Corestate reports figures for the first quarter of 2022 – business affected by increased macroeconomic uncertainties

Frankfurt, 10 May 2022 – The Corestate Capital Group (Corestate) published its results for the 1st quarter of 2022 today. According to the figures, consolidated aggregated revenues and gains amounted to € 37.6m (previous year: € 37.3m). The aggregated revenues and gains from continued activities stood at € 29.7m, compared to € 30.2m in the same quarter of the previous year. EBITDA from continued business activities improved from minus € 0.2m in 2021 to € 0.7m. Net profit from continued business activities adjusted for one-off effects amounted to minus € 7.6m (previous year: minus € 7.0m). Real estate assets under management within Corestate’s core business amounted to approximately € 18.4bn as at the end of the 1st quarter 2022.

Income in the Real Estate Equity segment proved to be largely unchanged compared to the same quarter of the previous year. While debt business recorded higher income from performance fees in the first three months of 2022, the segment as a whole saw a slight decline. Overall, the company’s operating results are slightly below the planned targets, despite declining negative impacts due to the coronavirus pandemic.

The sale of the property management activities, initiated within the scope of the concentration on the core real estate business, is progressing according to plan. The purchase agreement for CAPERA (book value € 2.6m) was signed at the end of April. The transaction involves more than 270 employees, € 18m in aggregated revenues and gains in 2021 and approximately € 2.5bn in assets under management. The sale is expected to close in the 2nd quarter 2022, resulting in a cash inflow of €14.5m. The marketing approach for the shopping centre in Giessen will be also relaunched after completion of the modernization work with a clear focus on optimising the sales price. The refurbishment measures expected to be largely completed in the 3rd quarter, with the resulting increase in the overall architectural appeal already leading to higher tenant occupancy.

Debt reduction and refinancing of the Group remain core issues on the financial level. At the end of the 1st quarter, Group net financial debt amounted to € 532.7m (2021: € 526.5m), while cash and cash equivalents stood at € 63.3m (2021: € 62.8m). In the light of the measures initiated to generate additional liquidity Management is currently analyzing appropriate options in parallel to refinance the bonds maturing in November 2022 and April 2023. For this purpose, Corestate has brought a financial advisor on board, who, if necessary, will prepare possible alternative scenarios together with the company. The Management Board will continue to prioritize the steps already taken to optimize the capital structure and free up liquidity.

The significant rise in macroeconomic risks generated since the outbreak of war in Ukraine and the ongoing disruptions to global supply chains are now also affecting the real estate sector. The dynamic interest rate and inflation structure is already leading to a decline in transaction business and greater restraint among clients. In addition, there are also increased uncertainties due to the as yet unresolved question of the company’s refinancing with potentially adverse implications for new business in the current year. Given the apparent decrease in income as a result, particularly in association with acquisition and performance-related fees in the core markets and products, the company no longer considers it likely that it will achieve the originally planned and published targets for the financial year.

However, due to the high degree of uncertainty, it is currently not possible to provide a reliable figure for a precise deviation. The Management Board is therefore withdrawing the forecast for fiscal 2022 and the corresponding dividend statement until further notice.