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LEG Immobilien SE Company Presentation | Positioning, Performance, and Path to Decarbonization with IR

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LEG Immobilien SE Company Presentation: Key Takeaways

Positioning in a Challenging Landscape:

Frank introduces LEG Immobilen SE as a prominent German residential real estate player. The company focuses solely on one asset class, making it the second-largest German residential company with a portfolio of around 167,000 apartments. Primarily operating in Northern Westphalia, which comprises 80% of their portfolio, LEG offers affordable living with an average monthly rent of approximately 420 Euros. Frank further illuminates how around 20% of their units bear rent restrictions, setting them apart from their competitors. The portfolio’s standout features include a precise focus, minimal corporate complexity, and a conservative framework.

 

Adjustments and Market Dynamics:

LEG began adapting to the evolving global economic landscape, characterised by the gradual disappearance of persistently low-interest rates, as early as Q3 2022. This foresighted approach has been praised for its proactivity. The company’s core KPI transitioned to Adjusted Funds From Operations (AFFO), a metric that conveys authentic business cash generation. The investment budget 2023 will be reduced by approximately 30% from 2022, and all new development projects have been paused. However, Frank highlights favourable structural market drivers, such as increasing demand for affordable housing amidst rising interest rates, stimulated by population growth from immigration and a reduction in new apartment constructions due to soaring construction costs.

 

Financial Highlights and 2023 Guidance:

Delving into the financial particulars of H1 2023, Frank indicates a strong like-for-like rent growth of 4.3%. LEG’s AFFO has risen to 118.6 million, marking an uplift of nearly 50%, partly attributable to the forward sale of electricity production from their biomass plant. The company is adhering to its guidance and maintaining its dividend policy, which aims for a 100% payout of the AFFO.

 

Path to Decarbonization and ESG Commitment:

Frank spotlights LEG’s steadfast dedication to Environmental, Social, and Governance (ESG) principles in a pivotal section of the presentation.

 

Climate Neutrality by 2045:

LEG has formulated a strategy to achieve climate neutrality by 2045, aligning with the objectives of the Paris climate treaty.

 

Tenant Education and Strategic Initiatives:

Their approach hinges on tenant education, projected to produce even greater saving effects than initially anticipated. By implementing initiatives like “renovate” and “zero Pro” and collaborating with Mitsubishi Electric, LEG aspires to lead the way in devising 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
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frank kopfinger - LEG Immobilien SE Company Presentation | Positioning, Performance, and Path to Decarbonization with IR -%sitename%

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

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Release Date

August 10, 2023

Duration

15:37

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