News

Interim result as of 30 June 2018
Deutsche Wohnen portfolio continues to gain value
 

• FFO I up by 13% to EUR 248.5 million or EUR 0.70 per share
• Valuation increase of the portfolio by EUR 678 million
• EPRA NAV up by 5% to EUR 37.42 per share
• Acquisition of 30 nursing facilities with around 4,700 care places

Berlin, 14 August 2018. Deutsche Wohnen concluded the first half-year 2018 with a consolidated group profit of EUR 652.7 million (H1 2017: EUR 672.0 million). In particular, the valuation increase of the portfolio, higher earnings from Residential Property Management and the improved financial result had a positive effect on the total comprehensive income.

Compared to the previous year, FFO I (Funds from Operations, operating result after current interest and taxes) increased by 13% to EUR 248.5 million (H1 2017: EUR 220.8 million). FFO I per share was up by 11% to EUR 0.70. EPRA NAV increased by 5% to EUR 37.42 per share (31 December 2017: EUR 35.74 per share). Due to the valuation increase, the loan-to-value ratio decreased to 33.8% (31 December 2017: 34.5%).
 

Strong operating performance

As of 30 June 2018, the Deutsche Wohnen portfolio comprised around 164,000 residential and commercial units with a fair value of around EUR 19.7 billion (without Nursing and Assisted Living). The average monthly in-place rent for the entire portfolio was EUR 6.51 per sqm as of the reporting date. On a like-for-like basis, the Deutsche Wohnen letting portfolio generated rental growth of 4.6% compared to the previous year. The vacancy rate remained low at 1.9% (previous year: 1.7%), of which some 0.5% was due to our investment programme.

Contracted rental income rose to EUR 387.3 million in the first half of 2018 (previous year: EUR 366.5 million) and led to an increase in net operating income (NOI) to EUR 307.7 million (previous year: EUR 283.7 million). The NOI margin in Residential Property Management improved to 79.4% (previous year: 77.4%).

As of 30 June 2018, 501 units with transfer of risks and rewards were sold and thus included in the Disposals result in the amount of EUR 9.0 million (previous year: EUR 20.5 million). Gross margins remained high at 30%. Attractive margins of 40% were achieved in the privatisation business, despite the valuation uplifts in prior years.

The earnings contribution from the Nursing and Assisted Living segment amounted to EUR 23.8 million in the first half-year of 2018 (previous year: EUR 24.7 million). The occupancy rate of 99% of the nursing facilities operated by KATHARINENHOF^(R), in which Deutsche Wohnen holds a 49% stake, has been at an above-average level for years.

Adjusted EBITDA excluding disposals improved to EUR 317.7 million (previous year: EUR 290.7 million).
 

Significant increase in the value of the portfolio

Deutsche Wohnen continues to benefit from its focused portfolio strategy and the strong demand for residential properties in metropolitan areas. This is reflected in a significant increase in the value of the portfolio of around EUR 678 million. The property portfolio is therefore valued at 25.2 times the annualised net cold rent of EUR 783 million or a gross yield of approximately 4.0%. This corresponds to a value of EUR 1,961 per sqm for the entire portfolio and EUR 2,186 per sqm for the property portfolio in Greater Berlin.
 

Acquisition of 30 nursing facilities with around 4,700 care places

Deutsche Wohnen has signed agreements to acquire 30 nursing properties with around 4,700 care places. Nearly 90% of the acquired properties are located in metropolitan areas, a big part of them in Hamburg (13 facilities). To manage the Hamburg facilities, the company initially took a minority interest in Pflegen & Wohnen Hamburg GmbH. The other 17 facilities are leased to well-known operators on long term leases. The transfer of risks and rewards is subject to normal market conditions and is expected to take place in the fourth quarter.

The obligations from purchase agreements total approximately EUR 680 million. This corresponds to a return based on the anticipated EBITDA of around 5% following integration.

Michael Zahn, Chief Executive Officer of Deutsche Wohnen SE: 'We are consistently pursuing our growth strategy in the Nursing and Assisted Living segment through the planned acquisitions of nursing facilities with above-average qualities and locations. With over 12,000 care places we are one of the largest owners of nursing properties in Germany and will therefore benefit greatly from the positive macro trends in the nursing market.'
 

Outlook

For the 2018 financial year, Deutsche Wohnen confirms its forecast for FFO I of around EUR 470 million.

Deutsche Wohnen

Deutsche Wohnen is one of the leading publicly listed property companies in Germany and Europe. Its operating focus is on managing and developing its portfolio, concentrating on residential properties. As of 30 June 2018, its portfolio comprised 163,942 units, of which 161,468 are residential and 2,474 commercial. Deutsche Wohnen is listed on Deutsche Börse's MDAX index and also traded on the leading indices EPRA/NAREIT, STOXX^(R) Europe 600 and GPR 250.

Important note

This publication is neither an offer to sell nor a solicitation to buy securities.

To the extent that this document contains forward-looking statements, these are not facts and are recognisable by such words as 'will', 'expect', 'believe', 'estimate', 'intend', 'endeavour', 'assume' and similar expressions. These statements express the intentions, opinions or current expectations and assumptions of Deutsche Wohnen and the individuals acting in concert with it. The forward-looking statements are based on current plans, estimates and forecasts that Deutsche Wohnen and the individuals acting in concert with it have made to the best of their knowledge, but do not make any claims as to their future accuracy. Forward-looking statements are subject to risks and uncertainties that are generally difficult to predict and are usually not within the control of Deutsche Wohnen or the individuals acting in concert with it. It should be remembered that the actual results or consequences may differ considerably from those mentioned or contained in the forward-looking statements.