Eran Edelman (photo PR)
The real estate company Brack Capital Properties NV (Brack NV), which operates in the field of real estate in Germany, reports its results for the fourth quarter and for the year 2022. The company’s total revenues from renting residential properties for 2022 amounted to approximately 56.7 million euros compared to approximately 54.1 million euros in the corresponding period last year. This, as a result of the rent growth in the residential real estate sector in 2022, which amounted to about a 2.2% increase in NIS from identical properties compared to the previous year (Like-for-like). It should be noted that the SHKD in new rentals in the residential market is about 9.3% higher than the average ShKD.
The FFO in 2022 amounted to about 25.4 million euros, compared to about 24.7 million euros in the corresponding period last year. As of 12/31/2022, the LTV ratio (net debt to total real estate) is approximately 36.4%, compared to 35.5% at the end of 2021, respectively. Assuming the sale of the yielding real estate assets, which are classified as held for sale , the LTV is 29.2%.
On December 30, 2022, the sale of residential properties located in the city of Leipzig was completed according to property values of approximately 240 million euros. The sale was completed through a “share transaction” and the full consideration, in the amount of approximately 126.1 million euros, was received by the company on the day the transaction was completed. During the year, the company completed the sale of three commercial properties with a total value of 22.1 million euros. In addition, during January 2023, the company completed another sale of a commercial property for a consideration of 12.9 million euros.
At the beginning of March 2022, the company successfully completed a private raising of bonds through the expansion of Series B. During the year, the company entered into an agreement with the controlling owner, Adler, to establish a credit line in the total amount of 200 million euros, with the maturity date at the end of 2023. As of today, The company withdrew an amount of EUR 150 million. On March 31, in response to the company’s request, Adler gave a unilateral commitment to the company according to which Adler undertakes to extend the repayment date of approximately EUR 70 million for a period of 6 months (until June 30, 2024) subject to the fulfillment of several conditions Suspensions, among other things, raising the interest rate and providing security against the loan, starting on January 1, 2024. During December 2022 and March 2023, the company completed transactions whose purpose was to refinance loans in the amount of 63.7 million euros for periods of two and three years, at an average interest rate of 5.5%.
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The main results for the fourth quarter of 2022:
The company’s total revenues from property rentals for the fourth quarter of 2022 amounted to approximately 14.6 million euros compared to approximately 13.6 million euros in the corresponding quarter last year, a 7% increase attributed to rent growth. The FFO for the fourth quarter of 2022 amounted to about 6.4 million euros compared to 6.2 million euros. The average interest rate on bank loans is about 2.00% (with an APR of 5.87 years).
The cash balance (consolidated) as of December 31, 2021 amounted to approximately 210 million euros. The EPRA NTA index as of 12/31/2022 amounted to approximately 900.2 million euros. The decrease is mainly due to the decrease in the value of the company’s residential real estate assets during the period. Also, the decrease is due to the provision for tax liability that may arise for the company as a result of the LEG transaction.
Starting at the end of 2021 and during the first half of 2022, LEG completed the purchase of the company’s shares, so that at the time of publication of the report, LEG owns 35.66% of the company’s shares. The purchase of the shares was carried out, among other things, in two significant transactions, one in front of certain shareholders in the company (in connection with 24% of the company’s shares) and the other in front of Adler, the controlling owner of the company, in connection with 6.7% of the company’s shares. The remaining shares were purchased by LEG in several other transactions. The ADLER-LEG transaction included, among other things, Adler’s commitment to participate in any tender offer that LEG may initiate, for the remainder of the company’s ordinary shares held by Adler, provided that the tender offer is made by September 30, 2022, at a minimum price per share stipulated in the agreement stipulated in the agreement between the parties And stands at 147 euros per share.
On August 3, 2022, the company learned that LEG decided not to publish a tender offer for the purchase of the remaining shares of the company and accordingly will not realize Adler’s commitment to it. On September 30, 2022, the LEG option expired. As of the date of signing the report, Adler owns 63.03% of the company’s shares, LEG owns 35.66% of the company’s shares, and all other shares (1.31%) are held by the public.
Eran Edelman, Chief Financial Officer at Rak NV: “At a time when the interest rate environment is changing and higher than what we were used to in the past, the company is focusing its strategy on strengthening the company’s capital and debt structure. During the last year, and in the last few months in particular, we took active actions to reduce the leverage and improve the company’s liquidity, among other things, by refinancing the company carried out in the last months and completing the sale of the assets in Leipzig at the end of 2022. These funding sources will be used to pay off the company’s obligations, including payments to bondholders H”.
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