Branicks Group AG: operational strength and significant debt reduction in the first half of 2024

Frankfurt am Main, August 27, 2024

Press release of the Branicks Group AG

Branicks Group AG: operational strength and significant debt reduction in the first half of 2024

• Bridge financing reduced in three steps to EUR 40 million by mid-August 
• Active transaction business with 15 property sales
• Another strong rental business with net rental income of EUR 77.1 million
• Like-for-like rental growth of 2% in the overall portfolio
• Funds from operations (FFO) at EUR 19.4 million after six months
• Assets under management at EUR 12.5 billion
• Forecast for 2024 confirmed  

Frankfurt am Main, August 27, 2024: Branicks Group AG (“Branicks”), ISIN: DE000A1X3XX4, one of Germany's leading listed real estate companies, has made significant progress on its consolidation path in the first half of 2024 thanks to the high quality of its real estate assets and the resulting operational strength. The transaction target in the Commercial Portfolio of EUR 500 to 600 million for the year as a whole has already been largely achieved, funds from operations (after minority interests, before taxes) of EUR 19.4 million have been generated and significant progress has been made in reducing debt. Branicks therefore confirms the forecast for the year as a whole. 

“With the sale of 15 properties with a total sales value of EUR 361 million, some of which were only notarized in the third quarter, we were a very active participant in a market that is only gradually picking up and achieved value-enhancing transaction successes. Together with another strong rental business and the further reduction of our costs, we have made good progress on our consolidation course. As promised, we have also significantly reduced our debt, which will greatly ease the burden on net interest income. Branicks delivers, and at speed,” said Sonja Wärntges, CEO of Branicks Group AG, at the presentation of the figures for the first half of 2024.

H1 2024 financials:

• As at June 30, 2024, assets under management amounted to around EUR 12.5 billion (June 30, 2023: EUR 14.2 billion). The gross rental yield in the Commercial Portfolio was 5.3% as at the reporting date (June 30, 2023: 4.9), the EPRA vacancy rate was 6.2% (June 30, 2023: 4.9) and the weighted average lease term (WALT) was 4.5 years (June 30, 2023: 5.0).

• Like-for-like rental growth for the overall portfolio was 2.0% compared to the reporting date of June 30, 2023. As expected, gross rental income in the proprietary portfolio fell year-on-year to EUR 89.1 million (June 30, 2023: EUR 96.9 million) due to sales. Net rental income decreased to EUR 77.1 million (June 30, 2023: EUR 85.0 million).

• Income from property management is influenced by the continued flat transaction market. In total, property management income of EUR 20.8 million (June 30, 2023: EUR 21.8 million) was generated from asset, property management and development fees.               

• Income from associates increased year-on-year to EUR 3.4 million (June 30, 2023: EUR 2.8 million).

• Operating costs were reduced by EUR 0.5 million to EUR 32.9 million (previous year: EUR 33.4 million) despite offsetting special effects from one-off expenses for legal and consulting fees. The number of employees decreased to 274 as at June 30, 2024 (June 30, 2023: 334). 

• Net interest income amounted to EUR -54.6 million (previous year: EUR -45.1 million).

• As at June 30, 2024, NAV remained almost stable at a high level of EUR 15.21 per share (December 31, 2023: EUR 15.54). Adjusted NAV, including the value contribution of the Institutional Business, amounted to EUR 17.31 per share (December 31, 2023: EUR 17.63).
   
• The loan-to-value (LTV) ratio increased slightly compared to the end of 2023 to 61.5% (December 31, 2023: 60.1%). Correspondingly, the adjusted LTV, which includes the value of the institutional business, increased to 58.8% (December 31, 2023: 57.6%). A reduction in the LTV is expected in the second half of the year.

• The bridge financing for the acquisition of VIB at the time was reduced from EUR 200 million at the end of 2023 by a total of EUR 80 million in two stages in the first half of the year and by a further EUR 80 million in August to a remaining amount of EUR 40 million. As communicated, Branicks is aiming to repay the bridge in full by the end of the year.

• Forecast for 2024 confirmed
  Branicks Group AG continues to plan transactions with a total volume of between EUR 0.8 and 1.2 billion across all segments for 2024. Purchases totaling around EUR 0.15 billion to EUR 0.3 billion are planned exclusively for the Institutional Business segment, both for existing mandates and as part of new mandates and investment vehicles. Branicks anticipates sales across all segments with a volume of around EUR 650 to 900 million. Of this, around EUR 500 to 600 million will be attributable to the Commercial Portfolio and around EUR 150 to 300 million to the Institutional Business. Based on the current proprietary portfolio, the planned letting performance and further on-balance sheet sales in the current financial year, Branicks expects gross rental income from the Commercial Portfolio to increase to between EUR 160 million and EUR 175 million. We also expect total income from property management of EUR 40 to 50 million in the 2024 financial year. In 2024, Branicks will focus in particular on further portfolio and cash flow optimization, so that total FFO (after minority interests, before taxes) is expected to be in the range of EUR 40 to 55 million. The business forecast is based on the key assumptions explained on page 89 of the Branicks Group AG annual report.

Invitation to the conference call on August 27, 2024 
The Board of Directors of Branicks Group AG invites you to the presentation of the financial statement for the first half-year of 2024 on 27 August 2024 at 10:00 a.m. CET.
 

To participate in the conference call, please register at: 
https://webcast.meetyoo.de/reg/47chR17kQ4eR

The webcast (incl. replay) can be accessed via the following link:
https://www.webcast-eqs.com/branicks-2024-h1

About Branicks Group AG:
Branicks Group AG (formerly DIC Asset AG) is a leading German listed specialist for office and logistics real estate as well as newly renewable assets with over 25 years of experience in the real estate market and access to a broad investor network. Our basis is the national and regional real estate platform with nine offices in the ground in all major German markets (including VIB Vermögen AG). As of June 30, 2024, we managed properties with a market value of EUR 12.5 billion in the Commercial Portfolio and Institutional Business segments.

The Commercial Portfolio segment comprises real estate held for our own account. Here, we generate cash flows from stable rent revenues on long-term leases while also optimizing the value of our portfolio assets through active management and realizing gains from sales.

In the Institutional Business segment, we earn recurrent fees from real estate services we provide to national and international institutional investors by structuring and managing investment products that return attractive dividend yields.

The shares of Branicks Group AG are listed in the Prime Standard of the German Stock Exchange (WKN: A1X3XX / ISIN: DE000A1X3XX4).

The company is fully committed to sustainability and occupies top positions in ESG-relevant ratings such as Morningstar Sustainalytics and S&P Global CSA. The Branicks Group is also a signatory to the UN Global Compact and the UN PRI network. Properties in the Branicks portfolio have been awarded renowned sustainability certificates such as DGNB, LEED or BREEAM.

For more details, go to www.branicks.com

PR Contact Branicks Group AG:

Stephan Heimbach

Neue Mainzer Straße 32-36

60311 Frankfurt am Main

Fon +49 69 9454858-1569

pr@branicks.com

IR Contact Branicks Group AG:

Jasmin Dentz

Neue Mainzer Straße 32-36

60311 Frankfurt am Main

Fon +49 69 9454858-1492

ir@branicks.com

Branicks Group AG at a Glance

¹Per-share figures adjusted in accordance with IFRSs (average number of shares 6M 2024: 83,565,510 | 6M 2023: 83,565,510)
²Warehoused assets not included

³Incl. full value of the Institutional Business

⁴Commercial Portfolio without properties to be repositioned and warehoused assets