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LEG Immobilien SE Elevator Pitch 2023 | Germany’s Prime Residential Market with IR



Frank Kopfinger, the head of investor relations at LEG Immobilen SE, addresses potential and existing investors in a detailed presentation emphasising LEG’s commanding presence in Germany’s residential market. Established as a Pure Play entity, LEG Immobilen SE stands out as one of Germany’s most significant residential behemoths, boasting ownership of an impressive 167,000 apartments, catering to a vast tenant base of about half a million individuals.


Diving into the specifics, Kopfinger underscores that LEG’s strategy is meticulously tailored to concentrate solely on the residential segment, particularly in Germany. The company’s strategic investment in North Rhine-Westphalia, accounting for a substantial 80% of its assets, is noteworthy, given the state’s economic clout, contributing to 22% of Germany’s GDP. LEG zooms in on the ‘affordable living’ asset class within the residential domain, reflecting its commitment to social responsibility. This dedication is evident in their affordable rent rates — a modest 6 Euro 50 per square meter, translating to an average of 420 Euros per apartment. A significant 19% of LEG’s units adhere to rent restrictions, and many tenants are beneficiaries of state subsidies, particularly those with minimal or no income.


Regarding financial metrics, LEG’s portfolio showcases a commendable evaluation of around 1,666 euro per square meter and a robust portfolio yield of 4.6%. Interestingly, the portfolio’s evaluation surpasses replacement costs (excluding land), estimated at around 5,000 Euros.

The financial landscape’s shifting contours, particularly the rise in interest rates, have witnessed LEG pioneering adaptive measures. As acknowledged by a prominent bank, LEG emerged as the front-runner in responding to these macroeconomic changes. One of the standout strategies includes pivoting their steering towards affo (adjusted funds from operations). Kopfinger asserts this metric mirrors real-world cash generation post-capital expenditure more accurately. LEG’s projections for 2023 are promising, anticipating a like-for-like rent growth ranging between 3.8 to 4.0%. Operational efficiency is also highlighted with a planned 10 million euro cost savings program to streamline administrative and operating expenses.


LEG delineates its approach on the developmental front by winding down its new development platform. While the existing projects will see completion, LEG has resolved to refrain from embarking on fresh acquisitions or initiating new undertakings. This move strategically limits cash outflows to 130 million euros until 2025. By this timeframe, LEG envisions its role as a net seller in the property market, targeting approximately 5,000 units. As a testament to LEG’s cautious and strategic planning, they’ve already achieved the sale of around 700 units at book value.


Frank concludes by emphasising LEG’s dividend policy, which will be pegged to the AFFO. The company aspires to distribute 100% and portions of the net proceeds resulting from disposals. Extending an invitation for deeper engagement, Kopfinger encourages stakeholders to approach him or the dedicated investor relations team to explore LEG’s myriad offerings further.


  • Affordable housing in Germany



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



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