Immoeast posts pre-tax loss of EUR 1.9bn in H1

CEE property investor and developer Immoeast said on Friday it booked a 'massive loss' in the first half of the year as a result of extensive depreciations on investment properties and development projects in the wake of deteriorating market conditions. Immoeast, part of Austrian group Immofinanz, said its earnings before tax had swung sharply into the red to EUR -1.86 bn from EUR 298.9 mln in the fist half of 2007/08 . As a result of the depreciations and write-offs, NAV per share declined to EUR 7.95, a drop of 24.5% year-on-year.

'This massive loss is due to extensive depreciations on investment properties and development projects due to deteriorating market conditions and the delay or cancellation of most development projects due to weak overall market conditions. Further losses occurred due to write-offs on other financial instruments and in shares in associated companies,' the company said on Friday.

It added that it is in talks with banks to secure liquidity which the company said was one of its biggest challenges at present. To help reach a refinancing agreement with creditor banks Erste, RZB, Bank Austria, WestLB, EuroHypo, and Helaba, the CEE developer has stopped almost all development projects and is embarking on an intensive asset sale programme. Immoeast said that 29 projects have been frozen, while 51 projects have been totally cancelled.

The property sale programme, which started in autumn 2008, has however suffered from the profound financial crises, and a slowdown in property investment volumes, it added.