Passion for Real Assets Passion for Real Assets
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2011 Annual Report Passion for Real Assets Passion for Real Assets Change in € m 2011 2010 in % Key operational figures Revenues 517.6 821.8 -37.0 thereof net rents 247.1 266.2 -7.2 thereof from project sales 119.9 396.9 -69.8 thereof fees for fund and property management, development and sales 91.5 102.8 -11.0 EBIT 43.3 256.2 -83.1 EBT -217.6 21.1 - Consolidated net profit -126.0 23.2 - thereof unrealised changes in value -116.6 -14.6 - Funds from Operations I (FFO I) 14.9 15.0 -0.4 Funds from Operations II (FFO II) -62.2 10.0 - Key balance sheet figures Total assets 6,904.2 7,292.4 -5.3 Equity (carrying amounts) 1,386.3 1,286.1 +7.8 Equity ratio at carrying amounts in % 20.1 17.6 +13.9 Net asset value (NAV) 985.3 884.8 +11.4 NAV adjustment potential of caverns 325.3 356.3 -8.7 NAV adj. (incl. value potential of caverns) 1,310.6 1,241.1 +5.6 Equity ratio at NAV adj. in % 19.2 17.1 +12.1 EPRA NAV 781.7 797.9 -2.0 EPRA NNNAV 1,131.4 985.9 +14.8 Key figures per share in € Number of shares at reporting date 207.9 126.0 +65.0 Average number of shares 142.1 127.9 +11.1 NAV 1) 4.74 7.02 -32.5 NAV adj. 1) 6.30 9.85 -36.0 EPRA NAV 1) 3.76 6.33 -40.6 EPRA NNNAV 1) 5.44 7.82 -30.4 FFO I 2) 0.10 0.12 -10.4 FFO II 2) -0.44 0.08 - Earnings (EPS), undiluted 2) -1.11 -0.07 - EPRA EPS 2) -0.99 -0.20 - Diluted earnings 2) -1.11 -0,07 - Dividend per share 0.00 0.00 - Segments IVG Real Estate: Fair value 3,776 4,266 -11.5 IVG Development: Invested capital (IVG share) 1,534 1,379 +11.2 IVG Caverns: Value of caverns under development 1,143 1,123 +1.8 IVG Funds: Assets under Management 15,054 15,096 -0.3 Employees at end of year (FTE) 586 590 -0.7 1) On the basis of the number of shares at reference date (31.12. 2011: 207.9 m shares/31.12.2010: 126.0 m shares) 2) On the basis of the average number of shares (31.12.2011: 142.1 m shares/31.12.2010: 127.9 m shares) 4 Passion for Real Assets Shareholders What does IVG stand for today? What makes us strong and successful in the future? Following our realignment, we addressed these questions in depth with the employees in our company. The result are new guiding principles centring on a key idea: Passion for Real Assets. In connection with this key phrase we have developed a self-assured vision: “We are passionate asset and investment managers with international expertise. We deliver our customers tailor-made solutions. We build relationships which create sustainable value. We are all united behind our vision so that we can rightly look upon IVG with pride – as an inter national, integrated investment platform specialised in real estate and infrastructure combining tradition, sustainability and success.” 1 IVG Immobilien is one of Europe’s leading Asset and Investment Managers Our business model is geared towards generating sustainable income while maintaining a balanced risk profile. At the same time, we are positioning our company as an investment platform with an integrated value chain. Investors and Tenants Investment Funds Direct Indirect Real Estate Real Estate Investments Investments Asset Management Related Transaction, Real Estate Caverns Real Estate Infra - Letting, Development Core Value Add/ Caverns Infra - structure Opportunistic structure (Germany) (Europe) and Management IVG Investment platform Our business is founded on two pillars – Investment and Funds – and IVG Funds: Structuring, distribution and management of investment supported operationally by our internationally positioned Asset Manage- products for institutional and private investors with a focus on core ment unit. real estate throughout Europe and real-estate-related investments such as caverns and logistics IVG Investment: Investments in real estate and caverns with equity – direct investments in Germany and indirect investments in real estate IVG Asset Management: Management of properties held by IVG in its and infrastructure projects throughout Europe own portfolio and in funds, as well as the purchase and sale of properties throughout Europe focusing on value increase IVG Immobilien is one of Europe’s leading Asset and Investment Managers Helsinki Stockholm Hamburg Etzel London Amsterdam Berlin Dusseldorf Warsaw Brussels Bonn Frankfurt a. 