Investing.com -- LEG Immobilien AG (ETR:LEGn) on Tuesday reported second quarter results showing continued operational strength with 3.7% like-for-like rental growth, though funds from operations remained under pressure from higher investment and interest costs.
The German residential property company posted cold rents of €473.4m, up 3.4% YoY, while like-for-like rental growth reached 3.7% YoY, matching the first quarter performance. The EPRA vacancy rate on a like-for-like basis improved to 2.3% from 2.6% at fiscal year 2025, while in-place rent increased to €7.21 per square meter, up 3.7% versus fiscal year 2025.
Recurring net operating income rose 3.3% to €396.3m, and adjusted EBITDA increased 2.3% YoY to €368.1m.
However, FFO I decreased 4.4% to €230.5m, or €3.05 per share, down 5.9%. Adjusted funds from operations fell 12.7% YoY to €110.5m, or €1.46 per share, down 14.1%, with the company expecting lower capital expenditure in the second half. Capital expenditure and maintenance increased 10% to €202m.
LEG confirmed its 2026 guidance for adjusted funds from operations of between €220m and €240m, with the midpoint of €230m representing 3.2% YoY growth. The company also maintained its FFO I guidance range of €475m to €495m, with the midpoint of €485m indicating 1.3% YoY growth. The company is targeting like-for-like rental growth of 3.8% to 4.0% for 2026.
The EPRA net tangible assets per share reached €139.04, up 1.4% in the first half of 2026. Property valuations on a like-for-like basis increased 0.7% YoY. The loan-to-value ratio improved to 45.5% from 46.8% at fiscal year 2025, approaching the company's year-end target of approximately 45%.
LEG sold 486 units for €42m during the quarter, with another disposal contract for 552 units for €36m at book value.
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