The property portfolio

At the end of the third quarter 2019, ADLER’s portfolio, including BCP, comprised 58,089 core quality rental units totalling 3.5 million square metres with an annualised net rent (including parking spaces and other areas) of EUR 221.1 million. The fair value of the total portfolio (investment properties and inventories) was EUR 4,904.2 million. The regional focus is on Lower Saxony (18,310 units), North Rhine-Westphalia (13,812 units) and Saxony (9,672 units).

ADLER’s residential portfolio also includes a small number of associated commercial units, mainly shops and offices of a type that is often found in city-centre residential properties. As at the end of the third quarter of 2019, we held 934 of these units which accounted for 1.6 percent of the properties held for permanent letting.

ADLER owns core quality properties located on the edges of larger conurbations. This is particularly apparent in North Rhine-Westphalia, where all of the company’s properties are in the Ruhr, which is still Germany’s largest industrial region. In Lower Saxony, the property holdings are mainly located in the Wolfsburg/ Braunschweig/Helmstedt region, a traditionally strong region in economic terms, and in Wilhelmshaven, a city which is benefiting from its deep-water port and from what is the German Navy’s largest base on the North Sea.

In Saxony and Saxony-Anhalt, the properties are predominantly located in the catchment areas for Halle, Leipzig, Chemnitz and Dresden – cities which are now benefiting from growth as a consequence of the significant infrastructure investments made in these areas over the last 20 years. Property holdings with core quality on the edges of conurbations are typically characterised by higher vacancy rates, but also generate higher rental yields than properties in central or so-called core plus locations. Peripheral locations benefit extensively from tight rental markets in city centres; when rents rise in desirable locations in the city centre and affordable flats are no longer available, price-sensitive demand tends to automatically shift to the surrounding areas.