HAMBORNER REIT AG: Revenue and earnings growth in first half-year – FFO forecast raised for 2023

PRESS RELEASE

HAMBORNER REIT AG: Revenue and earnings growth in first half-year – FFO forecast raised for 2023

• Strong operating performance in challenging market environment
• Positive revenue effects from indexation clauses
• Income from rents and leases rises by 4.3% to €43.7 million
• FFO climbs 16.3% year-on-year to €28.1 million
• Fair value of property portfolio €1.516 billion after revaluation
• Net asset value (NAV) per share of €10.58 (down 10.8% YTD)
• Revenue guidance updated and FFO forecast raised for 2023

KEY FIGURES FOR FIRST HALF OF 2023

Duisburg, 10 August 2023 – In a consistently difficult general economic environment, HAMBORNER REIT AG has continued the positive operating performance of the previous year and achieved growth in revenue and earnings in the first half of 2023.

Income from rents and leases amounted to €43.7 million, up 4.3% on the same period of the previous year. In particular, the development was positively influenced by property additions and contractually agreed rent adjustments as a result of the rise in inflation (indexation clauses). The resulting effects amounted to 4.3% as at 30 June 2023 (like-for-like).

The development in funds from operations (FFO) was very positive in the first half of 2023, rising by around €3.9 million or 16.3% year-on-year to €43.7 million with FFO per share of €0.35 (previous year: €0.30). Besides growth in rent, the increase is essentially a result of interest income and other operating income in connection with the early termination of a lease for the manage-to-core property in Mainz.

The company’s financial position remains comfortable. The REIT equity ratio was 56.4% as at 30 June 2023. Loan to value (EPRA LTV) rose to 42.2% as against the end of 2022 as a result of a value adjustment of the property portfolio and the dividend paid in the second quarter.

PORTFOLIO DEVELOPMENT

In light of the current developments on the property markets and in the interests of creating additional transparency for its stakeholders, HAMBORNER REIT AG arranged an additional intra-year revaluation of its portfolio as at 30 June 2023.

HAMBORNER REIT AG’s property portfolio was appraised by a third-party expert, which resulted in its fair value being reduced by 5.7% (like-for-like). The decline was due to a corresponding development within both the office and retail sub-portfolios.

Taking into account the revaluation and the disposal of a retail property in Mosbach in the second quarter, the fair value of the property portfolio was €1,516.4 million as at 30 June 2023 (31 December 2022: €1,608.6 million). Net asset value (NAV) per share declined by 10.8% as against the end of 2022 to €10.58.

In an off-market transaction in the first half of 2023, the company signed the purchase agreement for two further retail properties in Hanau and Offenburg that are fully let to the food wholesaler EDEKA Foodservice on a long-term contract. The purchase price volume was around €23.6 million in total. The payment of the purchase price and transfer of ownership of the properties took place on 20 July 2023.

OPERATING PERFORMANCE

The company continued the positive business performance of the previous year at an operational level as well, achieving several successes in its letting activities in the first half of the year.

Leases for rental areas of around 26,000 m² were signed in the first six months of the financial year, with office space accounting for around 70% of this figure. The follow-on lease for the entire manage-to-core property in Mainz was a particular highlight. As a result of a temporary vacancy due to structural conversion work, the EPRA vacancy rate of the portfolio as a whole increased slightly to 4.1% as at 30 June 2023. The redesigned areas were transferred to the new tenant at the start of August.

The weighted average lease term (WALT) remained at a consistently high level of 6.3 years, while the term within the sub-portfolios was 7.3 years (retail) and 5.0 years (office) as at 30 June 2023.

OUTLOOK

Taking into account the positive operating performance of the first half of 2023, the company now is able to update its revenue guidance. HAMBORNER is now forecasting income from rents and leases of between €88.0 million and €89.0 million for the 2023 financial year (previously: between €88.0 million and €89.5 million).

At the same time, on the basis of its current income and expenditure projections, the company is assuming higher FFO compared to its original forecast for the year as a whole of between €51.0 million and €53.0 million (previously: €50.0 million to €52.0 million).

Contrary to the original assumption that the property transaction market would pick up in the second half of 2023 and thus a forecast net investment volume of around €50 million, the company now expects that the market environment will not improve until a later date. The forecast therefore does not take into account any further purchases or disposals later in the year other than the property transactions that have already taken place in the first half of the year.

As a result of the intra-year valuation of its portfolio, the company expects that NAV per share will be between 7.0% and 12.0% lower than the previous year’s level at the end of 2023 (31 December 2022: €11.86). Previously, only a slight decline had been assumed.

Considering the market landscape, which remains dynamic despite uncertainty, the range of the revised forecast takes into account possible further value adjustments in conjunction with the regular external revaluation of the portfolio at the end of 2023.

KEY FINANCIAL AND PORTFOLIO FIGURES AS OF 30 JUNE 2023

The full half-year financial report 2023 is available for download at https://www.hamborner.de/en/financial-reports/.

ABOUT HAMBORNER REIT AG

HAMBORNER REIT AG 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 €1.5 billion. The portfolio focuses on modern office properties at established locations as well as attractive local supply properties as large-scale retail assets, retail parks and DIY stores in central inner-city locations, district centres and highly frequented edge-of-town sites of 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 sustainably attractive dividend strategy 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.

CONTACT

Christoph Heitmann
Head of Investor & Public Relations
Tel.: +49 (0)203 54405-32
Mail: info@ir.hamborner.de
Web: www.hamborner.de

DISCLAIMER

This press release has been issued by HAMBORNER REIT AG (hereinafter "HAMBORNER") solely for information purposes. This press release may contain statements, assumptions, opinions and predictions about the anticipated future development of HAMBORNER ("forward-looking statements") that reproduce various assumptions regarding, e.g., results derived from HAMBORNER's current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by HAMBORNER and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should therefore not be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute exact indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this press release was issued to its recipients. It is the responsibility of the recipients of this press release to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions. HAMBORNER accepts no responsibility for any direct or indirect damages or losses or subsequent damages or losses, as well as penalties that the recipients may incur by using the press release, its contents and, in particular, all forward-looking statements or in any other way, as far as this is legally permissible. HAMBORNER does not provide any guarantees or assurances (either explicitly or implicitly) in respect of the information contained in this press release. HAMBORNER is not obliged to update or correct the information, forward-looking statements or conclusions drawn in this press release or to include subsequent events or circumstances or to report inaccuracies that become known after the date of this press release.