S IMMO AG (SPI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the S IMMO AG Conference Call regarding the annual results 2020. [Operator Instructions] Let me now turn the floor over to your host, Bruno Ettenauer.

Good afternoon, ladies and gentlemen. Welcome to S IMMO AG conference call today. With me are my colleague, Mr. Wachernig; and Mr. Bayer, Head of Finance and Transaction. Before I start the presentation, I would like to briefly introduce myself because it's my first conference call for S IMMO AG. My name is, as mentioned already Bruno Ettenauer, I'm in the real estate business for over 30 years, there of, 10 years of S IMMO. Now let me skip through the presentation starting with Slide #2. Slide shows our management board, which consists of 3 persons starting with Mr. Herwig Teufelsdorfer next week. So all in all, we have 3 professionals on the Board of S IMMO AG. The next slide in our new presentation is #4. It's intended to show key drivers in the 3 areas of operational performance, financial as well as transactions and capital market activities. In the operation area, S IMMO managed to largely confine the effects of the corona crisis to the hotel business, which obviously was impacted significantly and is responsible for the reduction of our top line to EUR 147 million (sic) [ EUR 174 million ]. However, rental income increased to EUR 123.3 million despite the crisis, which is due to the quality of S IMMO's portfolio and due diligence operational measures that were taken. For the same reason, our occupancy rate largely unchanged and came to 93.9%. Going to the financial section. Our FFO I reached EUR 0.59 per share, in total, EUR 42.3 million. This constitutes a decrease to prior year that I will explain later. For now, suffice it to say that this decrease was caused by 2 singular and timing-related events, with EUR 39.1 million as in results from property valuation came in very strong in the light of the crisis. Those positive valuations and carefully selected acquisition increased our property portfolio to EUR 2.5 billion. Also our LTV ratio improved slightly and stood at 46.8% as of year-end. Let me spend a few words on EPRA NAV. As most of you probably know, EPRA has announced 3 new NAV metrics to replace EPRA NAV and EPRA triple net. However, for reasons of comparative, and as everybody is probably still more familiar with EPRA NAV, we continue to report EPRA NAV throughout this presentation, but show the new metrics in the appendix. As far as the actual number is concerned, EPRA NAV came to EUR 24.3 per share. We also have a slide later in the presentation, where we'll explain development from beginning of the year to year-end in more detail. Moving to the section of capital markets transaction. The main takeaway are that we acquired properties with a value of about EUR 107 million. The biggest being an office tower in Zagreb and was resolved for assets in the amount of EUR 46.9 million. The positive valuation for those properties since they were area marked for sale were quite significant and amounted to EUR 38.8 million. To summarize our activity on the capital markets, we successfully issued new capital in the amount of EUR 148.9 million in Q1 2020. Further, we have an ongoing share buyback program and hold about 4.7 million owned shares as of April 6. Last but not least, we successfully issued a green bond in the last quarter of this year with a total volume of EUR 130 million, a 7-year term and a coupon of rate of 1.75%. Now let me take a closer look to our annual results, Slide 5, please. As I already mentioned, total revenues decreased from EUR 210.4 million to EUR 173.9 million. Hardly saw, pricing the majority of the impact comes from our hotel business, where revenue declined from EUR 59.1 million to EUR 17.8 million due to the various lockdowns and business restriction. However, we could also reduce the hotel expenses from EUR 42.3 million to EUR 18.1 million. In effect, this means we could compensate the shortfall income on the expense side and ended the year with a hotel GOP of 0, but are, of course, unfavorable to prior year. But even aside the owned operated hotels rental income increased from EUR 119.4 million to EUR 123.3 million. Even factoring indebted expenses for bad debt increased from EUR 0.5 million to EUR 4.4 million. I believe this is quite a very good result in the light of everything that happened last year. In addition, as S IMMO used the crisis to stop -- step up building maintenance. However, in -- though debt and maintenance costs increased, we cut back another cost items so that property operating expenses only increased by EUR 5.8 million over 2019. Overall, our gross profit decreased from EUR 109.7 million to EUR 91.5 million, which is, as mentioned, mostly attributable to hotels. Backing out the [indiscernible] hotel operations, gross profit is more or less on last year's level. As we also reduced management expenses by EUR 2.3 million, EBITDA amounted to EUR 71.1 million as opposed to EUR 87 million for prior year. Now flipping to Slide 6. As you can see, despite the effects of corona crisis and due to our [indiscernible], relations were positive and reached EUR 39.1 million. Of course, we couldn't make the record high of last year. And as we will see later, we have ups and downs within this number, but to have a positive relation is something we are quite happy with given the circumstances. Our financial results is impacted by many offsetting effects, but the big one driver behind the increase is the missing dividend from IMMOFINANZ. On the tax line, you can see an improvement of about EUR 23.4 million, which is mainly due to the shortfall and property valuation compared to the prior year. Overall, therefore, our consolidated net income went from EUR 213.3 million to EUR 56.9 million. To summarize, the main driver behind this development is lower, but still positive property valuation. The other 2 main effects are missing dividend income and the reduced total GOP. Now, flipping over to Slide 7. Repotted FFO I and EPRA NAV over 4 years. Both figures exhibited a steady rising trend until 2019 and a pandemic-related setback in 2020. I am quite confident that major negative [indiscernible] surprises aside, 2021 and beyond will see S IMMO back on the growth track. But what are the drivers behind the FFO and NAV development of 2020. On the following 2 slides, you will see that there are only a few distinct items that explain the development of those KPIs. Starting with FFO I on Slide #8. We went from EUR 64.7 million to EUR 42.4 million. I think it's not worthwhile to go into extensive detail on this point. As clear, there are 2 