Tuesday, 26 August 2025
LEG Immobilien SE has reported a solid start to the 2025 financial year, underpinned by continued demand for affordable housing in Germany. The company posted Adjusted Funds From Operations (AFFO) of EUR 62.3 million in the first quarter, up 28.2% compared to the same period last year. The full-year guidance for AFFO remains unchanged, targeting between EUR 205 million and EUR 225 million.
Rental income in the free-financed segment rose by 3.5% on a like-for-like basis, while the overall portfolio showed a 3.0% increase. The average base rent per square meter stood at EUR 6.87, translating to approximately EUR 440 per month for a typical 65-square-meter LEG apartment. The vacancy rate also improved slightly, falling by 20 basis points year-on-year to 2.4%.
The recent acquisition and integration of Brack Capital Properties (BCP) added over 9,000 residential units to LEG’s portfolio. While this contributed to earnings growth, it also increased the loan-to-value ratio slightly to 48.4%, up from 47.9% at the end of 2024. LEG expects the figure to decline in the medium term as asset values stabilize and the company pursues further portfolio optimization.
Net Tangible Assets (NTA) per share increased to EUR 128.44 as of March 31, up from EUR 125.90 at the end of 2024. The company anticipates a further rise in asset values, estimating a portfolio revaluation of 0.5% to 1.0% in the first half of the year.
LEG has continued its divestment strategy, transferring ownership of 1,456 units valued at EUR 125 million since the beginning of the year. The company revised its sales plan following the integration of BCP, now aiming to sell around 5,000 units in total. Despite current market conditions, LEG remains focused on securing favorable sale prices, prioritizing value over speed.
The company’s gross yield for its total portfolio was 5.0% as of March 31, offering a premium over German 10-year government bonds. Investments in the quarter were slightly lower, at EUR 7.51 per square meter, but LEG expects higher capital spending through the rest of the year, particularly as it begins projects from the former BCP portfolio. Annual investment is projected to rise from EUR 34 to at least EUR 35 per square meter.
LEG’s financing remains stable, with an average interest rate of 1.55% and an average debt maturity of 5.6 years. The company maintains a Baa2 credit rating with a stable outlook and has already addressed all debt maturities through 2025. In January, LEG successfully placed a EUR 300 million, 10-year bond with a coupon of 3.875%. As of March, liquidity stood above EUR 800 million.
The company continues to engage with policy developments. It expressed concern over the federal government’s planned extension of the rent cap until 2029, arguing that it reduces incentives for new housing construction. Conversely, it welcomed regulatory changes favoring emissions efficiency over strict insulation standards. LEG supports cost-effective climate measures, particularly those that reduce CO₂ emissions with minimal impact on tenants.
Its subsidiary ventures, such as termios, dekarbo, and RENOWATE, reflect this focus. Termios reached a milestone in March with the commercial launch of “termios Pro,” an AI-supported thermostat that enables hydronic balancing and energy savings of up to 30%. Over 20,000 thermostats have already been ordered by external housing companies.
Digitalization continues to play a key role in LEG’s strategy. Approximately 28,000 tenants use the “LEG Hausportal” to receive updates and provide feedback on service quality. The platform, developed by LEG subsidiary youtilly, is now being offered to other housing providers. In parallel, LEG has restructured its IT services into a new unit, LEG Technology and Digitalization, to consolidate expertise and strengthen its use of AI and smart systems.
With stable core operations, improving property values, and strong liquidity, LEG confirms its full-year AFFO guidance and expects AFFO per share to rise more than 7% compared to 2024, based on the midpoint of the target range. The company’s performance in early 2025 supports confidence in its strategy despite ongoing market and regulatory challenges.
