German landlord Adler Group devalues portfolio by one billion euros, ET RealEstate

August 29, 2023

German real estate firm Adler Group on Tuesday said it had devalued its real estate portfolio by 1 billion euros ($1.08 billion) after its losses deepened in the first half on rising interest rates.

The company posted a January-June loss of one billion euros, widening from a loss of 604 million euros a year earlier.

Adler, one of Germany‘s biggest landlords, is fighting a liquidity crisis, triggered by a downturn in the domestic property market, rising energy and building prices caused by Russia’s invasion of Ukraine and the fallout from the COVID-19 pandemic.

“We are experiencing value losses, as everyone else in the market, due to a significantly changed interest rate environment,” CEO Thierry Beaudemoulin said.

The company plans to continue reducing its 26,000-apartment portfolio – especially projects that are still under construction – against the backdrop of a tough market environment.

Sales and purchases in the property market have “dried up”, Beaudemoulin said.

Funds from operations (FFO 1), a measure of recurring free cash flow and a key indicator for operational strength of real estate companies, fell 84% to 8 million euros during January-June, the company said.

The company also faces legal woes after offices of its subsidiary, Adler Real Estate, were searched by prosecutors as part of an accounting investigation in June. Adler Group said it stands behind its legal executive Sven-Christian Frank, who is listed as a defendant in the case.

Adler shares were down 8% by 0848 GMT. The stock has lost almost all of its value in the wake of a series of crises over the last two years.

  • Published On Aug 29, 2023 at 07:00 PM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETRealty App

  • Get Realtime updates
  • Save your favourite articles

Scan to download App

Source link

Abhay Singh

Web Developer

Leave a Comment