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 AFFO guidance for 2024 confirmed at €190–210 million, representing ~10% per share growth.

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

• Announced acquisition of the remaining stake in Brack Capital Properties (BCP), to be fully consolidated in 2025, expected to be AFFO neutral in 2025 and accretive from 2027 onward, with >90% regional overlap and mid-term profitability improvements.

• Portfolio devaluation slowed, with H2 2024 valuation expected to stabilize between 0% and +0.5%.

• Continued value-enhancing capital recycling strategy, with disposals executed above book value and ongoing portfolio optimization to reduce LTV towards a mid-term target of 45%.

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%); FFO I: €329.3 million (-6.6%).

• Cash and cash equivalents rose to €867.3 million, supported by a €500 million convertible bond issue and new loans.

• Investment properties valued at €17,761.9 million (-1.9% year-to-date); equity ratio at 37.2%.

• Gross yield stands at 4.9%, with portfolio valuation expected to stabilize in H2 2024.

Outlook and guidance

• 2024 AFFO guidance confirmed/raised to €190–210 million, with per share growth of ~10%.

• 2025 AFFO expected at €205–225 million, a 7.5% increase at midpoint, driven by rent growth and investment spending (>€35/sqm).

• Like-for-like rent growth guidance for 2025 set at 3.4–3.6%, with free finance units expected to exceed 4%.

• 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, intercultural projects, and IT security training completion rates.