Thursday, 27 August 2026
CA Immo continued to reduce the size of its investment portfolio during the first half of 2026 while concentrating more heavily on prime offices in Germany, a strategy that has lowered absolute rental income in the short term but left the retained portfolio with high occupancy and modest underlying rental growth.
Gross rental income declined 16% year-on-year to €104.8 million, while net rental income fell 14.5% to €90.5 million. EBITDA decreased 14.6% to €76.3 million and recurring earnings, measured by FFO I, fell 11.7% to €55.6 million. The group recorded a consolidated loss of €1.4 million, compared with a €31.3 million profit during the same period last year.
The contraction largely reflects the disposal programme undertaken over the past 12 months. CA Immo’s leasable area has declined by approximately 16% year-on-year as the company has sold properties considered outside its long-term strategy. On a comparable-property basis, annualised gross rental income increased 2.4%, indicating that the assets retained in the portfolio continued to generate rental growth despite the reduction in overall income.
Occupancy remained high at 94.1% at the end of June, compared with 94.9% at the end of 2025. CA Immo signed approximately 82,700 sqm of leases during the first six months, while around one-third of the space vacant at the reporting date had already been contracted for occupation at future dates.
The figures illustrate a deliberate change in the composition of the business. CA Immo now holds approximately €4.4 billion of property assets, down from €4.7 billion at the end of 2025. Investment properties account for €3.7 billion, developments for €686 million and assets held for trading or disposal for another €67 million.
Germany has become by far the group’s largest market, representing 75% of the portfolio, compared with 20% in Central and Eastern Europe and 5% in Austria. Offices now account for approximately 97% of the investment portfolio, and the German weighting is expected to increase further as CA Immo continues disposals elsewhere while completing new developments in Berlin.
The strategy is particularly visible in the company’s development pipeline. Upbeat, a roughly 35,000 sqm office building in Berlin that will serve as the headquarters of Deutsche Kreditbank, was completed and handed over at the end of July. The property has been leased to the bank for at least 15 years and will begin contributing fully to recurring income during the second half.
Two further developments are under construction in central Berlin locations and are scheduled for completion during 2027. Both are already fully pre-let. Together with Upbeat, the three projects are expected to contribute approximately €27 million of annualised gross rental income and add around €650 million of property value once completed and operational.
The development programme provides an important counterweight to the income being removed through asset sales. Rather than rebuilding the portfolio through acquisitions of existing properties, CA Immo is replacing part of the disposed income with newly completed offices carrying long leases and high occupancy from the outset.
At the same time, the company continues to accelerate its capital recycling programme. Ten non-core properties with a combined transaction volume of approximately €270 million have been sold so far in 2026, including two offices in Budapest and properties in Warsaw and Berlin, as well as a parking facility and three German development plots. One of those transactions closed during the third quarter. Agreements for another three German asset sales have also been signed, with completion expected later this year.
The approach leaves CA Immo increasingly exposed to the performance of Germany’s major office markets. Management argues that the market is separating between modern buildings in strong central locations and older properties facing increasing difficulties attracting occupiers and investment capital.
“Despite continuing to operate in a challenging market environment characterized by economic uncertainty and elevated rates, in H1 2026 CA Immo delivered stable operational performance, maintaining a high occupancy rate of 94%, improved operating efficiency with indirect expenses down 11%, and like-for-like annualized growth in rental income of 2%,” said CEO Keegan Viscius.
He said the company believes a portfolio concentrated on high-quality buildings in major urban locations provides greater resilience and that the completion of its Berlin developments should strengthen future earnings.
The first-half valuation figures nevertheless demonstrate that prime-focused strategies are not insulated from wider market conditions. CA Immo recorded a €53.7 million negative revaluation result, compared with a €14 million decline during the first half of 2025. The company attributed much of the deterioration to further outward movement in German property yields, affecting investment assets, developments and land.
This creates one of the more significant aspects of CA Immo’s strategy. Germany is simultaneously the market responsible for much of the latest valuation pressure and the country where the group is concentrating an increasing proportion of its capital.
The investment case therefore depends partly on a widening performance gap within the office sector. If companies continue concentrating their requirements on modern, energy-efficient buildings in central locations, high-quality properties could maintain stronger occupancy and rental performance even while weaker buildings struggle with vacancy, refurbishment requirements and declining investor appetite.
CA Immo’s own leasing performance provides some support for that argument, particularly given the full pre-leasing of its Berlin developments. It does not, however, remove the wider risks facing the German office sector, including economic uncertainty, changing workplace patterns and financing conditions.
Cost reductions are helping compensate for the smaller portfolio. Indirect expenses fell 11.3% to €18.5 million, while financing costs declined 26.2%, partly following repayment of a €350 million bond in October 2025 and another €150 million bond in March this year. The overall financial result consequently improved to a negative €17.4 million from a negative €28.7 million a year earlier.
The balance sheet has remained comparatively stable despite the portfolio changes and valuation losses. CA Immo reported an equity ratio of 47.6% at the end of June and net loan-to-value of 34.5%, unchanged from year-end. Cash and deposits amounted to €513.2 million.
Net asset value declined during the period. IFRS NAV stood at €26.54 per share at the end of June, approximately 3% below the €27.41 reported at the end of 2025, while EPRA NTA decreased from €31.74 to €31.08 per share.
CA Immo continues to expect FFO I of more than €90 million, or €0.97 per share, for the full year 2026. The contribution from the completed Upbeat development should begin strengthening recurring income during the second half, while the two remaining Berlin projects provide a further earnings pipeline for 2027.
The first-half results consequently tell a more complicated story than the decline in headline earnings suggests. CA Immo is deliberately sacrificing income from disposed properties while reducing costs, maintaining relatively low leverage and replacing part of that income with fully leased developments in Germany.
The strategy also represents a broader test of where value will emerge from Europe’s changing office market. CA Immo is increasingly concentrating its exposure on the proposition that well-located, modern offices will behave differently from ageing secondary stock, even as overall office investment remains challenged.
If that divergence continues, shrinking the portfolio while increasing its concentration on prime assets could ultimately strengthen earnings quality. If weakness spreads more deeply into Germany’s best office locations, however, CA Immo’s growing geographical concentration would also increase its exposure to that correction.
For the wider European office market, the significance is therefore less about CA Immo becoming smaller and more about what it is choosing to keep and build. Its portfolio strategy reflects an increasingly common assumption among institutional owners: the next stage of the office cycle may be determined less by whether investors want offices at all, and more by which buildings remain sufficiently competitive to attract tenants, capital and financing.
