Details of BaFin's Audit of Gateway Real Estate AG's 2023 Financial Report

On April 29, 2024, the German Federal Financial Supervisory Authority (BaFin) initiated an audit concerning the half-year financial report of Gateway Real Estate AG as of June 30, 2023. The focus of this audit is a property in Augsburg, initially valued at EUR 141.5 million, which recent evaluations suggest may have been overvalued by about 30% or EUR 42 million.

This re-evaluation stems from a new report commissioned in late 2023 by the company’s financing partner, marking a significant decrease from the figures reported in their December 31, 2022, consolidated financial statements. The adjusted value impacts 3.6% of the company's entire portfolio.

Following the revised valuation, Gateway Real Estate promptly reported this adjustment in an ad hoc announcement on November 23, 2023, and it was reflected in their September 30, 2023, interim statement. The property in question is intended primarily for residential development, a project in collaboration with the City of Augsburg. Despite the financial adjustments, the company maintains a positive outlook on its development prospects.

BaFin's current investigation aims to determine if the reported impairment should have been recorded earlier in the company’s 2023 half-year report. Gateway Real Estate AG is cooperating with the regulatory body and is hopeful for a favorable resolution through constructive dialogue.