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2021/01/13 / Erste Group Research

S Immo Group

The core business consists of buying, selling, developing, and letting real estate, asset management, and operating hotels and shopping centres, as well as of revitalising and renovating properties in large cities in Austria, Germany, and the CEE region.

Immofinanz is currently the biggest individual shareholder of S Immo, holding 26.49% of the company’s share capital. A merger with Immofinanz cannot be ruled out.

The real estate portfolio is well diversified and consists of high-value properties in top locations. As of the end of 3Q 2020, the occupancy rate remained high at 94.3%. The IFRS book value amounted to about EUR 2.4bn. Commercial properties accounted for 67.5%, residential properties for 30.8%, and land bank for 1.7%. Around two thirds of the real estate assets according to book value are located in Austria and Germany, the rest in CEE.

2019 was a record year for S Immo. However, 2020 the corona pandemic is burdening the business and thus the results. A number of individual factors (e.g. a slump in hotel revenues, a lower revaluation result, and lower dividend income due to the absence of any payouts in some cases) led to a decline in EBIT and EBT for the first nine months of 2020. The consolidated net income for 9M 2020 incurred a significant fall as well but remained positive. Operationally, the COVID 19 crisis hits the hotel sector the hardest within the types of use. According to Management, it will take this sector two to three years to recover fully.
S Immo has produced strongly positive operating cash flows on an annual basis since 2015. Since then, the company has significantly improved important credit metrics such as gearing and interest coverage. However, these deteriorated in 9M 2020, which was largely due to the negative impact of the corona pandemic. The equity ratio reached 44% at the end of 3Q 2020 and thus exceeded the 2019 referential figure slightly. While Management has not issued a guidance, it is optimistic it will overcome the crisis. The focus is currently on containing the negative effects of corona on the portfolio to a minimum.

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General information

AuthorErste Group Research
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria
Currency in focusEuro
Sector in focus-


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