OFFICEFIRST Immobilien AG
OFFICEFIRST Immobilien is ready to go public in 2016
DGAP-News: OFFICEFIRST Immobilien AG & Co. KG, / Key word(s): IPO 2016-09-16 / 07:34 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE PRESS RELEASE. OFFICEFIRST Immobilien is ready to go public in 2016 * IPO of one of the largest office property companies in Germany * Listing on the Prime Standard of the Frankfurt Stock Exchange planned before year end 2016 * Portfolio value of EUR 3.3 billion, focusing on the six important German metropolitan office markets Frankfurt, Munich, Hamburg, Stuttgart, Dusseldorf and Berlin (as measured by office stock) * Fully-integrated and value-add real estate management platform with strong local presence * Sustainable revenues from diversified mix of blue chip tenants with organic growth opportunities through increase of leases and reduction of vacancy * Additional upside from selected developments and capital recycling * Secured refinancing strengthens profitability and is the basis for capital market viability; further financial optimization planned * Dividend payout ratio of 65% to 70% of funds from operations (FFO) planned from 2017 onwards, for 2016, dividend of c. 50% of 2016 FFO envisaged * Transformation into a REIT corporation planned for 2017 * Target Loan to value (LTV) of approximately 45% Frankfurt, 16 September 2016 - OFFICEFIRST Immobilien AG ("OFFICEFIRST Immobilien" or the "company") is preparing to go public. The Company consists of the strategic core portfolio of IVG Immobilien AG, which was spun off in the first half of 2016. OFFICEFIRST Immobilien intends to list its shares on the regulated market segment (Prime Standard) of the Frankfurt Stock Exchange before the end of 2016. As currently planned, the IPO will consist of new shares in an amount of approximately EUR 450 million and of existing shares from the holdings of IVG Immobilien AG, to secure appropriate market liquidity in the aftermarket. One of the largest office property companies in Germany With 97 properties with a total value of EUR 3.3 billion (as at 30 June 2016), OFFICEFIRST Immobilien is one of the largest owners of office properties in Germany's attractive office property market. The company focuses on the six important metropolitan areas: Frankfurt, Munich, Hamburg, Stuttgart, Dusseldorf, and Berlin, where approximately 96% of its total portfolio (as at 30 June 2016) is located. The portfolio is well-balanced across these markets. The IPO will create financial flexibility and independence OFFICEFIRST Immobilien plans to use most of the net proceeds from the placement of new shares to fully repay the outstanding financial indebtedness under the bridge facility agreement in the amount of EUR 295 million, as well as for early repayments of parts of its outstanding debt and to partially fund the costs of the planned conversion of the company into a REIT. The company intends to use any remaining net proceeds for general corporate purposes, including the funding of potential selected developments and acquisitions. "We have reached our strategic goal: OFFICEFIRST Immobilien is ready for the capital markets", Michiel Jaski, Chief Executive Officer of OFFICEFIRST Immobilien, explains. "The past months have shown that we can further increase the profitability of the portfolio through asset management activities. Following the new refinancing, the next logical step is to take the company public. The IPO will provide us with access to the capital markets and further improve our capital structure. By doing so, we want to ensure that we can continue our successful long-term strategy: the powerful combination of stability and sustainable value creation." A real estate management platform focusing on the entire value chain OFFICEFIRST Immobilien operates a fully integrated and scalable real estate management platform that encompasses its entire value chain, from property development to property management. OFFICEFIRST Immobilien operates branches in the metropolitan areas. This allows OFFICEFIRST Immobilien to maintain direct contact with its tenants and guarantee the high quality of its services. Its pronounced presence throughout the value chain is an important competitive advantage it continually strives to improve. In addition to the current scope of work, the company plans to internalize almost all activities in the field of property management by the end of the year. A high occupancy rate with a large percentage of well-known tenants With an occupancy rate in its operating portfolio of 91.4%, OFFICEFIRST Immobilien generates in-place rent of approximately EUR 207 million.