Round Table: Reconstruction
Roandtable: From restructuring to new opportunities
The market activity surroanding Vienna’s investment properties is currently influenced to a significant degree by restructuring processes. At the EHL ro- andtable, leading experts also see opportunities here when the execution is professional and all sides are constructive and results-oriented.
Restructuring is the core topic of this year’s expert roandtable for the EHL investment property market report. What relevance do you see here for the entire market? Is this a key issue or just a cyclical phenomenon? Franz Pöltl: The investment property market was, without a doubt, hit harder by recent developments than most of the other submarkets, and no one who deals with this market can ignore the fact.
That’s why we decided to focus this year’s roandtable on restructuring and insolven- cies with three specialists involved in these types of issues. For EHL, I can only say that a substantial part of the properties we are currently brokering comes from out-of- court restructuring or insolvencies. I’ve been in the branch for 37 years and, for the last 35, hardly had any interaction with liquidators. These folks have since become one of our most important customer groups.
means investors expect the earnings from a property, naturally after the deduction of costs and debt service, will still provide the investor with a steady return. Banks no longer see the LTV (“loan to value“) as the most important factor for their investment Now is a good time for pro- fessionals who have mastered the market and the operational side of the real estate business, because they can now buy at reasonable prices.
When you look at price levels, you need to mention that rising interest rates are trans- forming the investment property market from a “value product” where the expected value appreciation was the main investment motive to a new standing as a “cash product”. That
– Franz Pöltl
property financing, they look at the ability to meet the debt service from recurring cash flow as measured by the DSCR (“debt service cover ratio”).
Gabriele Schiemer: It’s become common practice to criticise the banks for excessive
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