• Like-for-Like Rental Growth: 3.2% for the full portfolio; 3.8% for the free-financed portfolio.

• AFFO Guidance 2024: EUR190 million to EUR210 million, representing a 10% increase in AFFO per share.

• AFFO Guidance 2025: Expected to grow to EUR205 million to EUR225 million, a 7.5% increase.

• Net Cold Rent: Increased by 3.3% to EUR643.8 million for the first three quarters.

• Recurring Net Operating Income: Rose by 2.6% to EUR530.3 million.

• Adjusted EBITDA: Declined by 3.1% due to lower green electricity production contribution.

• AFFO: Decreased by 14.1% year over year to EUR152 million.

• Gross Yield: Portfolio gross yield of around 5%.

• Units Sold: 3,400 units sold for EUR330 million.

• Investment Spending: EUR24.63 per square meter in the first nine months, with a full-year guidance of EUR34 per square meter.

• Average Interest Cost: Maintained at a low level of 1.6%.

• Liquidity Position: More than EUR860 million.

• LTV (Loan-to-Value): 48.5% as of September, expected to be below 48% by year-end.

• Warning! GuruFocus has detected 13 Warning Signs with LEGIF.

Release Date: November 08, 2024

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

Positive Points

• LEG Immobilien SE (LEGIF) reported a strong 3.2% like-for-like rental growth for its full portfolio, aligning with its guidance range.

• The company confirmed its 2024 AFFO guidance, expecting an increase of around 10% for the AFFO per share.

• LEG Immobilien SE (LEGIF) announced the acquisition of the remaining shares in Brack Capital Partners, which is expected to be earnings accretive in the mid-term.

• The company has made significant progress in its capital recycling strategy, selling 3,400 units for EUR330 million, all above book value.

• LEG Immobilien SE (LEGIF) maintains a strong financial position with a low average cash financing cost of 1.6% and a liquidity position of over EUR860 million.

Negative Points

• The AFFO decreased by 14.1% year over year to EUR152 million, primarily due to higher investments and lower contributions from green electricity production.

• The company faces higher refinancing rates, which remain above its current average financing costs.

• There is uncertainty regarding the impact of potential rent regulation changes, although the effect on the portfolio is expected to be small.

• The acquisition of BCP will initially be AFFO neutral due to increased CapEx requirements.

• The company has not yet achieved its mid-term LTV target of 45%, indicating ongoing pressure to manage leverage.

Q & A Highlights

Q: Could you consider a full exit of the development exposure at the right price, and what are your plans for new locations added outside your core exposure? A: We do not consider ourselves the best owners for the two plots in Gerresheim and Grafenberg after shutting down our development operations. We are open to selling them or partnering in a joint venture. Regarding new locations, we plan to set up a hub in Leipzig to manage our assets in Eastern Germany, leveraging our substantial footprint there.