Good morning, ladies and gentlemen. Thank you for standing by. Welcome, and thank you for joining the Adler Group Full Year 2022 Investor Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may do so by pressing star and one. Press the star key followed by zero for operator assistance. It's my pleasure, and I would now like to turn the conference over to Gundolf Moritz, Head of IR. Please go ahead.
Thank you, Francine, and good morning to everyone. With me today are Stefan Kirsten, Chairman of the Board of Directors, Adler Group S.A. Next to me is Thomas Echelmeyer, CFO, and next to Stefan is Thierry Beaudemoulin, CEO. All three will guide you of today's presentation. At the end of the presentation, we have reserved time for a Q&A, where Stefan, Thierry, and Thomas will answer any questions you may have. Please note that this call will be recorded and made available on the company's website after the call, if it is not already on the website. I would now like to hand over to Stefan. Please go ahead.
Gundolf, thank you. Ladies and gentlemen, good morning also from my side here in Luxembourg. I'd like to start with an apology. It's very Asian, I'd like to start with an apology because some of us have a cold here, so there will be some sniffing and coughing in between. Let's go in medias res. I'd like to welcome you at our investor call, whether it's webcast or directly dialed in, of the unaudited financial statements of Adler Group S.A. for 2022. Presenting unaudited financial statements is truly an unusual occurrence for a company of this size, just as the entire previous year of Adler Group could be only generously described as unusual. Today, we can really look forward towards the future with a more positive outlook.
It was quite different almost exactly a year ago on April 30th, 2022, just before 7:30 P.M. here in Germany or in Germany was that meeting even. Due to the bond conditions at the time, we had to publish our audited financial statements by midnight. Otherwise, the bonds would have become due immediately. We would have slipped into a technical default and subsequently into insolvency in a rather disorderly manner. At the end of April 2022, we had averted a threatening insolvency for the first time. The capital market at that time was the most important stakeholder group, but, and this is very important for me to say today, we on the Board of Directors have always kept in mind the legitimate interests of all stakeholders in the group, and I will definitely refer back to this later.
The fact that the financial statements at the end of April 2022 were provided with a disclaimer of opinion is now almost a side note. I will address the topic of auditing shortly, but I can tell you today that we are currently not worried about any deadlines in the bond terms and conditions anymore. This is certainly positive news without glossing over Adler's current situation. The corporate update and the annual figures will be presented after my statement by Thierry and Thomas, as Gundolf has pointed out. They will also briefly discuss details of our agreement with a core group of bondholders, which has recently been judicially confirmed by the High Court in London.
As in every investor call since my appointment to the Board of Directors in February 2022, I'd like to begin by giving you an update on the current status quo. Those who have been following us in the media since the beginning will recognize the first five-point canon slide. You will see that we have added a new sixth line, meeting our legitimate stakeholder obligations in a sensible manner as we focus on a Berlin-anchored yielding portfolio going forward, is the conclusion under the title Stabilizing Adler Group in a Perfect Storm. To stay with the metaphor, ladies and gentlemen, Adler is certainly not sailing again in best weather, but in unchanged rough seas, we've stabilized the ship. At the last Q3 call on November 29th, I think I used the word perfect storm to describe the situation where we were at that time.
Poor markets for the sector-tied maturities for the bond, no auditor in sight for the group companies of Adler, both in Luxembourg as well as in Germany. No land in sight, so to speak. Why do we see things more positively today? As for the market development, I refer to the management's detailed statements in the company's annual report, which we published today. One thing is obvious: the markets, ladies and gentlemen, have turned negative. We're still navigating in a storm. Today, however, we have more certainty. Our competitors have presented their figures too, so we can better judge our performance data and our valuations. The restructuring plan agreed upon on November 25th, 2022, has been described to me as a liberation because it has averted a possible threatening insolvency for a second time.
