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Austrian property firm plans residential investment in Germany

PUBLISHED : Wednesday, 27 March, 2013, 12:00am
UPDATED : Wednesday, 27 March, 2013, 6:06am

Austrian company Conwert Immobilien Invest plans to buy German residential real estate, part of a strategy shift to focus more on buying and renovating apartment blocks.

The Vienna-based company may spend as much as €200 million (HK$2.02 billion) on residential property in German cities this year, it said in a statement.

Conwert plans to sell commercial properties as well as eastern European assets valued at €127 million in the next two years.

"The regrouping of our portfolio is going to continue," CEO Johannes Meran said. That means selling commercial real estate and reinvesting the proceeds in higher-yielding residential properties, mainly in Germany, he said.

Conwert posted a net loss of €167.8 million for last year after it wrote down more than 117 million euros on goodwill and other intangible assets.

It bought a majority stake in Hamburg's KWG Kommunale Wohnen last year, seeking to better position itself as a manager of residential real estate. The goal is to become a sustainable dividend-paying company on the basis of stable rental income.

The company said it wouldn't pay a 2012 dividend and will provide only a special dividend of 15 cents a share related to last year's capital decrease. It assumes the company would be able to propose a dividend of at least 20 cents a share for this year.

About 60 per cent of the company's €2.9 billion portfolio is in Germany. That's set to rise to 80 per cent within the next two years, Meran said.

"The German real estate market is active," said Stavros Efremidis, Conwert's executive director. "We will get opportunities this year."

The company predicts further restructuring charges this year, but they will "definitively be lower than 2012", Meran said.

Conwert aims to improve funds from operations, which gauges a company's ability to raise cash, to €25 million this year from €20.7 million in 2012.