DÜSSELDORF (dpa-AFX) - Sustained high demand for housing in metropolitan areas has provided a tailwind for real estate group LEG. 'Despite the volatile market environment, we have made a good start to the new financial year,' CEO Lars von Lackum stated in a press release on Wednesday. In these times of significant geopolitical and economic uncertainty, the real estate group's business model remains robust and the earnings outlook positive. The manager confirmed the targets for 2026. The stock shed approximately 0.9 percent in early trading.
In the first quarter, net cold rent grew by 3.3 percent year-on-year to 237.1 million euros, as the Düsseldorf-based company announced. Rent per square meter on a like-for-like basis rose from 6.90 to 7.15 euros. For the current year, rents are expected to continue increasing by 3.8 to 4.0 percent, a stronger pace than in 2025. This is primarily due to the fact that LEG is also able to raise rents in its subsidized portfolio this year. With around 28,000 subsidized units - just over 15 percent of its holdings - LEG is among the largest providers of social housing in Germany.
In 2028, the binding period for approximately 16,000 apartments will expire. According to previous statements, the currently subsidized rents, averaging 5.41 euros per square meter, are then to be brought in line with market rents in the privately financed sector. Consequently, rents for these apartments could be increased by about 12 percent in 2028. This would correspond to an additional rental growth of approximately one percentage point at the total portfolio level. Even after 2028, LEG will remain one of the largest providers of subsidized housing in its core regions with 11,400 social housing units.
However, the company's key performance indicator, AFFO (Adjusted Funds From Operations, adjusted for capitalized investments), declined by 5.9 percent to 58.6 million euros in the first three months ending in March. The company attributed this to investments. For the current year, the group continues to target a result of 220 to 240 million euros - which would represent a new record.
On the bottom line, the period result fell from 243.2 to 79.2 million euros. In the previous year, LEG had, among other things, generated significantly higher proceeds from the sale of real estate.
Meanwhile, the company is making good progress in reducing its debt. The ratio of net financial liabilities to real estate value is expected to drop to 45 percent as early as the current year. At the end of March 2026, the so-called LTV (Loan-to-Value) decreased by 0.60 percentage points to 46.2 percent. The sale of apartments is also contributing to the debt reduction.
In the first three months, the company completed or agreed upon the sale of around 1,000 apartments for approximately 74 million euros. The real estate group intends to divest a further 5,000 residential units, including around 1,400 units in eastern Germany from the former Adler subsidiary. At the end of 2025, the company owned over 171,100 apartments, 4.4 percent more than in the previous year./mne/nas/jha/