You may recall that the repayment of the Consus convertible bond was due, and this could not have been repaid without the agreement. The agreement has given us sufficient time and prospect of fresh money. The deadlines in the bond terms and conditions for the submission of an audited annual consolidated financial statement have now been extended to September 2024. We will receive a maximum of around EUR 930 million in new capital in the next days. As of today, I can say that the money will flow to us, and we are in the process of preparing to repay the maturing bond of Adler Real Estate AG with a volume of EUR 500 million the day after tomorrow. For details, I refer to the documentation from November and to the annual report.
In my Chairman's letter, I spoke in this context of the fact that the majority of bondholders gives us credit, which is a figurative sense of also meaning the word trust. We do not want and must not gamble away this delicate plant of new trust. As you know, however, this restructuring plan was blocked by a minority of bondholders. This blockade was lifted in London before the High Court, and I will come back to the blockers in a moment. A few days ago, on April 12th, the High Court ruled in our favor by sanctioning the restructuring plan, and on April 17th, following the completion of the restructuring plan implementation steps, we have amended the SUNs which now permit the incurrence of new money funding.
The finance documents related to the new money funding were executed over the past few days. Yesterday it was confirmed that all of the conditions precedent were satisfied or waived, following which we have proceeded to draw the funds. This will allow us to repay, as we said before, the Adler Real Estate 2023 notes upon their maturity on April 27th. This is the third time that we have averted an imminent and threatening insolvency in 15 months. The imminent repayment of the Adler Real Estate bond is an enormously important aspect for the trust of the capital market that finances us. Allow me to make a side note here. The capital market, at least the group of bondholders who supported us by vast majority, has always placed its trust in us.
In my perception, with more trust than we have been able to experience in the public opinion. The court's decision means that we have now had the time to, and the capital, to make sensible decisions how to shape our immediate future, for instance, without harmful time pressure and without discounted fire sales from our portfolio. Ladies and gentlemen, meeting our legitimate stakeholder obligations in a sensible manner as we focus on a Berlin-anchored yielding portfolio going forward is written on the aforementioned slide. This illustrates that the future development of Adler Group is, of course, not finalized and that we cannot draw a conclusive picture with a fixed date today. We can give you and all our stakeholders a clearer orientation. First, we will serve the legitimate demands of all, and I stress again, all our stakeholders.
We have always done in the recent months, we pay our creditors, our employees, our suppliers, and business partners. We ensure that our tenants can use the promised housing in accordance with their contracts. To be able to serve all these legitimate claims, we need liquidity. For this reason, we will largely leave behind our project development business in a reasonable manner and over a staggered period of one to two years. Why do I always emphasize legitimate claims? Well, because during our restructuring efforts, illegitimate claims have been made to us again and again. This also includes the demands of the group of blockers mentioned at the beginning. Group of bondholders in the long term want maturing in 2029.
Some of these creditors allegedly bought into the bond cheaply at the time when it was clear to every market participant that we were fighting for financial restructuring, if not even financial survival. This, ladies and gentlemen, is legitimate. However, I and my colleagues on the board do not think that it is legitimate to want to drive us into insolvency in the hope of making a good cut in the shortest possible time. All this at the expense of an approving majority in two rounds of 82% and 84% respectively. This is not correct. At this point, we have reached the limits of minority protection, and therefore we acted swiftly. It's not possible to predict exactly what the Adler Group will look like in 12-36 months. We've agreed upon a clear plan for debt restructuring, which of course depends on market developments.
On the way of implementing the plan, we will decide as a team, which will also become smaller. We will have to save significantly on cost and adapt the structures to the new size. The legal disputes with the minority bondholders over the restructuring plan, necessary from our point of view, by the way, has cost additional EUR 35 million. You can truly believe me, I would have liked to save that money. We want to and will, I repeat, fulfill the legitimate interests of all stakeholder groups as far as possible in a responsible and balanced manner. That, in turn, is the task of the Board of Directors, of which I'm the Chairman. We keep an eye on all our approximately 50,000 tenants, our more than 700 employees, and our investors.
