News

Interim result as at 30 June 2016
Deutsche Wohnen raises its forecasts following strong half year performance

• FFO I improves by 24% to EUR 0.58 per share
• FFO I forecast for 2016 raised to at least EUR 380 million
• Market dynamics lead to revaluation gains of around EUR 730 million
• Like-for-like rental growth of 3.9%
• Strengthening of nursing segment by the acquisition of a nursing portfolio comprising c. 4,100 beds and annual rental income of c. EUR 27 million

Frankfurt/Main and Berlin, 12 August 2016. With a consolidated group profit of EUR 623.0 million (previous year: EUR 542.8 million), the first half of 2016 was very successful for Deutsche Wohnen. The increase was mostly due to portfolio appreciation as a result of the continued highly positive performance of the market. As compared to the previous year, funds from operations (FFO I) increased by 38% to EUR 196.7 million (previous year: EUR 142.7 million). FFO I rose by approximately 24% to EUR 0.58 per share. FFO II improved by 24%, rising to EUR 233.4 million (previous year: EUR 188.9 million), which was equivalent to an increase of approximately 11% to EUR 0.69 per share.

The very positive half-year results produced an increase in EPRA NAV (undiluted) of approximately 9% to EUR 25.04 per share (31 December 2015: EUR 23.01 per share). The leverage ratio (LTV) fell from 42.0% on 31 March 2016 to 41.2%.

Strong operating performance

As at 30 June 2016, the Deutsche Wohnen portfolio comprised approximately 161,000 residential and commercial units with a fair value of approximately EUR 13.5 billion, or EUR 1,372 per square metre. On a like-for-like basis, Deutsche Wohnen achieved a rental growth in the strategic core and growth regions of 3.9% as compared to the previous year. The vacancy rate once more decreased from 1.7% to 1.4%.

Current gross rental income rose to EUR 347.8 million in the first six months of the financial year 2016 (previous year: EUR 313.3 million), while the operating earnings (net operating income - NOI) amounted to EUR 272.9 million (previous year: EUR 236.8 million). The NOI margin correspondingly increased from 75.6% to 78.5%. Adjusted EBITDA excluding earnings from disposals improved by 18% to EUR 266.5 million (previous year: EUR 225.2 million), largely due to further efficiency gains in business operations and a fall in general and administration expenses. The adjusted EBITDA margin rose by a good 8 percentage points from 68.3% to 76.6%.

The sale of 2,254 units (previous year: 7,329) resulted in earnings from disposal of EUR 36.7 million (previous year: EUR 46.2 million), while the lower share of block sales triggered an increase in the gross margin from 13% to 24% on average. The Nursing and Assisted Living segment recorded an occupancy rate of more than 98% and earnings (NOI) of EUR 8.7 million (previous year: EUR 7.9 million).

Portfolio continues to increase in value

The revaluation of the portfolio at the end of the first half of the year once more took account of the dynamic market environment, particularly in Berlin. The value of the portfolio thus increased by approximately EUR 730 million to approximately EUR 13.5 billion, or by approximately EUR 90 to EUR 1,372 per square meter. The company's property holdings are therefore valued at 19.1 times the annualised net cold rent of EUR 708 million or a gross yield of 5.2%.

Deutsche Wohnen significantly expands its nursing segment

Deutsche Wohnen has notarised its acquisition, by way of an asset deal, of a high-quality nursing property portfolio comprising 28 residential nursing home facilities and a total of 4,132 beds. The residential nursing home facilities, which are mainly located in Western Germany, have been leased to reputable operators on a long-term basis. The portfolio currently generates annual rental income in the amount of EUR 27.3 million, approximately 90% of which are attributable to inpatient nursing care and approximately 10% to assisted living services. The transaction remains subject to standard conditions precedent - among others, the granting of consent thereto by the supervisory board of the seller. The transfer of the benefits and encumbrances associated with the properties is set to take place in the fourth quarter of 2016.

"The planned acquisition of the nursing portfolio will enable us to significantly strengthen our presence in the as yet still largely fragmented nursing market and become one of the leading providers in this market. Due to the demographic changes currently underway, the German nursing market clearly represents a growth market for us, one from which we, as a company with long-standing experience in this segment, wish to benefit to a greater degree," says Michael Zahn, Chief Executive Officer of Deutsche Wohnen.

FFO I forecast raised

Due to the positive development of the company, Deutsche Wohnen has increased its forecast for FFO I for the financial year 2016 - without taking other acquisitions or opportunistic sales into consideration - from at least EUR 360 million to at least EUR 380 million. Assuming the framework conditions remain constant and barring any one-off items, we expect further price increases and a corresponding EPRA NAV of at least EUR 26 per share in 2016.

Deutsche Wohnen

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 focusses on residential properties. As at 30 June 2016, the holdings comprised a total of 160,836 units, of which 158,647 are residential units and 2,189 are commercial properties. Deutsche Wohnen is listed on the MDAX of Deutsche Börse and is additionally traded on the leading indices EPRA/NAREIT, STOXX^(R) Europe 600 and GPR 15.

Important information

This publication constitutes neither an offer of sale nor an invitation to purchase securities.

To the extent that this document contains any forward-looking statements, these are not to be understood as statements of fact and are characterised by the use of the words "will", "expect", "believe", "estimate", "intend", "aim", "assume" and similar expressions. These statements are an expression of the intentions, views or current expectations and assumptions of Deutsche Wohnen and those individuals acting in concert with it. These forward-looking statements are based on current plans, estimates and forecasts that have been generated by Deutsche Wohnen and the individuals acting in concert with it to the best of their knowledge; however, they do not constitute a guarantee of the accuracy of those plans, estimates and forecasts in future contexts. Forward-looking statements are subject to risks and uncertainties, which can usually only be predicted with some difficulty and generally fall outside of the sphere of influence of Deutsche Wohnen or the individuals acting in concert with it. It should be kept in mind that actual events or consequences may deviate significantly from those indicated or contained in such forward-looking statements.