EQS-Adhoc: LEG Immobilien SE: Realignment of business strategy to the market environment, followed by a new system of key figures for 2023 and a new dividend policy

Realignment of business strategy to the market environment, followed by a new system of key figures for 2023 and a new dividend policy

For 2023, the Executive Board, with the approval of the Supervisory Board, has decided to realign the business strategy against the background of the current market situation, which is characterized by inflation and rising interest rates, and to focus on the highest possible capital efficiency – irrespective of the capitalization rate of the invested funds.

Therefore, the Company no longer reports FFO I as a key figure in its guidance – since this is significantly influenced by the capitalization rate – but instead reports FFO I adjusted for capitalized CapEx measures, specifically AFFO.

For 2023, the company expects AFFO in the range of 110 to €125 million (expectation for 2022: 70 to €80 million).The key figures investments per square meter in the portfolio (expectation for 2023: around 35€/sqm; forecast for 2022: close to 42€/sqm) and rental growth in the comparable (like-for-like) portfolio (expectation for 2023: 3.3 to 3.7%; forecast for 2022: about 3.0%) remain unchanged as part of the guidance.

In particular, the business strategy with a stronger focus on maximizing potential capital efficiency is expected to lead to a development of FFO I – now no longer relevant – below the current market expectation in 2023. Based on the economic planning, the calculated FFO I of LEG Immobilien SE for 2023 is in a range of 425 to €440 million. The FFO I guidance for fiscal year 2022 is specified at 475 to €485 million – within the previous spectrum.

In addition, the dividend distribution for fiscal year 2023 will also be based on the new cash-oriented key performance indicator system. The plan is to measure the dividend payout based on two components: Depending on the market environment, 100% of AFFO is to be distributed on the one hand and a part of the net proceeds generated from property disposals on the other.

As in previous years, the dividend proposal for 2022 will be based on FFO I. However, the payout ratio of 70% is subject to further market developments.