To date, as a former CFO, I attach great importance to this, we have paid every liability on time. The fact that there have been price losses for shares and bonds is due to the risk on the capital markets and the perception of Adler there. Before I address the audit question, I'd like to refer one last time to the aforementioned slide and point out governance. We've streamlined what I called Byzantine structures with the help of external experts, restructured processes, and decision-making structures, repositioned compliance, and will convene this squeeze-out general meeting at Adler Real Estate AG in three days time. We've already delisted Consus from the stock exchange and from trading as far as this is technically possible. We, the Board of Directors, are convinced that our governance now meets modern standards. In terms of personnel, we're also well-positioned today.
In addition to me as the Chairman of the Board of Directors, the independent members, Thomas Zinnöcker, who heads the Investment and Financing Committee, Thilo Schmid, who heads the Audit Committee, and Thierry Beaudemoulin, who leads the Senior Management team as CEO and daily manager of Adler Group S.A., are also on the board, and this with a huge endorsement of our shareholders. The senior management team includes Thomas Echelmeyer, who joined as an Interim CFO in June 2022 and has been a permanent team member since September 2022. It is completed with Sven-Christian Frank as Chief Legal Officer. Ladies and gentlemen, it's planned to propose the appointment of Thomas as a member of the Board of Directors at the next Annual General Meeting.
In addition, we, as members of the Board of Directors, along with a core group of bondholders, have concluded that it's necessary to strengthen both the operational management and the Board of Directors with new personnel. For operational management, we are in the final discussions with candidates for the role of Chief Restructuring Officer. Thomas, don't kick me under the table. For the Board of Directors, we're still looking for an independent candidate with an affinity to capital markets. In this respect, our corporate governance forms a good basis for the audit of financial statements. This has also been confirmed by us in discussions with various auditing firms, even though we have not yet been able to appoint an auditor for 2022 and 2023 respectively. Speaking of which, where do we stand here?
After the rejection of a court-appointed mandate by KPMG in Germany at the beginning of 2023, it was clear to all of us that we had to consider alternative models for the audit. It will not be possible for us to get a general auditor for all jurisdictions in one go. We've therefore intensified our dialogue with the German constituents, namely the Institute of Public Auditors, IDW, the Professional Association of German Auditors, which is the German Chamber of Public Accountants, WPK, and the Auditor Oversight Body, APAS. Subject to all necessary resolutions, we will now have all Adler Real Estate AG activities, so the German part of the listed real estate company, audited by Rödl & Partner. This move clearly reduces risk in a significant part of our portfolio and will make a future comprehensive audit easier.
The agreement was reached after very intensive discussions with several suitable audit firms, I'd like to thank in particular the Board of Directors of the IDW for the comprehensive support in our situation. For the entire group in Adler Group S.A. as a single entity, we still need another auditor. We are continuing discussions which I prefer to comment upon once there's something concrete to report. As you might have seen yesterday, Adler Real Estate AG published a so-called ad hoc note. In the moment when we have reached the same level of concreteness at group level, Adler Group S.A. will, of course, under the stock exchange regulations, publish it along the same lines. All authorities and organizations affected by the submission of unaudited financial results have been informed, and the bondholders have given us an extension of the deadline until September 2024 for their needs.
I'm switching off the cuff for one moment. This does not mean we can rest, and we will continue to search, execute the matter, and inform you. As previously mentioned, we have also received an extension of the credit deadline from our bondholders as part of the restructuring plan and hope to build the necessary trust with the independent auditor for the audit. We've already communicated several times that we will make far-reaching concessions to the auditor for this. Ladies and gentlemen, in conclusion, a cat famously has nine lives. In any case, our Adler has obviously more than three. We avoided threatening insolvency on 30 April, 25 November, and now 12 April. We were able to avert an existential threat to Adler Group, and we will find a group auditor.
We accepted the challenge at Adler because we, as the entire Adler team, want to decide for ourselves how we proceed, even under difficult circumstances. Having said this, I'd like to hand over to our CEO, Thierry.
