DGAP-News: ADLER Real Estate AG: ADLER Real Estate AG improves its fundamentals across the board


DGAP-News: ADLER Real Estate AG / Key word(s): Half Year Results
ADLER Real Estate AG: ADLER Real Estate AG improves its fundamentals
across the board

01.09.2015 / 07:45

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Corporate News

ADLER Real Estate AG improves its fundamentals across the board

  - Further to the consolidation of Westgrund AG and the other acquisitions
    which took place during H1 2015, total assets increased by c.85% from
    c. EUR 1.4 billion in 2014 to c. EUR 2.6 billion

  - ADLER's current portfolio valuation still remains considerably lower
    than replacement costs allowing for future upside potential

  - EPRA NAV per share significantly increased from EUR 10.74 to EUR 14.03
    (+31%) in H1 2015 not including recent transactions such as conwert
    Immobilien Invest S.E.

  - Gross rental income is expected to increase by 142% to c. EUR 196m by
    FY 2015 up from the current c. EUR 81 million recorded in H1 2015, with
    an expected 12 months run rate of c. EUR 232 million

  - Funds from operations ("FFO I") are set to grow by more than 100% from
    c. EUR 6.3 million as at H1 2015 to c. EUR 14 million by FY 2015 and an
    FFO II amounting to c. EUR 40 million in line with analysts'
    expectations

  - ACCENTRO significantly contributed to FFO II increases in line with
    management targets

  - The  current cost of debt ("WACD") dropped from c. 4.7% in FY 2014, to
    c. 4.15% in H1 2015 and is expected to drop to below 4.0% by FY 2015 in
    line with management targets

  - Adler remains committed to a disciplined capital structure with an LTV
    target of below 60% by year end 2016

 
Hamburg, 1 September 2015. ADLER Real Estate AG, Frankfurt/M., (ISIN
DE0005008007) fully consolidated Westgrund AG, Berlin in the first half of
2015 increasing ADLER's total assets by c. 85% up from c. EUR 1.4 billion
in FY 2014 to c. EUR 2.6 billion. The corresponding gross rental income
including WESTGRUND is expected to reach c. EUR 196 million by year end.
Westgrund AG was taken over in the first half of the year and consolidated
for the first time on 30 June 2015. H1 results reflect the first time
consolidation but not the corresponding rental income collected during the
first six months of the year. The corresponding 12 months gross rental
income run rate is expected to reach c. EUR 232 million.
 
The positive developments in the market and more significantly an increase
in earnings during the first half of 2015, led to a considerable increase
in the net asset value of ADLER. The corresponding EPRA NAV per share
increased by c. 31% from EUR 10.74 to EUR 14.03 from the end of 2014 to the
end of June 2015. According to Axel Harloff CEO of ADLER Real Estate AG
"Given the current trend in price developments in Germany, we see a further
potential for value appreciation in the second half of the fiscal year".
 
Due to the financing structure, a positive impact on the balance sheet is
also expected to be recorded as a result of the 24.79 percent strategic
investment in conwert Immobilien Invest SE, Vienna which took place in
August 2015. conwert has already reported an increase in its earnings in
the  first half of 2015 and according to management it is expected to make
further improvements to their FFO I by c. 20 percent during the second half
of the year.

ADLER will sharply increase its earnings in 2015 due to a significant
growth in its property portfolio. Gross rental income ("GRI") rose in first
half of 2015 to c. EUR 81.0 million (first half 2014: c. EUR 25.0 million)
and is expected to reach at least EUR 196 million by the year end,
representing a significant increase compared to the previous year (c. EUR
84 million). "We are now starting to reap the rewards of our extensive
acquisition efforts," says Axel Harloff CEO. ADLER now has approximately
50,000 units, almost twice its holdings compared to the end of 2014.

EBITDA, adjusted for extraordinary- and one time effects- increased by a
staggering 511% from c. EUR 8.05 million to c. EUR 49.16 million. ADLER
also expects additional income from adjustments in rents in the portfolio
in line with market trends as well as a better occupancy rate going
forward. The occupancy rate alone rose during the second quarter by c.1
percentage point to c.89 percent. In addition to the rental income from the
investment properties, additional income from residential privatisations,
carried out by the subsidiary ACCENTRO, one of the leading residential
privatisation companies in Germany, is likely to rise as well. The price of
apartments has continued to rise sharply in Germany, increasing on average
by c.5.3 percent in the period between mid-2014 to mid-2015, according to
the analysis institute "F+B Forschung und Beratung". According to this data
residential rents have increased by 2.9 percent in the same period. For
ADLER, these price rises equate to a sustained appreciation in value.

