Adler boosts 1H rental income, option to increase conwert stake
Listed German residential property investor Adler Real Estate AG saw its income and earnings from property lettings rise by more than 50% in the first half year and nearly doubled its FFO in the period. The continuing high demand for Berlin property boosted revenue at subsidiary Accentro, while acquisitions and upward revaluations helped to increase NAV by 3.3% since December 31st.
Gross rental income reached €130.8m, an increase year-on-year of 61.7%. Adjusted EBITDA rose to €65.1m from €49.2m. Earnings from property lettings rose 55.6% to €61.0m, while FFO increased to €27.4m. The full-year FFO guidance has been increased by 20% to €55m. The company's LTV ratio fell 1% to 67% - still too high for the company, as are its financing costs compared to its peers.
Adler owns and manages nearly 50,000 residential units, mainly in northern and western Germany, and has become an increasingly integrated group by bolting on property management companies to manage its own assets- which has helped it become the fifth-largest German residential property group. Its privatisation subsidiary Accentro is a prominent player in the Berlin market – a recent sale of 419 Berlin apartments for €51m will have contributed €10m in one deal to parent Adler's earnings. Accentro is likely to earn €20m for the full year, the group says.
The company has signed an agreeement to potentially buy an additional 6m shares in listed Austrian residential property investor conwert Immobilien over the next two months. Exercising the option (from major conwert shareholder Petrus Advisers) could raise Adler's stake in conwert to 28.7% from its current 23.5%, giving it a blocking minority. The price of €88m would be financed by a bank loan, said Adler.
The Austrian company has more than 80% of its property portfolio in Germany, and Adler has been pressurising the group to improve the efficiency of its German operations.