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Overall portfolio shows strong value stability
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Outlook for 2023 takes into account significant uncertainty and the resulting caution among buyers
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CEO Lars Schriewer: “The long-term outlook for the real estate market remains positive.”
Berlin, April 28, 2023 – At its meeting yesterday,the Supervisory Board of ACCENTRO Real Estate AG (“ACCENTRO”) approved the audited annual and consolidated financial statements for the 2022 fiscal year. The annual reports were published today.
The real estate industry was severely impacted last year by the effects of the war in Ukraine. Following years of a boom, high inflation and the resulting shift in interest rates in particular led not only to a significant decline in construction activity and supply. Purchases of residential real estate—ACCENTRO’s core business—also slumped significantly.
The challenging market environment had a significant impact on ACCENTRO’s business performance in 2022. Following a strong first half of the year, the sharp decline in housing demand increasingly affected the company’s operating business. Ultimately, business performance was in line with expectations and met the forecast, which had to be adjusted at the end of November 2022. Consolidated revenue amounted to EUR 165.2 million (forecast: EUR 160–170 million; prior year: EUR 192.8 million). Consolidated EBIT amounted to EUR 8.5 million (forecast: EUR 8–10 million; prior year: EUR 45.2 million). Accordingly, consolidated comprehensive income for 2022 fell to -12.0 million EUR (previous year: 13.1 million EUR). Earnings per share amounted to -0.45 EUR (previous year: 0.37 EUR).
When analyzing the EBIT trend, it should be noted that in 2021, the gain from the fair value adjustment of investment property in the amount of EUR 19.0 million had a positive impact on earnings. In contrast, no increase in value could be realized last year due to difficult market conditions and higher interest rates. With a result from the fair value adjustment of –1.8 million EUR, or 0.3% of the total portfolio value, the real estate portfolio proved to be stable in value. This was attributable in particular to the successful reduction in vacancies and the increase in rents.
As of the end of 2022, ACCENTRO’s portfolio comprised approximately 180 multi-family buildings and 5,900 apartments with a total area of about 344,000 square meters. The book value of the entire portfolio amounted to approximately 620 million EUR. Net asset value per share stood at approximately 10 EUR as of the end of 2022.
Apartment sales in 2022 were heavily impacted by market conditions. Both private and institutional investors acted with significantly greater caution. Consequently, the volume of notarized sales fell to 296 units (previous year: 761 units) and EUR 93.6 million (previous year: EUR 246.5 million). Revenue from sales declined 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%).
Rental income, on the other hand, showed a positive trend. The general increase in demand for rental apartments and the successful reduction of vacancies in the company’s own portfolio contributed to a 4.7% increase in revenue to EUR 17.9 million (previous year: EUR 17.1 million).
Given the market environment, which remains extremely challenging, it is virtually impossible to make a reliable forecast regarding future business performance. The company therefore anticipates consolidated revenue for this year of between 100 and 120 million EUR and consolidated EBIT of between 0 and 2 million EUR. While a significant decline in revenue is expected in the sales segment, the company anticipates a slight increase in rental income, driven in part by the ongoing reduction in vacancies. In addition, revenue growth is expected in the service business, albeit from a low base. This cautious forecast requires ongoing review. An end to the war in Europe—which, unfortunately, is not currently expected—could immediately lead to a significant revival of the market.
Lars Schriewer, CEO of ACCENTRO Real Estate AG, looks to the future with cautious optimism: “Even though the German housing market is currently being hit particularly hard by the effects of the crisis, the long-term outlook for our industry and ACCENTRO remains positive. Structural demand for housing remains high. At the same time, the significant decline in residential construction is leading to an additional shortage of supply. In the most important segment—the sale of apartments—our company is well-positioned. As of the end of 2022, our own portfolio for individual privatization had a market value of approximately 285 million EUR. In the service business—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 property owners to sell approximately 500 apartments through individual privatization.”
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential real estate investor and the market leader in apartment privatization in Germany. As of December 31, 2022, its real estate portfolio comprised approximately 5,900 units. In addition to Berlin, its regional focus includes major cities and metropolitan areas in central Germany as well as the Rhine-Ruhr metropolitan region. ACCENTRO’s business activities encompass three core areas: the sale of apartments to private owner-occupiers and investors on a leasehold basis; 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 on the Prime Standard segment of the Frankfurt Stock Exchange (WKN: A0KFKB, ISIN: DE000A0KFKB3). www.accentro.de
Investor Relations Contact:
Thomas Eisenlohr
ACCENTRO Real Estate AG
Kantstraße 44/45
10625 Berlin
Email: eisenlohr@accentro.de
Phone: +49 (0)30 88 71 81 272