Passion for Real Assets
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Passion for Real Assets Annual Report 2012 The IVG business model IVG Immobilien AG 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. We are positioning ourselves as an investment platform for real estate and infrastructure (caverns) with an integrated value chain. Investors and tenants Asset Investment Funds Management Direct Indirect Real Real Investments Investments · Transaction Estate Estate Related · Letting · Development · Real Estate (Germany) · Real Estate (Europe) · Management · Core · Caverns · Caverns · Infrastructure · Value Add/ · Infrastructure Opportunistic IVG Investment Platform Our business is founded on two pillars – Investment and Funds – IVG Funds: Structuring, distribution and management of investment and supported operationally by our internationally positioned Asset products for institutional and private investors with a focus on core Management unit. real estate throughout Europe and on infrastructure (e. g. caverns) IVG Investment: Investments in real estate and caverns with equity – IVG Asset Management: Management of properties held by IVG in direct investments in Germany and indirect investments in real its own portfolio and in funds, as well as the purchase and sale of estate and infrastructure projects throughout Europe properties throughout Europe focusing on value increase Locations and regions of IVG Helsinki Stockholm Hamburg Etzel London Amsterdam Berlin Dusseldorf Warsaw Brussels Bonn Frankfurt Wiesbaden Paris Munich Vienna Budapest Milan Madrid IVG Regions North Europe Southwest Europe Germany Southeast Europe United Kingdom Poland (as per January 2013) Benelux Passion for Real Assets Group key figures 2012 (in € m) 2012 2011 Change in % Key operational figures Revenues 437.5 517.6 -15.5 thereof net rents 230.5 247.1 -6.7 thereof fees for fund and property management, development and sales 88.7 91.5 -3.0 thereof from project sales 35.8 119.9 -70.2 EBIT 144.7 43.3 - EBT -86.9 -217.6 -60.1 Consolidated net profit -98.7 -126.0 -21.6 thereof unrealised changes in value 51.3 -116.6 - Funds from Operations I (FFO I) 20.6 14.9 38.3 Funds from Operations II (FFO II) -51.0 -62.2 -17.9 Key balance sheet figures Total assets 6,130.8 6,904.2 -11.2 Equity (carrying amounts) 1,275.6 1,386.3 -8.0 Equity ratio at carrying amounts in % 20.8 20.1 3.6 Net asset value (NAV) 878.4 985.3 -10.8 NAV adjustment (future value potential cavern business and consideration of accrued hybrid coupon payments) 279.7 325.3 -14.0 NAV adj. (incl. future value potential cavern business and consideration of accrued hybrid coupon payments) 1,158.1 1,310.6 -11.6 Equity ratio at NAV adj. in % 19.3 19.2 0.3 EPRA NAV 669.7 781.7 -14.3 EPRA NNNAV 966.9 1,131.4 -14.5 Key figures per share in € Number of shares at reporting date 207.9 207.9 - Average number of shares 207.9 142.1 46.3 NAV1) 4.23 4.74 -10.8 NAV adj.1) 5.57 6.30 -11.6 EPRA NAV1) 3.22 3.76 -14.3 EPRA NNNAV1) 4.65 5.44 -14.5 FFO I2) 0.10 0.10 -5.4 FFO II2) -0.25 -0.44 -43.9 Earnings (EPS), undiluted2) -0.44 -1.11 -60.4 EPRA (EPS), undiluted2) -0.52 -0.99 -47.5 Diluted earnings2) -0.44 -1.11 -60.4 Dividend per share 0.00 0.00 - Segments IVG Real Estate: Fair value 3.193 3.776 -15.4 IVG Development: Invested capital (IVG share) 1.651 1.534 7.6 IVG Caverns: Value of caverns under development 1.078 1.143 -5.7 IVG Funds: Assets under Management 15.217 15.054 1.1 Employees at end of year (FTE) 551 586 -6.0 1) On the basis of the number of shares at reference date (31.12. 2012: 207.9 m shares/31.12.2011: 207.9 m shares) 2) On the basis of the average number of shares (31.12.2012: 207.9 m shares/31.12.2011: 142.1 m shares) U6 For IVG, 2012 was a year in which many milestones were passed successfully on its restructuring path. Extraordinary non-cash expenses prevented the Group from achieving its guidance for an almost break- even result. This was a setback not only for our shareholders but also for us in the realignment of the Group. However, with a positive opera- tional start into 2013, we feel vindicated in our persistent development of the business model, and with our “Passion for Real Assets” we will continue to do everything to overcome the challenges ahead and to make IVG profitable in the long term for our investors again. IVG We are an international, integrated investment platform specialising in real estate and infrastructure that provides its customers with tailor-made solutions on the basis of an integrated value chain. With approximately 550 employees (FTE) at 19 locations in major German and European cities, we manage assets totalling € 21.1 billion. € 1.1 billion invested capital in caverns (Investment: Caverns) € 1.4 billion €3.2 billion purchase and