Thanks to higher rents and lower vacancy rates, the real estate group LEG considers itself to be on track after the first quarter.

In its operating business, LEG has achieved around 49 million euros in its most important earnings figure, the cash inflow (AFFO), and is thus on track to reach its annual target of 180 to 200 million euros, explained CEO Lars von Lackum on Wednesday. However, the cash inflow of 54.9 million euros a year ago was higher than this year's figure.

An initial upturn in the transaction markets is noticeable, emphasized Lackum. The bottoming out of real estate valuations is providing additional optimism. Demand for affordable housing in Germany is steadily increasing. In the first quarter, this was once again reflected in an increase in net cold rent and another "very good" letting result. The vacancy rate fell by 30 basis points to 2.5 percent in the first three months. At the same time, rents in the privately financed sector rose by 4.1 percent.

Rapidly rising interest rates from the European Central Bank (ECB), exploding construction costs, high inflation and a lack of major transactions have caused problems for real estate groups that have been spoiled by growth for years in the past year. Real estate prices fell. Numerous project developers slipped into bankruptcy. Lackum recently emphasized that it was an "annus horribilis" for the sector. Industry leader Vonovia also saw its properties devalued significantly.

(Report by Anneli Palmen, If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)).