The property portfolio

At the end of 2019, ADLER’s portfolio comprised 58,083 quality rental units totalling 3.5 million square metres with an annualised net rent (including parking spaces and other areas) of EUR 224.4 million. The fair value of the total portfolio (investment properties and inventories) was EUR 5,007.3 million. The regional focus is on Lower Saxony (18,307 units), North Rhine-Westphalia (13,811 units) and Saxony (9,673 units). In December 2018, the non-core portfolio comprising c. 3,700 rental units was sold in two separate transactions, the rights and obligations of which were transferred in the first quarter 2019. The sale resulted in a corresponding reduction of the portfolio.

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 2019, ADLER held 950 of these units which accounted for 1.6 percent of the properties held for permanent letting.

ADLER owns properties located on the edges of larger conurbations. This is particularly apparent inNorth 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 theNorth Sea. In Saxony and Saxony-Anhalt, the properties are predominantly located in the – in part strongly –growing catchment areas for Halle, Leipzig, Chemnitz and Dresden.

Property holdings on the edges of conurbations are typically characterised by higher vacancy rates, but also generate higher rental yields than properties in central locations. Peripheral locations benefit extensively from tight rental markets in city centres; when rents rise in desirable locations in the city centre and affordable apartments are no longer available, price-sensitive demand tends to automatically shift to the surrounding areas.