Funds from Operation (FFO I) increased by more than 6 times from c. EUR 1.0
million in H1 2014 to c. EUR 6.3 million in H1 2015 and are expected to
more than double to at least c. EUR 14.0 million by the year end. ADLER's
FFO II guidance for FY 2015 is expected to reach at least c. EUR 40m in
line with current analysts' expectations. This is predominantly due to the
sharp rises in rental income as well as improved operating and financial
efficiencies from the property portfolios. The operating performance,
including sales activities ("FFO II"), reached a considerable EUR 32.9
million (previous half year: EUR 0.8 million) demonstrating the strong
contribution of ACCENTRO to the group finances and the strategic value in
exploiting the growing privatisation trends.
 
Despite the substantial growth and the successful issuance of a corporate
bond amounting to EUR 330 million, ADLER was nonetheless able to improve on
its capital structure. Its equity increased to c. EUR 580.4 million (end of
2014: EUR 311.2 million) as a result of the takeover of Westgrund AG and
the related capital increase in kind. Notwithstanding the Group's sharp
growth, the equity ratio rose to 22.2 percent (end of 2014: 21.9 percent).
The corresponding Loan to Value ratio (LTV), adjusted for convertible bonds
remained roughly unchanged at c. 68.9% as at end of June 2015. The
Company's WACD however, decreased significantly at the end of first half of
2015 to 4.15 percent down from 4.7 percent in line with management's plans.
Management expects further improvement to its WACD, and targets a level of
below 4 percent by year end and the LTV to decline further to c. 65
percent.

ADLER will finance its future growth by corresponding capital measures,
targeting an LTV below 60%. For further details about H1 2015 results
please refer to the respective half-yearly report and a company
presentation of ADLER Real Estate AG on website www.adler-ag.com.

The Management Board

For enquiries please contact:

Press:                                                                     
german communications dbk ag                    
Jörg Bretschneider                                         
Milchstr. 6 B, 20148 Hamburg                        
Tel.: +49 40/46 88 33 0, Fax: +49 40/46883340       
presse@german-communications.com               

Investor Relations:
Hillermann Consulting 
Christian Hillermann
Poststraße 14, 20354 Hamburg
Tel.: +49 40/32 02 79 10, Fax +49 40/32 02 79 114 
c.hillermann@hillermann-consulting.de

About ADLER Real Estate AG: is focused on establishing and expanding a
substantial residential property portfolio throughout Germany. It primarily
acquires equity interests in portfolios that are predominantly situated in
B locations in German conurbations. These portfolios, after deducting all
current costs including debt servicing still generate positive cash flow
and offer potential for sustainable value growth. The primary aim is to
acquire majority interests in order to ensure that the company can exercise
sufficient influence over the optimal management of the portfolios.

Alongside managing residential properties, ADLER pursues optimising its
portfolios. Following the majority takeover of ACCENTRO Real Estate AG, the
Group now includes Germany's largest privatiser of residential property.
ACCENTRO markets suitable residential properties from the ADLER Group's
portfolio on a targeted basis, and also brokers individual apartments on
behalf of third parties to owner-occupiers and investors who want to
properties directly and thus creating a quasi-pension income.

Following the completion of the acquisition of WESTGRUND AG, Berlin, in
late June 2015, ADLER is now one of the five largest listed German
residential real estate companies with a portfolio of almost 50,000
residential and commercial units. The company in addition to the FTSE EPRA
GLOBAL REAL ESTATE Index and the GRP General Index since 22 June 2015 is
has been included in Deutsche Börse's SDAX small cap index.



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Language:    English                                                    
Company:     ADLER Real Estate AG                                       
             Herriotstr. 5                                              
             60528 Frankfurt am Main                                    
             Germany                                                    
Phone:       +49 (0)40 - 29 8130-0                                      
Fax:         +49 (0)40 - 29 8130-99                                     
E-mail:      info@adler-ag.com                                          
Internet:    www.adler-ag.com                                           
ISIN:        DE0005008007, XS1211417362, DE000A1R1A42, DE000A11QF02     
WKN:         500800, A14J3Z, A1R1A4, A11QF0                             
Indices:     SDAX, GPR General Index                                    
Listed:      Regulated Market in Frankfurt (Prime Standard); Regulated  
             Unofficial Market in Berlin, Dusseldorf, Hamburg           
 
 
End of News    DGAP News-Service  
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391249 01.09.2015