German listed property companies lack transparency: Feri Rating

German listed property companies display a lack of transparency, according to the first transparency rating conducted by Bad Homburg, Germany-based Feri Rating & Research, with an average transparency level of just 36%. According to Feri, which also looked at Austrian and Swiss listed property companies, the most transparent listed German property firms of the 19 analysed are Polis AG and Fair Value, with transparency levels of 72% and 67%, respectively. The least transparent was Dibag Industriebau, at 15%.

Generally speaking, Feri pointed to an insufficient level of transparency in Germany’s residential listed property companies while open-ended property funds were markedly more transparent, with a transparency level of 62%. Feri based its transparency rating on the evaluation of the accounts statements of listed property companies with market capitalisation of at least EUR 50mln headquartered in Germany, Austria and Switzerland and focus on core-portfolio property investors. Feri said that each rating is based on 230 separate criteria, with the definitive factor for a rating being transparency on an individual property level.

‘Investors on the capital market react to transparency gaps with mark-downs for the risk involved,’ said Helmut Knepel, member of the board of Feri Finance. ‘In light of the findings of the transparency rating, it comes as no surprise that the trading values of many companies substantially undercuts their NAV.’

Feri said the five Swiss listed property companies it analysed had a median transparency level of 46%, with Zublin Immobilien Holding achieving the highest transparency level with 51.05% and Intershop Holding coming in last at 41.44%. Among the universe of five Austrian listed property companies, the median transparency level was just below 30%. Conwert Immobilien Invest received the highest ratio, or 41.36%, while Immofinanz received the lowest from Feri, or 25.16%.