2014 on target; set for acquisitive 2015
Summit Germany (SGL) owns a well-diversified commercial property portfolio, located in Germany's main commercial centres. Its strategy is to actively manage its assets to improve rent and capital values, and grow the scale of its portfolio through acquisition. The FY14 results confirmed impressive progress against all performance targets set for the first year post IPO. Phase one, restructuring, is now complete. The emphasis now switches firmly to portfolio growth. It currently has €95m of cash ready for EPS and cashflow enhancing acquisitions, and a €250m pipeline of potential purchases keeps its strategy on track. Higher competition for German real estate has put pressure on rental yields, down by c 1% vs a year ago, but debt costs have fallen even further. Lower yields benefit valuations of the existing €583m portfolio and as SGL closes the deals it is tracking - which we assume will take 12-18 months - the outlook for NAV and dividend growth is very positive.Summit Germany is a commercial real estate company, with a portfolio of properties mainly focused in Germany's main commercial centres. Co. owns, enhances and operates commercial real estate assets in Germany including office buildings, logistic centres and others, which are leased to commercial and industrial tenants. Co. invests primarily in such properties that provide substantial income flows and potential for value increase through asset management. As of Dec 31 2016, Co.'s aggregate portfolio comprised 100 assets, ca. 864,000 square meter (sq. m) of net lettable space, located on approximately 1,407,000 sq. m of land.
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