LEG sticks to full-year earnings outlook after strong Q1

Listed German residential landlord LEG Immobilien has reiterated its outlook for the 2014 financial year after a robust first quarter.

The company, one of Germany’s leading housing companies with around 95,000 rental properties, expects funds from operations (FFO) to come out at between €155 mln and €159 mln in 2014.

This forecast does not factor in the anticipated positive effects from the convertible bond issue in April this year and from further planned acquisitions. LEG also anticipates rent growth at the upper end of a range of 2% to 3% on a like-for-like basis and a further decline in the vacancy rate.

FFO for the first three months rose by 21.3% year-on-year to €41 mln on the back of strong growth in rental income. LEG increased its net cold rent by 5.7% to €94.3 mln compared to the year-earlier period. Organic rental income growth for the residential property portfolio accelerated to 3.0% year-on-year, reflecting a more dynamic increase in rents of 2.9% on a like-for-like basis.

The occupancy rate increased by around 10 basis points year-on-year to 96.9%.

‘We have made a good start to the new year,’ said Thomas Hegel, CEO of LEG Immobilien. ‘Our operating performance and the prospects for external growth mean that LEG can be confident with regard to the further development over the course of the year.’