Berlin Landlord GSW Has Funds to Buy as Many as 3,000 Apartments

GSW Immobilien AG (GIB), Berlin’s biggest publicly traded residential landlord, has enough funding to buy as many as 3,000 apartments as it plans to increase earnings by adding assets.

“We have firepower of 160 million euros, which is enough to buy 2,000 to 3,000 apartments before we even have to think about a capital increase,” Chief Financial Officer Andreas Segal said by phone today. “Acquisitions are worth it -- they raise our profitability.”

GSW bought 2,800 apartments in the first half after adding 7,000 last year. It now owns about 60,000 homes, mostly in the German capital, where the population is growing and rents are rising.

The number of Berlin households grew 13 percent to almost 2 million in the 10 years through 2011, according to the latest census. Berlin rents rose about 8 percent in 2012 and have gone up 26 percent in the past five years, according to online broker ImmobilienScout 24.

Segal said the 160 million euros ($213 million) that GSW has available includes an 80 million-euro credit line from Berlin-Hannoversche Hypothekenbank AG as well as access to mortgage loans.

In its earnings report today, the landlord said funds from operations excluding sales, a measure of a property company’s ability to raise cash, rose 30.4 percent in the first half to 42.5 million euros from 32.6 million euros a year earlier.

The gains were a result of more apartments and higher rents, according to the statement. The company said that its FFO will be between 73 and 78 million euros in 2013, repeating an earlier forecast. Net-rental income rose 16 percent to 91.8 million euros.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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