Q2 2026 ADLER Group SA Earnings Call
Operator: Ladies and gentlemen, welcome to the Adler Group publication Q2 2026 results investor conference call. I am Moritz, your conference call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Sven Döbelin, Head of Finance. Please go ahead, sir.
Operator: Ladies and gentlemen, welcome to the Adler Group publication Q2 2026 results investor conference call. I am Moritz, your conference call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Sven Döbelin, Head of Finance. Please go ahead, sir.
Speaker #1: Ladies and gentlemen, welcome to the Adler Group Q2 2026 results investor conference call. I am Moritz, your Chorus Call operator. I would like to remind you that all participants will be in listen-only mode during the conference, which is being recorded.
Speaker #1: The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and 1 on your telephone.
Speaker #1: For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sven Döbeling, Head of Finance.
Speaker #1: Please go ahead, sir.
Speaker #2: Thanks, Moritz. Good morning, everyone, and thank you for joining us for the Adler Group Q2 2026 results call. Speakers today, as usual, are our CEO, Dr. Karl Reineshuber, and our CFO, Torsten Asan.
Sven Döbelin: Thanks, Moritz. Good morning, everyone, and thank you for joining us for the Adler Group Q2 2026 results call. Speakers today, as usual, are our CEO, Dr. Karl Reinitzhuber, and our CFO, Thorsten Arsan. Both will lead through today's presentation and then answer your questions. Also, please note that this call is being recorded and will be made available on our website, where you can also find today's presentation. With that, I will hand it over to Karl.
Sven Döbeling: Thanks, Moritz. Good morning, everyone, and thank you for joining us for the Adler Group Q2 2026 results call. Speakers today, as usual, are our CEO, Dr. Karl Reinitzhuber, and our CFO, Thorsten Arsan. Both will lead through today's presentation and then answer your questions. Also, please note that this call is being recorded and will be made available on our website, where you can also find today's presentation. With that, I will hand it over to Karl.
Speaker #2: Both will lead today's presentation and then answer your questions. Also, please note that this call is being recorded and will be made available on our website, where you can also find today's presentation.
Speaker #2: And with that, I'll hand it over to Karl.
Speaker #3: Good morning, everyone, and thank you, Sven. Before we start with the Q2 numbers, let me give you an overview of our recent asset disposals on page 4.
Karl Reinitzhuber: Good morning, everyone, and thank you, Sven. Before we start with the Q2 numbers, let me give you an overview of our recent asset disposals on page 4. As already communicated in our Q1 figures, we closed Hedemannstraße in early April and returned the proceeds partly to the lending bank and partly to the 1L holders. We also closed the sale of Hansastraße, another non-strategic yielding asset in Berlin, and subsequently further reduced the 1L in May. Just this week, we received the funds from the second closing of Holsten, which we will use to further repay the 1L in the coming days. Furthermore, we signed 18 condominium units in Berlin for a total sales price of EUR 6 million. All of these disposals have enabled us to repay debt of EUR 201 million since the beginning of the year.
Karl Reinitzhuber: Good morning, everyone, and thank you, Sven. Before we start with the Q2 numbers, let me give you an overview of our recent asset disposals on page 4. As already communicated in our Q1 figures, we closed Hedemannstraße in early April and returned the proceeds partly to the lending bank and partly to the 1L holders. We also closed the sale of Hansastraße, another non-strategic yielding asset in Berlin, and subsequently further reduced the 1L in May. Just this week, we received the funds from the second closing of Holsten, which we will use to further repay the 1L in the coming days. Furthermore, we signed 18 condominium units in Berlin for a total sales price of EUR 6 million. All of these disposals have enabled us to repay debt of EUR 201 million since the beginning of the year.
Speaker #3: As already communicated in our Q1 figures, we closed Hedemannstraße in early April and returned the proceeds partly to the lending bank and partly to the 1L holders.
Speaker #3: We also closed the sale of Hansastraße, another non-strategic yielding asset in Berlin, and subsequently further reduced the 1L in May. Just this week, we received the funds from the second closing of Holsten, which we will use to further repay the 1L in the coming days.
Speaker #3: Furthermore, we signed 18 condominium units in Berlin for a total sales price of €6 million. All of these disposals have enabled us to repay debt of €201 million since the beginning of the year.
Speaker #3: Let me elaborate on my take regarding the current market environment for residential development and new building in Germany. My perception is that the uncertainty about inflation and interest rates, on the back of the ongoing crisis around Iran, continues to impact the real estate market.
Karl Reinitzhuber: Let me elaborate my take on the current market environment for residential development and new building in Germany. My perception is that the uncertainty about inflation and interest rates on the back of the ongoing crisis around Iran continues to impact the real estate market. German developers are cautious about their investment in new projects, and the same is true about their equity partners and banks. We nevertheless see some transactions and ventures going forward. As an example, Instone Real Estate has teamed up with the equity partner Ginkgo Fund for the further development of Benrather Gärten in Düsseldorf that they had just recently acquired from Adler. We continue to run our sales processes on our remaining developments, with some in advanced stages where we had liked to inform you about successful signings, but where the track to finalization is longer than projected.
Karl Reinitzhuber: Let me elaborate my take on the current market environment for residential development and new building in Germany. My perception is that the uncertainty about inflation and interest rates on the back of the ongoing crisis around Iran continues to impact the real estate market. German developers are cautious about their investment in new projects, and the same is true about their equity partners and banks. We nevertheless see some transactions and ventures going forward. As an example, Instone Real Estate has teamed up with the equity partner Ginkgo Fund for the further development of Benrather Gärten in Düsseldorf that they had just recently acquired from Adler. We continue to run our sales processes on our remaining developments, with some in advanced stages where we had liked to inform you about successful signings, but where the track to finalization is longer than projected.
