CORESTATE generated aggregated revenues of € 51.7 million (previous year: € 58.6 million), EBITDA of € 20.9 million (previous year: € 38.7 million) and adjusted net income of € 14.3 million (previous year: € 26.3 million) in the first quarter of 2020. The COVID-19 pandemic has been causing significant shifts in the transaction market with increasing momentum since the end of March, resulting in the temporary loss of revenues from warehousing, alignment capital and performance-based fees. Assets under management in the real estate core business rose organically by around 2.2% to € 24.8 billion in the first three months of the year; Corestate managed assets totaling € 28 billion at the end of March 2020.
Lars Schnidrig, CEO of Corestate: “After getting off to a promising start to the year, the crisis hit us – like many other companies – unexpectedly hard. In a very short time, we shifted from an active growth course to consistently limiting entrepreneurial risks. The effects on the transaction market are already reflected in our earnings strength in the first quarter. At the same time, we have launched a comprehensive package of measures in recent weeks aimed at securing our liquidity, cutting costs and reducing warehousing. This puts us on solid and future-proof footing.”
Cash and cash equivalents amounted to around € 80 million at the end of the first quarter; moreover, the company has no significant refinancing requirements before the end of 2022. With € 45.4 million, the company generated in the first three months the majority of its revenues in its core business, real estate investment management. In the area of real estate debt (mezzanine), the fund volume was increased to over € 1.3 billion. Regular analyses show no critical findings at the project or the borrower level. In real estate management, the same applies to the residential, logistics and office segments, where there have been hardly any significant impairments to date. Conversely, the retail, hotel and micro-living segments are experiencing in some cases significant volatilities in occupancy rates or even rent defaults at fund level; a significant intensification of the company’s own local property management activities has already been initiated here.
Nils Hübener, CIO of Corestate: “Our clients keep telling us that they continue to have an increasing demand for exactly what we can offer them with our current pipeline of over € 4 billion: profitable and sustainable real estate investments. However, the current focus is due to the crisis shifting from value-add properties to the core and core+ segments, which is what we are currently focusing on. We expect the transaction and financing markets to return to normal in the fourth quarter. “Even though we had to withdraw our financial outlook in view of the current high level of uncertainty, we will continue to be clearly profitable with our operating business this year. I am also very confident that catch-up effects from postponed transactions will have a clearly positive impact on our results after
the crisis comes to an end,” added Lars Schnidrig.
Corestate will publish an updated financial outlook for 2020 as soon as the consequences of the COVID-19 pandemic can be reliably assessed and sound planning is possible. This will most likely be in the third quarter. The company believes that the key market drivers of the business model will remain intact in the medium term, so that, if the investment market returns to normal, earnings and profitability figures can be achieved again from 2021 on similar to the figures the company had been achieving before the crisis.
About CORESTATE Capital
CORESTATE is an investment manager and co-investor with around € 28 billion in assets under management. The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanisation, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At CORESTATE, all concepts are supported with ESG expertise that is unique to the industry. With some 800 experts, CORESTATE offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. CORESTATE is listed on the Frankfurt Stock Exchange (SDAX) and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 13 countries across Europe, with offices in Frankfurt, Vienna, Zurich, Paris, Madrid and London.
Forward-looking statements
This press release may contain forward-looking statements. Forward-looking statements are all statements that are not historical facts and events. This applies wherever there is information about future financial profitability, plans and expectations with regard to the company, growth and profitability as well as economic conditions to which the company is exposed. Statements using the words “should”, “may”, “will”, “believes”, “expects”, “assumes”, “assumes”, “estimates”, “plans”, “believes”, “to the knowledge”, “estimates” or similar expressions indicate such forward-looking statements. Forward-looking statements are based on current estimates and assumptions made by management to the best of their knowledge. Such forward-looking statements are based on assumptions and factors and are subject to uncertainties, the non-occurrence or occurrence of which may cause the actual circumstances, including the Company’s net assets, financial position and results of operations, to differ materially from or be more negative than those expressly or implicitly assumed or described in these statements. Certain forward-looking statements, while appropriate at this time, may prove to be incorrect. Various known and unknown risks, uncertainties and other factors could cause the forward-looking statements, actual results, financial position, development or performance of the Company to be materially different from those expressed or implied by such statements. Therefore, the Company and its management cannot be held responsible for the actual occurrence of the forecasted developments. It should be noted that the Company assumes no obligation to update such forward-looking statements or to conform them to future events or developments.
