Total portfolio shows high value stability
2023 forecast considers strong uncertainty and thus restraint on the buyer side
CEO Lars Schriewer: "Long-term prospects for the real estate market remain good."
Berlin, 28 April 2023 - The Supervisory Board of ACCENTRO Real Estate AG ("ACCENTRO") approved the audited annual and consolidated financial statements for the 2022 financial year at its meeting yesterday. The annual reports were published today.
The real estate sector has been massively affected by the impact of the war in Ukraine in the past year. After a boom that lasted for years, high inflation and the resulting turnaround in interest rates in particular not only led to a significant decline in construction activity and supply. The purchase of residential real estate - ACCENTRO's core business - has also slumped significantly.
The difficult market environment had a significant impact on ACCENTRO's business development in 2022. After a good first half-year, the sharp slump in housing demand increasingly impacted the company's operating business. Finally, business development was in line with expectations and met the forecast, which had to be adjusted at the end of November 2022. Group revenues amounted to EUR 165.2 million (forecast: EUR 160 - 170 million, previous year: EUR 192.8 million). Group EBIT amounted to EUR 8.5 million (forecast: EUR 8 - 10 million, previous year: EUR 45.2 million). Accordingly, Group total income in 2022 fell to EUR -12.0 million (previous year: EUR 13.1 million). Earnings per share amounted to EUR -0.45 (previous year: EUR 0.37).
In the development of EBIT, it should be considered that in 2021 the result from fair value adjustments of investment properties in the amount of EUR 19.0 million had a positive effect on earnings. On the other hand, no value increase could be realised last year due to the difficult market development and the increased interest rate level. With a result from fair value adjustments of ‑EUR 1.8 million or 0.3% of the total portfolio value, the property portfolio proved to be stable in value. This was due in particular to the successful vacancy reduction and the increase in rents.
ACCENTRO's portfolio at the end of 2022 comprised around 180 apartment buildings and 5,900 flats with an area of approximately 344,000 square metres. The book value of the total portfolio was around EUR 620 million. The net asset value per share was around EUR 10 at the end of 2022.
The sale of flats was strongly affected by the market development in 2022. Both retail and institutional investors were much more restrained. Accordingly, the notarised sales volume fell to 296 units (previous year: 761 units) or EUR 93.6 million (previous year: EUR 246.5 million). Revenues from sales decreased by 15.5% to EUR 146.0 million (previous year: EUR 172.8 million). The profit margin of 26.2% was only slightly below the previous year's level (27.6%).
In contrast, rental income developed positively. The general increase in demand for rental flats and the successful vacancy reduction in the own portfolio contributed to a 4.7% revenue increase to EUR 17.9 million (previous year: EUR 17.1 million).
Due to the still extremely challenging market environment, the further business development can hardly be predicted with any validity. The company expects for this year Group revenues of between EUR 100 and 120 million and Group EBIT of between EUR 0 and 2 million. While a significant decline in sales is expected, the company anticipates a slight increase in rental income, partly due to the ongoing vacancy reduction. In addition, revenue growth is expected in the service business on a still low basis. This cautious forecast requires continuous review. An end to the war in Europe - unfortunately not expected at present - could immediately lead to a significant revival of the market.
Lars Schriewer, CEO of ACCENTRO Real Estate AG, is cautiously optimistic about the future: "Even though the German residential market is currently particularly hard hit by the effects of the crisis, the long-term prospects for our industry and ACCENTRO remain good. The structural demand for housing remains high. At the same time, the considerable decline in residential construction is leading to an additional shortage of supply. In the most important segment, the sale of flats, our company is well positioned. The own portfolio for individual privatisation had a market value of around EUR 285 million as at the end of 2022. In the service business, the sales services for third parties, we see potential in our partnership with ImmoScout24. ACCENTRO already enjoys the trust of renowned clients. For example, we have been commissioned by one of Germany's largest portfolio holders to sell around 500 flats in individual privatisation."
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential investor and market leader in residential privatisation in Germany. As at 31 December 2022, the real estate portfolio comprised around 5,900 units. In addition to Berlin, the regional focus includes major central German cities and metropolitan areas as well as the Rhine-Ruhr metropolitan region. ACCENTRO's business activities comprise three core areas. These include the tenant-oriented sale of flats to private owner-occupiers and capital investors as well as the sale of real estate portfolios to institutional investors, the management of its own real estate portfolio and services for third parties. The shares of ACCENTRO Real Estate AG are listed in the Prime Standard segment of the Frankfurt Stock Exchange (WKN: A0KFKB, ISIN: DE000A0KFKB3). www.accentro.de
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