DGAP-News: ADLER Real Estate AG: Another year of growth and improved operating performance

Financial year 2018: Another year of growth and improved operating performance

- Net rental income increased by 40.0% to EUR 238.4m

- FFO I grew by 83.2% to EUR 74.2m

- EPRA NAV (excl. goodwill and fully diluted) up by 33.2% to EUR 1,639.0m

- Excellent operational performance with l-f-l rental growth of 3.4%, reduction in vacancy to 6.0% and increase in average in-place rent to EUR5.49 per sqm/month, outperforming the 2018 guidance

Berlin, 28 March 2019 - Another very strong year for ADLER Real Estate AG (ADLER). Higher earnings and key figures for the year 2018 mainly driven by improvement in operating performance and the acquisition of c.70% stake of Brack Capital Properties N.V. (BCP) in April 2018.

Operational improvement fueling financial performance
In 2018, net rental income of ADLER increased by 40.0% to EUR 238.4m. Significant increase was partly driven by operational improvements achieved through internalization of property and facility management and also the acquisition of BCP. All the main key performance indicators improved. ADLER achieved like-for-like (l-f-l) rental growth of 3.4%, 190bps decrease in vacancy rate to 6.0% which resulted in the average in-place rent increase to EUR 5.49 per sqm/month (2017: EUR5.21 sqm/month).

FFO I for 2018 amounted to EUR 74.2m equal to an 83.2% increase compared to the previous year (EUR 40.5m). On a fully diluted basis FFO I per share reached EUR 0.94 compared to EUR 0.51 for the previous year.

At the end of 2018, EPRA NAV (excl. goodwill and fully diluted) amounted to EUR 1,639.0m and was thus 33.2% higher on the comparable figure of the previous year (EUR 1,230.5m). EPRA NAV per share on a fully diluted basis (excl. goodwill) came to EUR 20.77, a 35.1% year-on-year increase (2017: EUR 15.37).

Operational improvements starting to translate into FV uplifts of investment properties
Improvements in the operational key performance indicators have started to translate into increase in fair value revaluation of investment properties. Main factors for this were increases in rents, vacancy reduction, modernization capex on selected properties and ongoing repair and maintenance. Therefore, income from fair value adjustments of investment properties reached EUR 465.1m in 2018 (2017: EUR 235.4m).

Financing and LTV
Temporary increase in LTV due to successful acquisition of BCP in April 2018. As of 31 December 2018, LTV (excl. convertibles) stood at 61.4% (2017: 59.4%). Sale of c.37% of the BCP retail portfolio resulted in c.80bps reduction of LTV. Therefore, as of March 2019 LTV after executed transactions stands at 60.6%. Assuming remaining of the retail portfolio is sold at book value (-166bps) and treasury shares are valued at cost (-64bps), this brings LTV to 58.3%. ADLER continues to strive to achieve investment grade credit rating and has set long term LTV target at 50-55% with guidance for the end of 2019 of c.55%.

Another busy year of M&A transactions
In addition to acquisition of BCP in April 2018, ADLER completed two further transactions to streamline its portfolio. First one refers to disposal of non-core residential portfolio announced at the end of December 2018. This disposal was completed through two separate transactions adding up to a to sale of 3,700 units with gross asset value of EUR179.2m at c.3% premium to book value. Second transaction was signed on 25 March 2019 and relates to sale of EUR180.6m (c.37%) of the retail portfolio at c.7.6% premium to the book equity value. Remaining of the retail portfolio is expected to be sold by the end of 2019.

Positive outlook for 2019
ADLER expects to be able to improve its operating performance further in 2019.

The complete annual report of ADLER Real Estate AG for the financial year 2018 is available on the company's website (www.adler-ag.com).

Your contact for enquiries:

Tina Kladnik
Head of Investor Relations
ADLER Real Estate AG
Tel: +49 (162) 424 6833
t.kladnik@adler-ag.com

Key financials 2018