Hamborner REIT raises dividend on rising rent, revaluations

Listed German commercial property investor Hamborner REIT boosted its 2016 income and earnings and saw its portfolio value push the €1bn mark for the first time. On the strength of its results, it is promising shareholders an increased dividend, bringing the dividend yield up to 4.64%.

Last year the company bought five new properties for €180m, which it was able to revalue upwards by a further €10m by year-end. Along with further portfolio revaluations of 4.1%, Hamborner saw its portfolio value rise to €1.1bn from €900m in 2015. Income from rents and leases rose 18% or €9.4m to €61.8m, while rents rose 1.8% on a like-for-like basis.

Operating FFO rose 23.5% to €36.1m, although it fell on a per-share basis from €0.47 to €0.45 due to the dilution effect of a recent capital increase of 17.7m new shares which brought in €167m in fresh capital. The overall vacancy rate fell from 1.9% in 2015 to 1.3% over the period.

Hamborner's equity ratio of 67.8% (previous year 61.5%) is still well above the legally required 45% for a German REIT. The company plans a dividend of €0.43, one cent more than last year, on the grounds of the company's "sustainably strong performance".

The Duisburg-based company, Germany's second-largest REIT, focuses on retail trade space in mid-sized cities, along with specialist stores and medical buildings. Prominent assets include the Kurpfalz Centre in Mannheim (recently bought for €80m, the company's highest price paid for an asset), the DOMI centre in Dortmund, the 03 office building in Cologne and the Neustiftcenter in Passau.

Earlier this month it bought a retail park in Berlin's Marzahn-Hellersdorf from a fund managed by LaSalle Investment with 6,500 sqm and leased to Kaufland as anchor tenant. The asset generates rental income of €0.9m, aa gross initial yield of 5.3% and a WALT of nine years.

It followed that up by by buying the retail park "Market Oberfranken" in Hallstadt near Bamberg for €40.5m from a fund managed by GLL Real Estate, for a gross initial yield of 5.7%. The main tenants of the 21,800 sqm property include Müller, Tegut, C&A, Expert, and Aldi, who have a WALT of eight years, and generate a rent roll of €2.5m. Hamborner plans a €3.2m capex on the property.