Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Corestate Annual Results 2021 conference call and webcast. 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 press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Dr. Kai Klinger. Please go ahead.
Thank you so much. Ladies and gentlemen, thank you for joining us today on our earnings call for the presentation of our preliminary results for the financial year 2021. On the Corestate Investor Relations website, you can find our earnings press release and the corresponding slide deck. As usual, I'd like to draw your attention to the forward-looking statement and the disclaimer wording on page two of our presentation. This safe harbor language applies to the presentation and all comments we will be making today. I would also like to mention that everything is being recorded. You can replay the call and view the transcript on our investor relations website after the call. Please be aware all information on financial year 2021 we give you today within this presentation is preliminary and not audited.
With me on the call are the new CEO of Corestate Capital Group, Stavros Efremidis, who many of you already know, and our CFO, Udo Giegerich. We will guide you through the presentation, followed by the usual Q&A session. The timeframe for today's call is about 45 minutes. Now it's my pleasure to hand over to Stavros. Stavros, the floor is yours.
Thank you, Kai, and good morning, ladies and gentlemen, and a very warm welcome from my side. As you have probably heard or read, today the company announced the completion of a very successful fiscal year 2021 and the comprehensive reshuffle of Corestate leadership structure. I'm therefore very pleased to introduce myself to you as new CEO. Before we go on with our presentation, I want to do a quick side remark regarding the postponement of the publication of the audited consolidated financial statements we have announced also this morning. Yesterday, we were informed by Ernst & Young that they have not yet fully completed their audit procedures in certain sub-areas focusing on Corestate Bank as planned. As a result, the publication of the audited consolidated financial statements has been postponed. We have therefore published the preliminary and unaudited financial figures from 2021 today.
The company has, of course, already prepared the annual financial statements 2021 in full and firmly believes that the ongoing audit procedures will have no impact on the stated figures. However, we expect the audited consolidated financial statements to be published promptly, at least by March 31. Now we can move on page 4, please. At first, allow me briefly to introduce myself and describe my motivation for this decision. Starting as a shareholder with a significant stake in the company and having become Chairman of the Corestate Supervisory Board last year in December, now the vital time has come for myself and for Corestate to dare a comprehensive entrepreneurial new start.
To be honest, this was not originally my own idea, but it was initiated and driven by René, the former group CEO, after we had to fill a central vacancy at the Corestate Bank level at short notice in January as executive directors there. With this professional background, he was the ideal candidate. We have known each other for decades. With René, we can pursue a substantial growth path even faster. In combination with the executive board seat at HFS, he can now put all his energy into successfully expanding our debt business based, of course, on a fully institutional approach integrated into our group structures. In accordance with German regulatory and supervisory requirements, this role should not be exercised as a dual function together as an active member of the group board of management. My own motivation to returning to operations is also easily explained.
I have already invested a significant amount of capital, and in addition to my many years of experience as CEO in the real estate industry, I also bring my passion and my entrepreneurial and an excellent network to the company. We have now put together an ideal management team for Corestate. We start following the turbulence surrounding COVID and the shareholder changes of recent quarters. Together, we have nothing else in mind but to reinvest the company in terms of personnel, strategy, operations, and finance. As CEO, in addition to strategy M&A and my role as an impact generator, I'm primarily the contact person for our most important external stakeholders, such as clients and investors in our products as well as in our company on the capital market side. I'm also responsible for our real estate debt segment in close coordination with René.
With Isabella as our new COO, in the management team, we have promoted a woman from our own organization who has a great deal of experience with transformation, corporate excellence, organizational development, and ESG in top management positions in the real estate industry. Her nomination was also a clear endorsement of our uncompromising focus on ESG at all levels. She will be also responsible for the holding functions human resources, legal and compliance, IT, and marketing. To strengthen our investment and real estate practice in the management team, we are pleased to have Ralf Struckmeier on board as our new group CIO. Ralf is a highly experienced real estate deal maker who has been successfully involved in the top management of various real estate companies. I have known him for many years and we have done many smart and exceptional transactions together.
Ralf Struckmeier will head of real estate equity segment and is responsible for assets, fund and transaction management, as well as business development in the operating business lines. With our CFO, Udo Giegerich, and myself, the new management board will be composed of four members. It is also worth mentioning that our supervisory board, chaired by Dr. Bertrand Malmendier, has gained a new and a very experienced member in Dr. Roland Folz. As a well-known banker and active CEO of a fintech unicorn, he will strengthen our competencies, especially in the area of digitalization and scaling. I very much look forward to working together with my new colleagues on both boards as part of such a great team. Please flip now to page 5. As you can see, there's a lot going on Corestate right now, and I'm very excited about the journey ahead.
