IMMOEAST Annual Report 2006/07

The geographic structure of the portfolio was not only changed by the start of business in these new
“IMMOEAST countries”. There has also been a noticeable shift in the weighting of the countries in
which IMMOEAST was previously active. The most noticeable difference is the strong increase in
investments in the countries of South-eastern Europe, especially Romania. This country is experiencing
a rapid economic recovery, and advanced to become the most important investment location
for IMMOEAST in 2006/07. With a 33.4% share of the property portfolio, Romania has now overtaken
the traditional investment targets of Hungary, the Czech Republic and Poland.
The higher weighting of South-eastern Europe, Russia and Ukraine in the IMMOEAST investment programme
will be further intensified during the 2007/08 financial year. The reason for this redirection is
the current high level of returns that can be realised on investments in these countries as well as the
growth rates that exceed the more mature markets in the countries that joined the EU in 2004.
Central and Eastern Europe:
returns approach western levels
Regional
The property markets in the countries of Central and Eastern Europe (Poland, Slovakia, Czech
Republic and Hungary) have made substantial progress in their transformation from growth markets
of the post-Communist era to established markets of the 21st Century. During the slightly more
than three years since their accession to the European Union, the gap between these countries and
the property markets in the “western” EU countries has steadily declined. In the areas of market
transparency and legal security, there are now virtually no major differences.
These changes have also influenced the development of returns, and the returns on property investments
in the capital cities of the four above-mentioned countries are now only slightly higher than
in the west. The top returns on fully let prime office properties has nearly reached the level of top
returns in Vienna an Berlin.
PL, Warsaw, Mistral Office
Report by the Executive Board 33
Highlights 2006/07
Business Model and Strategy
Portfolio Structure
Corporate Governance and Outlook
Property Portfolio
Development of Business
Consolidated Financial Statements
Service and Glossary
RO, Constanta, Harbourside
Declining top rents require
change in strategic approach