distinctive drivers that stick out. Hotel GP, which went down from -- by about EUR 17 million and the missing dividend income, which is more than EUR 10 million. Apart from those 2, FFO I would actually have gone up. Now Slide 7 (sic) [ Slide 9 ], EPRA NAV. The reduction is mainly attributable to the pandemic-related decline in the share prices of IMMOFINANZ and S IMMO, which is shown under the heading valuation equity investments. At this point, I'd like to draw your attention to the fact that our shareholders received a dividend on prior year's level. But coming back to the valuation of investment in IMMOFINANZ and S IMMO, you can see on Slide 10. The book value of those investments was still above acquisition costs and amounted to EUR 478.7 million as at year-end 2020. At the closing prices of April 6, the value is even higher and amounts to EUR 522.9 million and using the latest published EPRA NAV, we went -- we even get to an inner value that's well above EUR 700 million. The purchase price for those 2 investments was about EUR 477 million. Now speaking about valuation on Slide #11. Here you can see our property valuation broken down by region and the usage type. Again, I'd like to emphasize that our relation results in time of advance net lifetime crisis speaks for the quality of the portfolio. But let's go to the detailed breakdown. Clearly, Germany spearheaded our valuations and contributed a positive net valuation of EUR 52.7 million, which is most related to the use types, residential and office. Austria came in positive with EUR 8.7 million, while CEE had an overall valuation start of negative EUR 22.3 million that stems from hotel and retail. Our valuation by use type [indiscernible] that I just said, namely the residential office are responsible for the upsides and retail, hotel, the downside. I would just like to add disclaimer. The use types on this slide for the main use type logic, meaning that next 6 years type buildings can only fall in 1 of these categories. Let me now move from the asset side to our debt and the debt financing profile on Slide #12. With our maturity profile on the top left hand, I believe the bar chart speaks larger for itself. In general, there are no yield in maturities that I will lose sleep over. As for LTV, we more or less capped last year's level and stood at 46.8% at year-end. Also, with a secured LTV of 31.3%, there is still quite some potential for financing if the need arises. Going to the bottom left-hand side, you can see an overview of our debt structure. As at year-end, about 2/3 of fencing are backing up bank loans and about 1/3 are bonds with a maturity profile that's well spreaded over the next 5 years. Further, about 15% of our bank loans are fixed rate and 85% are variable loans. However, it's important to note that we have interest rate derivatives in a nominal value that matches our variable rate loans. As far as cost of funding is concerned, our bank loans have an average cost of funding of 1.28% and bonds of 2.37%. The overall average, excluding derivatives amounting to 1.68% -- 1.86% (sic) [ 1.68% ], sorry. As we can point, the continuous decrease in cost funding, including derivatives from 2.67% in 2017 to 2.29% as of end of 2020. Having covered our balance sheet, let's now take a peak at how S IMMO fairs on the stock market. We plotted the share price development for the full year of 2020. Of course, like everyone sees and knows, our stock took quite a hit and devalued by about 24%. As far as shareholding structure is concerned, our largest shareholders IMMOFINANZ AG, with 26.49%. Indirectly, aggregate holding holds 10.78%; and EUROVEA, a company which is owned by Peter Korbacka, holds 5.21%. 57% are still in free float. On April 6, per share closed at EUR 21.55, which corresponds to a market capitalization of nearly about EUR 1.6 billion. As I'm sure you're aware, IMMOFINANZ announced the intention to publish a voluntarily publicly over bid -- offer sorry, to S IMMO shareholders. The offer and the offer documents are expected to be published around 15th of April. In this conflict, we ask you for understanding that we cannot comment on the offer before having received the offer document. IMMOFINANZ announced as well that one condition for the completion of the office that the maximum voting right is abolished at our next Annual General Meeting. Under these circumstances, we decided to postpone the AGM to a date shortly after the expiry of the acceptance period, but that all shareholders are able to take an educated decision. We strongly feel that this is in the best interest of all shareholders. Before I hand over to my colleague, Mr. Wachernig, I would like to give you a brief overview of our strategy and business model. In our portfolio, management, we take the long-term view and apply a value-generating strategy in combination with the diversification across use types and geographies. In difficult times, it helps tremendously that we are an established player in the market, and we have great in-house expertise and the strong asset management in place. We follow a very sustainable financing strategy, with a well spread maturity profile and has a land bank with quite some potential. Apart from that, projects are sometimes -- something we do opportunistically. All of that translates into the high quality portfolio, stable cash flow and balanced risk/reward ratio, dividend payments and an established access to capital markets and a stable credit rating. Great. S IMMO has been -- pursued a sustainable and prudent business policy for more than 3 very successful decades with the aim of constantly creating future income. We apply a business model that is directed towards 3 dimensions of time, anticipating property cycles and benefiting from them. In the short term, we relate at what time it makes a [indiscernible] sense to buy standing properties that generate immediate revenues. Currently, we are only investing [indiscernible] selectively, but in all of our markets. The medium-term research for properties that allow for a replanning and construction progress. This means that the period is ideally completed within 3 to 5 years. At the moment, we don't have a project under construction, but we focus mainly on zoning and planning activities in Bucharest, Budapest and Berlin, for example. To the end, our local experts continuously monitor the markets, where S IMMO operates and anticipate trends in the property sectors. And in the long run, we are going to work our land bank in the outskirts of Berlin. With that, let me now hand over to Friedrich, who will give you further details about the portfolio and about our current COVID situation.