First, allow me to start with a brief overview of the key initiatives and highlights from the past fiscal year 2021. The short- and long-term market drivers in the real estate sector are fully intact, and as expected, Corestate has benefited from the economic upturn after the effects of the pandemic have subsided, supported by another excellent performance in our equity and debt businesses. 2021 was a successful year for Corestate. We again delivered significant revenue growth and achieved our forecast at all levels. Let me give you some more details on our figures later. My predecessor, René, did a decent job and achieved an impressive turnaround for the company last year. With the acquisition and integration of AFS, today's Corestate Bank, he has formed a real estate investment powerhouse with a unique equity and debt platform.
A key objective of 2021 was to initiate the comprehensive transformation of the group. This has meant not only realigning the entire organization and simplifying structures and procedures to position Corestate strongly and flexibly for the future, but also focusing the business model on core real estate activities to shape its profile in the market. Thus, one of the strategic decisions have been made during the past year was to divest a large part of the personnel-intensive and low-margin property management business and to spin off the non-core asset management activities. Another topic in the Q1 was the significant commitment of Karl Ehlerding and myself as new anchor investor in Corestate. As part of the transaction, we replaced the two previous major shareholders.
As a result, we have now implemented realigned corporate governance structures and will successfully improve the level and quality of transparency and institutionalization of the entire group. That is my personal ambition. One crucial aspect in the internal perception of Corestate is the substantial progress in debt reduction and the readiness to refinance in 2022. In short, by the end of 2021, the replacement and the essential cash conversion measures have not yet been fully completed. For the most important position, my colleagues have either achieved in transaction closing, such as Giessen and for the first tranche from the UP fund, or there's already a contractual obligation of the specific cash flow, cash inflow. On this basis, we are very confident that we'll be able to successfully implement the upcoming refinancing before summer with a healthy set of figures.
Looking back, I can say that Corestate is back on track and met its financial guidance on all levels. Corestate thus delivered outstanding double-digit revenue growth and a triple-digit earnings improvement in 2021, once again demonstrating a strong market position as deal maker on our home turf. Please flip to page six now. You see an overview of our assets under management on this chart. End of 2021, the total assets under management went slightly down from EUR 27.8 billion to EUR 27.4 billion. The real estate assets under management within Corestate's core equity and debt segment remains in 2021 more or less unchanged at around EUR 19 billion. We have already graphically depicted our future core business here. As indicated, we will gradually divest our non-core activities with an asset under management volume of EUR 8.5 billion.
For this reason, they have been reported as discontinued operations in our annual report 2021. At the beginning of 2022, we have already successfully completed the disposal of the majority of our non-real estate portfolio with the aircraft and media funds, which were originally characterized as rundown units. In addition, the spin-off process for our property manager and operating CAPERA and CRM was also initiated. These portfolio measures are important strategic steps to sharpen our real estate profile and to focus on a future-proof, high profitable business set up with vast synergies and less complexity. Let's now move over the next slide, 7, where we start to walk through the specifics of our both core segments.
While being confronted with the economic effect of the ongoing coronavirus pandemic and the related restriction of our sector, especially in quarter one in 2021, the conditions for the business improved somewhat in the second half of 2021. The volume of transactions involving attractive real estate concepts and the investment appetite of institutional clients went up significantly. We have fulfilled on behalf of our clients several transactions and investments like the acquisition of a logistics portfolio in Paris region or the forward-looking office project VISION ONE campus in the south of Stuttgart. Other selected highlights in the operational business were, for example, the acquisition of the office project Weitblick in Augsburg, the new school building in timber construction and portfolio revitalization in Munich, or the opening of our landmark micro living property TrIIIple in Vienna.
In the course of the last year, the Corestate team followed constantly its operational agenda to achieve the business activities and clients reach. The group streamlined, bundled, and strengthened its own sales approach, resulting in a strong client focus on DACH regions. We can see on this slide different split up of our EUR 12.4 billion real estate equity business. Beyond our specialties like micro living, logistics or city quarters, the latter is subsumed under other. More than half of the assets under management are office properties, mainly in Germany, France, and Benelux. As a side note, above 80% are core and core plus investments.
