Hamborner Reit Ag

Welcome to the Hamborner Reit Q1 2026 Financial Results Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad or clicking the raise your hand icon in the lower right corner in the video player. Now I will hand the conference over to the speakers. Please go ahead.

Good morning, ladies and gentlemen. This is Niklas Karpf for Amborner Reit. Thank you for joining our conference call regarding our figures for the first quarter of 2026. I'm pleased to be here today together with members of our team, including my colleague Christoph from IR. As usual, I will begin with a brief presentation, after which we will open the floor for a Q&A. Everything will run smoothly from a technical standpoint and look forward to engaging with you. Let's start with an overview of the key figures as of 31st of March, 2026. Influenced by our disposals over the past 12 months, the income from rents and leases declined moderately by 1.9%. to 22.6 million Euro in the first quarter. FFO decreased by 1.6% year-on-year and amounted to 11.7 million Euro or 14 cents per share. During the first quarter, financial and portfolio figures overall showed a positive development EPRA, NAD and LTV were positively influenced by the stable revenue and also the earnings development as well as a value adjustment within the property portfolio resulting in a value of €9.27 per share and 43.1% respectively. Operating performance remained resilient, with a vacancy rate and total portfolio vault at solid levels of 3.5% and 5.2 years. As always, we are going to provide more details on the next slides. First of all, a closer look at earnings performance. Yeah, from the management of our properties, income from rent and leases amounted to 22.6 million euros. As noted before, the 1.9% year-on-year decline came primarily due to property disposals completed in the first half of 2025, as well as in the first quarter of this year. In the first quarter, income from ancillary cost allocations increased by 16%, driven by higher prepayments, including effects from the restructuring of our facility management. In contrast, operating expenses rose at a comparatively moderate rate of just 2.1%, which is primarily attributable to the disposal of properties with higher non-recoverable operating costs. Maintenance expenses decreased slightly on the first quarter and amounted to roughly 1.4 million. The costs related to ongoing minor maintenance and various smaller plant measures. As in previous years, major maintenance projects Personal and admin expenses increased by around 5 and 12% respectively. On the one hand, this is due to the expansion of personal capacities and the filling of vacant positions. On the other hand, the rise in admin costs mainly related to our upcoming annual general meeting, where costs, in contrast to the past, have partly been recognized already in the first quarter of the year. Other operating expenses were lower compared to the previous year, influenced by reduced external consultancy costs. Interest expenses slightly decreased in the first three months of 2026, mainly due to the refinancing at higher interest rates in the second half of 2025. Yeah, they increased in the first three months of 2000, first month. On the other hand, the lower interest rates for cash deposits led to lower interest income. Total FFO for the first quarter amounted to 11.7 million or 14 cents, down only 1.6% compared to the previous year period. Next slide, we'll briefly review the development of our portfolio key figures. Following the transfer of the recently sold DIY property in Dissing in the first quarter of this year, our portfolio currently consists of 63 assets. Apart from this disposal, the portfolio development was influenced by a value enhancement of our office asset in Cologne, resulting in a total portfolio value of approximately 1.34 billion as at the end of March. ACRA vacancy rate remained unchanged compared to year end 2025 at a low level of 3.5%. Total portfolio walls, as pointed out before, also remained largely stable at 5.2 years with terms of 6.3 years for the retail and 3.8 years for the