Thank you. Good afternoon, ladies and gentlemen, and a warm welcome also from my side. Although very warm welcome to you Ettenauer. I'm really looking forward to our cooperation for S IMMO in the future. And also a big thank you to [indiscernible] for more than 13 really exciting and very successful years, all the best to you. Before I start to explain the portfolio and the impact of the COVID-19 pandemic on our business, let me emphasize once more that as S IMMO is well equipped to handle the current challenges. We have experienced and competent teams in all markets and are constantly in close contact with all of our stakeholders. And we also have a high quality portfolio, which I will now present to you in more detail. On Slide 18, you can see that about 2/3 of our properties are located in Germany and Austria and about 1/3 in CEE, and nothing has changed on that. The main part of our rental revenues come from CEE with total revenues of almost EUR 74 million. Germany, on the other side, delivered strong increases in value as can be seen in sales-related ratings. Gains on property sales in our P&L are typically 0 because any increase in value is reflected in the property valuations. But this figure gives you an insight into the value growth potential of our German portfolio. You can also see that we have a land bank of potentially lettable area of roughly 150,000 square meters. Coming to the next slide, you can see the portfolio broken down by asset type and region. Obviously, office makes up the greatest part of our portfolio with almost half of the lettable area and more than 40% of the total book value of our properties. Hotels on the other side, only make up for 8.6% of our total book value. There is a considerable variety in rental yields regarding the different use types. Retail delivers a yield of 6.6%; office of 5.8%; residential is typically well below that, coming in at 3.5%. In the pie chart below, you can also take a closer look at how the asset types can be broken down by region. Summing up, S IMMO has a diversified and balanced portfolio. Our total book value of roughly EUR 2.5 billion is composed of 30% residential, mainly in Germany; 42% office; 80% retail; and 9% hotel; and the land bank is 2%. Moving on to the next slide. To get an idea of our investments, I would like to introduce you to a new addition to our portfolio. The latest purchase, we did our 2 Campus 6 buildings in Bucharest and Romania. The Campus 6 is located in Bucharest, well-established submarket Central-West. Last December, we signed a purchase agreement for the 2 properties of this business product with a purchase price of EUR 97 million in total. Together, both buildings have a total lettable area of nearly 38,000 square meters and are fully let. Two key tenants, Microsoft and Societe Generale are already moving in. The deal will be closed this June. Annual rental income will be EUR 6.7 million, a strong contribution to our earnings in the future. Both buildings have already been pre-certified with LEED Gold and WELL Silver. And we are absolutely convinced that the office market in the Romanian capital will continue to grow strongly following a slight pandemic-related stagnation. The 2 properties will add long-term value to S IMMO's CEE portfolio. Moving to the next slide. I would like to give you a quick summary of a very successful project development that came to an end almost exactly 10 years after its first started. The QBC at the Vienna Main Central Station. We, as S IMMO, bought a plot in 2011, like I said, exactly 10 years ago. In the beginning, our stake was 25%. And in 2013, we increased it to 35%. Over the years, the different construction units were developed and together with our development partner, UBM, we started to sell them in 2016. At the very end of last year, the last deal was closed on schedule despite 2 lockdowns in the meantime. This marks the end of a flagship project that brought us income of EUR 23 million in total over the years, just EUR 4.3 million in 2020. I myself would have loved to have one of the QBC properties in our portfolio, but demand and prices were so high that we had no chance but to sell it. So that was a quick look into the past. Let us now look ahead into our future projects. In Berlin and Potsdam, we have 4 plots that hold potential for project development with total investment costs of up to EUR 500 million and estimated rental income of EUR 29 million per annum. These projects can be realized within the next 5 years. The current developments on the CEE side. We have also exciting project developments in that area. So 2020 ended with the acquisition of a property with roughly 12,000 square meters, in the district of Petrzalka near the center of Bratislava. We are planning to develop an office project with about 22,000 square meters of lettable space at that side. The acquired plot is conveniently located directly on the main road that connects the Northern and the Southern areas of the Slovakian capital. In Budapest, we are planning to develop 29,000 square meters of office space on the Vaci Ut, one of the most significant office locations in Hungary's capital. The third plot is located in Bucharest and is also designated for an office development. With all projects, we are currently focusing on planning and zoning activities so that we can start the development as soon as the economic circumstances will allow it. As you can see, we own a land bank of about 2.5 million square meters of undeveloped plots by now in the Commuter Belt of Berlin. Currently, we have around 30 projects for medium- to long-term development. Mostly, we are striving for a