Speaker #3: German developers are cautious about their investment in new projects, and the same is true of their equity partners and banks. We nevertheless see some transactions and ventures going forward; as an example, Instone has teamed up with the equity partner Ginkgo Fund for the further development of Benrathergarten in Düsseldorf, which they had just recently acquired from Adler.
Speaker #3: We continue to run our sales processes on our remaining developments, with some in advanced stages where we would have liked to inform you about successful signings, but where the track to finalization is longer than projected.
Speaker #3: We expect to come up with some good news in due course. With €245 million, our disposal holdback basket remains almost fully filled, unchanged versus three months ago.
Karl Reinitzhuber: We expect to come up with some good news in due course. With EUR 245 million, our disposal holdback basket remains almost fully built unchanged versus three months ago. Moving on to page 6. On the financials, our net rental income came in at EUR 63 million for the first three months. First six, right. Compared to the prior year period, net rental income decreased as a result of the disposals of the North Rhine-Westphalia portfolio. The decrease was partly compensated by rent increases realized on the remaining assets. We are on track to reach our 2026 net rental income guidance in the range of EUR 124 to EUR 129 million. The adjusted EBITDA from rental activities amounted to EUR 37 million, reflecting a stable margin compared to last year. The adjusted EBITDA total amounted to EUR 29 million.
Karl Reinitzhuber: We expect to come up with some good news in due course. With EUR 245 million, our disposal holdback basket remains almost fully built unchanged versus three months ago. Moving on to page 6. On the financials, our net rental income came in at EUR 63 million for the first three months. First six, right. Compared to the prior year period, net rental income decreased as a result of the disposals of the North Rhine-Westphalia portfolio. The decrease was partly compensated by rent increases realized on the remaining assets. We are on track to reach our 2026 net rental income guidance in the range of EUR 124 to EUR 129 million. The adjusted EBITDA from rental activities amounted to EUR 37 million, reflecting a stable margin compared to last year. The adjusted EBITDA total amounted to EUR 29 million.
Speaker #3: Moving on to page 6. On the financials, our net rental income came in at €63 million for the first three months. First six, right?
Speaker #3: Compared to the prior-year period, net rental income decreased as a result of the disposals of the North Rhine-Westphalia portfolio. The decrease was partly compensated by rent increases realized on the remaining assets.
Speaker #3: We are on track to reach our 2026 net rental income guidance in the range of €124 million to €129 million. The adjusted EBITDA from rental activities amounted to €37 million, reflecting a stable margin compared to last year.
Speaker #3: The adjusted EBITDA total amounted to €29 million. As more and more development projects are being sold and the organization is becoming smaller, the negative financial impact from the development business will continue to become smaller.
Karl Reinitzhuber: As more and more development projects are being sold and the organization is becoming smaller, the negative financial impact from the development business will continue to become smaller. Our group's equity position stands at EUR 4.7 billion. The LTV increased slightly to 79.2%, in line with our expectations. Our cash position amounts to EUR 155 million. Please note that the sharp decrease in cash is attributable to inflows from Holstenquartier and Kornversuchsspeicher at the end of March, while the respective repayments under the first lien new money facility were done in April and subsequently reduced our cash position as compared to end of Q1. We will provide more color on financials later in the presentation. Overall, our Berlin anchored yielding portfolio continued its solid operational performance. We achieved 3.0 like-for-like rental growth on a year-on-year basis.
Karl Reinitzhuber: As more and more development projects are being sold and the organization is becoming smaller, the negative financial impact from the development business will continue to become smaller. Our group's equity position stands at EUR 4.7 billion. The LTV increased slightly to 79.2%, in line with our expectations. Our cash position amounts to EUR 155 million. Please note that the sharp decrease in cash is attributable to inflows from Holstenquartier and Kornversuchsspeicher at the end of March, while the respective repayments under the first lien new money facility were done in April and subsequently reduced our cash position as compared to end of Q1. We will provide more color on financials later in the presentation. Overall, our Berlin anchored yielding portfolio continued its solid operational performance. We achieved 3.0 like-for-like rental growth on a year-on-year basis.
Speaker #3: Our group's equity position stands at €0.7 billion. The LTV increased slightly to 79.2%, in line with our expectations. Our cash position amounts to €155 million. Please note that the sharp decrease in cash is attributable to inflows from Holstenquartier and Kornversuchsspeicher at the end of March, while the respective repayments under the firstly new money facility were done in April, and subsequently reduced our cash position as compared to the end of Q1.
Speaker #3: We will provide more color on financials later in the presentation. Overall, our Berlin-anchored yielding portfolio continued its solid operational performance. We achieved 3.0% like-for-like rental growth on a year-on-year basis.
Speaker #3: This was supported by increases on current rental contracts and reduction in vacancy, as well as ongoing reletting activities. We'll have a closer look at all KPIs on the following slides.
Karl Reinitzhuber: This was supported by increases on current rental contracts, a reduction in vacancy, and ongoing reletting activities. We will have a closer look at all KPIs on the following slides. Let's proceed to portfolio and operational performance on page 8. At the end of June 2026, we had 17,465 rental units. It's a marginal decrease of 18 units compared to March, driven by the condo sales in Q2, which I mentioned before. As a reminder, our portfolio is fully Berlin anchored with more than 99% Berlin assets. Only 49 units are located outside of Berlin, and we expect to sell these units within the coming quarters. In terms of value, the GAV of our yielding portfolio remains stable at EUR 3.5 billion. This reflects very little change from the prior period, as there with the revaluation gains partly offset by disposals during the second quarter.
