This article first appeared on GuruFocus .
Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Like-for-like rent growth of 3.7% in H1 2026, within the full-year guidance corridor, with 50 basis points from cost rent adjustments.
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APRA vacancy declined by 20 basis points to 2.3%, indicating strong demand and tight supply in the German residential market.
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Adjusted EBITDA grew by 2.3% to EUR368.1 million, with an EBITDA margin of 77.8%, in line with the full-year target of around 78%.
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Portfolio valuation increased by 0.7% (EUR135 million), marking the fourth consecutive positive revaluation, confirming recovery in German residential values.
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LTV reduced to 45.5%, down 210 basis points year-on-year, effectively at the target level of around 45%, with a clear path to reach the target by year-end.
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Disposals of EUR42 million were completed at or above book value, and the disposal program of up to 5,000 units remains on track.
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The Fraunhofer Institute confirmed that the Termeus Pro AI thermostat saves an average of 14% in energy consumption, supporting green ventures growth.
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Strong liquidity position of over EUR450 million, with no 2026 maturities left and 2027 maturities partially covered.
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Full-year guidance for AFFO (EUR220-240 million) and FFO1 (EUR475-495 million) is confirmed, with H2 expected to be stronger due to subsidies and lower investments.
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The new syndicated revolving credit facility of EUR750 million extends backup liquidity to up to seven years, enhancing financial flexibility.
Negative Points
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AFFO declined 12.7% year-on-year to EUR110.5 million in H1, impacted by higher cash interest costs and CapEx phasing.
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Net cash interest increased by EUR10.3 million due to rising refinancing costs and lower interest income, reflecting the gradual upward reset of funding costs.
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The transaction market remains challenging, with low volumes and buyer unwillingness to notarize deals, delaying larger portfolio disposals.
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Geopolitical tensions and higher inflation expectations have led to a more moderate valuation pace (0.7% vs. 1.8% in H2 2025), with no H2 valuation guidance provided.
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The Scripp dividend take-up was lower at 28.6% (vs. prior year), and the dividend payment will cause a temporary LTV uptick in Q3.
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Subsidies recognized in H1 were only EUR0.5 million versus EUR3.3 million last year, with the bulk expected in H2, creating phasing uncertainty.
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The biomass plant subsidiary negatively impacted results due to higher wood prices, contributing to a EUR2.8 million negative other effect.
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Rent growth is likely to land at the lower end of the guidance range (3.8-4%) as the upper end would require an uptick in churn, which is not expected.
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The company is not willing to sell assets below book value, which may limit disposal volumes and delay deleveraging progress.
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Green ventures are still not contributing positively to FFO1, with breakeven targeted for 2026 but no H1 numbers disclosed, and the renovation segment faces challenges.
Q & A Highlights
Q: Why continue with the dividend while still deleveraging, and would a split between dividends and buybacks or moving entirely to buybacks be better served? A: Lars von Lakum (CEO) stated that the company has a strong investor base relying on a steady dividend, and they are committed to their existing dividend policy, which allows for 100% of AFFO distribution. They will not split the dividend between dividends and buybacks, but if sufficient disposal proceeds materialize, share buybacks could be considered, always while keeping the LTV target of 45% in mind.
Q: Given the share price trades at a significant discount to NTA, is it fair to assume that if any larger disposal materializes, the proceeds will be allocated towards a share buyback? A: Lars von Lakum (CEO) acknowledged the low share price relative to NTA, making buybacks a natural hurdle rate for capital allocation. However, he emphasized that the priority is reaching the LTV target of 45%, and living up to the dividend policy. If sufficient disposal proceeds are realized, a share buyback would definitely be considered.
Q: On disposals, have any discussions on portfolios fallen away due to buyer financing, and should we anticipate progress in the second half? A: Lars von Lakum (CEO) explained that H1 2026 transaction volumes were lighter than 2025 due to geopolitical tensions and their effect on interest rates. While willing buyers exist, they have been hesitant to notarize deals. The company expects that stabilization, potentially from a ceasefire or peace agreement, will translate into more visibility on interest rates and help close deals. They remain in discussions on bigger portfolios.
Q: On modernizations, is the yield and cost you are achieving accretive to your implied yield rather than your book yield, given the market pricing of portfolios well below NTA? A: Lars von Lakum (CEO) stated that the company has moved away from full modernization approaches, which yield around 5% on 60-80% of costs, as this is not accretive at current cost of capital. Instead, they are investing in smarter, higher-margin ideas like green ventures (e.g., AI-supported thermostats) that deliver returns above the cost of capital.
Q: To reach the 45% LTV target by year-end, does this imply the buyer for the land plot in the Dusseldorf region exercises its option, and what kind of asset revaluations are expected in H2? A: Lars von Lakum (CEO) confirmed that the option is still running, and there is no negative indication that the buyer will not exercise it by the end of September. Regarding revaluations, Kathrin Kuhlings (CFO) declined to provide a specific H2 number due to ongoing volatility, but they will provide guidance with the Q3 figures in November. The company remains confident in reaching the 45% LTV target.
Q: What was the contribution of Green Ventures in H1, and how do you see 2027 and 2028 unfolding? A: Volker Wiegel (COO) stated that the company is on track to reach breakeven in 2026 for green ventures. The Fraunhofer Institute confirmed the effectiveness of the Termeus Pro thermostat, showing 14% energy savings. Kathrin Kuhlings (CFO) noted that they do not disclose the H1 number for equity-consolidated companies, but it will be visible in the full-year figures.
Q: On FFO guidance, you point to a stronger H2, but with H1 at EUR230.5 million and only EUR10 million in subsidies, the gap to the midpoint of EUR485 million seems large. Are there specific drivers for acceleration? A: Lars von Lakum (CEO) reiterated confidence in the full-year FFO1 guidance of EUR475-495 million. He noted that if they only expected to reach the lower end, they would have narrowed the range. The subsidies of EUR10 million are a main driver for H2, but other cost developments also contribute to their confidence in reaching the midpoint.
Q: How comfortable are you with your own portfolio valuation and the positive revaluation, given you are trading at a 30% discount to GAV? Would selling at a moderate discount be accretive if deployed in a share buyback? A: Lars von Lakum (CEO) defended the discipline of not selling below book value, stating that the values carried on the balance sheet are the right ones for the assets. Selling below book value would give away shareholder value and negatively affect the balance sheet. He emphasized that the company is not under pressure to sell and will stick to its policy.
Q: On subsidies, you expect roughly EUR10 million in H2. Is this a given, and what is the visibility? A: Kathrin Kuhlings (CFO) confirmed that most subsidies have already been applied for, and the company is in the process of being awarded them. The process takes time, but they have very good visibility on the overall number.
Q: On rental growth, the H1 run rate of 3.7% is close to the lower end of the guidance range. Is the upper end of 4% still possible? A: Volker Wiegel (COO) stated that reaching the upper end would require an uptick in churn, which is not currently seen, making it unlikely. However, they have not narrowed the guidance because rent growth depends on various factors like rent tables and churn, which are volatile. It is fair to say that reaching the upper end is not the basic assumption.
Q: On the planned ban of expropriations at the federal state level, are you confident the government will push it through? A: Lars von Lakum (CEO) expressed confidence that the federal government will take action on Article 15 to prevent expropriation without full market value. He noted that federal politicians understand the difficulty of refinancing debt if such actions occur, and while the timing is uncertain, he is confident the law will be passed in the coming months.
Q: Could you not simply write down your assets and then sell in line with book value to get transaction volume and manage leverage? A: Lars von Lakum (CEO) reiterated that there is no need to dispose of assets at lower prices than the current valuation, as they believe
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
