Details on results of operations by segment

Rental Segment

At the end of September 2024, the portfolio in the Rental segment had a vacancy rate of 2.1% (end of September 2023: 2.1 %), meaning that it was again nearly fully occupied.

In the first nine months of 2024, revenue in the Rental segment increased by 2.2% (9M 2023: 2.0%) to € 2,481.8million (9M 2023: € 2,429.3 million). Of the segment revenue in the Rental segment in the 2024 reporting period, € 2,120.5 million is attributable to rental income in Germany (9M 2023: € 2,085.9 million), € 270.2 million to rental income in Sweden (9M 2023: € 255.2 million) and € 91.1 million to rental income in Austria (9M 2023: € 88.2 million). Organic rent growth (twelve-month rolling) totaled 3.8% (3.8% as of September 30, 2023). The current rent increase due to market-related factors came to 2.2% (2.0% as of September 30, 2023), while the increase from property value improvements translated into a further 1.3% (1.1% as of September 30, 2023). All in all, this produced a like-for-like rent increase of 3.5% (3.1% as of September 30, 2023). New construction and vertical expansion measures also contributed 0.3% (0.7% as of September 30, 2023) to organic rent growth.

The average monthly in-place rent in the residential portfolio in the Rental segment came to € 7.94 per m² at the end of September 2024 as against € 7.67 per m² at the end of September 2023. The monthly in-place rent in the German portfolio at the end of September 2024 came to € 7.81 per m² (September 30, 2023: € 7.58 per m²), with a figure of € 10.59 per m² (September 30, 2023: € 9.78  per m²) for the Swedish portfolio and € 5.69 per m² for the Austrian portfolio (September, 2023: € 5.42 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 nine months of 2024 amounted to € -335.1 million and were thus up by 11.8% on the figure for the first nine months of 2023 of € -299.6 million.

All in all, the Adjusted EBITDA Rental came to € 1,801.9 million in the first nine months of 2024, down slightly, namely by -0.9%, on the prior-year value of € 1,818.6 million.

Value-add Segment

In the first nine months of 2024, the Value-add segment was hit by the general price increases for construction services and materials, as well as productivity losses due to smaller-scale investments. Modernization and continuous investments in the existing portfolio showed positive development. They were up by 8.4% year-on-year in the first nine months of 2024, also thanks to our increased investment in new photovoltaic facilities and heat pumps. In the multimedia business, the conclusion of an agreement to lease the existing coax network had an earnings effect of € 62.4 million in the first nine months of 2024.

All in all, revenue from the Value-add segment came to € 1,009.7 million in the 2024 reporting period, up by 11.6% on the value of € 904.7 million seen in the first nine months of 2023. External revenue from our Value-add activities with our end customers in the first nine months of 2024 amounted to € 149.1 million and had thus increased by 57.1% on the first nine months of 2023, for which the figure was € 94.9million. This is largely due to a positive effect in multimedia from the leasing of coax networks, which will not be reflected to the same extent next year. Intra-Group revenue came to € 860.6 million in the first nine months of 2024, 6.3% higher than the value of € 809.8 million for the first nine months of 2023.

Operating expenses in the Value-add segment in the first nine months of 2024 amounted to € -863.8 million, an increase of 3.9% by comparison with the figure for the first nine months of 2023 of € -831.4 million.

Adjusted EBITDA Value-add came to € 145.9 million in the first nine months of 2024, up significantly on the figure of € 73.3 million reported for the first nine months of 2023.

Recurring Sales Segment

In the Recurring Sales segment, the income from disposal of properties came to € 268.3 million in the first nine months of 2024 with 1,516 units sold (9M 2023: 958), up by 28.3% on the value of € 209.1 million reported in the same period of 2023; with 1,214 in Germany (9M 2023: 657) and 302 in Austria (9M 2023: 301). Income of € 200.2 million is attributable to sales in Germany (9M 2023: € 126.5 million) and income of € 68.2 million is attributable to sales in Austria (9M 2023: € 82.6 million).

The fair value step-up for the first nine months of 2024 came to 25.3%, down on the prior-year figure of 42.9%. This is due to lower step-ups for sales in Germany and Austria.

Selling costs in the Recurring Sales segment came in at € -15.2 million in the first nine months of 2024, up by 35.7% on the value of € -11.2 million for the first nine months of 2023.

Adjusted EBITDA Recurring Sales came in at € 38.9 million in the first nine months of 2024, down by -24.6% on the value of € 51.6 million seen in the first nine months of 2023.

In the 2024 reporting period, 3,913 units from the Non Core/Other portfolio (9M 2023: 755) were also sold as part of our portfolio adjustment measures, with proceeds totaling € 456.2 million (9M 2023: € 133.7 million). At 0.7%, the fair value step-up for Non Core/Other disposals in the 2024 reporting period was lower than the figure for the first nine months of 2023 (7.3%).

Development Segment

The Development segment was impacted primarily by the increased construction costs and high interest rates in the first nine months of 2024.

In the Development to sell area, a total of 1,534 residential units (9M 2023: 507 units) were completed in the 2024 reporting period, of which 1,534 units in Germany (9M 2023: 380). No units were completed in Austria in the reporting period (9M 2023: 127). In the first nine months of 2024, income from the disposal of Development to sell properties amounted to € 190.6 million (9M 2023: € 267.9 million), with € 125.6 million attributable to project development in Germany (9M 2023: € 227.7 million) and € 65.0 million to project development in Austria (9M 2023: € 40.2 million). The resulting gross profit for Development to sell came to € 26.2 million in the first nine months of 2024 with a margin of 13.8% (9M 2023: € 34.5 million, margin 12.9%).

Development operating expenses came to € -31.0 million in the first nine months of 2024, which was 34.2% higher than the value of € -23.1 million for the first nine months of 2023. This increase mainly arose due to impairment losses of € 12.8 million recognized on Development to sell properties in the first nine months of 2024 (9M 2023: 0.0).

Adjusted EBITDA in the Development segment amounted to € 0.0 million in the 2024 reporting period (9M 2023: € 14.9 million).

In the “Development to hold” area, a total of 875 units were completed in the first nine months of 2024 (9M 2023: 1,292 units), of which 864 were in Germany (9M 2023: 822units), 0 in Austria (9M 2023: 296 units) and 11 in Sweden (9M 2023: 174 units).