EQS-News: TAG Immobilien AG: Rising rental and sales results in Q1 2024; LTV already close to target at 45.6% 

PRESS RELEASE

Rising rental and sales results in Q1 2024; LTV already close to target at 45.6% 

• Result from rental business (FFO I) increases to EUR 44.6m after EUR 42.6m in Q1 2023 (+5%)
• Sales result in Poland up by EUR 11.0m to EUR 19.8m compared to EUR 8.8m in Q1 2023
• All guidance for financial year 2024 confirmed
• C. 780 residential units sold in Germany since the beginning of the year until May 2024; sales are expected to result in net cash proceeds of c. EUR 59.0m
• LTV declines to 45.6% from 47.0% at 31 December 2023; other financing KPIs remain at excellent levels
• Homes for Generations: Further improvement in the climate efficiency of the German portfolio and awards for TAG’s social commitment

Hamburg, 14 May 2024

Earnings increase in Q1 2024 – continuation of positive operating business performance from previous year

In operational terms, the first three months of the financial year 2024 were a very successful quarter for TAG Immobilien AG (TAG). FFO I, which includes the German and Polish rental business, rose by 5% year-on-year to EUR 44.6m (EUR +2.0m).

This result was initially driven by total like-for-like rental growth in the German portfolio of 2.4% p.a. (FY 2023: 2.3%). Vacancy in the Group’s c. 84,500 residential units in Germany increased slightly from 4.0% at the beginning of the year to 4.2% in March 2024 (compared to 4.7% in March 2023) due to seasonal factors. In the Polish rental portfolio, which comprised c. 2,600 residential units as of the reporting date, like-for-like rental growth amounted to 10.1% p.a. after 10.8% in FY 2023. As newly completed residential units were again let in the first quarter of 2024, vacancy increased to 9.8% as of the reporting date from 7.2% as of 31 December 2023. By contrast, the vacancy rate for units rented for more than one year in Poland was only 2.6%.

The sales segment, which is an integral part of TAG’s business model in Poland, also performed very well. Compared to Q1 2023, the adjusted net income from sales in Poland more than doubled (+125%) to EUR 19.8m (Q1 2023: EUR 8.8m). This was mainly due to a year-on-year increase in the number of units handed over (821 residential units handed over in Q1 2024 compared to 583 units in Q1 2023).

Although the number of residential units sold in Poland decreased year-on-year from 972 in Q1 2023 to 636 in Q1 2024, the strong increase in sales prices in recent quarters resulted in a higher total sales volume of EUR 118m compared to EUR 110m in Q1 2023.

Consolidated net income increased to EUR 52.9m in Q1 2024 from EUR 33.1m in Q1 2023 (+60%) thanks to the good operating results. All guidance for the financial year 2024 remains unchanged and is confirmed.

Sales of residential units in Germany continue to generate significant liquidity

Since the beginning of the 2024 financial year until the publication of today’s interim statement, sales contracts have been signed for c. 780 residential units in Germany. The cumulative selling prices amount to c. EUR 67.6m. The expected net cash proceeds, after repayment of the corresponding bank loans, will amount to c. EUR 59.0m. The average gross yield on the units sold was around 5.3%.

In the first quarter of 2024, 157 residential units were sold with cumulative selling prices of EUR 11.0m, net cash proceeds of c. EUR 6.9m and an approximately break-even sales result.

The sales are expected to close during the second and third quarters of 2024.

Lower LTV and strong financial ratios

TAG’s loan-to-value (LTV) ratio stood at 45.6% as of 31 March 2024, well below the level of 47.0% as of 31 December 2023. In addition to the good performance of the rental business, this was mainly due to the liquidity inflow from the sales in Poland.

Other financial ratios, such as the interest coverage ratio (ICR) and the ratio of net financial debt to adjusted EBITDA, were strong at 6.7x and 8.7x, respectively, at the end of the quarter (5.2x and 12.9x, respectively, excluding the Polish sales business). The average interest rate on financial debt remained constant at 2.2% compared to 2.2% at the end of 2023 and 2.1% at the end of 2022.

