LEG Immobilien SE

LEG reported H1 net cold rent of EUR 473.4 million, up 3.7% like-for-like and 3.4% reported. Adjusted EBITDA increased 2.3% to EUR 368.1 million, with an EBITDA margin of 77.8%. AFFO came in at EUR 110.5 million, down 12.7% year on year from EUR 126.6 million in H1 2025, and FFO I was EUR 230.5 million, down 4.4%. The portfolio valuation result was plus 0.7%, or EUR 135 million, and LTV was 45.5%, down 210 basis points from 47.6%. For full year 2026, management reaffirmed AFFO guidance of EUR 220 million to EUR 240 million, FFO I guidance of EUR 475 million to EUR 495 million, and an adjusted EBITDA margin of around 78%; they also reiterated the rental-growth guidance corridor of 3.8% to 4% and said LTV should reach around 45% by year-end.

Lars von Lackum’s message was that LEG is executing its plan across rent growth, vacancy, EBITDA, cash flow, valuation and leverage. He stressed discipline in capital allocation, saying every euro should go where it earns the most for shareholders, and reiterated that the company will not sell assets below what it views as fair book value. His tone was confident but cautious, repeatedly pointing to volatility, geopolitical tensions and weak transaction markets as reasons for patience rather than forcing sales or guidance changes.

Kathrin Köhling focused on the financial bridge and balance sheet. She said AFFO fell to EUR 110.5 million versus EUR 126.6 million in H1 2025 mainly because of higher net cash interest, higher personnel costs and higher investments, partly offset by rent growth; net cash interest was up EUR 10.3 million and investments reduced AFFO by EUR 13.4 million. She also highlighted a 45.5% LTV, average interest cost of 1.82%, average debt maturity of 5.7 years, interest coverage of 4.0x, liquidity of more than EUR 450 million, and a new EUR 750 million syndicated revolving credit facility. She emphasized that H2 should be stronger due to subsidies and lower investments, and that the company remains on track for full-year AFFO of EUR 220 million to EUR 240 million.

Analysts pressed on disposals, buybacks versus dividends, the path to the 45% LTV target, and whether LEG could hit the upper end of rent and FFO guidance. Management said the main issue in disposals is not financing but buyer unwillingness to notarize deals in a volatile market; they still expect some H2 closings, including the remaining 552 units and the Gerresheim land option, but said a full 5,000-unit disposal program by year-end would surprise them. On capital allocation, management said the dividend policy remains unchanged, but share buybacks become a possible use of disposal proceeds once LTV is at target. They also said the upper end of rent guidance looks less likely and that FFO guidance is kept wide because of moving pieces such as subsidies, value-add businesses and other operating factors.