Bank Austria started coverage of Immoeast with a “buy” rating. Immoeast made its biggest acquisition ever on Aug. 14 by spending €400 million for 25% of Hungarian real estate developer TriGranit Rt. The purchase gives Immoeast access to development projects in 11 eastern European countries and is expected to add €124 million to its annual earnings, according to the Creditanstalt report. Shares of Immoeast gained 2 cents to €9.14 in Vienna. The stock has risen 18% in the past year, increasing the company's market value to €5.08 billion. Immoeast, 51% owned by Immofinanz Immobilien Anlagen AG, is Europe's biggest publicly-listed property company by market value, according to Bloomberg data. Previously IMMOEAST was represented in the housing business with a joint venture project in the Baltics (800 units).
Preparations for a large number of other projects are to be wrapped up this year. “Projects for 2800 flats are a remarkable start, but in view of the tremendous opportunities opening up on the residential market in Central and Eastern Europe, it is merely a first step,” IMMOEAST Chairman Karl Petrikovics points out. There are already quite advanced negotiations for numerous additional projects, which will be concluded in the current 2006/07 business year (ending April 30, 2007). “Our commitment to residential building will reach a level several times that of the current volume,” Petrikovics emphasises.Unlike in the other submarkets, IMMOEAST will not function as a long-term investor in residential building, but, in cooperation with renowned local developers it will develop projects and sell them in the form of freehold flats. There is hardly any demand in the region for rental flats, but all the more so for modern freeholds. For this reason all projects will be sold in the form of freeholds and as a result the capital will only be tied up a short time. “In any case, the return on our equity will be substantially above 20 percent,” says Petrikovics. (Bloomberg, immoeast.at)