ADLER Real Estate AG, DE0005008007

ADLER Real Estate AG, DE0005008007

14.11.2016 - 08:03:17

ADLER Real Estate AG: First nine months of 2016: Performance improved further

First nine months of 2016: Performance improved further

- Substantial increase in funds from operations (FFO)

- Operating performance and fair value adjustments increase earnings significantly

- Ongoing growth in net asset value (NAV)

- Significant reduction in loan-to-value (LTV) and weighted average cost of debt (WACD)

Berlin, 14 November 2016. ADLER Real Estate AG has once again further improved its key earnings and net asset figures in the first nine months of the current financial year while at the same time significantly reducing its loan-to-value. "The first nine months offer confirmation that we are on the right track with the measures we have taken in the year to date to enhance our operations and consolidate our finances", comments Arndt Krienen, CEO of ADLER Real Estate AG. "They also show we will meet our current year forecast and even exceed it for our LTV ratio."

Substantial increase in funds from operations (FFO) In the first nine months of the current business year, ADLER Real Estate substantially increased the funds from operations (FFO), the cash flow- based earnings figure used in the real estate industry when assessing the profitability of the operating business. FFO I, which cover the property letting business, nearly doubled from EUR 9.9 million in the first nine months of the previous year to EUR 18.6 million in 2016. FFO II, which also include funds generated in the trading business which for ADLER represents an ongoing activity and not a one off occurrence, amounted to EUR 45.2 million in 2016, corresponding to a year-on-year increase of 17.7 percent. Basic FFO II per share thus came to EUR 0.78.

Operating performance and fair value adjustments increase earnings significantly The increase in FFO was based on a strong performance in both segments of ADLER Real Estate AG's business and namely property lettings and property trading.

In its property letting business, comprising almost 48,000 units, the Company generated earnings of EUR 91.3 million, 38.1 percent more than in the equivalent period in the previous year. A substantial share of this increase resulted from the successful integration of Westgrund AG which was acquired at the half year stage in 2015 and generated full year returns in 2016. In addition, growth was also driven by improved property management capabilities. When comparing September 2016 to September 2015, the average in-place-rent per square metre per month increased by 1.8 percent from EUR 4.90 to EUR 4,99 while the occupancy rate rose by 1.2 percentage points from 88.1 percent to 89.3 percent and as such in line with expectations and guidance

In its property trading business, which is predominantly conducted by the Group Company ACCENTRO Real Estate AG, ADLER Real Estate AG reported an increase in earnings of 64.7 percent to EUR 34.1 million. Further to positive earnings result, ACCENTRO also managed to sell a total of 897 units specially designated for privatisation. Moreover, nearly the same amount of non-core units (894) were disposed of in the first nine months representing more than one fifth of the investment properties designated for sale.

The substantial increase in earnings was generated not only by the Company's improved operating performance but also by fair value adjustments in line with market trends. Fair value adjustments as of 30 September 2016 accounted for a total of EUR 123.5 million, in line with the conservative end of the spectrum of the current strong momentum of property valuations in the market. In the course of the current business year, investment properties of ADLER Real Estate AG have been revalued by 5.4 percent.

Ongoing growth in net asset value (NAV) The balance sheet total, the equity ratio and the net asset value (NAV) which ADLER views as its key group management figure and calculates in accordance with the guidelines issued by the European Public Real Estate Association (EPRA), all benefitted from the strong increase in earnings. The balance sheet total increased in the course of the year by 9.0 percent to EUR 3,354.1 million, the equity ratio improved by 1.4 percentage points to 26.7 percent. Additionally the EPRA NAV totalled EUR 1,011.2 million at the end of the period under report ahead of its year end guidance and 15.0 percent higher than at the end of 2015. Basic NAV per share amounted to EUR 17.35.

Significant reduction in loan-to-value (LTV) and WACD The value increase of the investment properties also had a positive impact on loan-to-value, i.e. the ratio of financial liabilities (excluding convertible bonds) to total assets, with both figures adjusted to exclude cash and cash equivalents. LTV as at September 30, 2016 came to 61.9 percent - improving by 6.1 percentage points against last year's ratio and significantly outperforming the Company's forecast for the full year which was set at 65 percent ahead of time.

Through diverse financing measures, among them the refinancing of EUR 60 million of higher yielding liabilities, ADLER was able to reduce the weighted average cost of debt (WACD) from 3.99 percent to 3.8 percent. This equates to an improvement of 0.2 percentage points as compared to the beginning of the year. The target for the full year stands at 3.75 percent or below.

"To me", Krienen commented, "the results of the first nine months clearly show that we are able to deliver on the reported future guidance and even outperform them. Not only does ADLER promise, but we are also committed to deliver on what we plan to do"

The complete interim report of ADLER Real Estate AG for the first nine months of 2016 is available on the company's website (www.adler-ag.com).

Your contacts for enquiries:

Dr. Rolf-Dieter Grass (Management) /Alrike Allameh ADLER Real Estate AG Tel: +49 (0)30 200091429 E-mail info@adler-ag.com

Key financial and real estate figures

Income statement 9M 2016 9M 2015 EUR 000s Gross rental income 125.7 97.6 Earnings from property lettings 91.3 66.1 Earnings from the sale of 34.1 20.7 properties Income from fair value 123.5 21.9 adjustments of investment properties EBIT 217.3 127.1 Consolidated net profit 98.6 59.7 FFO I 18.6 9.9 FFO I/share (EUR) 1) 0.32 0.21 FFO II 45.2 38.5 FFO II/share (EUR) 1) 0.78 0.83

Balance sheet 09.30.2016 12.31.2015 Balance sheet total 3,354.1 3,076.2 Equity ratio 26.7 25.3 Investment properties 2,402.9 2,270.2 EPRA NAV 1,011.2 879.5 EPRA NAV/share (EUR) 1) 17.35 15.51 LTV (%) 2) 61.9 68.0 WACD 3.80 3.99

Cash flow 9M 2016 9M 2015 Cash flow from operating 81.9 17.4 activities Cash flow from investing -74.4 -382.3 activities Cash flow from financing 44.5 396.8 activities

Portfolio 09.30.2016 09.30.2015 Number of rental units under 50,931 52,088 management thereof proprietary rental units 47,662 48,336 in portfolio thereof proprietary rental units 1,507 1,968 held for privatisation Number of units sold 1,791 1,836 thereof privatised units sold 897 539 thereof non-core units sold 894 1,297

Occupancy rate (%) 89.3 88.1 Monthly in-place rent 3) (EUR/ 4.99 4.90 m²)

Employees 09.30.2016 12.31.2015 Number of employees 323 268 Full-time equivalents 298 246

1) Based on number of shares at balance sheet date plus shares from assumed conversion of mandatory convertible bond

2) Excluding convertible bonds

3) Contractually agreed rent as of 30 September in each case

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Language: English Company: ADLER Real Estate AG Joachimsthaler Straße 34 10719 Berlin Germany Phone: +49 (0)40 - 29 8130-0 Fax: +49 (0)40 - 29 8130-99 E-mail: info@adler-ag.com Internet: www.adler-ag.com ISIN: DE0005008007, XS1211417362, DE000A1R1A42, DE000A11QF02 WKN: 500800, A14J3Z, A1R1A4, A11QF0 Indices: SDAX, GPR General Index Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service

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