News

Annual result as at 31 December 2015
Deutsche Wohnen achieves its best annual result in the history of the company

• Continuing dynamic growth in market leads to a rise of EUR 1.7 billion in value of portfolio and an increase in EPRA NAV of 29% to EUR 23.01 per share
• Rise in FFO I of 39% to approximately EUR 303 million or EUR 0.94 per share
• Dividend (proposal) up by 23% to EUR 0.54 per share
• Further increase in FFO I to at least EUR 360 million and in EPRA NAV to EUR 25 to 26 per share anticipated for 2016

Frankfurt/Main and Berlin, 18 March 2016. In the financial year 2015, Deutsche Wohnen once again achieved marked increases in all its key figures. At EUR 1.2 billion, group profit was a good third higher than in the previous year. As Michael Zahn, CEO of the company, explains, "With the above-average rent and value potential of our high-quality portfolio, our successful Disposals segment and value-enhancing acquisitions, we are better placed today than ever before." In the reporting year, Funds from Operations (FFO I) increased by 39% to EUR 303 million (previous year: EUR 217.6 million) due to the achievement of synergy effects, significantly reduced financing costs following the successful refinancing measures as well as organic growth. FFO I per share rose by approximately 25% to EUR 0.94. FFO II (including disposals) increased to EUR 371.9 million (previous year: EUR 270.0 million), and by around 25% to EUR 1.16 per share. As at the reporting date, the Loan-to-Value Ratio had fallen to 38.0% (31 December 2014: 51.0%). EPRA NAV (undiluted) rose significantly in comparison to the previous year by 29% to EUR 23.01 per share (31 December 2014: EUR 17.86 per share).

Significant increase in operating results

As at 31 December 2015, the portfolio of Deutsche Wohnen comprised more than 148,000 residential and commercial units with a fair value of around EUR 12 billion. As at the reporting date, the average in-place rent across all our holdings was EUR 5.89 per sqm, with a vacancy rate of 1.8%. On a like-for-like basis, Deutsche Wohnen achieved a rental growth of 3.6% in its strategic core and growth markets. The vacancy rate in these markets decreased from 1.9% to 1.7%.

In the reporting year, Deutsche Wohnen increased its gross rental income to EUR 634.0 million (previous year: EUR 626.3 million) with an operating result (Net Operating Income - NOI) of EUR 474.9 million (previous year: EUR 460.6 million). The NOI margin rose from 73.5% to 74.9%. The adjusted EBITDA without Earnings from Disposals and one-off expenses increased by 10% to EUR 523.9 million (previous year: EUR 475.3 million). In particular, the gains in efficiency resulting from the integration of GSW contributed to this result. The adjusted EBIDTA margin rose significantly by about 4 percentage points from 67.5% to 71.8%.

Against the background of continuing high demand for property, the Earnings from Disposals, in particular, increased by 32% to EUR 68.9 million (previous year: EUR 52.4 million). A total of 9,405 units were sold and recorded in the balance sheet for 2015, of which 1,908 were individual privatisations and 7,497 sales to institutional investors.

Growth in value continues

In the financial year 2015, Deutsche Wohnen profited repeatedly from a dynamic market environment and the excellent development of its portfolio, above all in the Core⁺ regions. Following the valuation of the portfolio, the increase in value was approximately EUR 1.7 billion. The most significant increases in value were recorded in Greater Berlin with approximately EUR 1.6 billion and the Rhine-Main region and the Rhineland with approximately EUR 0.1 billion.

Acquisition of 22,000 units strengthens growth

Deutsche Wohnen succeeded in acquiring a total of just under 22,000 residential units in various transactions in 2015. A good two thirds of these properties are located in Core⁺ regions, and the remainder predominantly in Core regions. The company is strengthening its holdings in Berlin, one of the most dynamically growing markets in Germany, with more than 11,000 residential units. In complementing its existing portfolio, Deutsche Wohnen can use economies of scale to manage the holdings it has acquired at optimum cost. In 2016, these acquisitions will make a significant contribution to the growth of the company.

Capital market recognises the company's success

In 2015, the Deutsche Wohnen share price developed positively once again, achieving a plus of 31% and, in so doing, managing to outperform the positive trends of industry benchmarks like EPRA Germany. Subject to approval by the Annual General Meeting, our shareholders will also profit from a dividend of EUR 0.54 per share, which is 23% higher than the dividend for the previous year. Furthermore, against the background of the consistently positive development of our business, we intend to increase the pay-out ratio for the dividend payable for the financial year 2016 from its current level of 60% to 65% of FFO I.

Outlook

For the financial year 2016, Deutsche Wohnen is assuming that the market environment will remain favourable. On the basis of the current base scenario, i.e. without further acquisitions and opportunistic disposals, the company anticipates an increase in FFO I to at least EUR 360 million with a Loan-to-Value Ratio of about 40%. Without one-off effects and assuming that the general conditions for the company's business remain unchanged, increases in the value of its holdings are anticipated for 2016 as well. Accordingly, it is expected that the EPRA NAV per share will be between EUR 25 and EUR 26. With its modernisation programme of EUR 400 million Deutsche Wohnen expects to generate further value potential by specific investments in Core⁺ regions.

Deutsche Wohnen

Deutsche Wohnen is one of the largest publicly listed real estate companies in Germany and Europe with a business focus on managing and developing its portfolio, which focuses on residential properties. As at 31 December 2015 the portfolio comprised a total of 148,218 units, of which 146,128 are residential units and 2,090 commercial properties. The company is listed in the Deutsche Börse's MDAX and is also included in the leading indices EPRA/NAREIT, STOXX Europe 600 and GPR 15.

Important Notice

This publication represents neither an offer for sale nor request for purchase of securities.

Any statements regarding the future in this document do not represent any facts and use terms such "will", "expected", "believe", "estimate", "intend", "strive", and "assume" and other similar phrases. The statements express the intention, views and current expectations and assumptions of Deutsche Wohnen and parties acting in concert with Deutsche Wohnen. The statements directed at the future are based on current planning, estimates and forecasts, which Deutsche Wohnen and the parties acting in concert with Deutsche Wohnen have made to the best of their knowledge but do not contain any statement about their future validity. Future-based statements are subject to risks and uncertainties, which are generally difficult to predict and are generally not in Deutsche Wohnen's sphere of influence or that of the parties acting in concert with Deutsche Wohnen. Please note that the actual results or events may deviate substantially from those provided in or removed from the future-based statements.