residential usage. Four of these projects are currently underway. The average acquisition cost amounted to roughly below EUR 14 per square meter, 1-4, EUR 14 per square meter. The acquisitions in Berlin's Commuter Belt are precisely in line with our strategy of buying on an anti-cyclical basis and securing earnings for the future. We see very attractive long-term opportunities and significant value enhancement potential in these developments. At the same time, the downside risk of these investments is quite limited according to the low purchase price of EUR 14, as you can imagine. And I think it is safe to say that the pandemic has brought new dynamic for this area with the demand for residential units with enough space and green locations constantly rising. With that being said, let me move to a topic that is very close to my heart, sustainability. Our sustainability strategy is based on 3 pillars. We attach great importance to international certificates when purchasing or developing projects. 22% of our portfolio is already certified. Ongoing and future development projects are and will be certified according to international standards. The second pillar describes energy efficiency. We pay attention to environmentally friendly technologies. For example, we encourage the installation of LED and photovoltaic systems as well as general modernization of billing technology. We are also committed to switching completely to renewable energy. Austrian and German properties have been switched to green power already. And the same process will be finished for CEE by the end of 2022. The third pillar is creating awareness. We are committed to environmental laws and requirements. Likewise, we want to raise awareness among our employees, customers and business partners. At this point, I would like to refer once again for the issuance of our first green bond in February, a huge success with a total volume of EUR 150 million, a coupon of 1.75% and a 7-year maturity. We intend to use the net proceeds of this bond for further growth and will allocate the net proceeds to finance or refinance sustainable projects in line with our sustainable bond framework. This includes, in particular, the refinancing or financing of properties with high, great, sustainable certificates and of measures increasing in energy efficiency, both in line with our strategy. We also restructured the ongoing investment loan for our office building, the market Bucharest. So first long-term green loan. This is the first green loan for S IMMO, and I think it is safe to say that it won't be the last. Coming to the next slide, and this will be the last that we will talk about COVID and its impact on our business. Still, there are a lot of uncertainties, and we cannot really estimate the full impact that this pandemic will have on our way of living, working and socializing just yet. But let me tell you our assessment of the various asset classes and be clearly positive for the future. Let's start with the residential segment. After 1 year of pandemic, we do not see any impact on rent levels or vacancy rates. Quite contrary, we are already seeing positive effects on demand and revaluation results. Moving on to offices. Yes, the last few months have shown us that remote work can be useful [ to us ] working in a physical office. But offices will remain essential, not only for collaboration and representation. Apart from that, we need to distinguish between various industries and work requirements. I'm not sure if you know, just approximately 33% of jobs can be done from home. Over the last years, also the square meters per workstation have increased throughout our portfolio, and it is safe to say that the concept of modern open-space offices might be worth reconsidering. We only expect minimal declines in the office segment, and I'm very convinced that offices will not see a significant decline in demand, especially if they are well-located, efficiently planned and reasonably priced as ours. Now the retail segment. It is not a secret that there has been a trend towards online retail for some time now. That all actually started long before COVID-19 was an issue. Obviously, this trend gives us a lot between different types of retail and different retail properties. But, and I cannot stress this but enough, shopping centers and high street offer a shopping experience that cannot be replaced by any online shop. Also multichannel retailing will remain very attractive. Therefore, it is our conclusion that classic retail and online retail will continue to complement each other in a way that is beneficial for both as we have seen in the past already. As for hotels, and it is clear that it will take this segment the longest to reach the pre-crisis level again. But we are convinced that there will be a strong recovery and a lot of catch-up effects as soon as there is a widely established treatment for COVID-19 or when a large percentage of the population has received vaccination. At the same time, we expect that not all hotels will out live this crisis for the number of competitors will decline. And the quality and the location will be even more decisive. We expect the total recovery within the next 2 to 3 years. As an overall conclusion, let me emphasize, this crisis, as all the others, will pass, and our business is by far, strong enough to master this. Current developments on the corona vaccine market might lead to a recovery in summer this year. We are very optimistic to be back on the growth track soon afterwards. With that, let me -- I would like to thank you for your attention, and we are looking forward to discussing your questions right now.

