• Bridge Financing Payback: Fully repaid EUR500 million bridge financing for VIB acquisition.

• Property Disposals: Sold 19 properties for EUR417 million in the first nine months.

• Average Rent Increase: Increased from EUR6.51 to EUR7.72 per square meter.

• Assets Under Management: EUR8.9 billion, with a 2.3% like-for-like rental growth.

• Net Rental Income: EUR112.9 million, a decrease due to prior-year period inclusions.

• Real Estate Management Fees: Increased from EUR33.3 million to EUR37.4 million.

• FFO: EUR36.1 million for the first nine months of 2024.

• Gross Rental Income Guidance: Expected between EUR160 million to EUR175 million.

• Disposal Guidance: EUR650 million to EUR900 million, with specific targets for commercial and institutional portfolios.

• Interest Rate Improvement: Reduced from 3.36% to 2.8% by the end of September.

• Warning! GuruFocus has detected 6 Warning Signs with DDCCF.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Branicks Group AG (DDCCF) is ahead of plan in terms of financial consolidation, having fully paid back the EUR500 million bridge financing for the acquisition of VIB.

• The company has been active in the market, selling 19 properties for EUR417 million, demonstrating the high quality of its real estate portfolio.

• The commercial portfolio continues to generate stable and predictable rents, benefiting from rent indexation, with an increase in average rent from EUR6.51 to EUR7.72 per square meter.

• The institutional business recorded a 2.3% like-for-like rental growth, supported by a partnership with Encavis in the renewables segment.

• Branicks Group AG (DDCCF) has made significant progress in its Performance 2024 action plan, including OpEx reduction and liability reduction, and is focused on deleveraging its balance sheet.

Negative Points

• Like-for-like rental growth was slightly lower due to expired lease agreements, impacting overall rental income.

• The letting performance declined by 37% year on year to 218,000 square meters, mainly due to disposals.

• Net rental income fell to EUR112.9 million, primarily due to disposals and the absence of rent from properties in the VIB Retail Balance I fund.

• The company has reduced its acquisition target to zero, reflecting a cautious approach to preserve liquidity.

• There is uncertainty in the transaction pipeline, leading to a broad range in FFO guidance of EUR40 million to EUR55 million, indicating challenges in predicting financial outcomes.

Q & A Highlights

Q: What is the volume of closed disposals for the commercial portfolio after nine months, and what is signed but not yet closed? A: For the commercial portfolio, EUR369 million has been signed and closed. Additionally, there are EUR150 million signed but not yet closed, totaling EUR520 million. These are expected to be closed by year-end, impacting the LTV reduction.