(1) By the end of 2017, the company plans to further increase its occupancy rate by one to two percent (like-for-like) and to achieve organic lease income growth of two to three percent. Thanks to the large percentage of blue chip tenants such as Allianz, Daimler, and Siemens in its portfolio, primarily index-linked leases as well as an average weighted residual term (WAULT) of its leases of approximately 5.3 years(2), OFFICEFIRST Immobilien's business provides for stable cash flows. This forms the basis of the company's business model, which aims to increase value over the long term. Potential to increase the value of the Portfolio OFFICEFIRST Immobilien systematically exploits value creation opportunities. Driven by its real estate management platform, the company focuses on letting performance and is working on further increasing the occupancy rate. In the coming years, the company will focus on modernization and targeted investments in existing properties to further enhance attractiveness to tenants as well as selected development projects from the attractive development pipeline. The company will also expand its high-quality portfolio with additional selected acquisitions. OFFICEFIRST Immobilien's local presence and its connections within the six metropolitan regions offer important advantages when it comes to the identification and acquisition of new properties. Oliver Priggemeyer, Chief Operating Officer of OFFICEFIRST Immobilien, states: "OFFICEFIRST Immobilien's successful business model is based on sites and assets with great future potential. With our regional real estate management platform and the know-how of our entire team we achieve a higher letting performance and further improve the efficiency of our portfolio management. This is a strong base for long-term growth." Positive business performance in the first half of 2016 OFFICEFIRST Immobilien's positive performance in the first half of 2016 confirms the solidity of its business model and its strong position in Germany's six important metropolitan areas. Between January and June, OFFICEFIRST Immobilien was able to increase both revenues and earnings as compared to the first six months in 2015(3). Net rental income was EUR 99.5 million (H1 2015: EUR 97.7 million)(4), recurring EBITDA rose to EUR 76.6 million (H1 2015: EUR 72.0 million), FFO improved to EUR 46.6 million (H1 2015: EUR 40.9 million), and consolidated net profit rose significantly to EUR 122.5 million (H1 2015: EUR 87.8 million). Secured refinancing ensures capital market readiness In September 2016, OFFICEFIRST Immobilien took advantage of the favourable interest environment to refinance EUR 695 million at substantially lower interest rates via a consortium of banks, and thus achieve a significantly improved capital structure. In addition to a long-term property loan, the refinancing includes a bridge loan of EUR 295 million that the company plans to repay with proceeds from the IPO. It expects that the refinancing will allow it to increase its operating results (FFO) in the future. Thus, OFFICEFIRST Immobilien is now ready for the capital markets. Fabian John, Finance Director of OFFICEFIRST Immobilien, states: "Our strong performance in the first half-year period shows that our strategy and business model are successful. By securing refinancing, we have significantly lowered our borrowing costs, which means that our performance will be an even better reflection of our operational strengths in the future. The IPO and the planned use of the proceeds will give us even greater momentum, and allow us to further lower our cost of capital. In doing so, we are targeting a loan to value (LTV) of approximately 45%." Targeted dividend distribution rate of 65% to 70% of FFO OFFICEFIRST Immobilien's goal is to generate attractive long-term dividends for its shareholders. Beginning in 2017, the company plans to pay a dividend of 65% to 70% of funds from operations (FFO). For 2016, the year of the planned IPO, it is intended to pay a dividend of c. 50% of the FFO. To further increase FFO, OFFICEFIRST Immobilien plans to optimize its real estate operations, further reduce its cost of capital, and reorganize its status to form a REIT corporation in 2017. The preparations for the implementation of becoming a REIT are proceeding as scheduled. The funds required for the conversion will partly be financed from the IPO proceeds. Deutsche Bank and Goldman Sachs International are acting as Joint Global Coordinators and Joint Bookrunners. Kempen & Co, Berenberg, and BofA Merrill Lynch are engaged as additional Joint Bookrunners. About OFFICEFIRST Immobilien OFFICEFIRST Immobilien is focused on the management and development as well as the purchase and sale of office properties in Germany. The portfolio is primarily spread across