Corporate News

POLIS Immobilien continues to grow

- Rental income climbs 3 percent to EUR 4.7 million in first three months

- Funds from operations up 12 percent to EUR 1.8 million

- Increased investments in maintenance

- Guidance for 2015 confirmed

Berlin, 7 May 2015 - POLIS Immobilien AG [ISIN: DE0006913304] has reached its targets in the first quarter of 2015. Rental income increased by three percent to EUR 4.7 million and reflects the good take-up of the previous year. Funds from operations were up by as much as twelve percent on the previous year to EUR 1.8 million. Net rental income declined by one percent to EUR 3.9 million due to increased maintenance expenses. The Board of Management expects this trend to continue in the coming months and has confirmed the guidance for the full year. "As we intend to make increased investments in our properties in the current financial year in order to secure the high occupancy level through a good condition of the properties, maintenance expenses will continue to rise as the year progresses," said POLIS CEO Dr. Alan Cadmus.

Earnings before taxes (EBT) surged by 76 percent to EUR 3.7 million in the first three months of the year. The valuation of properties and interest rate derivatives had a particularly positive effect. Earnings per share after taxes amounted to EUR 0.28 (0.16).

The Berlin-based company, which specialises in the revitalization and management of office properties in established locations in Germany's leading office cities, boosted the occupancy rate by two percentage points compared to the prior year period to 94 percent in the reporting period. The rate is expected to rise to 96 percent by the end of the year.

The valuation of the investment properties as of 31 March 2015 vindicates the investments made and additionally led to a positive change in the market value by EUR 1.6 (previous year: 0.8) million. Especially positive results were scored by "Könneritzstraße" in Dresden and "Quartier Büchsenstraße" in Stuttgart. As POLIS intends to achieve high value increases also in future, the company will invest more in maintenance in 2015 and will bring planned renovation work forward. In the first quarter, maintenance expenses climbed to EUR 658 (previous year: 534) million.

While this work will reduce the net rental income and the funds from operations in the current financial year, they will pay off in the long term in the form of a high occupancy rate. The modernisation of the property at "Gutleutstraße 26" in Frankfurt will account for the bulk of the expenses - and there are already the first signs of success. At the beginning of the current quarter, POLIS signed a 15-year lease agreement for 2,800 square metres with a municipal partner. Leases have been signed for 75 percent of the property, whose modernisation will be completed in the third quarter, when the tenants will move in. "All investments will secure and increase the value of the properties and the overall result on a sustainable basis, " said Chief Financial Officer Dr. Michael Piontek.

Interest expenses declined by three percent to EUR 1.4 million due to the reduced utilisation of loans. The non-cash valuation of interest rate derivatives increased to a positive EUR 262,000, compared to a negative EUR 285,000 in the previous year.

Improved capitalisation

POLIS increased its equity ratio by three percentage points to 50 percent in the first three months. This solid capitalisation will help to finance the future growth. Due to the repayment of loans, bank balances declined by EUR 3.4 million compared to the end of the year to EUR 5.3 million. There are, however, unencumbered investment properties with a market value in excess of EUR 36 million which may be used to finance acquisitions.

Guidance for 2015

The Board of Management expects the high occupancy rate to stabilise the key operating performance indicators. The modernisation of the property at "Gutleutstraße 26" in Frankfurt will reduce the profit; however, as the company will incur high construction costs on the one hand and not generate any rental revenues during the construction phase on the other hand. The planned maintenance investments represent an additional burden. The occupancy rate of all properties should settle at 96 percent.

Rental revenues should rise only moderately in 2015 due to the vacancy of the "Gutleutstraße" property in Frankfurter. Funds from Operations are expected to decline by EUR 2.8 million due to the increase in maintenance expenses. Regardless of any further valuation effects of interest rate derivatives, the Board of Management projects earnings before taxes of a bit more than EUR 7.0 (previous year 10.3) million.

The quarterly report is available for downloading on the company's website at http://polis.de/IR/zwischenberichte.php.
 

POLIS Immobilien AG, which was founded in Berlin in 1998, is a listed real estate company that buys, refurbishes/revitalises, and manages office properties for its own portfolio. The company focuses on one market segment: office properties in inner-city locations at the most important German office centres. The company acquires both fully leased properties with modern facilities, which generate a secure cash flow, as well as properties that are vacant or require modernisation, and which offer specific value appreciation potential. The company pursues a moderate buy-and-sell strategy. As of 31 December 2014, POLIS Immobilien's real estate portfolio comprised a total of 23 properties with a market value of around EUR 313 million. POLIS Immobilien shares are listed on the regulated market (Prime Standard, ISIN: DE0006913304) of the Frankfurt Securities Exchange. Further information can be found at www.polis.de.

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