Ado Properties boosts FFO by 46%, plans €1bn investment
The listed pure-play Berlin residential property investor Ado Properties published a strong set of nine-month figures recently, boosting its holdings further through acquisitions and like-for-like rental growth.
Income from its rental activities increased by 40% from €46.7m to €65.2m year-on-year, both due to higher numbers of apartments now being managed but more significantly by like-for-like rental growth of 5.2%. EBITDA grew 35% to €46.4m from €34.2m.
FFO1 rose 46% to €31.5m on operational performance and improved interest expenses. NAV per share was €28.65 per share on 30th September, up from €24.10 at end-December. The share price is currently trading at about
Like many of its German-listed property peers, the Ado Properties share price has been battered of late as the sector falls out of favour on politicial uncertainty. Still, the company has been making steady progress since its IPO last year, and remains very bullish on Berlin residential. Since the IPO the company has invested a further €515m in twelve separate deals, adding a further 4,200 units, and plans to invest upward of a further €1bn over the next three years.
It recently increased its capital by 14.5%, helping it to grow its portfolio to €2.0bn in September and more than 18,600 units, of which 17,600 are residential. The overall loan-to-value is a conservative 35.9% and average interest payable on borrowings is 2.07%, almost all at fixed rates or hedged, while the loan maturity is 5.5 years.
CEO Rabin Savion said, "We anticipate our like-for-like rental growth to be at least 5% which should have an additional positive impact on our portfolio value, NAV and NAV per share. We expect our 2016 year-end FFO 1 run rate to be around €52 million, and for the year 2016 we anticipate a dividend pay-out ratio of up to 50% of FFO 1."
Savion commented that Ado Properties was less likely than other companies to be negatively affected by the Mietpreisbremse, or rental cap, introduced in many cities including Berlin last year. "The Mietpreisbremse doesn't apply to properties that are fully modernised or renovated, so it doesn’t have much of an impact on us", he said in a recent media interview. "It's actually a good defensive mechanism that helps to regulate the market. The real challenge today is to find enough investment opportunities because there is a lot of competition, even if the face of that competition has shifted significantly over the past decade."