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Adler Group S.A. reports continued robust operational 9M performance and confirms guidance for full fiscal year

EQS-News: Adler Group S.A. / Key word(s): 9 Month figures
Adler Group S.A. reports continued robust operational 9M performance and confirms guidance for full fiscal year
29.11.2022 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.

Adler Group S.A. reports continued robust operational 9M performance and confirms guidance for full fiscal year

  • Like-for-like ("LFL") rental growth of +2.0% YoY, 9M NRI and FFO 1 decreased due to several portfolio disposals over the last twelve months
  • Average residential rent stable at €7.56 per square meter, vacancy rate nearly halved to 1.7% compared to previous year
  • Solid cash position of €615m (excl. cash held hat BCP level) adding to full funding of Adler Group until mid-2025, together with recently arranged up to €937.5m incremental debt package
  • New strategy focusing on the residential real estate portfolio in Berlin while only selective development exposure will remain
  • Net rental income expected in range of €233m - €242m and FFO 1 expected between €84m - €88m for fiscal year 2022

Luxembourg, 29 November 2022 - Shortly after reaching an agreement with major bondholders providing an additional funding commitment and securing financing until mid-2025, Adler Group S.A. ("Adler Group") today reported a continued robust operational performance of its yielding portfolio in the first nine months of 2022.

The third quarter of 2022 continued to show strong fundamentals of the yielding portfolio. The average in-place rent of the rental portfolio stood at €7.56/sqm/month as of 30 September 2022, representing a LFL rental growth of +2.0% YoY. The vacancy rate almost halved compared to the previous year and stands at 1.7% (2021: 3.3%) demonstrating the increased portfolio quality following recent disposals. The development of net rental income and funds from operations from rental activities (FFO 1) reflect the effects of the revised size of the portfolio. Net rental income decreased by -28% YoY to €187m, FFO 1 was at €68m (-33% YoY).

On 30 September 2022, the fair value of the yielding portfolio was +1.4% higher on a LFL basis compared to end of Q3 2021. Compared to mid-year 2022 the LFL fair value decreased by -2.3%, reflecting the surge in interest rates. The gross asset value (GAV) of standing assets amounted to €5.3bn on 30 September 2022. The €2.6bn reduction relative to year-end 2021 was mainly due to disposals of assets and classifying the stake in BCP as held for sale.

The EPRA NTA stood at €3,282m (€27.93 per share), a decrease of 23.1% compared to the value at the end of 2021 of €4,269m (€36.33 per share).

The net loan-to-value ratio (LTV) of Adler Group was at 59.9% as of 30 September 2022. The LTV applicable for the bond conditions (LTV adjusted for held-for-sale positions) was at 55.0% on 30 September 2022, which was clearly below the relevant bond covenant threshold of 60%.

The disposals of the three development projects Ostend Quartier (Frankfurt), Westend Ensemble LEA B (Frankfurt) and Neues Korallusviertel (Hamburg) were closed in the third quarter of 2022. Total gross proceeds amounted to c. €218m. Furthermore, the sale of the Eurohaus project (Frankfurt) was signed with expected gross proceeds amounting to c. €37m.

Concerning the full fiscal year 2022, Adler Group confirms its guidance and expects a net rental income in the range of €233m - €242m and an FFO 1 between €84m - €88m.

On 25 November 2022, Adler Group achieved an agreement with major bondholders concerning bond terms and conditions and the provision of fresh capital. The agreement secures the financing of Adler Group until mid-2025, even in the theoretical event of the absence of any further portfolio or project disposals. It includes an up to €937.5m incremental debt package committed by bondholders. The agreement allows Adler Group to stabilise its platform without any short-term pressure to dispose assets substantially below book value and therefore allows management to focus on maximising long-term value for all stakeholders. As part of the agreement with bondholders, Adler Group has agreed not to submit a dividend proposal to its shareholders.

In line with the agreement with major bondholders, Adler Group revised its strategy, pursuing a transition to a pure-play Berlin anchored portfolio with a selective development exposure and limited capex requirements. Moreover, Adler Group aims to simplify its corporate structure and further enhance corporate governance by appointing a new Chief Restructuring Officer. Additionally, Adler Group intends to propose, and recommend to its shareholders, the increase of its Board of Directors by one additional non-executive director with extensive financial expertise to support the financial stabilization process.


Earnings call

An Analyst & Investor webcast and conference call will be held today, 29 November 2022, at 10.30am CET / 9.30am GMT.


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29.11.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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