Karl Reinitzhuber: This was supported by increases on current rental contracts, a reduction in vacancy, and ongoing reletting activities. We will have a closer look at all KPIs on the following slides. Let's proceed to portfolio and operational performance on page 8. At the end of June 2026, we had 17,465 rental units. It's a marginal decrease of 18 units compared to March, driven by the condo sales in Q2, which I mentioned before. As a reminder, our portfolio is fully Berlin anchored with more than 99% Berlin assets. Only 49 units are located outside of Berlin, and we expect to sell these units within the coming quarters. In terms of value, the GAV of our yielding portfolio remains stable at EUR 3.5 billion. This reflects very little change from the prior period, as there with the revaluation gains partly offset by disposals during the second quarter.
Speaker #3: Let's proceed to portfolio and operational performance on page 8. At the end of June 26, we had 17,465 rental units. It's a marginal decrease of 18 units compared to March, driven by the condo sales in Q2, which I mentioned before.
Speaker #3: As a reminder, our portfolio is fully Berlin-anchored, with more than 99% of our assets located in Berlin. Only 49 units are outside Berlin, and we expect to sell these units within the coming quarters.
Speaker #3: In terms of value, the GAV of our yielding portfolio remains stable at €3.5 billion. This reflects very little change from the prior period, with the revaluation gains partly offset by disposals during the second quarter.
Speaker #3: The GAV per square meter increased slightly to €2,886, up from €2,870 in March. Let's now move on to page 9 to further discuss our operational KPIs.
Karl Reinitzhuber: The GAV per square meter increased slightly to EUR 2,886, up from EUR 2,870 in March. Let's now move on to page 9 to further discuss our operational KPIs. As in previous periods, our semi-annual portfolio valuation was conducted by CBRE. After three consecutive years of like-for-like value declines, now our portfolio recorded the third semi-annual positive like-for-like fair value change of +0.5% in H1 2026, following an aggregated like-for-like fair value change of 1% in 2025. Rental growth outpaces the development of valuations, leading to an increase in rental yield from 3.5% to 3.6% on a year-to-year comparison, but also compared to Q4 2025. Rent increases continue to outpace revaluations so that the trend of slightly increasing rental yields continues.
Karl Reinitzhuber: The GAV per square meter increased slightly to EUR 2,886, up from EUR 2,870 in March. Let's now move on to page 9 to further discuss our operational KPIs. As in previous periods, our semi-annual portfolio valuation was conducted by CBRE. After three consecutive years of like-for-like value declines, now our portfolio recorded the third semi-annual positive like-for-like fair value change of +0.5% in H1 2026, following an aggregated like-for-like fair value change of 1% in 2025. Rental growth outpaces the development of valuations, leading to an increase in rental yield from 3.5% to 3.6% on a year-to-year comparison, but also compared to Q4 2025. Rent increases continue to outpace revaluations so that the trend of slightly increasing rental yields continues.
Speaker #3: As in previous periods, our semi-annual portfolio valuation was conducted by CBRE. After three consecutive years of like-for-like value declines, our portfolio has now recorded the third semi-annual positive like-for-like fair value change of plus 0.5% in H1 2026, following an aggregated like-for-like fair value change of 1% in 2025.
Speaker #3: Rental growth outpaces the development of valuations, leading to an increase in rental yield from 3.5% to 3.6% on a year-to-year comparison, but also compared to Q4 '25.
Speaker #3: Rent increases continued throughout past revaluations, so that the trend of slightly increasing rental yields continues. Again, it remains to be seen how interest rates and the real estate markets will move in the coming months with war in the Middle East and Ukraine, and the rather fragile world economy.
Karl Reinitzhuber: Again, it remains to be seen how the interest rates and the real estate markets will move in the coming months with war in the Middle East and Ukraine and the rather fragile world economy. Let's now move on to page 10 to further discuss our operational KPIs. We achieved 3.0% like-for-like rental growth year-on-year. As expected, we continue to achieve like-for-like rental growth in our target zone of above 3% per year, even if the 3.0% are behind our full year target of not below 3.5%. Let me explain the reasons behind that. Over the last 12 months, we have increased the rent of more than 30% of our residential units. Thereof, 80% CPI indexed and 20% Mietspiegel based leases. This is a relatively low number of increases in Mietspiegel based leases.
Karl Reinitzhuber: Again, it remains to be seen how the interest rates and the real estate markets will move in the coming months with war in the Middle East and Ukraine and the rather fragile world economy. Let's now move on to page 10 to further discuss our operational KPIs. We achieved 3.0% like-for-like rental growth year-on-year. As expected, we continue to achieve like-for-like rental growth in our target zone of above 3% per year, even if the 3.0% are behind our full year target of not below 3.5%. Let me explain the reasons behind that. Over the last 12 months, we have increased the rent of more than 30% of our residential units. Thereof, 80% CPI indexed and 20% Mietspiegel based leases. This is a relatively low number of increases in Mietspiegel based leases.
Speaker #3: Let's now move on to page 10 to further discuss our operational KPIs. We achieved 3.0% like-for-like rental growth year-on-year. As expected, we continue to achieve like-for-like rental growth in our target zone of above 3% per year, even if the 3.0% is behind our full-year target of not below 3.5%.
Speaker #3: Let me explain the reasons behind that. Over the last 12 months, we have increased the rents of more than 30% of our residential units.
Speaker #3: Of these, 80% are CPI-indexed leases, and 20% are Mietspiegel-based leases. This is a relatively low number of increases in Mietspiegel-based leases. The new biannual Berlin Mietspiegel was published in June, with an uplift of approximately 5% for the Adler portfolio.
