Friday, October 23, 2020

Markus Reinert expects further growth for IC

An article from the Immobilien Zeitung No. 43/2020.
Author: Lars Wiederhold

In recent years IC Immobilien has seen annual growth of about 10%, and in the spring it had also announced similar growth for the coming years. "What I said in February still holds true," stresses Markus Reinert, the chairman of the board of management. "The coronavirus crisis has not impaired the company's activities. We were lucky in that we had already given employees the opportunity to work from outside the office for a few days a month." In this respect the company had already established the corresponding IT structures, e.g. in invoice documentation. When the entire team began mobile working in March there were no problems at all.

Short-time work has not been necessary. Instead IC has strengthened its team somewhat. Ten new colleagues have been recruited, seven have left the company. In total IC now has about 280 employees. The assets under management have increased year-on-year, from 11 billion euros to 12 billion euros, and are distributed across 360 properties. IC has acquired several new mandates, among which is the management of twelve office buildings for a large foundation. Arbireo Capital also placed a large-scale order with the company this year. IC is assuming the commercial, technical and accounting property management for this client for the portfolio of a special AIF. The package encompasses 60 properties, incl. discounters as well as supermarkets, drinks stores and drugstores with a total leasable area of some 95,000 m². The cooperations with existing clients, incl. Wealthcap, Meag and Amundi, were also expanded.

In the shopping centre segment, which IC covers through a joint venture with IPH, in view of the coronavirus it was above all a question of stabilising the business situation this year, according to Reinert. After the lockdown had initially led in part to rent losses of 80% to 90%, the retail trade has gradually recovered, however, adds Reinert. "More quickly than the hotel segment," he says. "To date the office asset class has coped well with the crisis. We do not have any clients for whom the rent default ratio is more than 10%."

IC has no longer been a stock corporation since September 2020, but a limited liability company. This move had been planned well in advance and was to be implemented once the company was generating stable earnings. After IC had discontinued unprofitable contracts in previous years and completed the turnaround in the 2019 business year, Reinert saw the right point in time for the transformation. "It meant we could streamline our administration."

The next step for Reinert is to step up the international activities, something that had been announced in the past. The company intends to collaborate with a major partner abroad for international business. In the event of a cross-border mandate IC would then be responsible for the German properties and the partner for the foreign properties. Moreover, the real estate service provider is giving consideration to the foundation of a subsidiary in Switzerland. "The neighbouring country is interesting, because of late many investors from Switzerland have been active on the German real estate market," explains Reinert. "This is why one option is the establishment of a smaller team there."

"This is to be seen against the background that we intend to expand our investment and asset management arm," explains the IC CEO. In this respect the company is above all targeting clients who intend to invest sums of 1 billion to 5 billion euros in real estate. IC is currently negotiating with three such potential mandates.