office. Concerning rent development, on a year-on-year basis, our like-for-like annualized rental income again increased by 0.8%, primarily driven by indexation effects, especially in the office portfolio. The positive impact of indexation was partly offset by a higher vacancy level and slightly lower rent levels for follow-up leases. which are partly the result of numerous indexation-driven rent adjustments over the past two and a half years. On an annualized basis, the disposals of our properties in Osnabrück and Rübeck last year, as well as the retail asset in Ditzing this year, resulted in a reduction in rental income of 4.1 million euros or 4.5, 4.5 percent. As at the end of March, our annualized rents amounted to €87.8 million. Concerning tenant structure, compared to the end of 2025, only minor changes happened within our tenant structure, primarily driven by index-linked rent adjustments and property disparities. Reit Ag Reit Ag which is shown now on this slide here. Since the beginning of the year, we achieved several letting successes with a total contract volume of nearly 10,000 square meters. As in recent years, the majority of this was attributable to contract extensions and the exercise of options by existing tenants. Once again, reflected in a high retention rate of around 89%. At this stage, Humborner does not expect any major cluster risks in connection with upcoming re-lettings. In the coming years, this is clearly illustrated in the lease expiry schedule shown at the bottom of the slide. On the financing side, our company remains in a very solid position with 43.1%. Our LTV remains at a comfortable level and furthermore within our current target range. Total debt remains largely stable, slightly below 640 million euros. The average interest costs slightly increased to 2.2%. following our refinancing activities over the last three quarters. As we are currently tending to opt for shorter loan terms between three and seven years, the average term has been slightly reduced to three years. Further, debt metrics also remained largely stable with net debt EBITDA ratio at a level below 10. and an interest coverage ratio of 4.5. Regardless of the still challenging financing environment, the high quality of our portfolio and our extensive and reliable network of banks give us confidence in our ability to successfully complete the financing tasks ahead. And finally, I would like to give a brief outlook. The company's NGO general meeting will take place in early June. We propose to distribute 65% of our operating income generated in 2025, which corresponds to a dividend of 39 cents per share. To date, our operational performance has been in line with plans. We are optimistic about the remainder of the year and confirm our current full year guidance. Our rental income for the full year 2026 is expected to be between 87.5 and 89.5 million euro. And our assumption for the FFO range between 38 and 42 million. The operating result will be influenced in particular by the cost development in the areas of maintenance, personal expenses, and interest. And with regard to these cost categories, we will continue to act with high discipline and try to achieve a balance between current financial burdens and securing future growth and cash flow prospects. Regardless of the recently announced strategic adjustments, which include a growth focus on retail properties, a widened acquisition profile, as well as a reduction concerning our office exposure, our guidance currently does not take into account any further transactions. We have recently started sales activities for the first office properties and are simultaneously examining further acquisition opportunities. However, based on the current outlook, we expect potential transactions to have only a minor impact on this year's revenue and earnings development. We'll keep you informed on our progress and, if necessary, update our guidance during the course of the year. And with that, ladies and gentlemen, I would like to conclude the short presentation and open the floor for your questions. Thanks so much for now for your attention.

