DSSELDORF (dpa-AFX) – The most recent apartment purchases and rising rents gave the real estate group LEG (LEG Immobilien) a further boost in the second quarter of 2022. “The key drivers of our business remain intact,” said company boss Lars von Lackum when the quarterly figures were presented on Wednesday. The influx of people to Germany and the difficult environment for “Huslebauer” increased the already high demand for rental apartments. LEG has almost no vacancies and is fully financed until 2024. In view of the current development in interest rates and inflation, the company wants to act cautiously with new construction, acquisitions and running costs.
LEG confirmed that it intends to sell up to 5,000 units in the current year. About a third of the apartments are purchased from the competitor Adler Group (ADLER), which has gotten into trouble. On the other hand, LEG has identified other quarters that no longer fit the portfolio. The first market reactions are promising, it said.
Meanwhile, in the second quarter, operating profit from current business (FFO 1) increased by 5.2 percent year-on-year to EUR 120 million, as the MDAX group further announced. For the current year, the board of directors around group boss Lackum continued to be confident of increasing the operating result to 475 million to 490 million euros. The result for the period was EUR 905.7 million in the second quarter after EUR 938.9 million in the previous year.
Rents have been rising for years, especially in the major cities, but many medium-sized cities are now also catching up. In the middle of the year, the rent rose to an average of EUR 6.26 per square meter for a comparable area after EUR 6.10 a year earlier, as the group also announced.
Last year, LEG acquired almost 22,000 residential units, a large part of which came from the Adler Group. At the end of the year, LEG acquired a residential portfolio with around 15,400 apartments and 185 commercial units from a competitor for almost EUR 1.3 billion. Overall, the LEG portfolio has increased to around 166,000 apartments in Germany. With the residential and business units taken over directly from Adler with the large locations in Wilhelmshaven, Ostfriesland, Wolfsburg, Göttingen and Braunschweig, the group significantly expanded its presence in northern Germany.
However, LEG does not want to exercise the option to purchase the remaining shares in the Adler subsidiary BCP, as the Düsseldorf-based real estate group recently announced. At the end of 2021, LEG acquired a 31 percent stake in the Dutch housing association for EUR 328 million in a first step. At the time, LEG had also secured an option for a further 63 percent of the BCP shares from the Adler Group. If the option had been exercised, LEG would have paid at least EUR 765 million for it. BCP has more than 12,000 apartments, most of which are in Leipzig and North Rhine-Westphalia./mne/ngu/mis
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