Successful business performance in the second quarter of 2021: TAG Immobilien AG generates continuous FFO growth and significant NTA increase

DGAP-News: TAG Immobilien AG / Key word(s): Half Year Results
11.08.2021 / 06:55
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Successful business performance in the second quarter of 2021: TAG Immobilien AG generates continuous FFO growth and significant NTA increase; business activity in Poland further expanded: new location established and first tenants moving in

- FFO I in Q2 2021 at EUR 45.9m or EUR 0.31 per share (H1 2021: EUR 91.5m or EUR 0.62 per share),

- Valuation of the real estate portfolio as at 30 June 2021 leads to valuation uplift of 5.2%,

- EPRA NTA per share increases to EUR 23.69 from EUR 21.95 as at 31 December 2020 (up 7.9% and 11.9%, respectively, taking into account the dividend of EUR 0.88 per share paid out in Q2 2021),

- Expansion of the contractually secured project development pipeline in Poland to around 11,900 units, of which approx. 8,200 units for rent; first land bank acquisition in Gdansk as TAG's fourth location in Poland,

- First new construction projects completed in Wroclaw in June 2021 on schedule and within budget; first tenants move in,

- Further improved Sustainalytics ESG risk rating for TAG with classification in the best possible category 'negligible risk',

- Business activity remains almost unaffected by Covid-19 pandemic, guidance for 2021 financial year confirmed.

Hamburg, 11 August 2021

Key operating figures and earnings trend

The Group's net actual rent ('net cold rent') increased by 3.9% year-on-year in the first half of 2021. Based on comparable portfolios (like-for-like), rental growth was 1.6% in the last twelve months to 30 June 2021. Vacancy in the Group's residential units declined slightly to 5.8% in Q2 2021, from 5.9% in March 2021 and 5.3% at the beginning of the year.

FFO I (funds from operations excluding net income from sales), which is still calculated solely based on the rental business in Germany, reached EUR 45.9m in Q2 2021, compared to EUR 45.6m in Q1 2021 and EUR 44.5m in Q2 2020. Looking at the entire first half of 2021, FFO I amounted to EUR 91.5m, compared to EUR 86.5m in the same period of the previous year, which corresponds to an increase of 5.8%.

As in previous years, TAG's real estate portfolio was completely revalued as at 30 June 2021. The total valuation gain of EUR 310.4m (of which EUR 305.6m relates to the portfolio in Germany and EUR 4.8m to the portfolio in Poland, which is still being developed) corresponds to a valuation uplift of 5.2% in the first half of 2021, following 3.3% and 2.9% in H1 and H2 2020, respectively. In this respect, the high demand for affordable yet attractive homes, which has now also been evident for many years in 'B locations' and in East Germany, is leading to a significant increase in value for the real estate portfolio. As a result, TAG's portfolio is now valued at around EUR 1,150 per sqm, with gross initial yield at 5.5%.

EPRA NTA (net tangible assets) increased to EUR 23.69 from EUR 21.95 at 31 December 2020, even after the dividend payment of EUR 0.88 per share made in May 2021. The loan-to-value (LTV) ratio was 44.1% as at 30 June 2021, down once again compared to year-end 2020 (45.1%).

Overall, TAG generated consolidated net profit of EUR 324.1m in the first six months of 2021, compared to EUR 212.8m in the same period of the previous year. In addition to the good operating performance, this was due in particular to the EUR 138.0m year-on-year increase in the valuation result.

Further growth of the portfolio in Poland

The business performance in Poland was also very positive. In the first half of 2021, net income from sales increased to EUR 6.7m, from EUR -0.4m in the same period of the previous year. The total result from operations in Poland, which currently nearly completely includes sales transactions and is included in the Group's FFO II, amounted to EUR 4.5m in H1 2021 after EUR -0.8m in H1 2020.

The contractually secured pipeline for the construction of residential units comprises approximately 11,900 units as of the reporting date. Of this total, around 8,200 residential units are earmarked for letting, while approx. 3,700 are intended for sale. With the acquisition of land in Gdansk in Q2 2021, TAG established its fourth location in Poland after Wroclaw, Poznan and Lodz. In June 2021, business activities in Poland reached another milestone with the first tenants moving into three new building projects in Wroclaw. At the end of July 2021, almost 400 units were in the letting process. All projects were completed on schedule and within budget.

Improved ESG rating from Sustainalytics

At the beginning of August 2021, TAG's sustainability activities were recognised by the rating agency Sustainalytics, which ranked it in the best possible category ('negligible ESG risk', with a score of 9.9 after 12.6 previously). This places TAG among the top 3% of all real-estate companies and the top 1% of all companies worldwide.

"Our rental business in Germany remains very stable despite the ongoing Covid-19 pandemic and is seeing continuous increases in FFO," says Martin Thiel, CFO of TAG. "The good valuation result of the first half of 2021 shows a rise in demand for residential properties yet again, including in the B locations we prefer, and in East Germany. In Poland, we are celebrating increased sales results as well as the move-in of the first tenants into our recently completed new building projects. With the 8,000 to 10,000 rental units planned in Poland by the end of 2025 and the gross initial yields of 7-8% achievable there, we will ensure substantial and profitable external growth for the next years."

Please refer to the presentation published today and the interim financial report at for further details on the first half of 2021.

Overview of key financials and portfolio data

Income statement key indicators in EURm 01/01-06/30/2021 01/01-06/30/2020
Net actual rent 166.0 159.7
EBITDA (adjusted) 114.2 113.0
Consolidated net profit 324.1 212.8
FFO I per share in EUR 0.62 0.59
FFO I 91.5 86.5
AFFO per share in EUR 0.42 0.33
AFFO 61.9 48.6
Balance sheet key indicators in EURm 06/30/2021 12/31/2020
Total assets 6,800.7 6,478.0
EPRA NTA (fully diluted) per share in EUR 23.69 21.95
LTV in % 44.1 45.1
Portfolio data 06/30/2021 12/31/2020
Units Germany 88,319 88,313
Units Poland (contractually secured pipeline) 11,922 8,742
Real estate volume (total) 6,365.4 5,984.5
Vacancy in % (total) 6.1 5.6
Vacancy in % (residential units) 5.8 5.3*/4.5
l-f-l rental growth in % 1.6 1.4
l-f-l rental growth in % (incl. vacancy reduction) 1.6 1.5

*incl. acquisitions from 2020

Press enquiries

TAG Immobilien AG
Dominique Mann
Head of Investor & Public Relations
Phone +49 (0) 40 380 32 305
Fax +49 (0) 40 380 32 390

11.08.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Company:TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Phone:040 380 32 0
Fax:040 380 32 388
Listed:Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange
EQS News ID:1225392

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