Thank you, Stefan. I would like also to thank everybody for joining us here today. Before going into an update on our strategy and the full years 2022 results, allow me to mention a few words on the decision of the court. I strongly believe the approval of the restructuring plan is a great outcome for Adler and all its stakeholders. The additional liquidity and the amendment of bond covenants put us in a position where we don't have short-term liquidity pressure to dispose our assets at distressed price. Adler gets the necessary time to transition to stable position from where we can execute our long-term strategy as announced in November. We, as management team, will have more time to focus on what our business really comprise, which is actively managing our real estate and caring for our tenants.
Having said this, I would like to start today's presentation with a refresher on the strategy update we provided to you during the last result call. In a nutshell, our strategy is based on five pillar. Our portfolio strategy, we will execute orderly disposal of selected portfolio of and development projects. Down the line, only limited development exposure will remain. Asset management, we will finalize committed CapEx on development projects. No additional sizable CapEx commitment will be made. We will continue to work to obtain permit for land plots, allowing to explore sales with limited additional investments. Financing strategy. The restructuring plan and the new money facility is providing sufficient headroom to stabilize the platform over the next years. We intend to actively deliver via disposal of selected portfolio and development projects in an orderly fashion.
As part of the agreement with bondholder, Adler Group has the obligation not to declare or pay any dividend or make any other payment or distribution to any of its shareholders. Corporate strategy, we are working towards simplification of the group corporate structure without listed subsidiary and are currently reviewing all options with regard to BCP. We will streamline internal operation in line with the higher concentration and the adjusted scale of the portfolio, decreasing one-off overhead costs through reduction of external and interim advisory. On corporate governance, our search for an auditor continue with the goal of delivering audited full year 2022 and 2023 accounts by September 2024. As Stefan just mentioned, we have made very important step toward this goal.
As part of the bondholder agreement, we will propose another independent board member with strong capital market expertise to next extraordinary General Meeting and plan to appoint a Chief Restructuring Officer to senior management, because we have a very good CFO with us today. I would like now to hand over to Thomas on page eight, who will guide you through the results of the restructuring plan.
Thank you, Thierry. From my side, I would like to thank everyone who is joining us here today on the call. The restructuring plan sanction was received on twelfth of April, following the support of a huge majority of our bondholders. We are grateful for that support and of course, pleased that the English court sanctioned the plan. Following plan sanction, we can now proceed to complete our refinancing. I do not intend to go into the close details of the refinancing, as these are well known and in line with previous updates we have provided. These are outlined here on this slide for convenience. However, I would like to emphasize two important point of details on the slide. The first point relates to the auditor requirement. Previously, this had required the company to file audited financial statements by the end of this month.
That requirement has been amended to September 2024. Second, this refinancing puts the Group onto a stable platform without any short-term pressure to dispose assets to meet its funding needs in the near or medium term, from which we will now proceed to execute our business plan. As Stefan already mentioned, all TPs are mapped, the finance documents will be signed today. The new money will be drawn tomorrow to enable us to repay the Adler Real Estate fund on maturity on 27th of April, 2024. Handing over to Thierry on page 10, who will guide you through the key highlights of our full year results.
Thank you, Thomas. Moving to our operational performance. Even during this difficult time, I'm happy to be able to say that Adler residential rental portfolio has had a strong 2022 on the back of solid underlying rental fundamentals. Like-for-like rental growth in Q4 2022 has been +1.5% year-over-year, resulting in an average rent of EUR 7.58 per sq m per month. Vacancy remain at very low levels, standing at 1.3% at the end of the year, reflecting the high quality of our assets and our strong Berlin home base. On valuation, we continue to see the effect of increasing interest rate, resulting in a 1.9% like-for-like value decrease in Q4 compared to Q3.
The same 1.9% applies to the like-for-like value decrease in 2022 compared to the end of 2021, as revaluation loss in H2 were partially offset by the positive revaluation experience at the beginning of the year. Let's move to our financial performance. Net rental income came at EUR 245 million compared to EUR 346 million in full year 2021. FFO from rental activity totaled EUR 87 million compared to EUR 137 million in 2021. This correspond to FFO 1 per share of EUR 0.74 versus EUR 1.17 in 2021.
