Annington Q1 figures benefit from rising rents, refurbishment

It’s been a good start in 2014 for Germany’s largest landlord Deutsche Annington. The Bochum-based company boosted FFO in Q1 by a quarter to €61.9m, with CEO Rolf Buch forecasting a full-year figure of between €250m and €265m – well up on last year’s €224m. About 70% of this is destined for a dividend payout to shareholders.

The stock price has been on a steady upward trend since the beginning of the year, when Annington announced the acquisition of 41,500 residential units for €2.4bn from rivals Vitus and Dewag. The new buys were paid for through a capital increase and the issue of a hybrid bond. The recently-issued hybrid bond was for a volume of €700m and runs until 2074, paying a 4.625% coupon for the first five years, and was lead-managed by Barclays, JP Morgan and Morgan Stanley.

The priority for the next few months, said Buch, would be to integrate the new holdings into the business, along with implementing a €300m refurbishment programme for existing stock, starting with 2,500 units this year, all of which will improve rental income. An €800m programme has been planned for up to 2018.

UniCredit subsidiary HypoVereinsbank is providing €70m in loans for the Annington refurbishment and elderly-friendly housing programme, sponsored by bank KfW Kreditanstalt für Wiederaufbau for promoting energy-efficient housing. For refurbishment and maintenance, Annington is investing about €29.00 per square metre of its holdings this year. Annington now owns 215,000 residential properties, and manages about another 40,000 for third parties.