Immoeast cuts portfolio valuation

Austrian property investment company Immoeast has reported a 22.3% drop in operating profits for the first nine months of its 2007/2008 business year. Immoeast, part of Immofianz, said revenues rose 62.2% to EUR 212mln from EUR 130mln in the previous period but from earnings before interest and taxes (EBIT) dropped from just under EUR 160mln to EUR 124mln. 'Higher earnings were prevented by a slight decrease in the valuation of the real estate portfolio as part of an internal valuation carried out at the end of the third quarter,' Immoeast said in a statement.

The company said negative developments on the international financial markets, which had become dramatically more severe in recent days, had begun to leave their mark on the property investment market.

While the property markets continued to develop strongly, deep-seated concern shared by investors had led to a significant reduction in the number of real estate investment transactions. 'We are witnessing a serious liquidity crisis and therefore most players on the real estate market expect yields to rise. As we are staying true to our policy of cautious valuation, we have brought our valuations in line accordingly,' explained CEO Karl Petrikovics.

'We have purposefully opted for a cautious approach, as the prices reached in some transactions have demonstrated that the fair market values quoted by international real estate enterprise Colliers in autumn 2007 can still be reached and even surpassed in March of this year.'