TAG Immobilien AG starts into 2021 with significant earnings increase and new ESG initiatives

DGAP-News: TAG Immobilien AG / Key word(s): Quarterly / Interim Statement/Quarter Results
10.05.2021 / 06:55
The issuer is solely responsible for the content of this announcement.


TAG Immobilien AG starts into 2021 with significant earnings increase and new ESG initiatives

- FFO I in Q1 2021 at EUR 45.6m or EUR 0.31 per share (+8.6% year-on-year),

- Loan-to-value (LTV) debt ratio at 44.8% at the reporting date; Moody's rating agency raises outlook for TAG's Baa3 investment grade rating from 'stable' to 'positive',

- Further development of TAG's sustainability strategy: finalisation of a comprehensive decarbonisation strategy in 2021 with the long-term goal of managing a nearly climate-neutral residential portfolio;

- Low emission intensity of TAG portfolio by sector comparison with 31.9 kg CO2/m² p.a.; over 60% of the buildings already have an energy efficiency class of at least 'C'; less than 5% of the portfolio is in the lowest energy efficiency classes 'G' and 'H';

- Project developments in Poland offer extensive opportunities to plan sustainably and to incorporate climate and resource protection from the very beginning;

- Residential neighbourhoods worth living in with affordable rents as a key component of TAG's business model reconcile commercial and social interests.

Hamburg, 10 May 2021

Key operating figures and earnings trend

The Group's net actual rent increased by 4.4% year-on-year. On a like-for-like basis, rental growth in TAG's residential units was 1.4% p.a., unchanged from the 2020 financial year. Including the effects of changes in vacancy, total rental growth amounted to 1.2% after 1.5% p.a. in the 2020 financial year. In the first quarter of 2021, vacancy in the residential units increased from 5.3% at the beginning of the year to 5.9% as at 31 March 2021, in line with the trend in the same period of the previous year.

FFO I, calculated solely based on the rental business in Germany, increased by EUR 3.6m or 8.6% year-on-year in the reporting period. This significant increase was due in particular to a EUR 2.1m rise in the operating result (adjusted EBITDA) and lower income taxes. Overall, TAG generated consolidated net income of EUR 34.5m in the first three months, up from EUR 32.1m in the same period of the previous year.

The business performance in Poland was positive as well: in the first quarter of 2021, the contractually secured pipeline for the construction of residential units was expanded by around 300 units and therefore comprises more than 9,000 units as of the reporting date. Of this total, c. 5,900 residential units are intended to be let and c. 3,100 are intended for sale. Revenues from property sales in Poland amounted to EUR 19.2m in the first quarter of 2021, compared to EUR 11.4m in the same period of the previous year.

TAG further optimised its financing structure at the beginning of the 2021 financial year. In March, a new unsecured promissory note of EUR 100.0m was issued with a maturity of two years and a fixed interest rate of 0.1% p.a. As a result of this and further refinancing, the average interest rate of the total financial debt decreased to 1.4% after 1.5% as of 31 December 2020. The loan-to-value (LTV) ratio dropped to 44.8% as of 31 March 2021 after 45.1% at the end of the 2020 financial year. As a consequence of TAG's extremely stable economic development even during the pandemic, the rating agency Moody's raised its outlook for TAG's existing Baa3 investment grade rating from 'stable' to 'positive' in April 2021.

Focus of sustainability activities: climate protection and liveable communities at affordable rents

The Sustainability Report 2020, published on 22 April 2021, reported in detail on aspects relating to sustainability (ESG). One of TAG's main goals is to develop and manage a nearly climate-neutral residential portfolio in the long term. A comprehensive decarbonisation strategy will be completed by the end of 2021 and will set the framework for future investments in climate protection.

TAG is the owner of a German portfolio with annual CO2 emissions of 31.9 kg/m², which is a low emission intensity compared with the sector. Particularly in former East Germany, opportunities were used during TAG's strong growth phase a few years ago to acquire residential buildings that had already been modernised. In the following years, the Group invested continuously and systematically in the portfolio. Ecological aspects were permanently taken into account, especially in more extensive modernisation programmes to reduce vacancy. Moreover, a high share of the heating energy consumption is provided by district heating, and ongoing investments in heating systems by TAG's subsidiary Energie Wohnen Service GmbH ensure climate-friendly living. More than 60% of the buildings already have an energy efficiency class of at least 'C'. Less than 5% of the portfolio is in the lowest energy efficiency classes of 'G' and 'H'.

Martin Thiel, CFO of TAG, comments: "Thanks to the very positive business development of the last few years and based on the good quality of our buildings, we see ourselves well positioned for future investments in climate protection. We will carefully work out further details in the next few months. However, it is already clear today that we are investing extensively in climate-efficient buildings through our investments in new-build projects in Poland, which will amount to more than EUR 1 billion in the period 2020-2025".

Social aspects also play a key role in the long-term success of TAG and are not in contrast with current and future economic success. Explaining a key foundation of TAG's sustainability strategy, Claudia Hoyer, COO of TAG, says: "With more than 1,300 employees, TAG manages a portfolio of over 88,000 residential units in Germany alone. This entails a responsibility to society that we strive to fulfil through sustainable action. A key element of our business model has always been to reconcile economic and social interests. By investing outside the major metropolitan regions and in portfolios with existing vacancy, we create liveable residential communities at affordable rents for our tenants. At the same time, these investments are economically attractive".

Please refer to the presentation published today and the interim report at www.tag-ag.com/en/investor-relations for further details on the first quarter of 2021.

Overview of key financials

Income statement key figures in EUR m
01 Jan - 31 Mar 2021 01 Jan - 31 Mar 2020
Net actual rent 83.1 79.7
EBITDA (adjusted) 57.0 54.9
Consolidated net income 34.5 32.1
FFO I per share in EUR 0.31 0.29
FFO I 45.6 42.0
AFFO per share in EUR 0.21 0.15
AFFO 31.3 21.3
Balance sheet key figures in EUR m 31 Mar 2021 31 Dec 2020
Total assets 6,599.2 6,478.0
EPRA NTA (fully diluted) per share in EUR 22.13 21.95
LTV in % 44.8 45.1
Portfolio data 31 Mar 2021 31 Dec 2020
Units Germany 88,260 88,313
Units Poland (contractually secured pipeline) 9,027 8,742
Real estate volume (total) 6,017.1 5,984.5
Vacancy in % (total) 6.1 5.6
Vacancy in % (residential units) 5.9 5.3*/4.5
l-f-l rental growth in % 1.4 1.4
l-f-l rental growth in % (incl. vacancy reduction) 1.2 1.5
*incl. acquisitions in 2020

Press enquiries

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

10.05.2021 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:1194047

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