Deutsche Annington Immobilien SE / Key word(s): Real Estate/Half Year Results
31.07.2014 / 06:55
Half-year review: Deutsche Annington increases earnings forecast after strong operating performance and makes record investments in its properties
- Indicators confirm operational strength
- FFO 1 up 26 % compared with the previous six months to EUR 130.3 million
- Net asset value improves by 5.4 % on the year-end figure to EUR 5,038.2 million
- Earnings forecast for 2014 revised upwards
- Guidance increased: FFO 1 will rise to EUR 275-285 million
- Attractive dividend again of around 70 % of FFO 1
- Investments in modernisation and maintenance at a record level
- Modernisation and maintenance volume again increased to EUR 330 million
- Modernisation and maintenance expenses per square metre at an above-average of EUR 29
- Acquisition: integration successful
- Integration of the DeWAG portfolio successfully completed twice as quickly as planned
- DeWAG integration provides good starting point for integration of Vitus
- Change in the Supervisory Board of Deutsche Annington Immobilien SE
- Manuela Better, Lutz Basse, Dr Florian Funck and Christian Ulbrich are to be appointed to the supervisory body
- Robert Nicolas Barr, Arjan Breure, Fraser Duncan and Tim Pryce, who will step down from office as representatives of the former major shareholder, Terra Firma, on August 20, 2014
Bochum, July 31, 2014 - The Deutsche Annington Immobilien Group ("Deutsche Annington") can look back on a positive performance for the first half-year and is increasing its earnings forecast for the year as a whole. With the operating performance remaining strong, investments in properties are climbing to a new record level.
'We have clearly improved on every level after our one year as a listed company. We have moved closer to our customers, are in an excellent financial position and are actively investing in our properties. On this basis, we can increase our forecast for the 2014 financial year considerably', explained Rolf Buch, CEO of Deutsche Annington.
Indicators confirm operational strength
Following a strong year 2013, we improved our key indicators once again in the first six months of the current year. Taking the DeWAG portfolio into account, the monthly in-place rent per square metre rose 3.9 % from EUR 5.35 at the end of the first half of 2013 to EUR 5.56 at the end of the first half of 2014. Consequently the vacancy rate went down by 0.1 percentage points to 3.8 %. Compared with the previous six months, FFO 1 went up by a significant 26 % to EUR 130.3 million. This was mainly due to a decrease in interest expense and the DeWAG portfolio being incorporated from April 1 as scheduled. The net asset value (NAV) as at the June 30 reporting date increased by 5.4 % compared with the year-end figure to EUR 5,038.2 million.
Record level of investment
In line with the clear corporate strategy, the company once again increased its investments in modernisation by EUR 10 million to EUR 160 million for 2014 - last year's investments of around EUR 70 million are being more than doubled. Maintenance expenses of around EUR 170 million bring Deutsche Annington's total investment in its properties this year to more than EUR 330 million (2013: EUR 224 Million). Investment per square metre comes to EUR 29, far higher than the amount invested by private competitors. In the first half of the year, EUR 141.5 million went towards our buildings, 58 % more than in the same period last year. The focus will be on energy-efficient modernisations and on senior-friendly conversions.
The Deutsche TGS is part of the Group and, as at the reporting date, had almost 1,600 employees, making it the largest craftsmen's organisation in the housing industry. Our own staff performs the maintenance and modernisation work quickly and conscientiously. Our flexible and personal service makes a notable contribution to increasing customer satisfaction.
Acquisition: integration successful
In addition to making investments in its properties, the company is pursuing its acquisition strategy. The first portfolio acquired was previously managed by the DeWAG Group. It was integrated completely, twice as quickly as originally planned. This added some 11,300 residential units, 200 commercial properties and more than 5,000 garages and parking spaces to the portfolio. The new residential units are located in the attractive conurbations of Augsburg, Frankfurt am Main and Berlin, and add value to the portfolio. Our second acquisition, Vitus, with around 30,000 apartments, is also entirely on schedule: we expect to close the transaction on October 1 and the integration should be completed by the end of the year.
The company placed a further bond of EUR 500 million at the start of July in order to finance the two acquisitions. The eight-year bond's low interest rate of 2.125 % highlights the advantages of the unsecured financing strategy and confirms the confidence that the capital markets have in the company. The Company also gave private investors the opportunity to invest in Deutsche Annington by dividing the bond into shares of EUR 1,000 each. Along with March's cash capital increase which generated gross proceeds of EUR 304 million, a hybrid bond with a volume of EUR 700 million and a term of up to 60 years as well as an initial coupon of 4.625 % was issued in April 2014. The amount of the coupon of this equity-equivalent, long-term and unsecured corporate bond serves as a reference point regarding Deutsche Annington's current marginal cost of capital.
In addition to the improvement in the company's financial figures, the share price also saw a marked upturn. Despite Deutsche Annington distributing a tax-free dividend of EUR 0.70 per share, the company's share price went up by 17.5 % between the start of January and the end of June and outperformed the MDAX. The share's liquidity also increased significantly in the second quarter: the previous major shareholder Terra Firma and CPI Capital Partners placed a total of 30 million shares on the market in May. At the same time, Terra Firma passed all of its shares to the previous fund investors, who can now decide independently on their further share strategy. With this widely diversified shareholder structure, both the free float, which according to the definition of Deutsche Börse went up from 18.5 % to 58.8 %, and the share's trading volume increased significantly.
Forecast for 2014 revised upwards after strong first-half performance
Thanks to its strong performance in the first half of the year, Deutsche Annington is in a position to make a significant improvement to its forecast. The company now expects FFO 1 to total EUR 275-285 million in 2014 (instead of EUR 250-265 million previously), of which around 70 % is distributed as dividend as in the previous year.
Change in the Supervisory Board of Deutsche Annington Immobilien SE
Manuela Better, Lutz Basse, Dr Florian Funck and Christian Ulbrich are to be appointed to the supervisory body of the listed real estate group Deutsche Annington Immobilien SE. Upon their legal appointment, the new Supervisory Board members follow Robert Nicolas Barr, Arjan Breure, Fraser Duncan and Tim Pryce, who will step down from office as representatives of the former major shareholder, Terra Firma, on August 20, 2014. ("For more information please refer to the press release "Change in the Supervisory Board of Deutsche Annington Immobilien SE").
The full Q2 report is available from www.deutsche-annington.com. A brief German-language version of the analysts' presentation on the figures for the first half of the year is available to download from the Press section of the company's website.
About Deutsche Annington
Deutsche Annington is Germany's largest private-sector residential real estate company both in terms of portfolio value and the number of units owned. As at June 30, 2014, Deutsche Annington owned some 185,000 residential units worth a total of EUR 11.4 billion. The company is present throughout Germany. Deutsche Annington has its headquarters in Dusseldorf and employs more than 3,250 people.
Approval: Regulated Market / Prime Standard, Frankfurt Stock Exchange
Common Code: 094567408
Registered office of Deutsche Annington: Münsterstrasse 248, 40470 Düsseldorf, Germany
Business address of Deutsche Annington: Philippstrasse 3, 44803 Bochum, Germany
Head of Investor Relations
Phone: +49 234 314 2384
Head of Corporate Communications
Phone: +49 234 314 1149