Both NRI and FFO 1 were mainly impacted by the significant reduction in our yielding portfolio due to the completed disposal of the Northern portfolio to LEG in late 2021, the Eastern portfolio to Velero and KKR, as well as the Waypoint portfolio throughout 2022. EPRA NTA at the end of 2022 amounted to EUR 2.4 billion or EUR 20.77 per share, compared to EUR 3.3 billion or EUR 27.93 per share as per the end of Q3. On the leverage side, we have decided to shift the EPRA LTV as the company main LTV metric going forward, as recommended by the new EPRA guideline. Thomas will give you more detail on what the exact difference with our previous LTV methodology are.
As a result of this methodological change, and among other, the negative revaluation experienced in Q4, EPRA LTV stood at 74.5% at the end of the year. Our EUR 387 million cash balance, this is excluding cash held at BCP, combined with EUR 937.5 million in bondholder commitment as part of our restructuring plan, put us in a solid liquidity position to continue our operating activity as well as servicing our debt obligation when we maneuvered Adler into a stabilized position. Meanwhile, our cost of debt continued to remain stable as 2.2%, staying at the same level of Q3. Of course, the cost of debt will face a substantial impact in Q2 2023 once the restructuring plan become effective and the new money has been drawn.
With regard to development activity, we have continued our effort to strengthen our balance sheet and to reduce our development exposure further. In Q4 2022, two additional projects have been sold and 4 projects have received offer or are in exclusivity. More specifically, the sale of Schönefeld Schule was closed in Q4 2022, with gross proceed amounted to EUR 11 million. The sale of Parkhaus has been signed during Q4 and closed in Q1 2023, with total gross proceed amounting to EUR 18 million. In total, we have an additional EUR 506 million GAV in development project with offer, receive or exclusivity, including the project Kaiserlei, Wilhelm, Grand Central and Forum Pankow in Berlin. I would now like to hand over to Thomas, who will update you on our financial performance on page 12.
Thanks, Thierry. For the sake of good order, let me point out once again that we have presented you with an annual report in the version with unaudited figures. Of course, we are also looking for an auditor for Adler Group S.A. Once an auditor will have audited our financial statements, we will report on it. Should there be any discrepancies between the audited and unaudited version, we will of course, inform you about this. At the end of the fourth quarter, we had a portfolio of approx EUR 5.2 billion worth of yielding assets, as well as approximately EUR 2.2 billion worth of GAV in development projects.
Given the fact that we anticipate the sale of the 63% stake in BCP, held by our subsidiary, Adler Real Estate, we continue the classification of all of these assets and their associated liabilities as assets and liabilities held for sale. As such, our EUR 7.4 billion total GAV excludes BCP. During the last quarter of the year, the portfolio has seen continued impact of downward revaluations against the backdrop of rising interest rates. This resulted in a revaluation loss of EUR 101 million on the yielding portfolio, equivalent to a 1.9% like for like value decrease, and a revaluation loss of EUR 199 million on the development project. Furthermore, during Q4, we have sold the Parkhaus development project, which has been closed in Q1 2023. I would now like to move to the next page.
As Thierry mentioned earlier, we have decided to adopt the EPRA LTV as the company's main LTV metric. This has to do with the recommendation of EPRA in their new guidelines, as well as the company's wish to shift to a more industry-standardized leverage metric. What changes? The main differences compared to the company's previous LTV metric arise from, first, broadening the scope of receivables from financial assets to net working capital positions, also including payables. Second, reclassifying cash and cash equivalents held at BCP level from the nominator to the denominator part of the equation. Third, deducting non-controlling interests both on the net debt and asset side. This purely methodology change increased the Q3 LTV from 59.9% as per the old methodology to 67.6% as per the EPRA guidelines for EPRA LTV.