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Wiesbaden Paris Munich Vienna Budapest Milan Madrid Locations and branches of IVG (as per January 2012) Contents 04 Shareholders 30 People and Performance 2011 The Year 2011 6 Interview with the Management Board 32 Foreword by the Our new Guiding Principles 36 Management Board 8 Work and Life in THE SQUAIRE 38 Report of the Supervisory Board 12 Experts on the Energy Turnaround 40 Group Executive Committee 17 Interim Corporate Sustainability Review 44 Supervisory Board and Management Board 18 Corporate Governance 22 Investor Relations 26 Company Facts 2011 46 IVG Group 48 IVG Investment 52 102 IVG Funds 59 Passion for Real Assets 04 30 46 Experiencing Real Assets: Developing Real Assets: Professional Support of THE SQUAIRE – Working Leveraging expertise as Real Assets: Operating on the pulse an integrated real estate business – keeping a promise investment platform for day-to-day performance 2 Shareholders 62 Group Management 168 Additional Report Information Overview 64 EPRA Key Figures 170 Positioning and Strategy 65 Additional Data 172 Conditions and Business Development 68 Property Overview 174 Financial Position and Net Assets 74 Consolidated Subsidiaries and Further Information 78 Equity Investments 186 Risk Management 90 Group Advisory Committee 194 Outset 2012 and Outlook 99 Glossary 196 5-Year Overview 200 Consolidated Contact and Financial Calendar Financial Statements 102 Consolidated Income Statement 105 Consolidated Statement of Financial Position 104 Consolidated Statements of Comprehensive Income 108 Consolidated Cash Flow Statement 109 Statement of Changes in Equity 110 Notes to the Consolidated Financial Statements 112 Passion for Real Assets Auditors’ Report 166 62 102 168 Positioning Real Assets: Preserving Real Assets: Safeguarding Real Assets: Strategy – being in the right Sustainability – performing in Stability – knowing your markets the long term as well options 3 Experiencing Real Assets: The SQUAIRE – Working on the pulse It’s hard to imagine a better way of designing and developing an office and commercial complex. THE SQUAIRE at Frankfurt Airport shows how the working world in Europe will look in the future: with a high quality of life, a diverse range of opportunities for communi- cation, and optimum transport connections. The “NEW WORK CITY” is coming to life. Shareholders The SQUAIRE – Working on the pulse Shareholders The Year 2011 6 Foreword by the Management Board 8 Report of the Supervisory Board 12 Group Executive Committee 17 Supervisory Board and Management Board 18 Corporate Governance 22 Investor Relations 26 5 The Year 2011 IVG presents sustainability report IVG posts positive consolidated net profit in Q1 2011 IVG launches IVG receives proceeds Positive consoli- Dr Gerhard Niesslein does debt reduction of around €87 million dated net profit not extend his contract – programme as from an accelerated for the 2010 Professor Dr Wolfgang Schäfers planned capital increase financial year appointed as his successor 01 02 03 04 05 06 IVG launches new Paris fund IVG Warsaw KPMG moves in IVG share for institutional investors fund initiates at THE SQUAIRE is included in the acquisition FTSE LEED Silver, Gold programme EPRA/NAREIT and Platinum Global Real Estate for IVG office indices properties (“An den Brücken”, “ARTQUADRAT”, IVG awarded sustainability Oscar for “IVG-Infopark E”) “An den Brücken” project in Munich IVG Caverns again transfers seven caverns to clients in line with planning 6 The Year 2011 Foreword by the Management Board Report of the Supervisory Board Group Executive Committee Supervisory Board and Management Board Corporate Governance Investor Relations Shareholders IVG completes Successful placement Management Board with of ordinary capital increase Dr Hans Volkert Volckens generates proceeds and Mr Christian Kühni of around €145.5 million – formation of a Group Executive Committee Successful, IVG triples IVG earnings squeezed early prolongation of transaction volume by extraordinary effect Open day: “40 years €2.6 billion loans in 2011 to €2.25 billion in Q2 2011 of cavern construction in Etzel” Finalisation of IVG IVG returns guiding principles: IVG reassigned from to profitability “Passion for Real Assets” MDAX to SDAX in Q3 2011 07 08 09 10 11 12 IVG share Major lease signed for THE SQUAIRE Investor group led by is included in the with Deutsche Lufthansa AG – occu- IVG acquires landmark FTSE pancy rate rises to over 80% “Silberturm” building in EPRA/NAREIT Frankfurt’s banking district Global Real Estate indices LEED Gold awarded for “Hackesches Quartier” in Berlin Letting performance for 2011 with 800,000 sqm up significantly on previous year Hotel highlight to finish the year – Hilton and Hilton Garden Inn open in THE SQUAIRE 7 Christian Kühni Professor Dr Wolfgang Schäfers Dr Hans Volkert Volckens 8 Member of the Chief Executive Officer (CEO) Member of the Management Board (COO) Management Board (CFO) The Year 2011 Foreword by the Management Board Report of the Supervisory Board Group Executive Committee Supervisory Board and Management Board Corporate Governance Investor Relations Shareholders Foreword by the Management Board Dear Shareholders, Ladies and Gentlemen, The 2011 financial year was not an auspicious one on the financial mar- Slight recovery on real estate rental market kets. The financial and economic crisis led on to the sovereign debt and A moderate recovery could be observed on the real estate rental market euro crisis.