Martin Thiel, CFO and Co-CEO of TAG, commented: “With an LTV ratio close to our target of c. 45%, we are very well positioned financially. The surplus liquidity generated in both the rental and the sales business will enable us to invest more in the expansion of our Polish rental portfolio and, at the same time, to counteract rising financing costs by reducing financial debt. In addition, with the write-downs already recognised in the past quarters, the majority of the value adjustments in the German portfolio should be behind us, so we expect only a minor negative impact on the LTV ratio in this respect.”

Further improvement in the climate efficiency of the German portfolio and awards for TAG’s social commitment

In line with the Paris Climate Agreement, TAG’s goal is to make its real estate portfolio largely carbon-neutral by 2045. With a property portfolio in Germany that currently emits around 29.4 kg CO₂eq/m² (2022), TAG is already very well positioned. At present, c. 62% of all buildings in the German portfolio have Energy Performance Certificates in the four best categories
(A+ to C). This share is to be further increased and driven forward by the current model projects for serial refurbishment. The decarbonisation strategy published at the beginning of 2022 is being systematically continued. These successes in further advancing climate efficiency and TAG’s social commitment were reported on in detail in the Sustainability Report for the 2023 financial year, published on 25 April 2024.

Claudia Hoyer, COO and Co-CEO of TAG, said: “For years, we have been committed to promoting a good community spirit in our neighbourhoods. Together with partners from the social sector, we have expanded projects in several regions and launched new neighbourhood initiatives. In this way, we are helping to ensure that our neighbourhoods are good places to live and remain affordable. We are pleased that our social commitment has been rewarded with several excellent rating results and awards – not only nationally but also internationally.”

Further details on the first quarter of 2024 can be found in the interim statement published today and in a summary presentation at https://www.tag-ag.com/en/investor-relations/financial-statements/quarterly-reports/. The Sustainability Report for the 2023 financial year is available under https://www.tag-ag.com/en/sustainability/reports-and-presentations.

Key financials at a glance

Income statement key figures (in EUR m)	01/01/2024- 03/31/2024	01/01/2023- 03/31//2023
Rental income (net actual rent)	88.8	86.6
EBITDA (adjusted) total rental business	61.4	59.0
EBITDA (adjusted) from sales Poland	22.8	11.9
Adjusted net income from sales Poland	19.8	8.8
Consolidated net profit	52.9	33.1
FFO I per share in EUR	0.25	0.24
FFO I	44.6	42.6
FFO II per share in EUR	0.37	0.29
FFO II	64.3	51.1
Balance sheet key figures (in EUR m)	03/31/2024	12/31/2023
Total assets	7,303.8	7,299.8
Equity	3,025.2	2,964.5
EPRA NTA per share	18.63	18.31
LTV in %	45.6	47.0

 

Portfolio data	03/31/2024	12/31/2023
Units Germany	83,419	84,682
Units Poland (completed rental apartments)	2,559	2,417
Sold units Poland	636	3,586
Hand overs Poland	821	3,812
GAV total (real estate assets, in EUR m)	6,555.6	6,574.4
GAV Germany (real estate assets, in EUR m)	5,451.8	5,442.9
GAV Poland (in EUR m)	1,103.8	1,131.5
Vacancy in % Germany (total)	4.4	4.3
Vacancy in % Germany (residential units)	4.2	4.0
Vacancy in % Poland (total)	9.8	7.2
l-f-l rental growth in % Germany	1.8	1.8
l-f-l rental growth in % Germany (incl. vacancy reduction)	2.4	2.3
l-f-l rental growth in % Poland	10.1	10.8
Employees	03/31/2024	03/31//2023
Number of employees	1,848	1,849
Capital market data
Market capitalisation as 03/31/2024 in EUR m	2,224.3
Share capital as at 03/31/2024 in EUR	175,489,025
WKN/ISIN	830350/ DE0008303504
Number of shares as at 03/31/2024 (issued)	175,489,025
Number of shares as at 03/31/2024 (outstanding, excluding treasury shares)	175,482,891
Free float in % (excluding treasury shares)	100
Index	MDAX/EPRA

Contact:

TAG Immobilien AG

Dominique Mann

Head of Investor & Public Relations

Fon +49 (0) 40 380 32 305

ir@tag-ag.com