Furthermore, a number of items have impacted our leverage in Q4, bringing EPRA LTV to 74.5% at the end of the year. The delta between Q3 and Q4 is mostly explained by the following items. First, disposals mainly relating to the partial sale of BCP's Leipzig portfolio, the Schönefeld Schule development project, and single condominium sales. Second, negative revaluation of our portfolio on the back of rising interest rates. Third, debt repayment, including the EUR 120 million Consus convertible bond and additional EUR 21 million Consus debt. Fourth, remaining payment of minorities in relation to the sale of the Waypoint portfolio. Last point, other items such as operational income, development CapEx, interest payments, extraordinary advisory fees, and write-offs of forward sale and financial receivables. Let's have a look at the maturity schedule on the next page.
At the end of 2022, we had EUR 926 million upcoming maturities in 2023. Out of this, EUR 138 million has already been refinanced in early 2023, extending the maturities by two additional years. The remaining maturities are well covered through a combination of EUR 387 million cash on hand as per fiscal year 2022, with additional EUR 210 million cash held at BCP level. The bondholder commitments, which will inject EUR 937.5 million and expected capital recycling measures, including further refinancing efforts and additional disposals. As part of the agreement with bondholders, the maturity of the EUR 400 million Adler Group bond maturing in July 2024, will be extended by one year.
As we speak, we are in the process of repaying the EUR 500 million April 2023 Adler Real Estate bond on the 27th of April. Let's now turn to page 15. Our gross debt position decreased to EUR 6.6 billion at the end of the year, compared to circa EUR 7 billion at the end of the third quarter. We continue to have a mostly unsecured financing structure with 67% of our total debt, the remaining being mostly secured bank debt. When it comes to the cost of debt, we remain at an average of 2.2% with a fixed and hedged debt of 96% and with an average maturity of 3.3 years.
The additional liquidity provided under the bondholder agreement will come with a different yield profile and carries a coupon of 12.5%, which together with the coupon step up on the bonds affected by the restructuring plan, will increase our cost of debt starting in Q2 2023. Adler Group S.A. no longer has incurrence covenants in the way it previously did, as these have been amended as a result of the restructuring plan and refinancing. Nonetheless, we still report ratios here for fiscal year 2022. Moving on to the ratios. We have already discussed in detail the LTV on the previous slide, but please let me remind you that our bond covenants carry a different definition of LTV compared to EPRA and our old methodology. According to the bond prospectus definition, LTV is now at 60.9%.
Under the Group SA bonds following the refinancing, LTV will not be tested until 31st of December, 2024. Our ICR increased to 1.0 below the debt incurrence covenant required level at 1.8 x, but above the 0.4 x at the end of the third quarter. The unencumbered asset ratio decreased to 91% from 103% in the last quarter, below the 125% required level. This is mostly driven by the negative revaluation experienced during Q4. As a result of Adler Group's unsecured bonds having effectively amended on 17th April, 2023, the ratio-based incurrence tests have been removed. Adler Group now has fixed incurrence baskets and a maintenance based LTV covenant, which will be tested for the first time on 31 of December, 2024. Let's move now to page 16.
We ended the year with a cash position of EUR 387 million below the EUR 615 million we held at the end of the third quarter. Please let me remind you that the EUR 387 million excludes EUR 210 million of cash held at BCP level, which is classified as asset held for sale at group level. With that, we would get to a position of EUR 597 million cash at hand per December 31, 2022. There have been four main factors affecting the cash position during the first quarter. First, EUR 46 million of disposal proceeds, including the remainder of Velero/KKR transaction, the Schönefeld Schule development project, and single condominium sales. Second, EUR 49 million related to remaining payments to minorities in the sale of the Waypoint portfolio.
Third, a negative financing cash flow of EUR 175 million. This includes, among others, the EUR 120 million convertible bond at Consus level. Additional EUR 21 million Consus debt, as well as interest payments, other small amortizations and repayments. Lastly, we spent EUR 29 million in CapEx related to ongoing development projects at the Consus level. Thierry, back to you.
Thanks, Thomas. For 2023, we are providing an NII guidance of EUR 207 million - EUR 219 million, down from EUR 245 million in 2022. This is mostly impacted by the one hand, the number of disposals, including the sales of the Eastern portfolio to Velero/KKR, the sale of the Waypoint portfolio, and the sale of part of the Leipzig portfolio by BCP. And by the other hand, an anticipated but conservative like-for-like rental growth between 3%-4%. I would now like to move to the next page to end this presentation with some remarks. The approval of the restructuring plan safeguard Adler liquidity position with no new money providers providing EUR 937.5 million additional liquidity, allowing us to stabilize the company.
