TAG Immobilien AG concludes 2020 financial year successfully despite the difficult circumstances

DGAP-News: TAG Immobilien AG / Key word(s): Annual Results/Annual Report
17.03.2021 / 06:59
The issuer is solely responsible for the content of this announcement.


TAG Immobilien AG concludes 2020 financial year successfully despite the difficult circumstances

- FFO grows by more than 7% year-on-year (EUR 172.6m vs. EUR 160.6m); dividend per share also increases 7% to EUR 0.88 vs. EUR 0.82

- Business operations remain nearly unaffected by the Covid-19 pandemic; tenants offered secure homes and good service even in difficult times

- Successful acquisitions in 2020: close to 4,600 units acquired in Germany, residential project pipeline in Poland expanded by c. 4,900 units

- TAG is among leading real estate companies in the field of sustainability based on available ESG ratings

Hamburg, 17 March 2021

TAG Immobilien AG (TAG) today published its 2020 Annual Report, reporting on another successful financial year. TAG COO Claudia Hoyer comments: "For all of us, 2020 was marked by the special challenge of the Covid-19 pandemic. As a residential company, we bear a very special responsibility during this time and lend a helping hand to our tenants. This was reflected not only in our decision to voluntarily refrain rent increases over a period of several months, but also in the further intensification of our debt advising activities and support. Social involvement, which we have been practicing for years in many of our residential neighbourhoods, is more important to us than ever. TAG's business model as a portfolio owner for affordable housing has proven to be extremely robust during this period and our company is well positioned. We would particularly like to thank our employees, who have worked hard over the past year to make this positive performance and TAG's continued growth possible under the most difficult conditions."

Successful business operations

FFO (defined as FFO I excluding net income from sales) increased by EUR 12.0m or more than 7% to EUR 172.6m (EUR 1.18 per share) compared to the previous year, reaching the upper end of the guidance range of EUR 170-173m, which had already been raised in November 2020. In addition to the good operating performance, this increase was also due in particular to the successful acquisitions in 2019 and 2020.

At EUR 21.95, net asset value in the form of EPRA net tangible assets (NTA per share) was approximately 9% above the level of EUR 20.22 reported at 31 December 2019. The result from portfolio valuation contributed significantly to this development. The total year-on-year portfolio value growth was 7.5% (of which 6.2% from valuation gains and 1.3% from investments). As of the reporting date, TAG's residential portfolio is valued at an average of around EUR 1,100 per sqm or a 5.7% gross yield.

At 45.1%, the loan-to-value (LTV) ratio as at 31 December 2020 is almost unchanged from the previous year (44.8%). The average interest rate on financial debt decreased from 1.7% to 1.5% in 2020, with an average remaining maturity of 6.8 (previous year: 7.4) years.

TAG's annual like-for-like rental growth of 1.4% and 1.5% (including the effects of vacancy reduction) was below the previous year's figures of 1.9% and 2.4% respectively. The main reasons for this were the voluntary refrain of ongoing rent increases in the months of March to June 2020, as well as lower tenant turnover (and thus lower rent increases in re-letting) as a result of the Covid-19 pandemic.

At the end of 2020, vacancy in the Group's residential units reduced to 4.5%, down from 4.8% at the end of the previous quarter and 5.1% at 30 June 2020. At the beginning of the year, vacancy had been at 4.6%. Across the entire portfolio, i.e. including the portfolios newly acquired in 2020 and the commercial units, the vacancy rate is 5.6% after 4.9% at the beginning of the year.

Since the beginning of the 2020 financial year, TAG has also been active in the Polish residential market and is planning to build a high-yielding new-construction portfolio of around 8,000 to 10,000 rental apartments within the next 3 to 5 years. In 2020, the focus of business activities was still on sales. Even though the sales revenues of EUR 73.4m were below the planned EUR 80-85m due to a postponement of the handover of around 140 apartments to January and February 2021, the result of operations in Poland as a contribution to FFO II reached the guidance range of EUR 9-11m at EUR 9.1m thanks to the positive development in prices.

The guidance for the 2021 financial year, as published in November 2020, remains unchanged as follows:

- FFO I: EUR 178-182m or EUR 1.23 per share (+4%)

- Dividend per share: EUR 0.92 (+4%)

Successful acquisitions in Germany and Poland

In 2020, TAG acquired 4,578 apartments in Germany for a total purchase price of EUR 174.7m. All locations in these portfolios are in TAG's core regions in East Germany. On average, the acquisition multiple was 14.7 times the current annual net rent, or an annual gross yield of 6.8%. The average vacancy of 21.1% at the time of acquisition offers good development opportunities for TAG's active asset management.

In Poland, the contractually secured pipeline for the construction of apartments comprises a total of approx. 8,700 units as of 31 December 2020. Of these, around 3,000 apartments are earmarked for sale, while approx. 5,700 units are available for the letting business upon completion. Rental income is first expected upon completion of the first rental projects at the end of FY 2021. Until then, the business activity in Poland will continue to consist mainly of sales.

Sustainable business development as the basis for future success

In 2020, TAG systematically continued the sustainability activities it has been following for years. A holistic understanding of sustainability forms the basis of all business decisions, so as to balance economic, ecological, and social interests. Besides ecological goals and professional corporate governance, social targets are a particular priority. Developing liveable residential quarters at affordable rents in "B and C locations" not only increases tenant satisfaction, but has also been the basis of TAG's successful business performance for years.

Not least with this in mind, in June 2020, Sustainalytics as a leading ESG rating company, rated TAG among the top 5% of companies in the real estate sector worldwide. TAG also improved its ranking with other renowned ESG rating agencies. Detailed reporting on the topic of sustainability will be presented in a separate annual sustainability report, to be published on 22 April 2021.

"Our German business model, under which we actively manage and develop high-yield yet affordable real estate outside the major metropolises, has proven stable and reliable even in the Covid-19 pandemic. In addition, we can offer our shareholders the prospect of promising results from our long-term investments in Poland," says TAG CFO Martin Thiel, commenting on TAG's outlook. "We are strategically well positioned to offer our tenants affordable housing and our shareholders attractive dividends in the years ahead."

Key figures for the 2020 financial year and as at 31 December 2020

Income statement key figures in EURm 2020 2019 2018
Rental income (net rent) 322.5 315.0 302.2
EBITDA (adjusted) 222.3 214.7 206.4
Consolidated net profit 402.6 456.4 488.2
FFO I per share in EUR 1.18 1.10 1.00
FFO I 172.6 160.6 146.5
AFFO per share in EUR 0.69 0.64 0.60
AFFO 100.9 93.9 88.4
Balance sheet key figures in EURm as at 12/31/ 2020 2019 2018
Total assets  6,478.0  5,647.0  5,033.3
EPRA NTA (fully diluted) per share in EUR 21.95 20.22 17.35
LTV in % 45.1 44.8 47.3
Portfolio data as at 12/31/ 2020 2019 2018
Units Germany 88,313 84,510 84,426
Units Poland (contractually secured pipeline) 8,742 - -
Real estate volume (in EURm) 5,834.3 5,302.4 4,815.5
Vacancy in % (total) 5.6 4.9 5.3
Vacancy in % (residential units) 4.5 4.5 4.7
l-f-l rental growth in % 1.4 1.9 2.3
l-f-l rental growth in % (incl. vacancy reduction) 1.5 2.4 2.6
Employees 2020 2019 2018
Number of employees 1,354 1,160 993

Please refer to the presentation published today and TAG's Annual Report 2020 at https://www.tag-ag.com/en/investor-relations/financial-statements/annual-reports for further details on the past financial year.

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

17.03.2021 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:1176034

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