Prague-based CPI Property Group ended 2024 with €20.6 billion in total assets (€18.2 billion in property), while reducing LTV below 50% for the first time since 2022. That was made possible by €1.6 billion in disposals during 2024, part of a three-year €3.4 billion disposal strategy. CPI returned to the unsecured bond market twice and repaid its acquisition bridge financing while securing a new €1.5 billion revolving credit facility.
Speaking online during an investor’s call CEO David Greenbaum said the company had maintained 92.1% occupancy across its portfolio, with strong performance in CEE office markets and strong retail results.
Germany’s office sector, on the other hand, is weak and CPI’s holdings in Berlin reflect that. Still, average rents increased 4% to €11.46 per square meter, supporting net rental income growth despite lower occupancy.
CPI is targeting another €2 billion in disposals over the next three years, with €1 billion planned for 2025. The strategy aims to reduce leverage to levels supporting an investment grade rating within 1-2 years. The company’s interest coverage ratio of 2.4x remains below target, which has led to a focus on divesting non-core assets and repaying expensive debt.
Greenbaum acknowledged persistent concerns from investors over its hybrid bonds, since they are relatively expensive from a cash perspective and because Moody’s treat hybrid coupons as debt (they’re listed as equity in CPI’s books).
“Clearly the market activity in the last couple of days causes us to think very carefully about what the next steps will be, but we’ve taken great pains to emphasise over and over that we want to do something that is bondholder friendly.
“We’re continuing to focus on short-term liquidity and making sure that we extend debt maturities whenever it’s sensible to do so,” he said. We’re a little less focused on buying long-term debt at high discounts in order to generate equity. “That’s not a priority for us. We’ll be able to de-lever naturally by disposals and by repaying debt.”
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