We are grateful to our creditor for the support and trust that they have shown to the company in this refinancing. We continue our disposal effort in order to rationalize our balance sheet and to actively delever. Two additional projects have been sold in Q4 2022. We have had a stronger personal performance in Q4 with a 1.5% like-for-like rent increase year-over-year. Operational vacancy of the total portfolio continue to be structurally low level at 1.13%. We have experienced a 1.9% like-for-like negative revaluation of the yielding asset portfolio in Q4 on the back of surging interest rates. Value have gone down by the same 1.9% over 2022 as we experience positive value growth in the first half of 2022.
We have a solid liquidity position including EUR 387 million cash at hand at the end of the quarter to be expanded with the liquidity package secured through the agreement with our bondholder. We would like to open the floor for question. Thank you all for your attention. Gundolf, over to you for the Q&A.
Yes, thank you, Thierry. Simply handing over back to Francine for starting the Q&A session, please.
Thank you very much. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. We have the first question from Wolfgang Felix from Sarria. Your question please.
Yes. First of all, congratulations to the restructuring so far. I think it's obviously in almost everybody's interest. I only have one question, given we're swimming in a wealth of information as is, and that is to your disposal strategy of assets going forward. You've mentioned that you were going to largely leave behind the development assets over the next two years. I was wondering how you see the market there now and if there's any type of assets also that you're looking to perhaps let go earlier than others, or if you can talk us a little bit through that. Perhaps the other thing is what the various options are that you're currently considering for BCP. Thank you.
Thank you for the question. The one of the key points of the restructuring plan is to give us time to execute our sales strategy to maximize the price value. This is the first point. There is no immediate time pressure for us to dispose asset. When we look our portfolio, we have a majority of yielding assets anchored in Berlin, and we have development projects. As we don't intend to further develop this project, our first priority is to sell the development projects one by one or by package in an orderly manner. That's our first strategy. The second strategy, when you look our yielding portfolio, we want to focus more in Berlin. What is outside Berlin will be disposed of first.
Today, we see the market, of course, the volume of transaction has lowered, but we are seeing interest for our development project and also for our yielding asset. In regard to BCP, our strategy is clear, is to sell also our stake at the best time and at the best price. Thank you.
Okay. Any sort of differentiation among different types of development assets you're not, I guess, ready to give at this point?
Sorry, could you rephrase your last question?
I was wondering if there were any types of development assets you were looking to perhaps sell before others?
I think of course, the project which are under construction are the one where we want as a priority to dispose, because then it will limit the additional CapEx we are having for. We are also in close contact with municipality to see with them what is the best timing also for them, because they are delivering building permit and have also interest that the project are moving forward and not stand at the moment. We are on this point, very opportunistic and we are in contact with developer and investor which are very interesting in our development portfolio.
Okay, thank you.
Ladies and gentlemen, I repeat. If you would like to ask a question, please press star followed by one. There seems to be no further questions at this time, and I hand back to Dr. Kirsten for closing comments. Oops, there's one question came in. Sorry. Which comes from Peter Cuckovic from UBS. Please go ahead.
Hi, morning. Thanks for the call and congratulations on closing the restructuring. My question is around the domination agreement, and what are your plans on pursuing that and what the timing on that looks like, please?
There will be no domination agreement when the squeeze-out happens in two days or three days.
Okay. There's no need. That is effectively.
We take over 100% of the company.
Yep. Okay. That's not an issue anymore, right? Okay.
No, we just reached for the higher, for the higher bar immediately. Yeah.
Mm-hmm. Mm-hmm. Okay.
The domination agreement is over. We just looked at each other puzzled because, yeah, but that's the point. Okay, Peter?
