The European listed property sector as represented by the GPR 250 Europe Index finished the first quarter 0.7% higher although it lost 0.3% in March. Finland (2.2%), Switzerland (1.6%), France (1.2% and Netherlands (1.0%) were the only local country indices showing positive total return performances in March, while losses ranged from 0% for the UK to 8.6% for Austria.
Proposals by the UK government to class REITs as institutional investors have been broadly welcomed by the industry. In its Budget, the UK Treasury said it still intended to allow REITs to class income from other REITs as earnings from its tax-exempt rental business, allowing one REIT to invest in another.
It also said that the government is further considering the case for REITs being included within the definition of institutional investor.
Shares in Germany’s IVG Immobilien fell sharply (-72.0% in March) after it announced a major new restructuring of financing strategy to tackle legacy issues and external challenges. This news came on top of earlier news of a consolidated loss, and no improvement of loan to value.
IVG board wants to restructure financing, entailing a postponement of the AGM giving time to prepare and present the new strategy.
The company, which will present its plan to shareholders soon cited stricter capital requirements for banks, changing demand in its caverns business, a general fall in demand for commercial property due to a weaker economy.
In addition, new IFRS 13 accounting standards as possibly detrimental to the company’s business. Apart from external factors, IVG cited internal reasons for the restructuring.
Austria-based Immofinanz Group expects to raise €700m from the sale of its residential unit as soon as November 2013, planning to sell more than half of the company in an IPO of its Buwog unit and selling more at later stages. The IPO hinges on the company’s success in adding about 10,000 German apartments and selling homes in Austria.
Germany’s conwert Immobilien Invest SE increased its stake in the Hamburg-based company KWG Kommunale Wohnen to 75.7%. conwert Immobilien Invest SE acquired a majority stake of approximately 60% in KWG Kommunale Wohnen in December 2012.
Since then, the stake has gradually been increased in several tranches. By acquiring the majority stake, conwert has increased its existing German portfolio by some 66% to almost 24,500 units. As previously announced, conwert will fully consolidate KWG in the first quarter.
