ACCENTRO Real Estate AG to Perform Unprecedented Property Devaluation Due to Market Conditions

On 12 April 2024, ACCENTRO Real Estate AG announced forthcoming significant property devaluations and preliminary financial results for the 2023 fiscal year. The devaluations, rooted in independent valuation reports, reflect the stressed real estate market, characterized by reduced transaction volumes, high inflation, and the European Central Bank's interest rate policies. The company attributed the substantial devaluations also to a conservative approach in preparing and auditing its consolidated financial statements.

Previously, the 2022 financial year forecasted consolidated revenues between EUR 100 to 120 million and EBIT ranging from EUR 0 to 2 million. However, due to the then-unpredictable market conditions, ACCENTRO could not provide a reliable forecast for 2023. The recent devaluation, estimated between EUR 50 to 60 million, has impacted the financial outlook significantly, with expected revenues and EBIT in the high double-digit million range, but negatively for EBIT.

This valuation adjustment will lead to a breach of net financial indebtedness limits set in the 2020/2026 and 2021/2029 bond agreements, thereby entitling bondholders to termination rights under certain conditions. In response, ACCENTRO's Management Board plans prompt negotiations with bondholders and will seek an IDW-S 6 expert opinion to navigate the situation.