Deutsche Wohnen raises FFO forecast on strong rental growth

Another listed residential housing company to post strong first-half figures based on rising rents and appreciation in capital values is Deutsche Wohnen AG which, like LEG Immobilien, has also raised its forecast for FFO for the full year after a strong rise in the first half.

Now Germany's second biggest residential landlord after Vonovia (ex-Deutsche Annington), Deutsche Wohnen is now targeting FFO of between €285m and €290m for the full year after posting a figure of €142.7m in the first half.

Group profit increased to €542.8m compared with €94.6m a year ago, mainly reflecting strong portfolio appreciation. The value of the portfolio, comprising around 144,000 residential and commercial properties, increased by more than €700m to around €10.3bn at end-June, or by around €80 to €1,160 per sqm. A further 6,500 units were added during the period, which was slightly less than the volume of units sold.

According to Deutsche Wohnen CEO Michael Zahn, "We have seen the greatest increase in value of €103 per m2 in the Berlin portfolio, while our core regions, such as Magdeburg or Halle/Leipzig, have also developed positively. This confirms our focused portfolio strategy, on whose basis we expect further growth potential in the future,’ he added.

Despite disposals, gross rental income remained unchanged at €313.3m compared with the year-earlier period. Net operating income (NOI) fell back to €236.8m from €238.8m a year earlier. On a year-for-year comparision, Deutsche Wohnen achieved rental growth in its strategic core and growth regions of 2.5%.