According to parent company GE Capital’s latest annual report, profit at GE Real Estate dropped by $1.1bn last year as occupancies and rents across its property portfolio plummetted.
The report comes after GE said on 23 January that its real estate subsidiary would post a loss of $500m this year.
The loss will contribute to a fall in GE Capital’s profit to $5bn from $8.6bn in 2008.
In response to market speculation GE vice-chairman and chief financial officer Keith Sherin said in a statement that the company would not need to raise additional capital, and that its financial services businesses would be profitable in the first quarter of 2009.
However, he added that GE Capital would hold an investor meeting later this month looking at the “hot spots in the company, including real estate, US consumer, global mortgage with a focus on UK home lending, and central and eastern Europe exposure”.
In its annual letter to shareholders on 2 March GE said it wished it had “not become so exposed to commercial property and
GE’s property portfolio generates $1.7bn in net operating income. The company has $2.9bn of commercial mortgage-backed securities.
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