Okay. Okay. Okay, fantastic. Very quickly on the market, obviously you now have bought yourself a runway, no pressure to sell assets at lower prices, and hopefully you trade out of this period of market volatility, you know, and able to crystallize higher values. What are you seeing in secondary market for similar assets? I mean, My understanding is that bid offer is pretty wide in all sorts of real estate in Germany. On the resi, because obviously you're mostly in the yielding assets, what are you seeing in kind of a kind of more retail type sales? I'm sure there's transactions. As portfolios are not selling, I'm sure there are individual asset sales going on in German cities where you know, you have exposures. What are you seeing price-wise in terms of year-over-year changes in transactional values?
Peter, this is Stefan. Before I hand over to Thierry, I would like to, let's say, comment on your statement, no pressure. This company has tons of pressure to sell because the restructuring has been with very expensive money. The further we come, the quicker. We just have no pressure to go into, let's say, blackmailing type, fire sales. With that, I'll hand over to Thierry.
Understood. Thanks.
Yeah. On the market, as I mentioned, the volume of transaction and the larger transaction are now a bit off the table because of uncertainty around interest rate. What is very positive is that we can really slice our portfolio in different size and type the different kind of buyer, starting from privatization, going to family office looking for EUR 10 million-EUR 15 million transaction. We are also having discussion for larger transaction. What we see is, of course, the timing of executing this transaction are longer, especially for the buyer to secure the financing. They have to reduce the leverage. For core assets, we see price stabilize after the decrease we have seen. Of course, the main point of the market today is limited volume compared to the one which we have known in the past year.
You're saying there are some transactions that are stabilizing at lower levels, right? Is that what I understood correctly or not?
Yeah. Correct.
Okay. What are those lower levels year-over-year compared to book values?
This is what we are seeing in the evolution of our valuation with the decrease we have with 2022. That's what we see.
Okay. Well, that's an external values view on your portfolio, right? I mean, the actual transactions on the ground could potentially diverge to that.
That's true, but what CBRE does, on the yielding portfolios is, the market valuation as it is at the moment.
Okay.
Let's keep in mind, the German resi market has a completely different level of resilience, than what you see, for instance, in the U.S. or in other markets because of its highly regulated nature.
Mm-hmm.
...in connection with a significant under supply of new flats and new accommodation. Therefore, there is an automatically stabilizing effect. It's, yeah, the regulation stabilizes the market. Therefore, neither with our competitors nor in us, you've seen the yielding portfolios in their valuation crashing down. There will be no crashing down. It will be single digits here or there, but anything else would not fit to the macroeconomic environment in which we deal.
Obviously, yeah. I mean, the yielding portfolio should be much more resilient than CRE, for example, or other types of real estate. You know, single digits, that's obviously, that's very encouraging.
Yeah.
That, that, you know, the, the-
that's what we see from-
Yeah.
That's what we see from everybody. That's not Adler-specific.
Yeah. Okay. No, this is exactly what I wanted to hear. Not Adler specifically, but away from you.
Yeah.
Thank you, thank you so much for that color. That's really useful.
Thank you, Peter.
Thank you.
We have no further questions. Now back to Dr. Kirsten for closing comments.
Francine, thank you. Well, ladies and gentlemen, I've been nearly 40 years in business now and 12 years in German resi. The year 2022 is for the whole industry by far the toughest year I've seen so far. That Adler is still standing, has various effects and influences. We were able to stabilize financially through a very early started restructuring. I think we started 2nd or 3rd of May last year. We brought this across all sorts of hurdles to conclusion in the last days. We've had a lot of headwind with regard to portfolio marketing, cost increases and other aspects. The key point why we are still able, on a going concern assumption, to present to you today is the team.
It's the people who work for us and with us to bring the company forward, who digest a lot of little losses, defeats, and also the bigger ones, stand up and keep going. Therefore, I'm thanking the team. I'm thanking all our stakeholders for the trust which they are giving into the company. I'm thanking everybody who helps us to maneuver in these rough seas. Ladies and gentlemen, thank you very much for your interest in the company today, and have a good day.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you very much for joining and have a pleasant day. Goodbye.