LEG Immobilien (LEG) Q3 2024 earnings summary

Executive summary

• Net cold rent rose 3.3% year-over-year to €643.8 million, driven by 3.2% like-for-like rental growth, with strong operational focus and portfolio now at 165,299 units.

• Adjusted EBITDA declined 3.1% to €491.7 million, margin at 76.4% (prior year: 81.4%), and AFFO fell 14.1% to €152.0 million, but Q4 expected to be stronger.

• 2024 AFFO guidance confirmed at €190–210 million, implying around 10% per-share growth; 2025 guidance raised to €205–225 million, targeting 7.5% growth at midpoint.

• Announced acquisition of the remaining stake in Brack Capital Properties (BCP), to be fully consolidated in 2025, expected to be AFFO neutral in the near term and accretive mid-term.

• Disposals of ~3,400 units for €330 million, all above book value, supporting LTV reduction and capital recycling.

Financial highlights

• Net cold rent: €643.8 million (+3.3% year-over-year); recurring NOI: €530.3 million (+2.6%).

• Adjusted EBITDA: €491.7 million (-3.1%); AFFO: €152.0 million (-14.1%); AFFO margin dropped to 23.6% from 28.4%.

• Gross yield at 4.9%; portfolio valuation expected to stabilize in H2 2024 (0% to +0.5% effect).

• LTV stable at 48.5% as of September, targeted to fall below 48% by year-end and 45% mid-term.

• Cash and cash equivalents increased, supported by €500 million convertible bond at 1% coupon, extending maturity to 2030.

Outlook and guidance

• 2024 AFFO guidance confirmed at €190–210 million, with midpoint implying ~10% per-share growth.

• 2025 AFFO guidance raised to €205–225 million, driven by rent growth (3.4–3.6%) and higher investments (>€35/sqm).

• Investment spending to increase to at least €35 per sqm in 2025.

• LTV medium-term target remains max 45%; 100% AFFO payout plus part of net disposal proceeds as dividend.

• ESG targets for 2024 include 4,000 tonnes CO2 reduction and IT security training completion.