CORESTATE announced today its results for the third quarter of 2020. According to this, the core business, real estate assets under management, has grown organically by 4.1% to € 25.2bn since the start of the year. Assets under management including non-real-estate assets came to € 28.4bn as at 30 September 2020. The figures reflect the recovery in key areas of the market for real estate investments following setbacks due to COVID-19 in the second quarter.
Frankfurt, 11 November 2020. Corestate Capital Group (Corestate), a leading independent real estate investment manager in Europe, announced today its results for the third quarter of 2020. According to this, the core business, real estate assets under management, has grown organically by 4.1% to € 25.2bn since the start of the year. Assets under management including non-real-estate assets came to € 28.4bn as at 30 September 2020. The figures reflect the recovery in key areas of the market for real estate investments following setbacks due to COVID-19 in the second quarter.
In the first nine months of 2020, Corestate generated aggregated revenues and gains of € 142.7m (previous year: € 185.6m), EBITDA of € 46.1m (previous year: € 100.1m) and adjusted net profit of € 20.8m (previous year: € 67.6m). Net profit stood at € 4.4m (previous year: € 51.3m).
Net financial debt fell significantly to € 449m (end of June 2020: € 530m). The financial leverage ratio, the ratio of net financial liabilities to EBITDA, was 3.7x (end of June 2020: 4.0x). The company reaffirms the medium-term target corridor of 2.0x to 3.0x based on the debt reduction already announced.
Helvetic Financial Services (HFS), Corestate’s mezzanine financing subsidiary, looks back on a solid fund year 2019/2020 (end of fund year: 31 October). Despite the COVID-19 pandemic, the HFS financing funds have been able to build on their leading position in the market and deliver stable returns for investors. The success factors that have proven important, especially in times of crisis, include broad diversification across more than 50 individual investments and a clear focus on attractive residential development projects in metropolitan areas, as well as professional and active fund management. Moreover, banks and other market players are currently taking a restrained approach towards mezzanine commitments for real estate. This is having a very beneficial effect on the excellent market position and growth prospects of HFS, with its current fund volume of roughly € 1.3bn. Accordingly, the pipeline of potential new projects has reached a record level.
Corestate CEO Lars Schnidrig says: “The crisis had a significant impact on us in the first half of the year and accelerated our development process towards more Core and Core+ transactions, which was already under way. As a result, we were able to further expand our core business of real estate investment management in the third quarter. At the same time, we made tremendous progress in reducing our net financial debt thanks to the successful placement of new shares. We are therefore very optimistic that we will be able to achieve a financial leverage ratio of less than 3.0x in the year ahead on account of the measures already introduced.”
Nils Hübener, CIO of Corestate, adds: “Since June, we have been seeing a gradual recovery in transaction activity – and we are participating through a few very successful investments. One impressive example is the acquisition of the largest urban development quarters in Germany to date, located in Nuremberg, for around € 300 million. From talking to current and prospective clients alike, we also know that there will be few alternatives to sustainable, profitable real estate investments in the medium term. Residential, city quarter and logistics investments are in particularly high demand, all of which are areas where we offer tailored, high-return solutions. Despite the current resurgence of the COVID-19 pandemic, we and most observers expect the market for real estate investments to gain momentum from the second half of next year, at the latest. Accordingly, we anticipate a significant rise in aggregated revenues and gains once again at all income levels in 2021.”
The company confirms its financial outlook for the financial year 2020, with aggregated revenues and gains of € 185m to € 210m, EBITDA of € 55m to € 80m and adjusted net profit of € 25m to € 50m.
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.
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