At the bottom right of this slide, you can see a substantial and balanced maturity profile of this well-performing EUR 12 billion assets base with an average maturity in our real estate equity business of about 5 years, which is regularly improved by organic asset management growth. When I dare a look into our upcoming months and quarters, we expect further organic growth in all business units, supported by a strong sourcing pipeline in advanced contractual status of around EUR 1.3 billion for our real estate equity operations. Please follow me to page 8 of the presentation now.
This page is about our real estate lending and financing business, where we are in charge of gross asset value of EUR 6.6 billion with our more than EUR 1.2 billion mezzanine fund. This is based on track record of near-zero default rates over the past decades. At the end of the last year, we have financed through 3 evergreen fund vehicles, 42 projects with an average financing size of around EUR 29 million and unchanged average loan duration of 1.5 years. The focus has not shifted in years. The vast majority of the investments in the metropolitan areas in Germany, Austria, and Switzerland. Above 70% of the lending goes to the top 7 cities in Germany.
Even more important for the performance of the funds, roughly 70% are residential and core projects, which went through the crisis without any negative impact according to the ongoing high demand. Currently, we have provided funds to 23 different developer groups on a single asset basis, the largest counterparty of which takes no more than 70% in total. On the investor side, we saw more or less a stable development of the fund during the crisis without any significant project impairments and only minor churn. Based off the current performance of this double-digit return product, we feel very comfortable positioned, especially if we think of cross-selling effects from our integrated platform for real estate equity and debt products.
The past year also saw a good performance by HFS, a leading provider of mezzanine finance of the German housing and commercial real estate market, as well as the launch of new products such as Stratos or a new senior loan offering. Taking over German credit platform and fully licensed securities trading bank 2021 has not only uniquely rounded out Corestate existing business model, but it was also put the company in a position to leverage a variety of value-enhancing synergies potential in its product offering as well as in its sales activities when approaching customers. We are absolutely convinced that this strategy was the basis for our remarkable performance during the crisis and will be foundation for a very profitable future.
Therefore, we expect further organic growth in all lines with the Corestate Bank and the HFS business in 2022, supported by strong financing pipeline of around half a billion EUR for our mezzanine borrower business. In addition, we see our Corestate Bank already mandated financings for projects in preparation of more than EUR 2 billion. Please follow me on page number nine of this presentation. Despite the difficult conditions, I'm happy to report that everybody at Corestate kept extremely busy and our deal teams closed a large number of very attractive transactions in the course of the year. What does that mean in terms of our figures? According to the financial guidance, which was still inclusive of discontinued property management operations, we expect to reach aggregated revenues and gains of between EUR 235 million and EUR 260 million.
We finally delivered on a like for like basis, EUR 246 million. Our guidance for the adjusted EBITDA was between EUR 90 million and EUR 95 million, and we come out at the lower end of EUR 90 million. On adjusted net profit, we aimed at a range from EUR 50 million to EUR 70 million and reached EUR 59 million. These figures reflect Corestate's excellent performance and comeback in a still challenging 2021, which we owe first and foremost to the hard work and dedication of the company's employees at all locations. With this, I would like to hand over to our CFO, Udo Giegerich. Udo.
Okay. Stavros, many thanks and a very warm welcome to all of you from my side. I'd like to give you information on our income lines in very brief. After solid business development in the first six months, 2021, we have seen especially an ongoing recovery in the second half of the year. In 2021, Corestate was able to successfully increase its aggregated revenues and gains by more than 28% from EUR 191.4 million to a total of EUR 245.5 million. The property management business for the third parties, which is to be sold and therefore flagged as discontinued operations, contributed EUR 30.1 million to aggregated revenues and gains in the reporting period.
Considering that income generated by continued core activities increased 2021 by 33% from EUR 162 million to EUR 215.4 million on a like-for-like basis. Let us take a deeper look into the individual top-line growth of the reporting segments. The real estate equity segment generated revenues of EUR 77.6 million, clearly above the prior year's level with EUR 70.4 million. Our equity transaction fees, including acquisition fees and realized sales and promote fees, climbed to EUR 32.7 million from EUR 20 million last year. What was mainly driven by an upswing of the general transaction environment in Q4. The asset and property management fees, including the development fees in this segment, went down from EUR 50.3 million to EUR 44.8 million, mainly due to a drop in our development business for micro living or serviced apartment projects.