[Operator Instructions] And the first question comes from Stefan Scharff.

Stefan here from SRC Research from Frankfurt. The first question is about your undeveloped land, which gives you a good growth prospects for future. Perhaps you can say a little bit more here what this could mean for your revaluation picture? And also for your -- for the investment volume, what you expect for the coming years? And the second question, again, the revaluation topic, which was -- the build was a bit more dark in the first quarter with the negative revaluation of about EUR 30 million. And you argued a little bit about Hungary, for instance, perhaps you can say a little bit more about Hungary and the development of the prime yields there? And what is your expectation here for the market?

Yes. Thanks, Stefan. I just remember that the negative impact in Hungary for the first quarter was a CBRE report and everybody was wondering why they made this kind of negative announcement about Hungary. So this is completely stupid still today as the offices are not impacted, especially not in our portfolio. Only the hotel business definitely is impacted. So I think this was a quite pessimistic impression of one report from CBRE, which [indiscernible] really, really much realized from that point.

Yes, luckily.

Yes. The total figure for the full year is a negative EUR 2 million valuation, roughly. So there is a small negative valuation, but really not decisive.

Okay. And the undeveloped plan -- land? This is mainly Berlin. So can you say a bit more here about the plans and about the time line?

So there are 2 aspects. On the one hand side, we have 4 projects, which are -- 3 of them in Berlin and 1 is in Potsdam. And I think it's also shown in the presentation that there will be rough gross investment volume of EUR 500 million. But for that -- for post [indiscernible], 3 projects in Berlin, and that 1, which is in Potsdam. And this is definitely targeted in the short term. So in the next 5 years, they can be realized, but we are still in the process of deciding when we are going to start these precise projects. This is the 3 in Berlin and the 1 in Potsdam. And the second one...

