HAMBURG (dpa-AFX) - TAG Immobilien felt the effects of less favorable financing conditions and the difficult real estate market environment last year. Among other things, the Group therefore devalued its German portfolio by 11.6 percent and sold additional apartments. The bottom line was a loss of almost 411 million euros, as the company announced in Hamburg on Tuesday. A year earlier, a profit of a good 117 million euros had been achieved. The management confirmed the targets for 2024 that were published in mid-November. The share price fluctuated.

The MDax company's shares recently managed to break into the profit zone and rose by around half a percent to 12.39 euros, continuing the recovery of the past few days. Nevertheless, the value of the share has more than halved since mid-2021, starting from a price of almost 28 euros.

The slump in the real estate market, which was also triggered by higher interest rates, weighed heavily on the share price until spring 2023 and pushed it down to an interim low of EUR 5.41. Since then, the share price has recovered by 125 percent. Hopes that interest rates would soon fall again had tended to help the share in recent months.

In 2023, TAG's operating profit from the rental business (FFO 1) fell by a good 9 percent to EUR 171.7 million. The company thus met the targets it had set itself in its day-to-day business. In 2024, operating profit is expected to be between EUR 170 million and EUR 174 million. As already announced, TAG does not intend to pay a dividend for 2023. Instead, the money will be used to finance projects in Poland, among other things.

Simon Stippig from analyst firm Warburg Research praised the operating performance in Poland in the final quarter in particular. In addition, the German business had developed solidly and the value of the portfolio was in line with expectations.

TAG entered the Polish market at the end of 2019 with the acquisition of project developer Vantage Development and expanded its business in 2022 with the purchase of residential developer Robyg. Most recently, the real estate group also founded a joint venture with a fund company of the financial investor Centerbridge Partners, which is responsible for the purchase of land and the construction and sale of residential units.

From TAG's point of view, the real estate market in the neighboring country is doing much better: in 2023, sales prices for apartments in Poland's major cities rose by between 15 and 20 percent, according to the press release. FFO II - which includes the Hamburg-based company's sales activities in addition to the rental business - increased slightly to EUR 255.6 million, exceeding the target range set by management. The TAG Management Board also expects "continued strong demand" for new-build apartments in Poland in 2024.

In Germany, on the other hand, business remained difficult. Only the sale of an owner-occupied office building, which was accounted for at historical cost, just managed to generate a positive result from the sales business in the home market.

Thanks to the strong demand for rental apartments, however, the German rental business at least has improved recently: the vacancy rate in the Group's almost 85,000 residential units fell to 4.0 percent in December 2023./lew/niw/mis