Globalworth Real Estate Investments has announced its interim results for the six months ended 30 June 2016. The investment manager says that, during the first half of 2016, they focused on organically growing the Company, mainly by concentrating their efforts on the company’s development programme, optimising the capital structure and improving the occupancy of the portfolio. During the period, the company’s NAV increased by 2.5% to €512.2m (31 December 2015: €499.7m). However, the NAV per share increased by 0.3% to €8.00 (31 December 2015: €7.98). The company says that this was affected by the issuance of c.1.4m additional shares during H1-16 to settle outstanding liabilities. Reflecting this, the loan to value ratio saw a marginal fall to 43.7% (31 December 2015: 43.9%). The company says that the portfolio’s open market value increased by 3.4% to €962.4m (31 December 2015: €931.1m).
The company net operating income increased by 69% to €19.9m (H1-15: €11.8m) reflecting the addition of five leased properties in the revenues generating properties portfolio. However, earnings before tax fell some 87% to €5.3m (H1-15: €39.7m), which the company says was mainly due to the significant fair value gain on investment property and gain on acquisition of four subsidiaries of c.€39m recorded in H1-15. In comparison, H1-16 saw no acquisitions and there was a relatively small increase in the value of investment property generated of €5.4m. EBITDA was down 23% to €24.5m (H1-15: €31.7m). The company says that this was mainly due to the significant gain on fair valuation of completed investment property and investment property under development of c.€23.2m recorded in H1-15 whereas in H1-16 only €5.4m was recorded. However, normalised EBITDA, from ongoing operating activities, was up 85% to €16.2m (H1-15: €8.8m).
In terms of operational developments, the company says that its flagship Globalworth Tower development in Bucharest (pictured) was delivered in Q1-16, offering c.54,700sqm of class “A” office space. The company says that, including this and another class A development in Bucharest, its commercial standing gross leasable area increased by c.22% at end of H1-16 to c.370,033sqm. The company says that the average occupancy of commercial standing gross leasable area was c.80.3% at 30 June 2016 and this has increased to 82.3% at 31 August 2016. The company has let or pre-let c.335,500sqm of commercial space let with a WALL of c.6.9 years.
In terms of finance, the company completed a €180m senior secured real estate bond issue that was subscribed by the Canada Pension Plan Investment Board (CPPIB) and Cairn Capital. The company’s weighted average cost of debt fell from 6.2% as at 31 December 2015 to 5.3% at 30 June 2016.
Globalworth Real Estate’s NAV growth is tempered by share issuance : GWI