Karl Reinitzhuber: The new biannual Berlin Mietspiegel was published in June with an uplift of approximately 5% for the Adler portfolio. To capture this potential, we sent out increases for 2,500 units still in June, including the Mietspiegel uplift. These increases will only become effective in September. Until year end, there are 8,700 rent increases more still to come. Thereof, 45% Mietspiegel based. On the back of this program, we are confident to report a rental growth number north of 3.5% at year end 2026. Our average rent increased from EUR 8.45 per square meter per month recorded a year ago to EUR 8.68 in June 2026. Turning to vacancy, our operational vacancy rate has reduced further to 0.9%, down from 2% a year earlier. This confirms the continuous demand for rental apartments in Berlin, driven by continued population growth and a very limited new house supply.
Karl Reinitzhuber: The new biannual Berlin Mietspiegel was published in June with an uplift of approximately 5% for the Adler portfolio. To capture this potential, we sent out increases for 2,500 units still in June, including the Mietspiegel uplift. These increases will only become effective in September. Until year end, there are 8,700 rent increases more still to come. Thereof, 45% Mietspiegel based. On the back of this program, we are confident to report a rental growth number north of 3.5% at year end 2026. Our average rent increased from EUR 8.45 per square meter per month recorded a year ago to EUR 8.68 in June 2026. Turning to vacancy, our operational vacancy rate has reduced further to 0.9%, down from 2% a year earlier. This confirms the continuous demand for rental apartments in Berlin, driven by continued population growth and a very limited new house supply.
Speaker #3: To capture this potential, we sent out increases for 2,500 units still in June, including the Mietspiegel uplift. These increases will only become effective in September.
Speaker #3: Until year-end, there are 8,700 rent increases still to come, of which 45% are Mietspiegel-based. On the back of this program, we are confident to report a rental growth number north of 3.5% at year-end 2026.
Speaker #3: Our average rent increased from €8.45 per square meter per month, recorded a year ago, to €8.68 in June 2026. Turning to vacancy, our operational vacancy rate has reduced further to 0.9%, down from 2% a year earlier.
Speaker #3: This confirms the continuous demand for rental apartments in Berlin, driven by continued population growth and the very limited new housing supply. Let me briefly deviate from the usually more quantitative information in this section and bring some more qualitative achievements to your attention.
Karl Reinitzhuber: Let me shortly deviate from the usual more quantitative information in this section and bring some more qualitative achievements to your attention. In 2026, Adler Group has initiated and executed various measures to improve its services and operational excellence in the Berlin portfolio and the platform. Adler is improving direct communication with tenants via a tenant app and an AI hotline. We are digitizing property management with a new ticketing system, reducing turnaround times for repairs by outsourcing minor repairs and investing in climate friendly heating systems by changing to heat pumps. Progress in these areas is based on a previously established optimized IT infrastructure and strong partnerships. All of this not only increases quality and speed of our services to our tenants, but also saves costs with digitalization and creates value with decarbonization. You can read more about these initiatives in our press release from 31 July.
Karl Reinitzhuber: Let me shortly deviate from the usual more quantitative information in this section and bring some more qualitative achievements to your attention. In 2026, Adler Group has initiated and executed various measures to improve its services and operational excellence in the Berlin portfolio and the platform. Adler is improving direct communication with tenants via a tenant app and an AI hotline. We are digitizing property management with a new ticketing system, reducing turnaround times for repairs by outsourcing minor repairs and investing in climate friendly heating systems by changing to heat pumps. Progress in these areas is based on a previously established optimized IT infrastructure and strong partnerships. All of this not only increases quality and speed of our services to our tenants, but also saves costs with digitalization and creates value with decarbonization. You can read more about these initiatives in our press release from 31 July.
Speaker #3: In 2026, Adler Group has initiated and executed various measures to improve its services and operational excellence in the Berlin portfolio and the platform. Adler is improving direct communication with tenants via a tenant app and an AI hotline.
Speaker #3: We are digitizing property management with a new ticketing system, reducing turnaround times for repairs by outsourcing minor repairs, and investing in climate-friendly heating systems by switching to heat pumps.
Speaker #3: Progress in these areas is based on a previously established, optimized IT infrastructure and strong partnerships. All of this not only increases the quality and speed of our services to our tenants, but also saves costs through digitalization and creates value through decarbonization.
Speaker #3: You can read more about these initiatives in our press release from July 31. Now, I would like to hand it over to Torsten, who will walk you through the financials starting on page 12.
Karl Reinitzhuber: Now I would like to hand it over to Thorsten, who will walk you through the financials starting on page 12.
Karl Reinitzhuber: Now I would like to hand it over to Thorsten, who will walk you through the financials starting on page 12.
Speaker #2: Thank you, Karl, and also a warm welcome from my side. At the end of June 2026, our yielding portfolio was valued at €3.5 billion and our development portfolio at around €400 million, based on externally appraised values.
Thorsten Arsan: Thank you, Karl, and also a warm welcome from my side. At the end of June 2026, our yielding portfolio was valued at EUR 3.5 billion and our development portfolio at around EUR 400 million, based on externally appraised values. This brings our total GAV to EUR 3.9 billion, unchanged from the figure reported at the end of the first quarter. In yielding assets, there was a slight increase in value resulting from disposals of 18 condominium units in Berlin, being more than offset by the revaluation of the portfolio. Let's now move on to the financing section on page 13. Let me briefly walk you through the debt repayments update. We made further part redemptions of the first lien new money facility in Q2 2026, amounting to EUR 160 million in total.
Thorsten Arsan: Thank you, Karl, and also a warm welcome from my side. At the end of June 2026, our yielding portfolio was valued at EUR 3.5 billion and our development portfolio at around EUR 400 million, based on externally appraised values. This brings our total GAV to EUR 3.9 billion, unchanged from the figure reported at the end of the first quarter. In yielding assets, there was a slight increase in value resulting from disposals of 18 condominium units in Berlin, being more than offset by the revaluation of the portfolio. Let's now move on to the financing section on page 13. Let me briefly walk you through the debt repayments update. We made further part redemptions of the first lien new money facility in Q2 2026, amounting to EUR 160 million in total.
