Listed housing company LEG Immobilien joined its peers in posting higher revenues in the first half-year thanks to rising rents, lower vacancies and the integration of recent acquisitions. It managed to boost its FFO1 operating profit by 12.1% to €218.2 million.
A mid-term revaluation of the Düsseldorf-based company's assets led to an upward appreciation of more than €1.1 billion, or 7.5%, reflecting the rise of property values in Germany. The company said it still expects to reach the upper end of its €410-420 million operating profit forecast, without accounting for further acquisitions and disposals.
CEO Lars von Lackum told analysts in a teleconference that he would definitely be interested in picking up any housing assets that might come on to the market in the event that the mega-merger between LEG's bigger rivals Vonovia and Deutsche Wohnen does go ahead. As part of financing that merger there has been talk that about 25,000 apartments could be sold by Vonovia, apart from a further unspecified number that Vonovia could offer to the state of Berlin as municipal housing.
Von Lackum said LEG wasn't prepared to pay any price for further assets, and nor was it planning any takeover of smaller firms. LEG already owns about 145,000 rental properties, housing about 400,000 residents. Its natural heartland is North Rhine-Westphalia where most of its properties are, although it has recently been acquiring portfolios outside the state - most recently a portfolio of 2,200 units from Deutsche Wohnen at eleven different locations in south-western Germany, and a portfolio in the Hanover area. It plans to buy a total of 7,000 apartments this year.
The average value of its property portfolio at end-June was €1,641 per sqm, up from €1,503 at end-December. The in-place rents increased to an average of €6.09 per sqm, keeping LEG on target for a 3% rent increase for the full year. The portfolio's gross rental yield is 4.4%.
