LEG Immobilien SE Company Presentation 2022 | Revolutionizing Real Estate With IR

Excerpt

Frank Kopfinger, the Head of Investor Relations and Strategy at LEG Immobilen SE, navigates through the company presentation for 2023.

Positioning in a Challenging Landscape:
Frank introduces LEG Immobilen SE as a prominent German residential real estate player. With a focus solely on one asset class, the company proudly stands as the second-largest German residential company, housing around 167,000 apartments. Their primary region of operation is Northern Westphalia, which makes up an impressive 80% of their portfolio. LEG takes pride in offering affordable living spaces with an average monthly rent of approximately 420 Euros. Emphasizing their distinctiveness, Frank highlights that about 20% of their units have rent restrictions, marking a significant differentiation from their peers. LEG’s portfolio is characterised by its precise focus, minimal corporate complexity, and conservative framework.

Adjustments and Market Dynamics:
Adapting to a world where perpetually low-interest rates are phasing out, LEG adjusted its approach as early as Q3 2022, earning them a commendation for their proactive stance. Their core KPI has shifted to AFFO, reflecting genuine business cash generation. Investment spending for 2023 is set to decrease by about 30% from the previous year, coupled with a halt in new development projects. On the brighter side, the company observes favourable structural market drivers. Despite rising interest rates, the demand for affordable housing is escalating due to a combination of factors – from a growing population due to immigration to a decrease in new apartment constructions because of heightened construction costs.

Financial Highlights and 2023 Guidance:
Frank presents a detailed financial overview of H1 2023, noting a robust like-for-like rent growth of 4.3%. LEG’s AFFO stands at 118.6 million, an increase of nearly 50% thanks partly to their biomass plant’s forward sale of electricity production. The company remains on track with its guidance and confirms its dividend policy, targeting a 100% payout of the AFFO.

Path to Decarbonization and ESG Commitment:
Moving to one of the presentation’s most crucial segments, Frank underscores LEG’s unwavering commitment to Environmental, Social, and Governance (ESG) considerations. The company has charted a path to achieve climate neutrality by 2045, aligning with the Paris climate treaty. Their strategy leans on tenant education, expecting it to yield even higher saving effects than initially anticipated. With initiatives like “renovate” and “zero Pro” alongside a partnership with Mitsubishi Electric, LEG aims to pioneer solutions for real estate decarbonisation.

Chapters

LEG Overview
Affordable housing in Germany
Demand – supply imbalance will persist for the coming years
Ongoing strong performance of operations
Guidance 2023: Focus on AFFO
Strong CO2 Reduction of 15% in 2022
Transition roadmap towards climate neutrality
LEG positions itself as first mover solutions provider

Resources

Host

Frank Kopfinger, CFA
Head of Investor Relations & Strategy | LEG SE

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