The total revenue from real estate debt went up significantly by 30.6% from EUR 93.3 million to EUR 121.9 million, underlining the leading position in a very prospering market. In 2021, revenue from underwriting and structuring fees almost doubled from EUR 18.8 million to EUR 36 million, mainly driven by the consolidation of the Corestate Bank, its unique market position, and a booming deal pipeline. Revenue from asset management and performance fees, including coupon participation fees, increased from EUR 64.2 million to EUR 67.8 million. Income from bridge loans grew to EUR 18.8 million from EUR 10.3 million, supported by the peak in lending over the year. Income from the other segments developed positively hand-in-hand with the improved market valuation and transaction environment after 2020. Moving on to slide 11, please. With this chart, we would like to give you a little more background on our P&L figures and key ratios.
All in all, we had operating expenditure in amount of EUR 99 million, down from EUR 111 million last year. The OpEx ratio improved significantly by more than 20 percentage points to 46%. While the expenditure in the equity segment and in others went down, the cost increase in the debt segment was mainly driven by consolidation of the Corestate Bank. The G&A expenses of nearly EUR 45 million includes around EUR 17 million one-off expenses from M&A related activities, extraordinary transformation costs, and provisions for the already started efficiency program. The main focus for the upcoming quarter and years will be on improving the overall cost structure by taking out complexity, avoidance of double functions within the organization, and using modern technologies and digitalization while increasing revenues. Our EBITDA for continued operations for 2021 stood at EUR 72 million and the adjusted figures at EUR 90 million. It creates a significant turnaround.
The adjusted EBITDA margin shows an impressive jump from 10% to roughly 42%. Depreciations and amortizations, almost EUR 40 million, include also the consolidation effects from the acquired Corestate Bank. Our income tax amounted to EUR 3 million compared with -EUR 7 million last year. The figure is mainly driven by usage of group tax effects from the first time consolidation of Corestate Bank and the offsetting of tax loss carryforwards in the German tax group. Our net profit for the financial year 2021 stood at EUR 18 million, corrected by M&A-related expenses in amount of EUR 11 million, depreciation of EUR 33 million on PPA-related intangibles, the provision for efficiency measures of EUR 6.5 million, and deferred tax liabilities of EUR 9 million. The corresponding adjusted net profit shows more than EUR 59 million. The visible upswing and our cost discipline have helped us to achieve all these successful figures in 2021.
Thus, as Stavros already said, we have met our business forecast in all budget lines. Please flip to the next page. Page 11 provides an overview of the main balance sheet items at the end of the year. With just close to EUR 840 million in equity, the equity ratio improves to more than 51% at the end of 2021. By far the largest component in our current assets is the goodwill position created mainly in association with the acquisition of HFS, Hannover Leasing, STAM, and finally, the Corestate Bank. All cash-generating units of our continued operations show more than sufficient flexibility and headroom in the context of the semi-annual impairment test.
Investments in associates and joint ventures have increased in the course of 2021, results mainly from the short-term technical bridging of the project VISION ONE in the Stuttgart metropolitan area, which has already been placed with investors in 2022. Inventories went up in particular related to CapEx measures at the Giessen property from the corresponding restricted cash account. At other current financial assets, our bridge loans went significantly down to EUR 93 million at the end of the year, and our trade receivables positions includes a short-term increase of around EUR 20 million from outstanding contractual sales and promotion fees from successful concluded deals in December.
Total liabilities were relatively stable in comparison with prior year, while the non-current liabilities went down and the current liabilities increased almost by the same amount because of the reclassification of our convertible bond due to its maturity in November 2022. Turning to the next page 13. As you know, one of the major tasks of the management team, among other things, is the noticeable reduction of net debt to aim an acceptable leverage ratio and thus creating a solid financial foundation for the group and its future-oriented growth path. Let me be very clear, we could certainly show some progress in this manner. In particular, in the last quarter, 2022, 2021, sorry, but overall due to shifts in debt figures, we failed in our aspiration to achieve a leverage ratio of around 3x at the end of the year.
Nevertheless, now we want to reiterate our goals, and we are steering the right course to achieve this ambition. I think you are quite familiar with this chart. What you can see at the end of December, we had around 622 million euros of total debt. This contains EUR 133 million banks and other debt, including EUR 54 million warehousing debt. With our cash pile of more than EUR 76 million, considering additional EUR 20 million for leasing liabilities or net debt, our net debt stood roughly at EUR 527 million. Against the backdrop, we have redeemed EUR 30 million for the HFS bond and bought back already EUR 6.5 million of our convertible bond.
Thus, this totals to an improved financial leverage at end of 2021 of about 5.9x versus 32.8x at the end of the year before. Against backdrop of the refinancing program we will have, which will happen 2022, it certainly makes sense to provide you more color on our path of debt reduction and explain the various sources in more detail. As you can see on this slide, the crucial step of our cash conversion program for 2022 to reduce our net debt by some EUR 280 million. The starting point is an operating cash flow, cash inflow of more than EUR 40 million out of our own fund structures from already earned contractual performance and promote and sales fees from 2021.