Okay. You need the building limits and the zoning permits for this area?

We need to have that. So it's still undergoing, and we do not have them by now, but we are working on that heavily.

Okay, okay. So it's not possible to make this call without the IMMOFINANZ topic. And to start with this, I could read a little bit in your annual report on Page 58. It's about your bonds. And you have the '24 bond, you have the '25 bond, the '26 bond and so on and also the green bond. And there's always this show of change of control clause, meaning the 50% threshold. And in some cases, also 30% threshold for the bondholders to ask for repayment, if there's a change of control, perhaps you can tell us a little bit more here about this topic.

Well -- Bruno Ettenauer. I think we checked it very carefully. And I think there are 2 aspects to be mentioned. The first one is some of them are quite high yielding. So we do expect that the change of control will be executed because it could be refinanced cheaper later on. That's your first topic. The second one is the one we made in December last year. The green bond, which is a coupon of 1.75% -- 70.5 (sic) [ 1.75% ]. This one is -- this could be affected by [indiscernible] controlled clause. Nevertheless, what we did is we are going to ask for some sort of bridge loan, if necessary. As you know, we have the shares from S IMMO, and it could be possible also to put some security there, to have bridge loan. But frankly, I do not believe that there will have an impact because my impression and my experience in the last years is that such change -- controlled clauses, we are -- were never, let's say, executed. So I think the risk for us is -- we simply investigate it very clearly, but we think that this risk is not something which can hit us.

Okay. Okay. So today, there came be news about the request for The Extraordinary Shareholders meeting on 30 April. And your first working day -- sorry for that was also the IMMOFINANZ takeover offered the very low EUR 18. So perhaps you can say a little bit more about why they -- perhaps you think they put such a pressure or such a pace in this process or they want some very fast process here. And what is your opinion about that? I just can't imagine that the retail portion of their portfolio is much higher than your retail portion in the portfolio. This might be reason or perhaps you can give us a little bit more on your share, a bit more your view on this topic with IMMOFINANZ.

Sorry. But frankly speaking, I can only explain our position. I'm -- it's hard for me to explain the position of the other one. Why they -- what's the motivation to act in that direction? I mean you have to have in mind that they launched a takeover bid for -- which have 4 major conditions. The first condition is that the achieve -- the acceptance is higher than 50% of the outstanding shares. The second one is that we eliminate the voting cap. The third one is that there is no proceeding pending to register this change in the statutes and therefore this acceptance of the antitrust authority. So what we did and what is our position is that we try to come into, let's say, in the route, which correspond hands to the logic economic consequence of such a deal. That means we just executed the first condition that is the acceptance more than 51% -- 50% of the outstanding shares. If they achieve that, we said very clearly, then we call for an EGM. And if they say about -- the key idea about the expanded [indiscernible] of their offer. Then again, we will recall the EGM in advance so that its correspondents and meets the timing [indiscernible] will not to walk into EGM an over decision about eliminating the voting cap. And then for what reason ever, this offer is not successful, it's because not accepted or does not exist afterwards. So that's our approach and nothing more. So we try not to defend our position. It's clearly a [ rational ] approach to protect our shareholders' interest.

And the next question is Christoph Schultes.

Also a question from my side, a little bit -- a follow-up question. I wanted to ask -- I refer also on your 4 projects, you mentioned on Page 23, I would be interested in how much square meters these 4 projects require out of your land bank approximately?

The projects on 23 are not in -- not the same situation of the land bank. The land bank is different. The land bank is in the outskirts of Berlin, and then the Berlin [indiscernible] area. Yes, so these 4 projects are already within our portfolio. So they are already -- they are standing properties on that. There are cash flow generating properties on that. And we are now thinking about doing a zoning additional -- because there's additional land on that outstanding properties. And we are now discussing with architects, shall we do a town development with purely office development or shall we do a mixed-use office and residential project on this land, and that's -- the discussions are going on now, which we're going to decide in, let's say, this year and next year, where to do, what and when we are going to start. But these are existing properties, existing standing properties with additional land within Berlin and one in Potsdam. And the other, the other 30 projects are land bank in the outskirts of Berlin in the range between 20 and 40 kilometers out of the city center of Berlin.