MPT Advisory Group

operates in almost all European markets, with a focus on CEE and SEE. Our strength is to go into detail and yet maintain an overview.

Based on solid training, our managing partners combine years of experience in project development, the restructuring of real estate projects and in the financing business – from clerks to senior management.

We come from the real estate industry and the banking business. We know the capital market and its “rules of the game”. We know how corporations “think” and are familiar with the needs of their financial partners.
MPT Advisory Group has an extensive network of specialists and provides you with the relevant know-how to turn your “dormant” property into a successful project again.

MPT Managing Partner

Raimund Machowetz

MANAGING PARTNER

Real Estate Trustee.

Main focus: Real estate and project development, restructuring of distressed real estate projects, reorganisation of real estate projects, deal and transaction management, leasing and management of real estate.

Experience in Austria, Russia, Ukraine, Czech Republic, Slovakia, Hungary, Poland, Romania, Slovenia, Croatia, Netherlands, Bosnia and Herzegovina, Serbia.

Wolfgang Tutsch

MANAGING PARTNER

Business consultant, real estate trustee, Mediator.

Areas of focus: M&A; distressed asset management, deal and transaction management, restructuring of distressed real estate projects, financings, liquidation, insolvencies.

Experience in Austria, Germany, Netherlands, Slovenia, Croatia, Slovakia.

94,3 %

Achieved
occupancy rate

296 Mio.

Project volume
handled in trust

100%

Satisfied
clients

We are happy to answer your questions!

These are economic key figures of the property agreed with the financing bank. If these are not achieved, a breach of the covenant occurs, which also entitles the bank to call in the loan. The first step is usually to increase the credit margin. Frequently agreed covenants are LTV, LTC, DSCR, ICR, break-even rent. With our “calculation tool” you can quickly and easily calculate the frequently used covenants of your property.

The Loan To Value ratio indicates the relationship between the outstanding loan and the market value of the financed property. However, the mortgage lending value can also be agreed as a reference, which is mainly the case in mortgage banking. Compliance is usually checked annually by requesting a current market value appraisal. Falling market values jeopardise compliance with the agreed LTV.

The loan to cost ratio indicates the ratio of the outstanding loan to the total investment costs of the project. Please note which costs must be included in the Total investment costs according to the loan agreement. In general, all costs directly incurred by the project must be included.

A restructuring trust is an instrument designed to facilitate the restructuring of a company or project company by an independent third party. The third party takes over the company shares in trust and provides the management, with the mandate to implement an agreed restructuring plan.

A very important advantage is that the shareholders have the chance to keep the company, and even more, if the turnaround succeeds, to take back a restructured company. For the bank, there is the chance to get the outstanding loans properly serviced, i.e. to avoid losses.

This includes all the costs incurred in the construction of a property: Costs of land acquisition (including estate agents), financing costs, construction costs, costs of planning, project management, local building supervision, other ancillary services and also letting costs. Of course, the total investment costs can also be determined when purchasing an already completed operational property.

indicates how often the sum of interest and principal payments is included in the NOI in a defined period (usually year). The number must therefore be greater than 1 in any case, as otherwise the debt service can no longer be paid from the net income of the property. In principle, the net rental income can also be used instead of the NOI, in which case the ratio changes, of course.

indicates how often only the sum of interest payments is included in the NOI in a defined period (usually one year). The ICR is a key figure very often used for financial covenants. In principle, the net rental income can also be used instead of the NOI, in which case the ratio changes, of course.

indicates how high the minimum rent per m2 and month must be in order to cover the interest and capital payments. The management costs that cannot be passed on must be taken into account accordingly. Full occupancy is assumed. I.e. the break-even rent indicates the rent per m2 and month that must be achieved in order to cover all loan payments and operating costs assuming full occupancy.

is a key figure from hotel management. It indicates the rental income achieved per available room. The average room rate (AAR) is therefore multiplied by the average occupancy rate.

The NOI is quickly defined: All operating expenses are deducted from the sum of all revenues. Total income is the sum of net rents plus all other ordinary income and earnings from the property. Operating expenses include operating costs that cannot be passed on to the tenants.

Whether rental arrears or vacancy costs are also subsumed under operating costs is already a matter of definition. The details of operating costs are also important. Basically, they are those costs that cannot be passed on to the tenants, i.e. higher vacancy rates reduce the NOI, since the owner has to bear the operating costs attributable to the vacant space. It should be noted, however, that only those costs that have to be incurred for the proper operation of the property itself are taken into account. Thus, for example, legal fees incurred in the course of tenant support are operating costs, whereas those incurred for issues of company law are not. Translation costs incurred because the shareholder or managing director does not speak the local language are not operating costs. However, translation costs incurred on behalf of tenants (sometimes into English) do fall under operating costs.

It is advisable to clearly define the NOI for one’s own asset management so that the figure is really meaningful.

is a ratio that is usually calculated in the retail business. It represents the ratio of a tenant’s turnover per m2 to the tenant’s total rental costs per m2 in a period.

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