Another EUR 50 million-EUR 60 million will come from repayments and replacements of our bridge loans. The future run rate for this position will be below EUR 50 million. Added to this is roughly EUR 90 million from the closing of the Giessen asset end of April and the cash conversion from other smaller co-investments in the first half year. Thus, for the second half of 2022, we have another EUR 40 million-EUR 50 million designated as proceeds from placements and reductions of our co-investments. Furthermore, we expect usual inflows from 2022 performance fees at the end of the year of around EUR 50 million.
In total, we will reduce our net debt position by more than EUR 280 million by the end of the year and deliver a healthy financial setup with a leverage ratio of between 2 and 3 times as basis for our refinancing. We are currently preparing to go to the market with the refinancing of EUR 300 million straight bond well before the summer. The EUR 200 million convertible bond will be repaid from our cash position as announced. To stress this again, debt reduction and financial de-risking is a top priority for me and my colleagues in the upcoming weeks and months. With this, I would like to thank you for your attention and please flip to page 16. Stavros, over to you.
Many thanks, Udo. In an initial retrospect, we can state the German real estate market proved its resilience in many asset classes during the pandemic and remains very attractive for long-term investors. This is especially true of the ongoing recovery phase of the German economy. Looking forward, we see that despite the continued presence of COVID-19 and the current war in the Ukraine, life and the real estate industry will gradually return to normality. A clear and tangible outcome of our current discussion with clients is that the real estate transaction market is already back in very vibrant state, and risk appetite of the investor side is visibly increasing further. Basically, any company that wants to be successful in the long run has to constantly question and sometimes even reinvent itself, especially when the operating conditions change.
Now, after the long pandemic phase and the changes in the board and the shareholder base, the ideal time has come for Corestate to dare a consistent entrepreneurial new start. We will therefore carry out a comprehensive rebranding within the entire group in the second half of the year and reposition ourselves vis-a-vis all internal and external stakeholders, but above all, in the real estate and capital markets. Focusing on our core business while establishing new and transparent corporate governance with a dynamic team will help us to unlock previously unused potential. Against this backdrop, in the view of the continued positive market development in the real estate sector, we again expect an annual organic new business driven growth in our core assets under management of 5%-10%, which will of course, be reflected in our revenues and earnings.
Yes, we also have to become more efficient and cost sensitive. This will involve sensibly streamlining and harmonizing of our internal structures and processes. An ongoing efficiency program will deliver substantial cost savings of around EUR 10 million per year, starting in 2023, at least. Provisions of EUR 6.5 million for expenses relating to these programs were set aside already in 2021. In summary, I can assure you that Corestate has developed strongly and presented good figures. We will now build on this and put the company on a substantial growth track. On the main objectives of Corestate's newly formed management team, we will also significantly reduce financial debt and complete the planned refinancing before the summer this year. A key element of this is a significant reduction of the leverage ratio to 2-3 times in 2022.
In the medium term, we aim to reduce this ratio to below 2x on the basis of a strict financial policy. This will substantially reduce our corporate risk profile to the greater benefit for our investors, clients, employees, and business partners. In parallel, we will once again become for our shareholders an attractive growth and dividend stock. I'm highly motivated and committed to achieve this together with my new colleagues and the management and supervisory board. Please move to the last slide, 15. As usual with our annual accounts, we would also dig in a little bit more now on what we see in 2022 in terms of figures. The main message is clear. This year, operations will be driven by a more normalized and less volatile investment environment.
In brief, we are dealing with the formerly strong debt business, an equity business that is picking up momentum, and we can demonstrate further scope for more efficiency and profitability on the cost side. We are optimistic about the upcoming quarters. Hence, for 2022, we expect now acquisition and sale fees in our real estate equity business of between EUR 30 million-EUR 40 million and asset and property management fees of between EUR 40 million-EUR 50 million. Please note that is the figures without the CRM and CAPERA business. Our debt segment will show EUR 50 million-EUR 60 million of underwriting and structuring fees as well as, on the midpoint, EUR 75 million from asset management and coupon participation fees, including our bridge lending income. The other segments will deliver between EUR 5 million and EUR 10 million.
