CPI PROPERTY GROUP reports record financial results for the 2018 financial year

CPI PROPERTY GROUP reports record financial results for the 2018 financial year

CPI PROPERTY GROUP (hereinafter “CPIPG” the “Company” or together with its subsidiaries the “Group”), the largest owner of income-generating real estate in the Czech Republic, Berlin and the CEE region, hereby publishes its results for the financial year ended 31 December 2018.

“2018 was an extraordinary year for CPI Property Group. Our core markets of the Czech Republic, Berlin and the CEE region are among the strongest economies in Europe, and demand for real estate remains vibrant,” said Martin Nemecek, CEO. “Our asset management teams achieved higher levels of occupancy and rents, leading to record income for the Group. The Group´s capital structure was transformed through refinancing, accelerating the process which began in 2017, and our reputation as a leader on the international capital markets is now firmly established. By every measure, CPIPG is doing better than ever.”

Highlights for the 2018 financial year include:

- Total assets of €8.3 billion, an increase of €0.7 billion from 2017, driven by higher property portfolio valuations primarily in Berlin and the Czech Republic and acquisitions of €290 million.

- Total revenues of €604 million (up 17% versus 2017), reflecting the combined effects of acquisitions in 2017 and 2018 and 4.9% like-for-like growth in rental income. - Substantially improved occupancy to 94.5% at year-end (up 1.7 p.p. versus 2017).

- Funds from operations of €164 million (up 29% versus 2017). - EPRA NAV rose by 14% to €4.5 billion.

- Net Loan to Value (LTV) reached a record low of 36.7%.

- Strengthened credit ratings: a new “BBB” rating from S&P, Moody´s upgrade to “Baa2“ and a new “A-“ rating from Japan Credit Rating Agency.

- Successful issuance of €550 million of undated subordinated “hybrid” notes under our EMTN programme in May 2018.

- Issuance of €840 million of senior unsecured bonds under our EMTN programme in Euros, Swiss Francs and Japanese Yen during 4Q 2018.

- Repayment of about €1.5 billion of subsidiary bonds and secured loans leading to a streamlined funding structure and improved credit metrics.

- Record 65% of unencumbered assets at the end of 2018, relative to 43% at the end of 2017.

- Reduction of secured debt from 59% at the end of 2017 to 37% at the end of 2018. 2

- Significant improvement of Net Interest Coverage Ratio to 4.2x for 2018, which only partially reflects the effect of early repayment of high-coupon subsidiary bonds.

- CPIPG enhanced financial flexibility in 2018 by signing €230 million of 2-year revolving credit facilities; in March 2019 the facilities were replaced by a new €510 million 3-year revolving credit facility.

- In Q1 2019, the Group further expanded its active presence on the international capital markets through the issuance of senior unsecured bonds in Hong Kong Dollars and US Dollars under the EMTN programme, and the placement of senior unsecured schuldschein (assignable loans). The issuance of bonds and schuldschein, alongside the new revolving credit facility signed in March, meant that the Group had more than €1 billion of available liquidity at the end of Q1 2019.

“While we are proud of our success, CPIPG is not standing still. The Group will continue focusing on the long-term performance of our properties and the satisfaction of our tenants and communities,” said Martin Nemecek. “Most importantly, we will continue investing in the heart of our business: our local teams, who bring their enthusiasm to work every day. Working together, I am certain that CPIPG will enjoy a successful 2019.”