The following is a summary of the LEG Immobilien SE (LEGIF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• LEG Immobilien reported about 10% increase in AFFO per share for 2024, projecting further growth of approximately 7.5% for 2025.

• Confirmed a guidance range for AFFO of EUR 190 million to EUR 210 million for 2024, with projections increasing to EUR 205 million to EUR 225 million for 2025, driven by rent growth and efficient refinancing.

• Noted a net cold rent increase of 3.3% amounting to EUR 643.8 million in the first three quarters of 2024.

• Expects minimal valuation changes between 0% to +0.5%, indicating stabilization in property values.

Business Progress:

• Acquired the remaining shares in Brack Capital Partners (BCP), expecting to fully consolidate the company from early 2025, anticipated to be neutral in its effect on AFFO per share during the year of acquisition but accretive in the medium term with over EUR 5 million in synergies by 2027.

• Continued executing a capital recycling strategy, having signed transactions for 3,400 units totaling EUR 330 million. This ongoing portfolio optimization focuses on maintaining and enhancing asset quality while progressing towards an LTV mid-term target of 45%.

• Expanded investment in property maintenance and upgrades, planning an increase in investment spending by EUR 1 per square meter, focusing on energy optimization and modernization.

Opportunities:

• Plans to increase rent in their free-financed portfolio by 3.8% to 4%, driven by strong market dynamics and no cost rent adjustments for subsidized units.

• Opportunities for future rent dynamics and profitability improvement through the integration and optimization of recently acquired Brack Capital Partners, expanding LEG's footprint into new eastern German markets with substantial asset base and expertise.

Risks:

• Potential challenges in managing increased property investments and integrating the complex structure of Brack Capital Partners, with associated one-time costs around EUR 3 million for restructuring.

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