Based on this, with our core real estate activities, we want to realize in 2022, aggregated revenues and gains of between EUR 210 million and EUR 230 million and an EBITDA of between EUR 90 million and EUR 110 million. On this basis, we are targeting a resumption of dividend payments that were temporarily suspended during the coronavirus pandemic and are planning to distribute at least EUR 0.50 per share as dividend out from 2022 earnings in the 2023 financial year. All in all, the new management team is highly committed to its goals and the entire company is very well on track to deliver what we have promised. With this positive outlook, I would like to hand back to the operator and we are now happy to answer your questions.
Thank you. 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 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Andre Remke from Baader Bank. Please go ahead.
Stavros Efremidis, congratulations to your new position. Thanks for the presentation. I have a couple of questions, maybe question by question, I would prefer. The first question is on your guidance. Does the EUR 90 million-EUR 110 million range relate to the adjusted EBITDA from continued activities, i.e., the comparable figure for the last year, the EUR 90 million?
Hi, Andre. It's Kai. Yes, you're absolutely right. We are talking about reported EBITDA in 2022. Last year, it was adjusted, and there we are talking about EUR 90 million adjusted EBITDA and reported in the lower 17 in 2021.I
I.e., you compare the EUR 70.7 million and your guidance compares to that figure, the EUR 90 million.
Right.
To one element.
Right.
Okay.
Right.
Do you see any kind of adjustments to the EBITDA for the current fiscal year?
No, we have done our provisioning for our cost program already, in 2021. We are guiding as pretty clean, 2022.
Okay. Perfect. Second question relates to your AFS acquisition. You agreed on an earn-out component of 1.5 million shares. This is partly included in the equity already. Previously, you stated that this will depend on certain income levels for last year until, if I remember correctly, 2023. Could you elaborate whether this is still the issue and do we have to expect or is that the 1.5 million new shares will kick in?
We expect further that we achieve our internal goals and if we are doing so, then of course there are contractual obligations for another earn-out component.
This has nothing to do with the situation from Ernst & Young that the report is still unaudited.
Absolutely not. It has nothing to do with that.
Okay. That's clear statement. The third question is on your real estate equity business. Well, this turned positive again last year, but still with a very limited margin. Looking at the revenue guidance for this business for this year, there seems to be limited growth or virtually no growth. Do you consider keeping this business or maybe completely focusing on the higher margin debt business?
No, absolutely the opposite. We are highly convinced about, first of all, the synergies between both debt and equity and, obviously, the stickiness in our equity funds, we are talking here about at least five, typically 10 years term, are much higher compared to our much more profitable debt business. Nevertheless, our internal cost allocation is not finally done now because we are still dealing with some internal cost structures and its allocation. Our current split up is a little bit misleading. Nevertheless, our fixed costs are much higher in our equity business.
Plus we, if you see the turbulences in 2021 and the still, especially in the first half, reluctant investor base, beyond the core or co-core plus segments, there we can see a clear upside in the future if the markets are in a much more normalized environment. We are believing, we are strong believers in our equity real estate business.
Do you already expect a higher profitability for this year on this business?
Yes. Slightly. Yeah.
Only slightly. It will go along with the revenue guidance in this business.
You know this industry quite well, René, and Andre, I'm sorry. It takes time to attract money, and if you are here in the driver's seat and you can improve your upfront acquisition fees, then of course there's the juice in, and this is actually what we wanna do.
Okay. Perfect. A question on the mentioned divestment process on CRM and CAPERA. When could we expect next news on that? Are you already in negotiations with potential buyers or is this too early in the process at the moment?
We are here in the process, and usually it takes time if you will find your final love. This is nothing for the next weeks or month, but clear aim is to complete this in 2022.
Okay. Very last question on your efficiency program. You spent EUR 6.5 million last year. Do we have to expect any cost occurring this year?
Yeah. We don't want to overpromise here, but there's a certain likelihood that we can see or harvest the first fruits out of that, especially on our material cost side, because there it's easier to do it than on personnel. The main impact will be fully materialized in 2023.
This goes along with your first answer on the adjustments to EBITDA that provisions are done. There is nothing more to come above the EUR 6.5 million.
Yeah, sure. You're right. Sorry.
The cost.
You're right. We have there a clear game plan, and this is already provisioned in 2021, in last year. Again, nothing more for 2022 expected.
Okay, perfect. That's from my side. Thank you very much.
The next question is from a line of Alexander Groß from Deutsche Bank. Please go ahead.
T hank you for taking my question and congrats to a good operating result. Maybe also question by question, if I may. Can you give details on the cash balance and how it has been evolving as from the start of the year?
