Annual result as at 31 December 2014
- Market dynamics in Core+ regions lead to portfolio appreciation by EUR 953 million
- FFO I up by 90% to EUR 217.6 million; FFO II improved by 96% to EUR 270 million
- EPRA NAV per share up by 25% to EUR 18.10
- Dividend raised by 29% to EUR 0.44 per share
- FFO I forecast of at least EUR 250 million for 2015
In the reporting year Funds from Operations (FFO I) increased by 90% to EUR 217.6 million (previous year: EUR 114.5 million). Calculated per share, FFO I rose by approximately 17% to EUR 0.76. Taking disposals into consideration, FFO II improved by 96% to EUR 270 million (previous year: EUR 137.5 million), and per share by approximately 21% to EUR 0.94. The Loan-to-Value Ratio fell to 51.0% as at the reporting date (31 December 2013: 57.4%). EPRA NAV (undiluted) rose significantly in comparison to the previous year to EUR 18.10 per share (31 December 2013: EUR 14.51 per share).
Significant increase in operating results
As at 31 December 2014, the portfolio of Deutsche Wohnen comprised 149,168 residential and commercial units with a fair value of approximately EUR 10.0 billion. The in-place rent across the whole portfolio was EUR 5.69 per sqm as at the reporting date, with a vacancy rate of 2.2%.
In the reporting year, it was possible to increase the gross rental income to EUR 626.3 million (previous year: EUR 372.9 million), with an operating result (Net Operating Income – NOI) of EUR 460.6 million (previous year: EUR 264.0 million). On a like-for-like basis Deutsche Wohnen achieved rental growth in the strategic core and growth regions of 2.5%. The vacancy rate fell in these regions from 2.0% to 1.9%.
Against the background of the continuing high demand for home ownership, particularly earnings from disposals rose again markedly in comparison to the previous year by 128% to EUR 52.4 million (previous year: EUR 23.0 million). In total, 4,115 units were sold in 2014 of which 2,016 were sold to owner-occupiers and 2,099 to institutional investors.
The higher valuation of our holdings underscores the high quality of our portfolio
The excellent development of the Deutsche Wohnen portfolio with its clear focus on Core+ regions is reflected in the current valuation of our properties. The annual valuation of our portfolio shows an increase in value of EUR 953 million. The major increases in value concerned essentially Greater Berlin (EUR 819 million) and the Rhine-Main region (EUR 73 million).
As Michael Zahn, CEO of Deutsche Wohnen AG points out, “We see that our consistent focus on German growth markets is bearing fruit. We are anticipating further increases in value in these markets in future and have designed our investment strategy accordingly. Therefore, we have decided to implement a comprehensive modernisation programme over the next four years amounting to EUR 280 million with a focus on our Core+ regions. This programme will further enhance the value of our portfolio and will generate internal growth.”
Strong position on the capital market further developed
With a market capitalisation of around EUR 7 billion, Deutsche Wohnen is one of the leading publicly listed property companies in Germany and Europe.
“Our focused and concentrated portfolio strategy together with our commitment to high quality, has convinced the capital market. The Deutsche Wohnen share price rose by 39.5% in the reporting year to EUR 19.58 and is showing a significant premium,” explains Chief Financial Officer (CFO) Andreas Segal. In the first few months of 2015 the share price rose again by 25% and was at EUR 24.44 as at the balance sheet date 3 March 2015.
As announced, Deutsche Wohnen has increased the pay-out ratio for the dividend that is planned for 2014 from 50% to 60% of FFO I. Subject to the approval of the Annual Meeting, the dividend will be EUR 0.44 per share, which represents an increase of 29% compared to the previous year.
For the financial year 2015 Deutsche Wohnen is assuming that general market conditions will continue to be favourable. In our basic scenario – assuming no further acquisitions or opportunistic disposals – the company is forecasting a rise in FFO I to at least EUR 250 million.
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 portfolio, which focuses on residential properties. As at 31 December 2014 the portfolio comprised a total of 149,168 units, of which 147,105 are residential units and 2,063 commercial properties. Deutsche Wohnen is listed in the Deutsche Börse’s MDAX and is also included in the leading indices EPRA/NAREIT and GPR 100.