The key performance figure Funds from Operations (FFO, without disposals) increased in comparison to the equivalent period of the previous year by approximately 88% to EUR 114.2 million (previous year: EUR 60.6 million). Calculated per share the FFO (without disposals) increased by 5% to EUR 0.40. The Loan-to-Value Ratio (LTV) as at the reporting date was 56.2% (31 December 2013: 57.3%). The intrinsic value of the company, measured as EPRA NAV (undiluted), rose to EUR 14.20 per share (31 December 2013: EUR 13.99 per share) in the first half-year of 2014.
Strong operational performance
As at 30 June 2014 the portfolio of Deutsche Wohnen comprised 148,035 residential units with a fair value of approximately EUR 8.8 billion. As at the reporting date the average in-place rent in the entire portfolio was EUR 5.62 per sqm, with a vacancy rate of 2.5%. The continuing high demand for accommodation in German metropolitan areas is benefitting both the lettings business of Deutsche Wohnen and its Disposals segment.
Accordingly, it was possible to increase the current gross rental income to EUR 313.4 million (previous year: EUR 168.1 million) in the first half-year of 2014 with a Net Operating Income (NOI) of EUR 238.8 million (previous year: EUR 126.6 million). Over the past twelve months Deutsche Wohnen (including GSW) was able to achieve rental growth in its entire portfolio of 3.4% on a like-for-like basis, with a continuously low vacancy rate of 2.5%. In its Core+ regions, which constitute 80% of the entire portfolio, the company achieved rental growth of 3.9% on a like-for-like basis, with a vacancy rate of 2.0%. Moreover, in its Core regions, which to a large extent consist of acquisitions from the years 2012 and 2013, the company was able to achieve rental growth of 2.0% and to reduce the vacancy rate to 3.0% (previous year: 3.8%).
In comparison to the equivalent period of the previous year the sales result rose markedly to EUR 25.6 million (HY1 2013: EUR 12.3 million). In the first half-year of 2014 3,462 units were sold, 1,664 of which as privatisations. Deutsche Wohnen is benefitting here from the high demand for property as a form of investment.
Integration of GSW proceeding more swiftly than planned
“The integration of GSW is proceeding swiftly. We are ahead of our targets both in terms of our schedule and in terms of the cost-savings,” explains Michael Zahn, CEO of Deutsche Wohnen AG. “The high acceptance by our shareholders is also a positive signal. For example, the Annual General Meeting in June of this year was almost unanimous in its support for the conclusion of a domination agreement between Deutsche Wohnen and GSW. We are now able to implement this agreement swiftly and we expect synergies of more than EUR 10 million in 2014.”
Forecast for 2014 raised
Because of the very good operational performance of the company and the progress in the integration of GSW the forecast for FFO (without disposals) of at least EUR 210 million for 2014 is being increased by further EUR 10 million to EUR 220 million. This does not take into consideration the minority stake in GSW.
Deutsche Wohnen is one of the largest publicly listed residential property companies in Germany and Europe with a business focus on managing and developing its residential property portfolio. As at 30 June 2014 the portfolio comprised a total of 150,100 units, of which 148,000 are residential units and 2,100 commercial properties. In addition, the company operates around 2,200 nursing places/apartments in the business area of Nursing and Assisted Living. The company is listed in the Deutsche Börse’s MDAX and is also included in the leading indices EPRA/NAREIT and GPR 100.