(Adds revaluation of property portfolio, CEO comment, 2023
guidance)
FRANKFURT, May 4 (Reuters) - Vonovia sold five
properties to CBRE Investment Management for about 560 million
euros ($620.4 million) on Thursday, as high interest rates and
the surging cost of construction and energy weigh on property
values.
Two of the five properties, with a total 1,350 residential
units, are in the final stages of construction, with completion
expected by the end of August.
The sale price is below the book value of the properties as
of the end of December and the expected costs of completion,
which stood at 600 million euros, Vonovia said.
The group said the deal underlined the intrinsic value of
its portfolio. At the same time, it revalued its overall
property portfolio at the end of the first quarter, resulting in
a total market value that was down 3.5 billion euros from the
end of December, at 91.2 billion euros.
Nonetheless, Chief Executive Rolf Buch said the deal was
"cause for optimism" for the wider sector.
"After a very difficult first quarter 2023 with little
movement, the market is cautiously opening," he said.
Vonovia also reported a 17.8% slide in first-quarter group
funds from operations (FFO) to 462.6 million euros.
It affirmed its full-year guidance for group FFO of 1.75
billion euros to 1.95 billion euros, down from 2.04 billion in
2022.
($1 = 0.9026 euros)
(Reporting by Maria Sheahan and Matthias Inverardi; Editing by
Jacqueline Wong)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.