Preliminary figures confirm successful business performance with revenue and earnings growth in 2023 – Increased dividend proposal – Presentation of decarbonisation strategy

PRESS RELEASE

HAMBORNER REIT AG: Preliminary figures confirm successful business performance with revenue and earnings growth in 2023 – Increased dividend proposal – Presentation of decarbonisation strategy

• Successful operating performance in difficult market environment
• Income from rents and leases rises by 4.6% to €91.1 million
• FFO increase of 7.2% to €54.7 million
• Fair value of property portfolio at €1.471 billion after year-end revaluation
• Net asset value (NAV) per share of €10.02 (-15.5% YOY)
• Loan-to-value (LTV) of 43.5%
• Dividend proposal raises by 2.1% year-on-year to €0.48 per share
• Presentation of decarbonisation strategy with medium and long-term climate targets
• Full-year forecast for 2024 assumes further revenue growth and declining FFO

PRELIMINARY FIGURES AS AT 31 DECEMBER 2023

Duisburg, 8 February 2024 – HAMBORNER REIT AG looks back on another successful financial year with today’s publication of its preliminary, unaudited figures. In a macroeconomic environment that continues to be characterised by considerable uncertainties, the company has achieved significant growth in both revenue and earnings.

Income from rents and leases increased by 4.6% year-on-year and amounted to €91.1 million. The positive development was particularly influenced by property additions and contractually agreed rent adjustments as a result of inflation development (index-based rent adjustments). The resulting effects amounted to around €2.5 million in the past financial year (like-for-like).

In consultation with the auditor appointed for the first time for the 2023 financial year, the company has reclassified items within the income statement. In particular, the tenant prepayments for property taxes and insurance previously recognised under “income from incidental costs passed on to tenants” were reported proportionately under revenues in the 2023 financial year. This led to an increase in income from rents and leases of around €2.2 million. In the course of preparing the financial statements, the corresponding figure for the 2022 financial year was also subsequently increased by around €2.1 million.

Funds from operations (FFO) developed positively as well in the past financial year and increased by around €3.7 million or 7.2% year-on-year to €54.7 million. Accordingly, FFO per share amounted to €0.67 (previous year: €0.63). In addition to rent growth, the increase was mainly due to interest income and lower maintenance expenses, which are attributable to the postponement of measures to the current 2024 financial year.

The company’s financial situation remains comfortable. The REIT equity ratio was at a high level of 55.1% as at 31 December 2023. The loan-to-value (EPRA LTV) increased to 43.5% (Previous year: 39.1%) over the course of the year due to the value reductions in the property portfolio and the dividend payment made in the second quarter.

PORTFOLIO DEVELOPMENT

In a challenging transaction environment, the company was able to add two further high-quality large-scale retail properties with long-term leases to its portfolio in 2023. The total purchase price volume was €23.6 million. In addition, a small retail property that was no longer in line with the strategy was sold for €1.5 million.

After the company had already carried an unscheduled valuation of the portfolio during the year as at 30 June 2023 in order to create additional transparency, further adjustments were made to the portfolio value as part of the regular year-end valuation. The valuation was again carried out by an external appraiser and resulted in 4.7% decline in the fair value of the property portfolio (like-for-like) compared to the value at end of the first half of 2023, particularly due to the change in the interest rate environment. On a full-year basis total portfolio value decreased by 10.5% (like-for-like), while the impairment losses were attributable to a greater extent overall to negative developments within the office portfolio.

Taking into account the year-end valuation and the completed transactions, HAMBORNER had 67 properties with a total value of €1.471 billion as at 31 December 2023. The Net asset value (NAV) per share fell by 15.5% year-on-year to €10.02.

OPERATING PERFORMANCE

The company also continued its positive development at an operating level. Numerous letting successes were achieved in the 2023 financial year and contracts for rental space were signed for a total of around 110,000 m². Highlights include early renewals at three DIY store locations with an area of around 33,000 m². Overall, the letting result increased by around 30% compared to the previous year. At the same time, the retention rate also increased to around 88% and demonstrates the continued high level of satisfaction among existing tenants.

The letting successes are also reflected in other key portfolio indicators. The weighted average lease term (WALT) remained stable and stood at 6.4 years as at 31 December 2023, with the terms within the retail portfolio at 7.6 years and for and for the office portfolio at 4.8 years. The EPRA vacancy rate remained at an extremely low level of 2.8% at the end of the year.

DIVIDEND

Despite the challenging overall environment and in view of the successful business performance in 2023, the Management Board intends to continue its reliable dividend policy and to propose to this year’s Annual General Meeting a dividend increase of 2.1% year-on-year to €0.48 per share. Based on the current share price, this would correspond to a dividend yield of approximately 7.6%.

The company’s Annual General Meeting takes place on 25 April 2024 as part of an in-person event.

