TAG Immobilien AG acquires 1,000 new residential units in Saxony - increasing its real estate portfolio to 80,000 units in total

DGAP-News: TAG Immobilien AG / Key word(s): Acquisition

2016-01-25 / 18:00
The issuer is solely responsible for the content of this announcement.


TAG Immobilien AG acquires 1,000 new residential units in Saxony - increasing its real estate portfolio to 80,000 units in total.

Increased reduction in vacancy rates and rental growth - vacancy rate in residential units drops in December 2015 to 7.5%, after 8.4% in September 2015 and 9.0% a year ago.

Hamburg (25 January 2016) - TAG Immobilien AG ("TAG" or the "Company") acquired 1,000 new residential units for EUR 39.5m in December 2015. The portfolio, situated in Saxony, is primarily located in the cities of Chemnitz (70%) and Riesa close to Dresden (20%). This acquisition further strengthens the presence of TAG in the Saxony region, which has been demonstrating a positive economic development.

The portfolio, which was fully refurbished during the 1990's, comprises of an area of approx. 57,100sqm and currently has a vacancy rate of approx. 3.8%. The current annual net cold rent is EUR 3.36m or EUR 5.05/sqm. The purchase price implies a multiple of 11.8x of the annual net cold rent, or a gross initial yield of 8.5%. The transaction is expected to close in the first quarter of 2016.

Following both, this most recent acquisition as well as the one announced in November 2015, the Company's total portfolio comprises of almost 80,000 units, compared to 72,500 units at the beginning of 2015.

In addition, TAG has continued to make significant progress in decreasing the vacancy rate of its core portfolio since the beginning of 2015. As of year-end 2015, the vacancy rate in the residential portfolio decreased by 1.5 percentage points from 9.0% to 7.5%, compared to the beginning of 2015. This represents a remarkable achievement compared to the years 2014 (0.8 percentage points) and 2013 (0.7 percentage points). Furthermore, this positive trend has been observed in all regions TAG operates in. For example, the vacancy rate in the Erfurt region decreased from 7.6% to 4.3%, in the Salzgitter region from 15.5% to 12.1%, and in the Rhine-Ruhr region from 2.6% to 2.2%. As a result of this very positive development, rental growth on a like-for-like basis and including effects from vacancy reduction rose to 3.3% p.a. at 31 December 2015 after 2.1% p.a. at year-end 2014.

Martin Thiel, CFO of TAG Immobilien AG, comments as follows:
"In line with our previous acquisitions, this most recent 2015 portfolio purchase also perfectly fits with our existing property and asset management structures. The attractive purchase price proves our capital-recycling-strategy, which we will continue to pursue in 2016. Furthermore, we believe that the accelerated reduction of the vacancy rates across all of our portfolio regions is evidence for the healthy fundamentals of the underlying residential markets. In Q4 2015, we were able to reduce the vacancy rate for the residential portfolio by 0.9 percentage points to 7.5% - this development confirms the innovative letting concepts which form part of the sustainable asset management approach of TAG."

Press enquiries:

TAG Immobilien AG
Head of Investor & Public Relations
Dominique Mann
Phone +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390

2016-01-25 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 32 390
ISIN:DE0008303504, XS0954227210, DE000A12T101
WKN:830350, A1TNFU, A12T10
Listed:Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart
End of NewsDGAP News Service

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