The cash balance has not substantially evolved from the beginning of the year. We are expecting the closing of the LA Wohnen and the Herschel project and the inflows rather soon. However, we had to wait there for the waiving of the preemption rights by the municipalities, and especially the one municipality in Berlin, and it normally takes some time to get these waivers in.
Perfect. Your net debt therefore is also modified.
Yeah. Net debt also is quite unchanged.
All right. Thanks. On bond buybacks, have you done any more until today?
We are continuously looking into this market, but we have not done so far any further buybacks.
It's the EUR 6.5 million that still stands.
Roughly 6.5, yeah.
All right. Perfect. Thank you. In terms of coupon participating fees, how much have you .
Yeah. There was no substantial inflow, cash, change. These EUR 50 million are still very efficiently invested in the Stratos funds and will produce interest there, but we have not received it.
When do you anticipate to get them? Is it before the refinancing or?
Before the refinancing, yeah.
Okay. On Giessen, could you also give an update on the disposal, please?
The disposal process is going very well. We received a confirmation basically that we can close the deal end of April. The buyer has now or is close to finally arrange a financing for himself in the area which he wanted, and therefore he will now collect the money and then we can close end of April.
What will be the percentage that he will take over from Giessen?
It's still in his obligation to do this, to define this, how much funds he will get in. He has the right to buy 51% plus the option to go to the 90%. As he has now got substantial financing, we are still optimistic that he goes rather to the upper end.
Okay, perfect. Thank you. That's it from my side. Thank you.
The next question is from a line of Philipp Häßler from Pareto. Please go ahead.
Yes. Hello. Philipp Häßler from Pareto Securities. I have three questions, please. Firstly, on your discontinued operations, you said there was an impact of EUR 30 million on revenues. Could you perhaps share the impact on the EBITDA? Secondly, the impact from your deleveraging plans, what will be the impact on your future profitability? On Ukraine, the war in Russia, do you have any Russian investors in your products? Maybe you could shed some light on this. Thank you.
Hi, it's Kai. Maybe quick and dirty. We have a negative EBITDA on our discontinued operations of roughly EUR 1 million. More or less it's neutral, and it was also neutral in the past. Maybe a small dip from the uncertainties and the corona pandemic. We don't have. Your last question is quite easy. We don't have any significant, substantial or relevant exposure to Russia with Russians or. We don't expect any direct impact from all measures which we are seeing today in the news. Beg your pardon, your second question was? Impact of the deleveraging plan.
We don't see any significant impact, with maybe taking a little bit aside, the unusually high bridge lending which we've had, especially in last year. There we are dealing maybe with around EUR 10 million income from mezz lending. Beyond that, our budgets and plans for 2022 are targeting higher profitability if you make back-of-the-envelope math, the midpoint of our guidance.
Okay. Thank you. Very clear.
You're welcome.
The next question is from the line of Kai Klose from Berenberg. Please go ahead.
Yes. Good morning. I've got three questions, if I may. First one, could you also comment on the departure of the two former board members from ex-AFS, and if additional ex-colleagues from AFS have also left Corestate?
Hi, Kai. Stavros Efremidis speaking here. We ask you to understand that we are not allowed to comment on the personnel matters for legal reasons. We currently see no relevant operational or financial impact from the changes in Corestate Bank senior management. We still have a strong record pipeline of more than EUR 2 billion managed financings or projects in preparation based on a highly institutionalized and fully integrated team. On the contrary, we have seen the changes in management as an opportunity to realign the Management Board in a new and functional way.
Okay. Thank you. The next question on page 7, how to read the chart at the bottom right quickly. We have around EUR 1.4 billion of AUM in the real estate segment expiring. It is fair to assume that when you guide for a 5%-10% increase in AUMs, that this is net of this EUR 1.4 billion decline, so meaning that you have to replace this EUR 1.4 billion decline?
Yes and no. Actually our 5%-10% organic growth starts next year. We are still in the transformational year where we are cleaning up our AUM. We will be roughly neutral, maybe a touch positive on our AUM growth this year in the real estate equity segment, but the profitability will be higher.
Okay. To ask the question a different way, how much of the EUR 1.4 billion of expiries this year you expect to extend?
Only a minor amount. Actually, we are talking here about retail investor funds where the likelihood is lower to generate the usual term with that because it's actually a legacy portfolio out of Hannover Leasing. A bigger part is legacy portfolio out of Hannover Leasing. On the student housing and micro living, there's a certain likelihood. There we are talking about service apartment that we will not keep these properties in the future.