the top metropolitan areas Frankfurt, Munich, Hamburg, Stuttgart, Dusseldorf and Berlin. With a total value of EUR 3.3 billion (as at 30 June, 2016), OFFICEFIRST Immobilien is one of the largest owners of office properties in Germany. The company's objective is to sustainably increase the value of its individual properties through its in-house value creating capabilities and real estate management activities. OFFICEFIRST Immobilien media contact Libor Vincent Head of Communications & Investor Relations Tel.: +49 69 60 60 50 13 62 Fax: +49 69 60 60 50 23 62 Cell: +49 162 4494906 E-mail: libor.vincent@officefirst.com (1) Annualized as at the reference date at 30 June 2016, and including annualized compensation of EUR 0.2 million for transfers, and also EBIT under the agreement with Hilton International to manage the Hilton Hotel and the Hilton Garden Inn Hotel in THE SQUAIRE in Frankfurt am Main (near the airport). (2) As at the reference date at 30 June 2016. Including the agreement with Hilton International to manage the Hilton Hotel and the Hilton Garden Inn Hotel in THE SQUAIRE in Frankfurt am Main (near the airport). Not including the management agreement with Hilton International, the WAULT is 4.4 years. (3) OFFICEFIRST Immobilien was founded in the first half of 2016 when IVG Immobilien AG transferred individual properties, business shares and deposits to it. Prior to receiving these transfers, OFFICEFIRST Immobilien had no subsidiaries and no operational business of its own. For the purposes of comparison with the combined financial information prepared in accordance with International Financial Reporting Standards (IFRS) for the six-month period ended as at June 30, 2015, the Group interim financial statements for the six-month period ended as at 30 June, 2016, were prepared as if the above-mentioned transfers had already occurred as at 30 June, 2015. (4) Including EBIT under the agreement with Hilton International to manage the Hilton Hotel and the Hilton Garden Inn Hotel in THE SQUAIRE in Frankfurt am Main (near the airport). Important notice These materials may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities (the "Securities") of OFFICEFIRST Immobilien AG (the "Company") in the United States, Germany or any other jurisdiction. The Securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Securities of the Company have not been, and will not be, registered under the Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in, and in reliance on, Rule 144A under the Securities Act. This publication constitutes neither an offer to sell nor a solicitation to buy securities. The offer will be made solely by means of, and on the basis of, a securities prospectus which is to be published. An investment decision regarding the publicly offered securities of the Company should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and will be available free of charge from OFFICEFIRST Immobilien AG, Mozartstr. 4-10, 53115 Bonn, Germany, or on the OFFICEFIRST Immobilien AG website. In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. The Underwriters are acting exclusively for the Company and the Selling Shareholder and no-one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company and the Selling Shareholder for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any other matter referred to herein. In connection with the Offering, the Underwriters and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase securities of the Company and may otherwise deal for their own accounts. Accordingly, references in the Prospectus, once published, to the securities being issued should be read as including any issue or offer to the Underwriters and any of their affiliates acting as investors for their own accounts. In addition certain of the Underwriters or their respective affiliates may enter into financing arrangements and swaps with investors in connection with which such Underwriters (or their affiliates) may from time to time acquire, hold or dispose of the Company's shares. The Underwriters do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. None of the Underwriters or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or, with limited exception, other information relating to the Company the Selling Shareholder, or their respective subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. --------------------------------------------------------------------------- 2016-09-16 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: OFFICEFIRST Immobilien AG & Co. KG, Mozartstraße 4-10 53115 Bonn Germany E-mail: info@officefirst.com Internet: www.officefirst.com End of News DGAP News Service
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