ADLER Real Estate AG: Updating 2017 Guidance

Updating 2017 Guidance

- In place rent on a square meter basis significantly increased to EUR 5.17 (+3.4%)

- Net rental income excluding vacancy reduction grew by c.2.8%

- WACD reduced by c. 1pp compared to FY16 from c.3.7% to 2.7%

Berlin, January 25, 2018: ADLER Real Estate AG has outperformed its 2017 guidance on a number of items especially those connected to operational performance. "In the course of compiling our numbers for 2017" said Tomas de Vargas Machuca, Co-CEO of ADLER Real Estate, "we have clear indications that we outperformed some of the key metrics we have guided for."

Due to active management of the rental portfolio, average rent in the core portfolio had reached EUR 5.11 per sqm/month at the nine months stage, thus surpassing the full year target of EUR 5.08 already. The figures have improved further in the fourth quarter, reaching EUR c.5.17 at year's end. This equates to an increase of approx. 3.4% compared to FY16.

In line with improving rents, net rental income excluding vacancy reduction increased at a faster rate than originally planned due to operational performance and favorable market conditions reaching c.2.8%. According to initial estimates which are still preliminary, the 2017 target of a 3 percent increase including vacancy reduction could reach c.3.5% for FY17.

The most striking outperformance was reached in the efforts to reduce the average cost of debt. While the target for 2017 stood at 3.45 percent, WACD, which stood at 3.69% as of FY 16 is expected to fall to around 2.7% percent. Tomas de Vargas Machuca said: "This great result is mainly attributable to the successful placement of the EUR 800 million bond at the end of 2017 with an average coupon of c.1.7 percent. Not only was this the second largest bond of all German real estate companies last year, but also achieved the tightest pricing for a BB+ rated issue in these maturities. The proceeds were used to refinance more than EUR 600 million of higher yielding promissory notes." "The strategic decision to internalize the property management has proven right as the momentum is picking up. We are all set to realize our reversion potential", said Maximilian Rienecker, Co-CEO of Adler Real Estate AG.

The other guided figures such as FFO I and EPRA NAV  are expected to meet the reported 2017 guidance.

ADLER will release the 2017 results and its guidance for 2018 on March 26, 2018.

For enquiries, please contact:

Dr Rolf-Dieter Grass
Head of Corporate Communication
ADLER Real Estate AG
Telephone: +49 (30) 2000 914 29
r.grass@adler-ag.com