Speaker #2: This brings our total GAV to €3.9 billion, unchanged from the figure reported at the end of the first quarter. In yielding assets, there was a slight increase in value resulting from disposals of 18 condominium units in Berlin being more than offset by the revaluation of the portfolio.
Speaker #2: Let's now move on to the financing section on page 13. Let me briefly walk you through the debt repayments update. We made further part redemptions of the first lien new money facility in Q2, amounting to a total of €160 million.
Speaker #2: This included €93 million repaid following the closing of Holsten, €11 million repaid from the closing of Kronversuchsspeicher, and €4 million repaid from condo sales, all on 2 April 2026.
Thorsten Arsan: This included EUR 93 million repaid following the closing of Holsten Quartier, EUR 11 million repaid from the closing of 1 4Südspeicher, and EUR 4 million repaid from condo sales, all on 2 April 2026. Furthermore, we repaid EUR 3 million on 7 April 2026 and EUR 5 million on 13 May 2026 after the closing of Hedemannstraße and Hansastraße respectively. Furthermore, we have returned EUR 15 million to other lenders from the proceeds of Hedemannstraße. Please note that so far we have returned EUR 4 million in Q3 from a second closing linked to Hansastraße and plan to repay funds from the second closing of Holsten Quartier in due course. Turning to the 2026 maturities. During the second quarter, we also successfully completed the prolongation of a EUR 6 million secured bank loan, extending the maturity from 2026 to Q4 2028.
Thorsten Arsan: This included EUR 93 million repaid following the closing of Holsten Quartier, EUR 11 million repaid from the closing of 1 4Südspeicher, and EUR 4 million repaid from condo sales, all on 2 April 2026. Furthermore, we repaid EUR 3 million on 7 April 2026 and EUR 5 million on 13 May 2026 after the closing of Hedemannstraße and Hansastraße respectively. Furthermore, we have returned EUR 15 million to other lenders from the proceeds of Hedemannstraße. Please note that so far we have returned EUR 4 million in Q3 from a second closing linked to Hansastraße and plan to repay funds from the second closing of Holsten Quartier in due course. Turning to the 2026 maturities. During the second quarter, we also successfully completed the prolongation of a EUR 6 million secured bank loan, extending the maturity from 2026 to Q4 2028.
Speaker #2: Furthermore, we repaid €3 million on 7 April 2026 and €5 million on 13 May 2026, after the closing of Hedemannstraße and Hansastraße, respectively.
Speaker #2: Furthermore, we have returned €15 million to other lenders from the proceeds of Hedemannstraße. Please note that, so far, we have returned €4 million in Q3 from a second closing linked to Hansastraße, and plan to repay funds from the second closing of Holsten in due course.
Speaker #2: Turning to the 2026 maturities. During the second quarter, we also successfully completed the prolongation of a €6 million secured bank loan, extending the maturity from 2026 to Q4 2028.
Speaker #2: This is another good example of constructive discussions with our lending banks, especially where assets in Berlin provide strong collateral. For the remaining €12 million of 2026 bank maturities, discussions are ongoing.
Thorsten Arsan: This is another good example of constructive discussions with our lending banks, especially where assets in Berlin provide strong collateral. For the remaining EUR 12 million of 2026 bank maturities, discussions are ongoing. These are standard bilateral talks with the respective lenders, and based on the tone so far, we expect to reach prolongation agreements well ahead of maturity. Overall, the picture remains unchanged. With the continuous inflow of disposal proceeds and the supportive dialogue with banks, the 2026 maturity profile is now fully addressed, and we remain focused on reducing the first lien facility with further disposal proceeds. Let's now move on to page 13 and take a look at our current debt KPIs. Following the further past redemptions of the first lien new money facility in Q2, our total nominal interest-bearing debt decreased to EUR 3.5 billion, down from EUR 3.6 billion in March.
Thorsten Arsan: This is another good example of constructive discussions with our lending banks, especially where assets in Berlin provide strong collateral. For the remaining EUR 12 million of 2026 bank maturities, discussions are ongoing. These are standard bilateral talks with the respective lenders, and based on the tone so far, we expect to reach prolongation agreements well ahead of maturity. Overall, the picture remains unchanged. With the continuous inflow of disposal proceeds and the supportive dialogue with banks, the 2026 maturity profile is now fully addressed, and we remain focused on reducing the first lien facility with further disposal proceeds. Let's now move on to page 13 and take a look at our current debt KPIs. Following the further past redemptions of the first lien new money facility in Q2, our total nominal interest-bearing debt decreased to EUR 3.5 billion, down from EUR 3.6 billion in March.
Speaker #2: These are standard bilateral talks with the respective lenders, and based on the tone so far, we expect to reach prolongation agreements well ahead of maturity.
Speaker #2: Overall, the picture remains unchanged. With the continuous inflow of disposal proceeds and the support of dialogue with banks, the 2026 maturity profile is now fully addressed, and we remain focused on reducing the facility further with additional disposal proceeds.
Speaker #2: Let's now move on to page 13 and take a look at our current debt KPIs. Following the further partial redemptions of the first-lien new money facility in Q2, our total nominal interest-bearing debt decreased to €3.5 billion, down from €3.6 billion in March.
Speaker #2: Our LTV increased slightly to 17.92%, as we had expected. The weighted average cost of debt remains unchanged at 7.1% at the end of June, and our average debt maturity is around 2.9 years, with the rest of our financing maturing only in 2028 or later.
