The third quarter of the current financial year was characterised by solid overall development of our assets from an operational standpoint. Nevertheless, currency effects in Russia and lower hotel revenues resulted in a minus of EUR -6.5 million for the first nine months of the year. In line with our current objectives, financial expenses were significantly reduced, development projects pushed ahead and cash flow-generating acquisitions made.

After buying back all of the convertible bonds and redeeming the majority of the outstanding bonds, we took advantage of the prevailing low interest rate levels to optimise our financing structure at the holding level and successfully placed a seven-year bond in September. As a result, we are in an optimal financial position to act rapidly and flexibly when interesting investment opportunities arise.  

It is still our goal to rapidly build up our property portfolio again following the partial portfolio sale and to strengthen our earning potential. We took important steps to this end with our two office projects in Poland after the end of the reporting period: At the beginning of October, we opened the Ogrodowa office building in Łódź. The state-of-the-art office building offers 28,000 square metres of space and is located directly in the city centre near the Manufaktura shopping centre. The first tenants for offices and service facilities have already moved in. Negotiations are currently under way with prospective tenants for the remaining space, so occupancy is expected to increase to about 60 per cent by the end of the year. Lease agreements have also been concluded for 60 per cent of the office space at the Mogilska office building in Krakow. The building shell for the office property with 12,000 square metres of space was finished at the beginning of November, and the building is scheduled to be completed by the end of the first quarter of 2019. 

Development projects that are currently still in the planning phase but will quickly be made ready for the start of construction include the Chopin office building in Krakow with 21,000 square metres of space as well as four office properties with up to 73,000 square metres of net floor space in Białystok. Furthermore, we have promising property reserves at AIRPORTCITY St. Petersburg and have started the planning activities for Avior Tower 1. In addition to our own developments, we have focused our attention on completing cash flow-generating acquisitions and purchased the fully occupied Mogilska 41 office building in Krakow in December 2017. In May 2018, this was followed by the B52 office building in Budapest, which is also fully let out. Their earnings contributions can already be seen in the revenues from the rental of office properties, which rose from EUR 9.6 million to EUR 11.3 million.Along with the ongoing activities in our core CEE markets of Poland and Hungary, we are also evaluating options in Western Europe and definitely see potential for acquisitions here – in one case, negotiations are already at an advanced stage. We consider 2018 to be a transition year following the sale of part of our portfolio last year, and expect a significant increase in revenues and an improvement in gross income for 2019 following the opening of the Ogrodowa office building in Łódź this year.