In This Article:
Release Date: March 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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LEG Immobilien SE (LEGIF) achieved an 11% growth in AFFO, reaching 200.4 million, demonstrating strong financial performance.
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The company successfully transferred 2,500 non-core units in 2024 and signed another 1,800 units for 2025, with total proceeds of 400 million.
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Net rent increased by 3.0% to 859.4 million, with a recurring net operating income rise of 5.1%, indicating robust operational performance.
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The company maintained a low cash financing cost of 1.49% by issuing low coupon bonds and repaying higher-cost debt.
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LEG Immobilien SE (LEGIF) has a strong cash position of over 900 million, covering all 2025 maturities and planned refinancing needs.
Negative Points
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The company's LTV remains above the midterm target of 45%, currently at 47.9%, indicating a need for further deleveraging.
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New tenant protection regulations in North Australia affect 23% of the portfolio, potentially limiting rent growth.
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The market recovery in Germany is still below the long-term average, which could impact future disposal programs.
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The AFFO contribution from green ventures is expected to be minimal in 2025, with a single-digit million euro impact.
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The company faces challenges in refinancing upcoming maturities in a higher interest rate environment, despite a low starting base.
Q & A Highlights
Q: Do you foresee any major changes in rent regulation beyond 2025, and what is the rationale for considering a potential exit from your green ventures? A: (Unidentified_3, COO) We don't expect major effects from rent regulation changes in the near future. Regarding green ventures, we aim to scale them quickly and may consider selling stakes to partners, especially in markets where we lack expertise. We expect a single-digit million euro contribution to AFFO from these ventures this year.
Q: Your balance sheet remains highly leveraged. What are your plans to reduce the LTV, and by when do you expect to reach a more market-acceptable level? A: (Unidentified_2, CEO) We aim to reach our midterm LTV target of 45% by continuing our sales program. We are currently marketing around 3,000 units and expect additional sales to help reduce leverage. The timeline depends on asset valuations and market conditions.
Q: Are you offering a scrip alternative to the dividend, and how will you influence the level of take-up? A: (Unidentified_4, CFO) We will likely offer both a scrip and cash dividend, similar to previous years. The decision on pricing and take-up levels has not been finalized yet.