PRESENTATION OF DECARBONISATION STRATEGY

The company’s sustainability activities in the 2023 financial year focused on the development of a company-wide decarbonisation strategy. The basis for formulating the strategy was the knowledge gained in 2022 as part of a carbon footprint project with regard to greenhouse gas emissions at corporate and portfolio level. After systematically evaluating the historical CO₂-balances 2021 was defined as the base year for deriving long-term decarbonisation targets in view of the comparatively high availability of consumption and emissions data.

As a result, HAMBORNER has committed to achieving net-zero greenhouse gas emissions at corporate level by the end of 2045. As a key milestone for achieving this target, the company is aiming to reduce energy-related emissions at portfolio level by 50% by end of 2030 compared to the base year 2021. This corresponds to a reduction in emissions intensity from 56.4 kgCO₂e/m² in the base year in 2021 to 28.2 kgCO₂e/m² in 2030. This requires an average annual reduction in energy-related emissions of 5.6%.

The key aspects of the decarbonisation strategy will be presented at today’s press and analyst conference. The corresponding presentation is available in the Investor Relations section of the HAMBORNER website at https://www.hamborner.de/en/ir-downloads/.

FORECAST FOR 2024

In view of its high-quality property portfolio, the solid financial, earnings and liquidity situation and despite the persistently difficult economic conditions, the company is fundamentally positive about the course for 2024.

Accordingly, the company has provided an initial guidance for the anticipated business performance in the current financial year:

• Income from rents and leases: €91.0 million to €92.5 million
• Funds from operations (FFO): €49.0 million to €50.5 million

Business development in the current 2024 financial year is likely to remain characterised by ongoing uncertainties regarding further developments on the property markets. The timing and volume of potential property acquisitions and selective disposals as well as the resulting effects on revenue and operating earnings are difficult to forecast at this time. For this reason, the company has not included further property acquisitions and disposals in its guidance.

Income from rents and leases will be positively influenced by the acquisitions made in the 2023 financial year and by further index-based rent increases as a result of higher inflation.

Funds from operations (FFO) will continue to be influenced by uncertainties on the letting market, the ongoing dynamic inflationary situation and the associated development of the interest rate environment. At the same time, cost increases are expected, particularly in the area of maintenance expenses. One of the reasons for this is the postponement of measures originally planned for 2023, which in turn led to an unscheduled increase in FFO in the past financial year. Furthermore, increased other operating expenses in connection with the implementation of strategic projects and additional personnel expenses as a result of new hires and replacement of vacant positions are to be expected.

PRELIMINARY KEY FINANCIAL AND PORTFOLIO FIGURES AS OF 31 DECEMBER 2023

The company will release the final business figures for 2023 as part of the publication of the annual report on 14 March 2024.

ABOUT HAMBORNER REIT AG

HAMBORNER REIT AG a public company listed in the SDAX that operates exclusively in the property sector and is positioned as a portfolio holder for high-yield commercial properties. The company generates sustainable rental income on the basis of a diversified portfolio of properties distributed throughout Germany with a total value of around €1.5 billion. The portfolio focuses on modern office properties at established locations as well as attractive local supply properties as large-scale retail assets, retail parks and DIY stores in central inner-city locations, district centres and highly frequented edge-of-town sites of major German cities and mid-sized centres.

HAMBORNER REIT AG is distinguished by its many years of experience on the property and capital market, its consistent and sustainably attractive dividend strategy and its lean and transparent corporate structure. The company is a registered real estate investment trust (REIT) and benefits from corporation and trade tax exemption at company level.

CONTACT

Christoph Heitmann
Head of Investor Relations, Financing & Corporate Communications
Tel.: +49 (0)203 54405-32
Mail: info@ir.hamborner.de
Web: www.hamborner.de

DISCLAIMER

This press release has been issued by HAMBORNER REIT AG (hereinafter "HAMBORNER") solely for information purposes. This press release may contain statements, assumptions, opinions and predictions about the anticipated future development of HAMBORNER ("forward-looking statements") that reproduce various assumptions regarding, e.g., results derived from HAMBORNER's current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by HAMBORNER and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should therefore not be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute exact indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this press release was issued to its recipients. It is the responsibility of the recipients of this press release to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions. HAMBORNER accepts no responsibility for any direct or indirect damages or losses or subsequent damages or losses, as well as penalties that the recipients may incur by using the press release, its contents and, in particular, all forward-looking statements or in any other way, as far as this is legally permissible. HAMBORNER does not provide any guarantees or assurances (either explicitly or implicitly) in respect of the information contained in this press release. HAMBORNER is not obliged to update or correct the information, forward-looking statements or conclusions drawn in this press release or to include subsequent events or circumstances or to report inaccuracies that become known after the date of this press release.