Thorsten Arsan: Our LTV increased slightly to 79.2% as we had expected. The weighted average cost of debt remains unchanged at 7.1% at the end of June, and our average debt maturity is around 2.9 years, with the vast majority of our financing maturing only in 2028 or later. All our ratings, including the issuer rating of B minus with a stable outlook, remain unchanged. As in the past, our utmost priority is to assess further improvements of our capital structure. Let's turn to debt maturity schedule on page 15. The debt maturity picture looks largely unchanged compared to three months ago, but reflects the repayments of the first lien new money facility in Q2, the repayment of EUR 50 million of secured debt originally due in 2028, and refinancing of EUR 6 million of the remaining 2026 maturities.
Thorsten Arsan: Our LTV increased slightly to 79.2% as we had expected. The weighted average cost of debt remains unchanged at 7.1% at the end of June, and our average debt maturity is around 2.9 years, with the vast majority of our financing maturing only in 2028 or later. All our ratings, including the issuer rating of B minus with a stable outlook, remain unchanged. As in the past, our utmost priority is to assess further improvements of our capital structure. Let's turn to debt maturity schedule on page 15. The debt maturity picture looks largely unchanged compared to three months ago, but reflects the repayments of the first lien new money facility in Q2, the repayment of EUR 50 million of secured debt originally due in 2028, and refinancing of EUR 6 million of the remaining 2026 maturities.
Speaker #2: All our ratings, including the issuer rating of B- with a stable outlook, remain unchanged. As in the past, our utmost priority is to assess further improvements of our capital structure.
Speaker #2: Let's turn to the debt maturity schedule on page 15. The debt maturity picture looks largely unchanged compared to three months ago, but reflects the repayment of the new money facility in Q2, the repayment of €15 million of secured debt originally due in 2028, and the refinancing of €6 million of the remaining 2026 maturities.
Speaker #2: Looking ahead, our next significant maturity is in 2027, where we have a total of €88 million due. As you can see on this slide, 97% of our financial debt matures only in 2028 or beyond.
Thorsten Arsan: Looking ahead, our next significant maturity is in 2027, where we have a total of EUR 88 million due. As you can see on this slide, 97% of our financial debt matures only in 2028 or beyond. Let's turn to LTV on the next page 16. The LTV increased this quarter by 210 basis points, mainly due to the usual impact from interest expenses, both paid and accrued. This increase has been partially offset by the revaluation of yielding disposals. As always, as a reminder, kindly notice that our bond covenant LTV, with a threshold of 90%, is calculated differently, leading to a lower figure than stated here. Let's continue with cash on the next page 17. At the end of the Q2, our cash position stood at EUR 155 million, in line with our expectations.
Thorsten Arsan: Looking ahead, our next significant maturity is in 2027, where we have a total of EUR 88 million due. As you can see on this slide, 97% of our financial debt matures only in 2028 or beyond. Let's turn to LTV on the next page 16. The LTV increased this quarter by 210 basis points, mainly due to the usual impact from interest expenses, both paid and accrued. This increase has been partially offset by the revaluation of yielding disposals. As always, as a reminder, kindly notice that our bond covenant LTV, with a threshold of 90%, is calculated differently, leading to a lower figure than stated here. Let's continue with cash on the next page 17. At the end of the Q2, our cash position stood at EUR 155 million, in line with our expectations.
Speaker #2: Let's turn to LTV on the next page, page 16. The LTV increased this quarter by 210 basis points, mainly due to the usual impacts from interest expenses, both paid and incurred.
Speaker #2: These increases have been partially offset by the revaluation of yieldings and yielding disposals. As always, as a reminder, kindly notice that our bond covenant LTV, with a threshold of 90%, is calculated differently, leading to a lower figure than stated here.
Speaker #2: Let's continue with cash on the next page, page 17. At the end of the second quarter, our cash position stood at €155 million, in line with our expectations.
Speaker #2: As you might know, we usually invest our cash holdings in money market funds and call money in order to generate interest income. You see the development of the cash position in the usual format on this slide.
Thorsten Arsan: As you might know, we invest our cash holdings usually in money market funds and call money in order to generate interest income. You see the development of the cash position in the usual format on this slide. On the cash inflow side, we realized proceeds from yielding disposals as discussed earlier. Yielding assets disposals includes proceeds from the condominium sales and Hedemannstraße as well as Hansastraße. The proceeds were largely returned to the investors of the first lien new money facility, along with the proceeds from Holsten Quartier and
Thorsten Arsan: As you might know, we invest our cash holdings usually in money market funds and call money in order to generate interest income. You see the development of the cash position in the usual format on this slide. On the cash inflow side, we realized proceeds from yielding disposals as discussed earlier. Yielding assets disposals includes proceeds from the condominium sales and Hedemannstraße as well as Hansastraße. The proceeds were largely returned to the investors of the first lien new money facility, along with the proceeds from Holsten Quartier and and Kornversuchsspeicher received in March. The decrease in our cash position is mainly driven by the fact that we have received disposal proceeds in March, but have only made the corresponding repayments in April. With that, back to you, Karl.
Speaker #2: On the cash inflow side, we realized proceeds from yielding disposals as discussed earlier. Yielding assets disposals include proceeds from the condominium sales and Hedemannstraße, as well as Hansastraße.
Speaker #2: The proceeds were largely returned to the investors of the firstly loans, along with the proceeds from Holsten and Kronversuchsspeicher received in March. The decrease in our cash position is mainly driven by the fact that we received disposal proceeds in March but only made the corresponding repayments in April.
Karl Reinitzhuber: We continue and progress the evaluation of options for our Berlin residential portfolio and the related financing structures together with our advisor, Evercore. As the German federal government has announced on July 2nd that they will prevent expropriation on state level by federal law, more interest from investors and financing institutions in Berlin residential assets can be expected.