If you wish to ask a question, please dial the pound key followed by 5 on your telephone keypad or click the raise your hand icon in the lower right corner of the video player to enter the queue. To withdraw your question, Reit Ag The next question comes from Thomas Whistler from MWB Research Ag. Please unmute your microphone.

Yes, hello. Thanks for taking my question. I just wanted to follow up on your recent statement regarding the property disposals. Can you maybe add some colors on how long this process will take? Is it an exercise which might take a couple of years or what do we have to expect in terms of time frame of exiting the office segment?

Yes, Thomas, good morning. Thanks for your question. Regarding the disposal plan for the office properties, we anticipate a midterm perspective here, and if I say midterm, we are talking about, let's say, four or five years. It might be run up to six years, but That's how we define the term here for us. So we don't see ourselves to be in a hurry. We want to do it in a disciplined way and obviously it's also strongly connected with what we see on the acquisition side on considering the further development of the retail market. So these two things always have to be connected.

Great, thank you very much. If I may, just one more follow-up question. If I see your FSO, the run rate in Q1, if I just do the math and simply multiply this by 4, I would get to a number which is exceeding the upper end of the guidance range. Is it fair to assume that in the second half there will be more burden coming from refinancing or where do you think you will remain with your guidance in the FOH?

Thomas, I think there are a couple of things which have an influence here or which will have an influence anticipated from our side. One, obviously, are the effects from financing costs, which you see more or higher financing costs, which you see to a larger extent in the second half. Um, then, uh, secondly, um, uh, I mean, if you look at the maintenance history on our side, um, it's quite usual that typically during the second half, um, maintenance, um, the part on maintenance is going up concerning the, the overall maintenance throughout the year. It's especially focused during the last five, six months. Um, and on top of it, we also, um, as of today, higher expenses compared to the first half of the year for IT-related costs. Yeah.

Perfect. Thanks, Nicholas.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Philip Kaiser from Warburg Research GmbH. Please go ahead.

Yeah, hello everyone. Thanks for taking my question. Following up on the maintenance expenses below last year Q1, you mentioned also during the presentation that the majority of those Reit Ag Reit Ag Reit

There are various measures, I think, from two days to six. Obviously, we are talking about several individual measures here, but as of today, I think it's fair to assume that several measures have been locked in already. I mean, for us, please take into account that the overall expense we are planning here are also influenced by tenant improvements, and tenant improvements are apart from other regular maintenance is sometimes really very difficult to predict. for instance with upcoming with tenants for upcoming leases then there's quite some movement still in there who's responsible for the final investments is it the tenant or the landlord for instance and this can move the needle quite substantially just as an example yeah

Perfect. Thanks a lot. Next one is on your maturity profile, especially on the upcoming years, 2027, 2028. Any concrete plans already to tackle this maturity schedule?

What we did in the past two years was seeing that there are stronger refinancing needs to move everything or to start the discussions with our banking partners on the financing side earlier than we did in the past. And that's what we're continuing as well for the next franchise for 2027-28. I think we provide a lot of visibility to our financing partners concerning our refinancing. So we start pretty early in the discussions and also the experience from last year has shown that Sometimes for rather minor reasons like simply existing resources then for final details it takes a bit longer than expected and that's another reason for us to start quite early on those. But this has no fundamental influence or had no fundamental influence finally on the positive outcome. So we are very optimistic as of today.

Okay. Thanks for the clarification. And what's your kind of indicative all-in rate for you? And currently being quoted on five to seven years secure bank debt compared to the 2.1, 2.8. Any major changes expected waiting on FFO?

You mean the total cost now that we have currently based on today's financing level that we have on financing costs for refinancing?

Yeah, exactly.

Yeah. so let's say it's around let's say around 4 a bit higher than 4% if you look at the current swap rate on a 5 year term for instance obviously it depends on for which term we fix the rate and and what kind of assets we are talking about, etc. So all the influencing variables here. But that's around the number, let's say, the high 3 and beginning 4%, let's say, roughly between 4%, maybe 4.2%, something like 4.3%. And concerning the FFO, we would expect compared to 2025 financing costs approximately 10% increase.

Okay. Thanks a lot. Very helpful. Then on your valuation, you uplift the Cologne office building. Could you shed some more light on the driver behind this? Reit Ag Reit Ag Reit Ag Reit Ag

conclusion here from the valuation side. And it was, yeah, that's the reason behind it.

Okay, thanks. That's very helpful. And the last one, out of curiosity, I think there was this Reit Act in February allowing Reit to operate more in renewables and charging infrastructure. Any tankable plants? for for homeowner here any for thought I'm meaningful changes expected I'm

I mean, we are still internally analyzing really the effects from it. And the reason for this is, I mean, first of all, I'm very grateful and happy that there's more flexibility now. I think it should help us in certain areas. Personally, I don't expect a major wave of opportunities coming from it, but in certain areas it should help us. We have analyzed the potential internally here that we can take from this, and it will help us, I think, on the energy side concerning how we handle, for instance, Reit Ag Reit Ag Reit Ag Reit Ag There are no more questions at this time so I hand the conference back to the speakers for any closing comments. Yeah, then thanks so much again from our side and hope to talk to you soon and have a good remainder of the week. Thank you.