focusing on certain countries or certain sectors.”
The Constantia purchase is only part of Immoeast’s story. Last year, the firm made the strategic decision to divest parts of its central European portfolio and reinvest in southeastern Europe and the CIS. This decision was taken because the firm thought it was time to cash in some investments, crystallize profits and redeploy that cash in new territories. The shift, announced in 2007, has already begun.
“We have already shifted our investment focus further east and southeast,” says Petrikovics. “These markets provide enormous growth potential from which we want to profit. Our competitive advantage is a well-established management structure with long-standing contacts and vast experience in those regions – this is key for success in markets still very different from western ones.”
The idea is to reap the benefits of being an early mover. To maximize its returns from shifting into these new markets, Immoeast is moving in aggressively. “I want to stress that we are focusing only on this particular region,” says Petrikovics. “For us, CEE/SEE/CIS is not one out of many markets where we could invest in; it is our home market and we totally concentrate on these particular areas and the opportunities they provide. As the leading regional player we will always have an important advantage over global players of whatever size they may be.”
Five properties or stakes in properties in the Czech Republic, Poland and Estonia were sold by Immoeast in the 2007/08 business year ending April 30 2008. Stakes in the Palladium shopping centre in Prague, the Olympia shopping centre in Olomouc, the Haabersti residential project in Tallinn and Immoeast’s Andel Park B office property in Prague were sold. The firm also sold the Salzburg Centre in Warsaw to the German open real estate fund SEB Global Property Fund for €41 million. It’s not surprising then, that Immoeast’s Revenue rose 62.2% in the 2007/08 business year from €130.6 million to €211.8 million.
Currently, Immoeast’s largest investment projects are under way in Russia and Romania. In Moscow, the company is developing the Rostokino and GoodZone shopping centres. And in Romania it is also focused on retail, developing several shopping centres as well as a chain of logistics parks. Other important ventures are the expansion of retail park chain Stop.Shop in Hungary, Czech Republic, Slovakia, Slovenia, Romania, and Poland, and several large office developments in Warsaw.