To understand that quickly, this chart on page seven at the bottom right compares to the total AUM or to the EUR 19 billion
No, no.
AUM.
Actually, the EUR 12.4 billion on the left side. We are talking only about our real estate equity segment. This is not including debt or our non-core business. To com-
Okay. Do you have a comparable chart, showing the expiry profile for the debt segment?
Not really, because it doesn't make any sense because on the debt side we have evergreen fund structures, where you're locked in at least 12 months after the 5-year end. Usually where we have the highest stability. We are seeing there based on our pipeline of roughly EUR half a billion that we will increase our fund volumes here in the direction of EUR one and a half billion this year from currently between EUR 1.2 billion and EUR 1.3 billion in our direct mezzanine lending and whole loan business , which is then comparable to. You can see this on slide 8, to EUR 6.6 billion gross asset value.
Of course, including a 20% growth, this will also go up whatever by EUR 1 billion plus.
The last question on my side.
Yes, please.
The last question on my side. How many assets in the real estate fund business have been financed by Corestate Bank in EUR million or EUR billion?
Actually, usually there is a chain. For instance, we have in our real estate equity segments, if a building is completed, then there is no more financing from HFS or mezzanine. In the early beginning, if it comes to the acquisition of the plot, then we are in many cases the financier of the developer. Which then gets handed over to an institutional investor. Roughly, I would say we are talking here in our real estate equity segment currently between half a billion EUR and 1 billion EUR of AUM. Which we have already done in this chain on this value chain.
You said EUR half a billion to EUR 1 billion.
EUR 1 billion out of our EUR 12 billion registered equity AUM so.
EUR 1 billion you said?
Yeah, between EUR half a billion and EUR 1 billion. I kinda can't figure out the detailed number if you want to because I have to go to a single project level. I can.
Thank you very much.
Give you this number later on.
Thank you.
You're welcome. Bye.
The next question is from the line of Manuel Martin from Oddo BHF. Please go ahead.
Hello, gentlemen. Thank you for taking my question. I think it's more or less three questions one by one. First one is a follow-up question just to clarify. The guidance that you're giving on EBITDA level for 2022 is excluding the property management, I would suppose.
Hi, Manuel. It's Kai. Yes, you're right.
Okay.
Only the core bit.
All right. On the disposal of the property management business, what made you change your mind? 'Cause in former times it was kind of included in your strategy. What was the reason to change your mind?
Less complexity. We wanna decomplex or we wanna streamline our business in general. We have currently 800 people in this company, which is a huge oil tanker. We want to become more in the direction of a speedboat. The main reason is, of course, we can show some synergies between both property and asset management, but the main reason is it's highly margin dilutive, and we saw this in times of COVID. The management awareness of this business was much higher and so it was a question of allocation of management attention in the company. It would be much more efficient to go for the more profitable ones.
Okay.
Actually it's meanwhile a business standard in our industry. The most asset managers have sold the property management activities and unbundled it.
Okay. I assume that that will support also a bit your deleveraging efforts, I would assume. If you say.
There's always something at the end of the day in our bank account.
Okay. Last question. On the delay of the auditing process of Ernst & Young. Can you give us some indication or a hint what is so complicated in the auditing process in Corestate Bank, why is there a delay?
Yeah, you can imagine there were some changes in management in the very short term and therefore Ernst & Young wanted to focus a bit more on these Corestate Bank activities. These came up quite short term and we could not provide the full information then, or, and therefore they said that they need some more time. We discussed with them quite intensively over the last days. However, they didn't come to a full conclusion and therefore they have to still proceed with the working.
Okay. Thank you.
This concludes our Q&A session. I would like to hand back to Dr. Klinger for closing comments.
Thank you so much for listening. We appreciate your interest and your question. We will be on the road as usual. Unfortunately, mostly online, but, for instance, we are tomorrow on and on, Thursday back in London. We're quite happy about that. I would also like to apologize once again for any inconvenience caused by the temporary postponement of the publication of our, audited annual report. This is, certainly not standard practice, but in uncertain times it is sometimes better to have sufficient certainty and precision in auditor statements than to have, to correct them after the fact. As mentioned by Stavros at the beginning, we expect to complete all open audited procedures in the near future and definitely, before end of March. We'll then immediately publish the annual financial statement, and annual report that have been already prepared.
Do not hesitate to contact us for any further questions you may have. Once again, thank you. We look forward to speaking to you soon. Stay healthy and safe.
Thank you.
Bye-bye.
Bye-bye.
Bye.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.