Details on Results of Operations by Segment

Rental Segment

At the end of June 2024, the portfolio in the Rental segment had a vacancy rate of 2.2% (end of June 2023: 2.2%), meaning that it was once again virtually fully occupied.  

The segment revenue in the Rental segment increased by 2.0% (6M 2023: 2.3%) from € 1,618.6 million in the first six months of 2023 to € 1,650.4 million in the first six months of 2024. Of the Rental segment revenue, in the 2024 reporting period rental income in Germany accounted for € 1,410.0 million (6M 2023: € 1,388.7 million), rental income in Sweden for € 179.9 million (6M 2023: € 171.4 million) and rental income in Austria for € 60.5 million (6M 2023: € 58.5 million). Organic rent growth (twelve-month rolling) totaled 3.8% (3.5% as of June 30, 2023). The current rent increase due to market-related factors came to 2.2% (1.5% as of June 30, 2023), while the increase from property value improvements translated into a further 1.3% (1.2% as of June 30, 2023). All in all, this produces a like-for-like rent increase of 3.5% (2.7% as of June 30, 2023). New construction and vertical expansion measures also contributed 0.3% (0.8% as of June 30, 2023) to organic rent growth.  

The average monthly in-place rent within the Rental segment at the end of June 2024 came to € 7.86 per m² compared to € 7.58 per m² at the end of June 2023. The monthly in-place rent in the German portfolio at the end of June 2024 came to € 7.73 per m² (June 30, 2023: € 7.51 per m²), with a figure of € 10.51 per m² (June 30, 2023: € 9.50 per m²) for the Swedish portfolio and € 5.66 per m² for the Austrian portfolio (June 30, 2023: € 5.37 per m²). The rental income from the portfolio in Sweden reflects all-inclusive rents, meaning that the amounts contain operating, heating and water supply costs. Moreover, the rental income from the Austrian real estate portfolio includes maintenance and improvement contributions (EVB).

We have adapted our modernization, new construction and maintenance strategy to reflect the current overall financial conditions in the 2024 fiscal year. The overview below provides details on maintenance, modernization and new construction.

Operating expenses in the Rental segment in the first half of 2024 were up by 15.2% on the figures for the first half of 2023, from € 202.7 million to € 233.5 million. 

All in all, the Adjusted EBITDA Rental came to € 1,191.6 million in the first six months of 2024, down slightly on the prior-year value of € 1,209.0 million.

Value-add Segment

Developments in the Value-add segment remained dominated by the current overall conditions for our own craftsmen’s organization. The general price increases for construction services and materials, as well as productivity losses due to smaller-scale investments, continued to impact economic development. The volume of modernization and portfolio investments in the first half of 2024 almost matched that seen in the first six months of 2023.

All in all, revenue from the Value-add segment came to € 635.3 million in the 2024 reporting period, up by 2.5% on the value of € 619.8 million seen in the first six months of 2023. External revenue from our Value-add activities with our end customers in the first six months of 2024 declined by 9.8% compared with the first six months of 2023, from € 66.4 million to € 59.9 million. This can be attributed primarily to price adjustments in energy distribution compared to the previous year, which were passed on to our tenants accordingly. Group revenue rose by 4.0% in the first six months of 2024 from € 553.4 million in the first six months of 2023 to € 575.4 million. 

Operating expenses in the Value-add segment in the first six months of 2024 were up slightly on the figures for the first six months of 2023, from € 575.7 million to € 578.5 million.

Adjusted EBITDA Value-add came to € 56.8 million in the first six months of 2024, up by 28.8% on the figure of € 44.1 million reported for the first six months of 2023.

Recurring Sales Segment

In the Recurring Sales segment, income from the disposal of properties in the first six months of 2024 came to € 163.9 million, which was 15.9% higher than the prior-year value of € 141.4 million in the first six months of 2023. 921 residential units were sold (6M 2023: 628), of which 722 were located in Germany (6M 2023: 412) and 199 in Austria (6M 2023: 216). Of this amount, income from sales in Germany accounted for € 122.6 million (6M 2023: € 82.7 million) and income from sales in Austria for € 41.3 million (6M 2023: € 58.7 million).

The fair value step-up came in at 24.2% in the first six months of 2024, down on the comparative value of 45.6% for the first six months of 2023. This is due to lower step-ups for sales in Germany and Austria.

Selling costs in the Recurring Sales segment came in at € 9.7 million in the first half of 2024, up by 32.9% on the value of € 7.3 million seen in the first half of 2023. 

Adjusted EBITDA Recurring Sales came in at € 22.2 million in the first six months of 2024, down considerably on the value of € 37.0 million seen in the first six months of 2023.

Moreover, in the first six months of 2024, 2,948 residential units from the Non Core/Other portfolio (6M 2023: 654) were sold as part of our portfolio adjustment measures, with proceeds totaling € 352.7 million (6M 2023: € 101.0 million). At 0.0%, the fair value step-up for Non Core/Other disposals in the 2024 reporting period was significantly lower than the figure for the first six months of 2023 (9.2%).  

Development Segment

Economic development in the Development segment continued to be impacted primarily by the increased construction costs and interest rates in the reporting period.

In the “Development to sell” area, a total of 1,018 units were completed in the 2024 reporting period (6M 2023: 231 units), all 1,018 of them in Germany (6M 2023: 104). No units were completed in Austria in the reporting period (6M 2023: 127 units). Proceeds from the sale of development properties to sell amounted to € 70.1 million (6M 2023: € 218.3 million) in the first six months of 2024. Of this amount, € 53.8 million was attributable to project development in Germany (6M 2023: € 189.6 million) and € 16.4 million to project development in Austria (6M 2023: € 28.7 million). The resulting gross profit for Development to sell came to € 10.5 million in the first six months of 2024, with a margin of 15.0% (6M 2023: € 22.6 million, margin of 10.4%).

Development operating expenses came to € 17.7 million in the first six months of 2024, 16.4% above the comparative value of € 15.2 million seen in the first six months of 2023.

Adjusted EBITDA in the Development segment amounted to € -4.1 million in the 2024 reporting period (6M 2023: € 9.7 million).

In the “Development to hold” area, a total of 637 units were completed in the first six months of 2024 (6M 2023: 962 units), of which 635 were in Germany (6M 2023: 502 units), none were in Austria (6M 2023: 296 units) and two were in Sweden (6M 2023: 164 units).