Tuesday, 4 August 2026
LEG Immobilien SE has reaffirmed its full-year 2026 guidance after reporting stable operating performance during the first six months of the year, supported by continued demand for affordable housing across its core German markets.
The residential landlord recorded steady rental growth, improving occupancy and a stronger balance sheet, while maintaining investment in its housing portfolio and digital transformation initiatives.
Like-for-like in-place rents increased by 3.7% year-on-year to €7.21 per sqm, reflecting resilient demand for affordable rental housing. The company’s average monthly net rent remains around €450 per apartment, keeping its portfolio within the affordable housing segment.
Occupancy also strengthened during the period. The like-for-like EPRA vacancy rate declined to 2.3%, indicating that the portfolio remains close to full occupancy as demand continues to outpace available supply in many of LEG’s operating regions.
Adjusted EBITDA rose 2.3% to €368.1 million, while rental income increased 3.3% to €396.3 million.
Adjusted Funds from Operations (AFFO), the company’s primary cash flow metric, reached €110.5 million in the first half, compared with €126.6 million a year earlier. LEG attributed the decline largely to a deliberate acceleration of investment spending during the first half of the year rather than weaker underlying operations.
Capital expenditure increased by around 10% to €202 million, equivalent to €18.19 per sqm, as the company continued upgrading its residential portfolio. Management expects investment levels to moderate during the second half, while additional public funding is anticipated to support earnings.
As a result, the company continues to forecast AFFO of €220–240 million for the full year.
LEG further improved its financial position during the reporting period.
The company’s loan-to-value (LTV) ratio declined from 46.8% at the end of 2025 to 45.5%, moving close to its year-end target of approximately 45%. Total financial liabilities fell by just over 5%, while equity increased to €8.88 billion, lifting the equity ratio to 42.4%.
Average financing costs remain comparatively low at 1.82%, with an average debt maturity of 5.7 years, while available liquidity is sufficient to cover debt maturities through the first quarter of 2027.
LEG’s residential portfolio was revalued at the end of June, producing a modest 0.7% uplift, suggesting continued stabilisation in German residential property values following recent market volatility.
The portfolio was valued at €19.75 billion, while EPRA Net Tangible Assets (NTA) increased to €139.04 per share, up from €137.14 at the end of 2025.
Although the German residential investment market remains relatively quiet, LEG completed or agreed sales of approximately 1,000 apartments worth around €78 million during the first half. These disposals form part of the company’s ongoing programme to selectively sell around 5,000 non-core units, generally at book value.
Alongside portfolio investment, LEG continues expanding its digitalisation programme aimed at improving operational efficiency.
The company expects automation and AI-based property management systems to contribute more than €10 million annually to earnings from 2030. During the first half, implementation continued for both its Langdock AI platform and the ServiceNow digital service platform.
Separately, the Fraunhofer Institute validated the performance of LEG’s AI-supported termios Pro smart heating thermostat. According to the study, the technology can reduce residential heating energy consumption by approximately 14%, supporting both energy efficiency objectives and operating cost reductions.
LEG welcomed recent political signals supporting stronger protection of private property rights, arguing that greater legal certainty is important for attracting long-term investment into Germany’s residential housing sector.
At the same time, the company expressed concern over planned reductions to Germany’s federal housing allowance programme, suggesting that while the financial impact on LEG itself is limited, the changes could increase pressure on local authorities and lower-income households.
LEG expects market fundamentals to remain favourable through the remainder of 2026, supported by persistent housing shortages and strong demand for affordable rental accommodation.
The company reaffirmed its full-year guidance, forecasting:
Management believes its focus on affordable housing, disciplined capital allocation and continued operational improvements positions the company to deliver stable returns despite ongoing economic uncertainty.