Karl Reinitzhuber: Let me now conclude this presentation with some final remarks. We confirm our guidance of a net rental income between EUR 124 million to EUR 129 million for the full year 2026. The outlook for the full year 2026 like-for-like rental growth is above 3.5%, partly driven by the new Berlin Mietspiegel released in June. As pointed out earlier, we still see concerns with German residential developers about interest rates and crisis in the Middle East. The rental growth in all residential segments continues to be solid. The recent disposals have translated into debt repayments of EUR 201 million since the beginning of the year. Even though we cannot report further signings of development sales to date, we are confident for the time to come as we are pursuing a number of sales processes in advanced stages.
Speaker #2: And with that, back to you, Carl.
Speaker #1: Let me now conclude this presentation with some final remarks. We confirm our guidance of net rental income between €124 million and €129 million for the full year 2026.
Speaker #1: The outlook for the full year 2026, like-for-like rental growth, is above 3.5%, partly driven by the new Berlin Mietspiegel released in June.
Speaker #1: As pointed out earlier, we still see concerns with German residential developers about interest rates and the crisis in the Middle East. The rental growth in all residential segments continues to be solid.
Speaker #1: The recent disposals have translated into debt repayments of €201 million since the beginning of the year. Even though we cannot report further signings of development sales today, we are confident for the time to come, as we are pursuing a number of sales processes in advanced stages.
Speaker #1: We continue and progress the evaluation of options for our Berlin residential portfolio and the related financing structures together with our advisor, Evercore. As the German federal government has announced on July 2nd that they will prevent expropriation on the state level by federal law, more interest from investors and financing institutions in Berlin residential assets can be expected.
Karl Reinitzhuber: More interest from investors and financing institutions in Berlin residential assets can be expected. This might open more opportunities for our portfolio and its financing. Nevertheless, the federal government will still have to deliver the envisaged federal law. Also, the outcome of the Berlin elections on 20 September will be closely observed by all stakeholders in Berlin real estate. Therefore, the coming months will be very relevant for the shaping of the political and legal environment for the Adler business. We do not face any maturities of capital market indebtedness before the end of 2028. As just said, 97% of our financial debt matures only in 2028 or beyond. It goes without saying that we remain focused on our comprehensive cost-cutting programs and budget discipline to ultimately preserve our liquidity position. With that, I would like to thank you for dialing in.
Speaker #1: This might open more opportunities for our portfolio and its financing. Nevertheless, the federal government will still have to deliver the envisaged federal law. Also, the outcome of the Berlin elections on September 20 will be closely observed by all stakeholders in Berlin real estate.
Karl Reinitzhuber: This might open more opportunities for our portfolio and its financing. Nevertheless, the federal government will still have to deliver the envisaged federal law. Also, the outcome of the Berlin elections on 20 September will be closely observed by all stakeholders in Berlin real estate. Therefore, the coming months will be very relevant for the shaping of the political and legal environment for the Adler business. We do not face any maturities of capital market indebtedness before the end of 2028. As just said, 97% of our financial debt matures only in 2028 or beyond. It goes without saying that we remain focused on our comprehensive cost-cutting programs and budget discipline to ultimately preserve our liquidity position. With that, I would like to thank you for dialing in.
Speaker #1: Therefore, the coming month will be very relevant for the shaping of the political and legal environment for the Adler business. We do not face any maturities of capital market indebtedness before the end of 2028, as just said, 97% of our financial debt matures only in '28 or beyond.
Speaker #1: It goes without saying that we remain focused on our comprehensive cost-cutting programs and budget discipline to ultimately preserve our liquidity position. And with that, I would like to thank you for dialing in.
Speaker #1: We are now looking forward to your questions. Back to you for the Q&A. Thank you, Carl.
Karl Reinitzhuber: We are now looking forward to your questions. Sven, back to you for the Q&A.
Karl Reinitzhuber: We are now looking forward to your questions. Sven, back to you for the Q&A.
Sven Döbelin: Thank you, Karl, and I hand it over to our operator, Moritz, to open up for the Q&A.
Sven Döbeling: Thank you, Karl, and I hand it over to our operator, Moritz, to open up for the Q&A.
Speaker #3: And I'll hand it over to our operator, Moritz, to open up for the Q&A.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Noor Sehwal from Morgan Stanley. Please go ahead.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Noor Sehur from Morgan Stanley. Please go ahead.
Speaker #4: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone.
Speaker #4: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.
Speaker #4: Questioners on the phone are requested to disable loudspeaker mode and, if possible, turn off the webcast volume while asking a question. Anyone who has a question may press star and one at this time.
Speaker #4: One moment for the first question, please. And the first question comes from Nur Sehur from Morgan Stanley. Please go ahead.
Noor Sehwal: Hi. Could you give some color on what is going on currently in the disposal market? If you could give us some guidance on the amount of disposals you guys are targeting and the timeline for those, and how much of the repayment under the first lien should we expect by year-end would be helpful, because I think post what you reported Q1, there has been minimum repayment. Just some color on disposal market, what is happening, and the timelines you guys are targeting would be helpful.
Noor Sehur: Hi. Could you give some color on what is going on currently in the disposal market? If you could give us some guidance on the amount of disposals you guys are targeting and the timeline for those, and how much of the repayment under the first lien should we expect by year-end would be helpful, because I think post what you reported Q1, there has been minimum repayment. Just some color on disposal market, what is happening, and the timelines you guys are targeting would be helpful.
Speaker #5: Hi, could you give some color on what's going on currently in the disposal market, and if you could give us some guidance on the amount of disposals you guys are targeting and the timeline for those? And, how much of the repayment under the first lien should we expect by year-end?
Speaker #5: Would be helpful because I think, post what you reported Q1, there's been minimum repayment. So just some color on, like, the disposal market—what's happening and the timelines you guys are targeting would be helpful.
