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ADLER Real Estate AG: Package of measures to sustainably boost earnings strength

DGAP-News: ADLER Real Estate AG / Key word(s): Miscellaneous

2016-06-09 / 15:26

The issuer is solely responsible for the content of this announcement.

Corporate News

ADLER Real Estate AG: Package of measures to sustainably boost earnings strength

- Relocation of corporate headquarters to Berlin

- Cutting costs with numerous individual measures

- Refocusing real estate portfolio and asset management

- Expanding group-internal property management

Hamburg, 9 June 2016. ADLER Real Estate AG will be led by a new Management Board as of 9 June, the date of this year's Annual General Meeting. As announced in March already, the term in office of the longstanding Management Board member Axel Harloff expired upon the conclusion of the Annual General Meeting. The CEO function will be assumed by Arndt Krienen, who was appointed to the Management Board of ADLER Real Estate AG in January 2016 already having previously sat on the Management Board of WESTGRUND AG, a company acquired in mid-2015. Sven-Christian Frank, previously Director of Asset Management at ADLER, has been newly appointed to the Management Board as of 9 June 2016.

At today's Annual General Meeting, shareholders of ADLER Real Estate AG were informed about an extensive package of operating and structural measures with which the company aims to sustainably boost its earnings strength. As stressed by Arndt Krienen, the recent years of rapid growth are due to be followed by a year of consolidation in 2016. "If you have grown by making acquisitions, as we have, then you also have to make sure you see to the integration. That will be our key focus in the current year. We intend to organise and optimise our portfolio of residential units, standardise and centralise our company structure, restructure our property management, and focus more closely on costs than was possible in the period when growth was our top priority."

Corporate headquarters relocated to Berlin
One forthcoming change involves relocating the corporate headquarters from Frankfurt to Berlin, a measure approved by a large majority of shareholders today. This relocation is intended to bring the company's legal and organisational structures in line with each other. The Group's core tasks will be pooled in Berlin. The Frankfurt location will be relinquished in the further course of the year, while activities in Hamburg, previously ADLER's central location, will be reduced to a small number of functions. ACCENTRO Real Estate AG and WESTGRUND AG, the companies taken over and acquired in 2014 and 2015 respectively, already have their headquarters and central administration departments in Berlin.

Cutting costs with numerous individual measures
Cost savings are also to be achieved by integrating the various IT systems, generating savings and synergies at group companies, refinancing relatively high-interest debt capital and implementing various individual operating measures. "Overall, we expect savings on a scale of EUR 11 million. However, these measures will only take full effect in 2017", adds Arndt Krienen.

Refocusing property portfolio and asset management
The property portfolio, which comprised 48,055 units in total at the end of March 2016, is to be reorganised and optimised. Around 4,500 units have already been identified as "non-core" and, where possible and economically expedient, are to be sold off over the next two years. As the units involved have above-average vacancy rates and below-average rents, this disposal will boost the company's earnings strength. To enable the portfolio to be simultaneously managed more effectively, the company's asset management is to be restructured. To date, this function formed part of the various companies that ADLER has taken over. From the middle of this year, it will have a group-wide regional structure. Comments Sven-Christian Frank, the Management Board member responsible for asset management: "We will be turning a decentralised into a centralised structure and replacing the various units currently operating in parallel with group-wide asset management from a single source."

Expanding group-internal property management
Group-internal property management, which currently manages just over a quarter of the residential units, is also to be expanded. "This will only be possible on a step-by-step basis, however. By 2017, we aim to have a reached a stage where virtually all of our portfolios are managed by group-internal employees. That will give us greater proximity to our customers, enhance our knowledge of local markets, and reduce the number of interfaces with external service providers", comments Frank with regard to the benefits of this change. "We will then be a vertically integrated group capable of offering tenants the full range of services they expect from their landlords."

ADLER Real Estate AG: ADLER Real Estate AG, headquartered in Frankfurt and with its administrative headquarters in Hamburg, focuses on the acquisition, management and administration of residential property privatisation. ADLER invests primarily in portfolios with residential property companies in B-locations of major conurbations with units that achieve a positive cash flow and can demonstrate a sustained appreciation potential.

The ADLER subsidiary, ACCENTRO Real Estate AG, is one of the largest privatisers of residential property in Germany. ACCENTRO markets suitably targeted residential property from the holdings of the ADLER Group and procures condominiums for third party owner-occupiers and investors seeking to provide for their retirement.

In addition, ADLER holds a 23.5 percent stake (31 December 2015) in conwert Immobilien Invest SE, Vienna, one of the leading real estate companies in Austria. conwert holds more than 82 per percent of its property portfolio in Germany, many of them in A-cities.

With nearly 50,000 residential units, ADLER is among the top five largest German residential property companies listed in Germany. In addition to the listing on the FTSE EPRA / NAREIT Global Real Estate Index in London and the GRP General Index, shares in ADLER are also listed in the small cap index SDAX of the Deutsche Börse.

Contact for enquiries:

Dr. Rolf-Dieter Grass
ADLER Real Estate AG
Tel.: +49 30/2000 914 29

2016-06-09 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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