In the first quarter of 2018, the impact of the partial portfolio sale on our operating business was fully evident for the first time. Due to the disposal of eight hotel holdings, the operating result declined slightly, which, together with exchange rate losses, led to a result of minus EUR 3.0 million for the traditionally weak first quarter. 

We are now shifting our focus back to growing and building up our property portfolio. We are pursuing these goals in line with our strategic orientation by completing our ongoing development projects and launching new projects as well as by purchasing cash flow generating assets that offer potential for the future. By completing selective property sales at favourable terms, we can secure proceeds that will enable us to rapidly execute reinvestments.

The last two points in particular are illustrated by our activities in Budapest, where we concluded an agreement to purchase the B52 Office property after the reporting date. This class A office building offers over 5,200 square metres of space and is fully occupied, which will provide us with ongoing income once the transaction closes – presumably before the end of the second quarter. We also see additional potential here, as the local office market is currently in a phase of rising rents. In a separate transaction, we disposed of a development property that is also located in Budapest in May 2018, which brought in proceeds of EUR 5.4 million.

For the current financial year, we expect a significant reduction of interest costs due to the early redemption of bonds and the elimination of project loans. Along with our project pipeline and the favourable environment for real estate investments, this makes us highly optimistic for the rest of the year.