sales volume real estate in IVG’s own port folio in IVG’s own portfolio and (Investment: Real Estate) the fund portfolio 600,000 sqm leasing performance in 2012 for IVG-owned and fund properties € 3.4 billion fund volume with private investors (Funds: Private Funds) € 11.8 billion fund volume with € 1.7 billion invested capital in institutional investors development projects (Funds: Institutional Funds) (Investment: Development) 45 specialised funds and mandates for institutional investors 2 Contents Shareholders Group Management Report Foreword by the Management Board 08 Overview 74 Report of the Supervisory Board 12 Positioning and Strategy 75 Group Executive Committee 17 Conditions and Business Development 78 Supervisory Board and Management Board 18 Financial Position and Net Assets 85 Corporate Governance 22 Further Information 88 Investor Relations 26 Risk Management 99 Outset of 2013 and Outlook 108 People and Performance 2012 Consolidated Financial Statements Interview with the Management Board 34 IVG Investment by example of THE SQUAIRE 38 Consolidated income statement 113 IVG Investment by example of Caverns 40 Consolidated statement of financial position 114 IVG Funds 42 Consolidated statement of comprehensive income 116 IVG Asset Management 44 Consolidated statement of cash flows 117 Statement of changes in equity 118 Notes to the consolidated financial statements 120 Sustainability Auditors’ Report 171 Corporate sustainability at IVG 48 Further Information Facts and figures IVG 2012 EPRA Key Figures 174 IVG Group 56 Further Data 176 IVG Investment 60 Property Overview 178 IVG Funds 69 Consolidated Subsidiaries and Equity Investments 190 Group Advisory Committee of the IVG Immobilien AG 197 Glossary 198 5-Year Overview 203 Contact and Financial Calendar 204 3 The Year 2012 Operational activities in the 2012 financial year IVG EuroSelect 21 Munich: IVG Private Funds invests in head- quarters of Allianz Deutschland AG IVG establishes green leases in Germany – testing phase successfully completed IVG certified as a “Top employer” 2012 by CRF Institute for extraordinary employee benefits 01 02 03 04 THE SQUAIRE wins several awards (including LEED Gold certification) Own car park for THE SQUAIRE opened The “city under one roof” concept is working perfectly: The NEW WORK CITY in THE SQUAIRE is pulsing with life. 4 IVG reduces debt by another € 200 million Stock exchange listing of IVG Immobilien Management REIT-AG IVG hands over Successful first closing office space in for IVG Garbe Logistic THE SQUAIRE to Fund Deutsche Lufthansa IVG Warsaw Fund AG – third anchor successfully placed tenant moves in IVG wins EPRA Gold/ with 1,100 emplo- Bronze Award for its yees; occupancy annual report and rate rises to around sustainability report 85 % IVG publishes second sustaina- bility report 05 06 07 08 09 10 11 12 IVG and Beni Stabili Gestioni establish joint venture IVG reduces debt by € 320 million through scheduled partial repayment of “CORE” financing 5 THE SQUAIRE at Frankfurt Airport shows how the working world in Europe will look like in the future: with a high quality of life, a diverse range of opportunities for communication, and optimum transport connections. The “NEW WORK CITY” comes to life. 6 Shareholders We would like “to thank our shareholders, investors and capital providers for the trust they placed in us again in 2012.” Shareholders Foreword by the Management Board 08 Report of the Supervisory Board 12 Group Executive Committee 17 Supervisory Board and Management Board 18 Corporate Governance 22 Investor Relations 26 7 Christian Kühni Professor Dr Wolfgang Schäfers Dr Hans Volkert Volckens 8 Chief Operating Officer (COO) Chief Executive Officer (CEO) Chief Financial Officer (CFO) Foreword by the Management Board Report of the Supervisory Board Group Executive Committee Supervisory Board and Management Board Corporate Governance Investor Relations Foreword by the Management Board Dear Shareholders, Ladies and Gentlemen, In an environment dominated by the ongoing sovereign debt and euro concluded new leases or prolonged existing ones for a total of 600,000 crisis, 2012 was a “year on standby” for the economy as a whole and sqm on its own account and for third parties. The main regional focuses the real estate industry. The adoption of the expanded euro bailout fund for leasing were Hamburg, Dusseldorf and Amsterdam. As at the end of ESM was an important milestone on the path towards strengthening the 2012, the average vacancy rates for office properties in Europe and in European financial markets. However, the decisive phase in establish- the five German key markets were 9.3 % and 8.9 % respectively. The ing a concerted, reliable fiscal policy for the Community still lies ahead.