Hamborner REIT (HAB2) Investor Update summary

Portfolio overview and strategy

• Manages a €1.4 billion portfolio of 66 properties, split 57% retail and 43% office, with a 97% occupancy rate and average lease term of 5.7 years.

• Focuses on metropolitan regions in Germany, with major tenants in food retailing such as Edeka, Kaufland, and REWE, which together account for over 30% of rental income.

• Portfolio has been optimized by selling smaller assets and acquiring newer, larger properties, reducing average property age.

• Strategic shift to include 10–20% of assets with higher value-add potential, while maintaining a core, defensive profile for 80–90% of the portfolio.

• High tenant retention and diversified locations mitigate cluster risk, especially in the food retail segment.

Financial performance and guidance

• Q1 2024 Funds from Operations (FFO) were €11.9 million, slightly below the prior year due to asset sales and higher costs.

• Loan-to-value (LTV) ratio improved to 41.1% after debt repayments; average financing cost is 1.9%, but new loans are expected at 3.5–4%.

• 2025 guidance: rental income of €87.5–89 million and FFO of €44–46 million, both lower than previous years due to recent disposals and rising costs.

• Maintenance, administrative, and IT costs are expected to rise in 2025, with some one-off expenses in the current year.

• Most rental contracts are indexed to inflation, providing some protection against cost increases.

Dividend policy and capital allocation

• Proposed dividend for the last fiscal year is €0.48 per share, with a payout ratio of 76%.

• From 2025, payout ratio will be reduced to 60–70% of FFO, down from a 10-year average of 76%.

• Dividend decisions will also consider market conditions, company situation, and alternative investment opportunities.