DGAP-News: HAMBORNER REIT AG / Key word(s): Preliminary Results
HAMBORNER REIT AG completes 2020 financial year with further growth in revenue and earnings - Preliminary figures underline profitability and portfolio stability
- Income from rents and leases rises by 3.6% to €88.2 million
- FFO up 2.4% year-on-year at €55.6 million
- Vacancy rate with 1.8% still at extremely low level
- Successful progress in portfolio optimisation
- NAV per share: €11.05
- Dividend proposal likely in line with previous year
SUCCESSFUL 2020 FINANCIAL YEAR
Duisburg, 4 February 2021 - HAMBORNER REIT AG enjoyed another successful financial year according to the preliminary and unaudited figures published today - in spite of the coronavirus pandemic. Income from rents and leases amounted to €88.2 million in the past year, up by €3.0 million or 3.6% as against 2019. Funds from operations (FFO), the key operating earnings indicator, rose by 2.4% in the past year to €55.6 million (previous year: €54.3 million). FFO per share increased accordingly to €0.69, thus bettering the previous year's record figure by another cent. The targets for revenue and income for the 2020 financial year announced in July 2020 were therefore fully met or even outperformed.
The vacancy rate remained at an extremely low level of 1.8% in 2020. The company's financial situation is likewise comfortable. The loan-to-value (LTV) ratio was 44.5% as at 31 December 2020 (previous year: 42.4%). The REIT equity ratio of 54.5% (previous year: 57.3%) was still well in excess of the 45% required under the German REIT Act.
The company added three high-quality, newly built office properties and a retail centre in an excellent location to its portfolio in 2020. The total investment volume was €101.4 million. The properties have already been transferred to the HAMBORNER portfolio and will contribute around €5.0 million to income from rents and leases in future.
Over the course of the second half of 2020, the company had its first successes in conjunction with its ongoing portfolio optimisation by successively selling off high street retail assets. As a result, contracts were signed to sell a total of eleven mostly smaller properties that are no longer consistent with strategy. The cumulative sale prices amounted to around €59.1 million in total and are therefore approximately 2% higher than the fair value of the eleven properties as at 30 June 2020. The annualised total rent of the properties last amounted to around €3.9 million. The earnings contribution from their sale amounted to around €23.8 million. Ownership of three of the properties was already transferred in the fourth quarter of 2020. The other properties are expected to be transferred to their buyers in the first quarter of 2021.
As usual, the company commissioned a third-party expert to reappraise its property portfolio as at the end of 2020. The revaluation resulted in the fair value of the properties already in the portfolio as at 31 December 2019 being reduced by 3.5%. The reduction essentially related to retail properties in city centre locations that were hit particularly hard by the coronavirus pandemic. Taking into account the revaluation and the property additions and disposals over 2020, the fair value of the portfolio as a whole was €1.625 billion as at 31 December 2020. Net asset value (NAV) per share declined by 4.7% as against the end of 2019 to €11.05 (31 December 2019: €11.59).
The company will release its final figures for 2020 when it publishes its annual report on 22 March 2021.
In line with the positive business performance in 2020, the Management Board and the Supervisory Board intend to propose the payment of a dividend to this year's Annual General Meeting, which is expected to be at the level of the dividend distributed last year.
CURRENT BUSINESS PERFORMANCE
In the current market environment, HAMBORNER is continuing to benefit from its stable and diversified portfolio and its high share of tenants of good credit, particularly in the area of food retail. However, given the current developments in connection with the coronavirus pandemic and the associated nationwide lockdown since the middle of December 2020, individual tenants affected by closures curtailed or suspended their rent payments in the month of January. Across the portfolio as a whole, rental payments (including ancillary costs and VAT) declined to 92.6% in total in January. The rate of incoming rent payments is therefore above the level of the first lockdown in March/April (around 90%). Depending on the duration and extent of the official restrictions, it must be anticipated that a number of tenants will still not be able to (fully) honour their payment obligations. HAMBORNER is continuing its trusting dialogue with the tenants and is confident of finding mutual and fair solutions.
Taking the current business performance into account, the Management Board of HAMBORNER REIT AG this week released its first guidance for the current financial year:
- Income from rents and leases of between €82 million and €86 million
- Funds from operations (FFO) of between €45 million and €50 million
- Net asset value (NAV) expected to be at about the same level as the previous year
At present, this forecast is still subject to the uncertainties essentially stemming from non-recurring effects anticipated during the year.
The current developments in connection with the coronavirus pandemic are reflected in the guidance. Given the temporary decline in the rental income rate and the uncertainty regarding the extent of official restrictions, as a precaution the company has taken possible revenue and earnings effects into account in its guidance that roughly match the level of the previous year.
Furthermore, this year's guidance is influenced by the ongoing portfolio optimisation, which is set to continue in the 2021 financial year as well. Depending on the progress made in the disposal of city centre retail properties in the portfolio, and the timing of the intended reinvestment of the proceeds from their sale, a temporary decline in rental income is assumed in the current financial year. Furthermore, in some cases the planned property sales result in non-recurring expenses - the exact amount of which cannot be reliably estimated at the current time - to pay off loans. The company is striving to optimise the timing of the intended purchases and sales over the year as regards their effect on revenue and earnings.
Another key factor considered in the guidance is the possible re-letting of retail space currently used by the tenant Real. In view of the announced restructuring of the hypermarket group Real, the company is proactively exploring alternative uses for this space. Thanks to the high quality of the three locations in the portfolio with space let to Real, and the expertise of internal asset management, the company has already succeeded in identifying potential new tenants and has initiated early negotiations for the possible subsequent letting of the space in question. To ensure that the overall attractiveness of the properties remains high and to tap the potential from subsequent letting, investment expenses are anticipated in the current financial year, though their amount cannot be reliably quantified at the present time. Depending on how negotiations proceed, a corresponding earnings effect is expected in the current financial year.
CONVERSION TO REGISTERED SHARES
The conversion from bearer to registered shares resolved by the Annual General Meeting in October 2020 will take place on the coming Monday, 8 February 2021. On this date, the registered shares of HAMBORNER will be credited to its shareholders' accounts and traded under the new securities code of A3H233 (ISIN: DE000A3H2333) for the first time.
PRELIMINARY KEY FIGURES 2020
ABOUT HAMBORNER REIT AG
HAMBORNER REIT AG is a public company listed in the SDAX that operates exclusively in the property sector and is positioned as a portfolio holder for high-yield commercial properties. The company generates sustainable rental income on the basis of a diversified portfolio of properties distributed throughout Germany with a total value of around €1.6 billion. The portfolio focuses on modern office properties at established locations as well as local supply properties as large-scale retail assets, retail parks, DIY stores and attractive high street properties in major German cities and mid-sized centres.
HAMBORNER REIT AG is distinguished by its many years of experience on the property and capital market, its consistent and sustainable dividend policy and its lean and transparent corporate structure. The company is a registered real estate investment trust (REIT) and benefits from corporation and trade tax exemption at company level.
04.02.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
HAMBORNER REIT AG
Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
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