April 2, 2014 / 4:42 PM / in 4 years

Buwog plans to pay out up to 65 percent of FFO as dividend - CEO

FRANKFURT, April 2 (Reuters) - Austrian property group Buwog, which is to be spun off from Immofinanz on April 28, is planning to pay out up to two thirds of its operating earnings to shareholders, its Chief Executive said.

“In the medium term we want to pay out 60 to 65 percent of our recurring funds from operations (FFO) as a dividend,” Daniel Riedl told Reuters on Wednesday, without specifying the group’s current FFO.

Riedl added that Buwog wants to tap its cash flow to buy up to 4,000 apartments per year, mainly in Germany.

In three to five years Buwog wants to have 75 percent of its residential property in Germany, where it generates higher margins than in Austria, which currently still accounts for 50 percent of the business.

“A relocation of our headquarters from Germany to Austria is not on our agenda,” Riedl said.

Immofinanz’s shareholders last month approved a spin-off of an initial 51 percent of Buwog to its shareholders to separate its more conservative portfolio of German and Austria homes from its eastern European commercial assets.

“Immofinanz will likely reduce its Buwog stake to zero within the next two to three years”, Riedl said. (Reporting by Arno Schuetze and Kathrin Jones)

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