FCR Immobilien

DB: FC9

€107.5m market cap

€12.5 last close

FCR Immobilien is a German real estate investor primarily focused on small and mid-sized properties in tier two domestic locations. It looks for special situations translating into bargain purchases. Subsequent measures are aimed at improving rental income generation.

Investment summary

FCR invests mainly in retail property, targeting total returns derived from recurring rental income and capital gains. It seeks to acquire properties at attractive prices and actively manages the assets to improve income, by reducing voids and increasing rent levels and capital values with minimal or no capex. A key element of FCR’s strategy is to sell properties where asset management plans are mature, with capital recycled into new opportunities. Consequently, gains on disposal are a significant element of returns, with historical average gross IRR at project level of c 25%. High leverage is part of its strategy, with ECB’s monetary easing providing FCR with relatively cheap debt funding.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 16.4 4.9 1.3 5.9 206.8 N/A
2018A 37.2 10.1 3.0 16.9 72.2 N/A
2019E 44.1 17.9 6.3 41.9 29.1 N/A
2020E 61.2 22.7 8.6 62.5 19.5 N/A
Industry outlook

FCR is well positioned within its market niche outside of major German cities. It is an experienced player in a largely semi-professional market (although with some close competitors). While Germany is facing a period of economic slowdown, FCR’s high exposure to tenants from defensive sectors (most notably food retailers, making up nearly 40% of FCR’s net rental revenue) should provide stability. Similarly, the fierce competition from online retailers should have limited impact on FCR given its emphasis on neighbourhood stores offering products that are rarely purchased online.

Last updated on 17/02/2020
Share price graph
Price performance
%
1m
3m
12m
Actual 3.4 22.0 33.5
Relative* 2.2 17.8 10.3
52-week high/low €12.5/€8.2
*% relative to local index
Key management
Falk Raudies CEO