CORESTATE generated aggregated revenues and gains of € 95.6 million (previous year: € 121 million), EBITDA of € 25.9 million (previous year: € 68.9 million) and adjusted net profit of € 11.4 million (previous year: € 47.8 million). These figures reflect the shifts in risk propensity among investors in the transaction market due to the COVID-19 pandemic and the associated temporary impact on revenues from warehousing, alignment capital and performance-based fees.
Luxembourg, 11 August 2020. Corestate Capital Holding S.A. (Corestate), a leading independent real estate investment manager in Europe, generated aggregated revenues and gains of € 95.6 million (previous year: € 121 million), EBITDA of € 25.9 million (previous year: € 68.9 million) and adjusted net profit of € 11.4 million (previous year: € 47.8 million). These figures reflect the shifts in risk propensity among investors in the transaction market due to the COVID-19 pandemic and the associated temporary impact on revenues from warehousing, alignment capital and performance-based fees.
Real estate assets under management (AuM), the core business, grew organically by 3.4 percent to € 24.9 billion. Assets under management including non-real-estate assets came to € 28.2 billion as at 30 June 2020. Corestate subsidiary Helvetic Financial Services (HFS) was able to cement its market-leading position in the crisis. The mezzanine fund volume stood at over € 1.3 billion and delivered stable margins and income.
“The shifts in the market and in client behaviour caused by the crisis are helping us significantly accelerate the changes we had already initiated in our product portfolio,” said Lars Schnidrig, CEO of Corestate. “Institutional investors in particular are almost exclusively requesting investment opportunities in the Core segments, which is what we now focus on. At the same time, the considerable detrimental impact of the pandemic on our earnings is forcing us to adjust our cost structure. We will simplify our business in certain areas, focus on efficiency and digitalization and want to generate major savings as a result.”
The company has also announced plans to refine and standardise the Group’s brand identity and position. The new direction will be accompanied by an even stronger focusing of products on ESG criteria and the further expansion of sales in the DACH region.
Net financial debt stood at € 530 million (previous year: € 607 million) at the end of June and is set to be lowered significantly to under € 400 million in upcoming quarters due to the scheduled placement of co-investments and warehousing assets. The financial leverage ratio, the ratio of net financial liabilities to EBITDA, was at 4.0x at the close of the six-month period. The Company has confirmed the medium-term target corridor of 2.0x to 3.0x based on the planned debt reduction.
Due to the continuing global uncertainties resulting from the COVID-19 pandemic, the company is not yet able to publish a detailed financial outlook for the ongoing fiscal year. Especially the risk of a second wave of infections resulting in further unpredictabilities in the market significantly hampers resilient forecasts on potential fees from transactions or income from alignment capital and warehousing. Investors currently show low risk appetite and tend to postpone investment decisions. The company although expects the sentiment to improve in the fourth quarter. Moreover, Corestate anticipates stable revenues from asset and property management and a stable cost base. As soon as reliable planning is feasible, the company will publish a financial outlook for 2020.
Nils Huebener, CIO of Corestate, adds: “Although we see some signs of a gradual return to normality following the lockdowns in Europe, it remains hard to predict how stable this recovery already is. We believe that the real estate transaction market bottomed out in the second quarter and it is likely that the market will gradually recover over the next months. The pressure towards investments in real estate will intensify in view of the low-interest environment, and we deliver the right products with our tailor-made investment solutions and sustainable asset management competence. This puts us in an excellent position to return to our successful growth path in the foreseeable future.”
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.