Karl Reinitzhuber: Well, thanks, Noor. As I pointed out earlier, the market environment for German residential developers is currently challenging on the back of the rises of interest rates with the ongoing difficulties around Iran and the uncertainties around inflation. Nevertheless, as I pointed out earlier, we are running good processes and are in advanced discussions with residential developers about the sale of a number of our developments. We expect that one or the other of our developments will still come to signing of the sale before year-end. We will report about that when it really happens. As I said, we are fairly positive that we can report progress on development sales in the coming months.
Karl Reinitzhuber: Well, thanks, Noor. As I pointed out earlier, the market environment for German residential developers is currently challenging on the back of the rises of interest rates with the ongoing difficulties around Iran and the uncertainties around inflation. Nevertheless, as I pointed out earlier, we are running good processes and are in advanced discussions with residential developers about the sale of a number of our developments. We expect that one or the other of our developments will still come to signing of the sale before year-end. We will report about that when it really happens. As I said, we are fairly positive that we can report progress on development sales in the coming months.
Speaker #1: Well, thanks, Nur. As I pointed out earlier, the—let's say—market environment for German residential developers is currently challenging on the back of the rise in interest rates, with the ongoing difficulties around Iran and the uncertainties around inflation.
Speaker #1: Nevertheless, as I pointed out earlier, we are running good processes and are in advanced discussions with residential developers about the sale of a number of our developments. We expect that, let's say, one or the other of our developments will still come to signing of the sale before year-end.
Speaker #1: But we will report about that when it really happens. But as I said, we are, let’s say, fairly positive that we can report progress on development sales in the coming months.
Speaker #5: Could you give us some color on the magnitude of the sale you’re expecting by year end? Just so I have an idea of how the first lien repayments might look in terms of timing.
Noor Sehwal: Could you give us some color on the magnitude of the sale you are expecting by year-end, just so I have an idea of how the first lien repayments may look like in terms of timings?
Noor Sehur: Could you give us some color on the magnitude of the sale you are expecting by year-end, just so I have an idea of how the first lien repayments may look like in terms of timings?
Speaker #1: Sorry, the question was about the volume we expect for this year. Well, as I said, we will report that once it happens. Yeah, and I would, let's say, not give a premature outlook at this point in time.
Karl Reinitzhuber: Sorry. The question was about the volume we expect for this year. Well, as I said, we will report that once it happens. And I would not give a premature outlook at this point in time.
Karl Reinitzhuber: Sorry. The question was about the volume we expect for this year. Well, as I said, we will report that once it happens. And I would not give a premature outlook at this point in time.
Speaker #5: Okay, and just one last follow-up on this. So, at least for this year, is the plan still to just target the development portfolio sales, which size-wise seems to be small, or is the plan that you're going to look to sell the rental book as well?
Noor Sehwal: Okay. Just last follow-up on this. At least for this year, is the plan to still just target the development portfolio sales, which size-wise seems to be small, or is the plan that you are going to look to sell the rental book as well so material repayments could be done on the debt?
Noor Sehur: Okay. Just last follow-up on this. At least for this year, is the plan to still just target the development portfolio sales, which size-wise seems to be small, or is the plan that you are going to look to sell the rental book as well so material repayments could be done on the debt?
Speaker #5: So, material repayments could be done on the debt.
Speaker #1: Yes. Well, as we have pointed out already in previous meetings, we are working on and considering the options also for the Berlin portfolio, with our advisor Evercore. But also there, we would report something—let's say—when there are real tangible results and decisions. Let's say we are progressing this, but there is nothing to report at this point in time.
Karl Reinitzhuber: Well, as we have pointed out already in previous meetings, we are working and considering the options also for the Berlin portfolio with our advisor, Revacor.
Karl Reinitzhuber: Well, as we have pointed out already in previous meetings, we are working and considering the options also for the Berlin portfolio with our advisor, Revacor.
Karl Reinitzhuber: But also there, we would report something when there are real tangible results and decisions. We are progressing this, but there is nothing to report at this point in time.
Karl Reinitzhuber: But also there, we would report something when there are real tangible results and decisions. We are progressing this, but there is nothing to report at this point in time.
Speaker #5: Okay, thank you. Understood. I'll get back in the queue.
Noor Sehwal: Okay. Thank you. Understood. I will get back in the queue.
Noor Sehur: Okay. Thank you. Understood. I will get back in the queue.
Operator: As a reminder, if you would like to ask a question, you may press star and one at this time. It looks like there are no further questions at this time. I would like to turn the conference back over to Dr. Karl Reinitzhuber for any closing remarks.
Operator: As a reminder, if you would like to ask a question, you may press star and one at this time. It looks like there are no further questions at this time. I would like to turn the conference back over to Dr. Karl Reinitzhuber for any closing remarks.
Speaker #4: As a reminder, if you would like to ask a question, you may press star and one at this time. Oh, it looks like there are no further questions at this time.
Speaker #4: So, I would like to turn the conference back over to Dr. Carl Reinezuber for any closing remarks.
Karl Reinitzhuber: Thanks, everyone, for joining today. We will publish our Q3 2026 figures on 26 November, and the respective results presentation will take place on the same day. Thorsten and I look forward to speaking to you then. All the best for everyone. We close the call.
Karl Reinitzhuber: Thanks, everyone, for joining today. We will publish our Q3 2026 figures on 26 November, and the respective results presentation will take place on the same day. Thorsten and I look forward to speaking to you then. All the best for everyone. We close the call.
Speaker #1: Thanks, everyone, for joining today. We will publish our Q3 2026 figures on November 26, and the respective results presentation will take place on the same day.
Speaker #1: Torsten and I look forward to speaking to you then. All the best to everyone. We close the call.
Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Speaker #4: Ladies and gentlemen, the conference is now over. Thank you for choosing our call, and thank you for participating in the conference. You may now disconnect your lines.
