Nov. 12 (Bloomberg) -- Deutsche Wohnen AG, Germany’s second-largest residential landlord by market value, said nine-month profit rose 65 percent after the company earned more rent from newly acquired properties.
Funds from operations excluding divestments, a measure of a property company’s ability to generate cash, climbed to 86.3 million euros ($116 million) from 52.4 million euros a year earlier, Deutsche Wohnen said in a statement today. The Berlin-based company repeated an FFO forecast of 110 million euros for this year.
Deutsche Wohnen owns about 90,000 apartments in German cities including Berlin and Frankfurt, after almost doubling its holdings in the past two years. The company is on track to complete the acquisition of competitor GSW Immobilien AG this year, raising its portfolio to 150,000 apartments and making it Germany’s second-largest apartment owner after Deutsche Annington Immobilien SE.
“We are on the home straight and assume that we will be able to close the transaction at the beginning of December -- much earlier than we expected,” Chief Executive Officer Michael Zahn said in the statement.
Deutsche Wohnen doesn’t plan any other major acquisitions in the next two years while it focuses on integrating GSW, Zahn said on a call with reporters today. Adding GSW will generate annual cost savings of about 25 million euros starting in about two years.
The company has been buying apartments to take advantage of rising German rents and its ability to raise capital on the stock market at favorable terms.
Deutsche Wohnen didn’t report FFO for the third quarter. Net income for the three months through September increased to 16.3 million euros, or 10 cents a share, from 13.8 million euros, or 7 cents, a year earlier. Profit from Deutsche Wohnen’s main business of renting apartments climbed to about 69 million euros from 48.8 million euros.
The company plans to pay a 2013 dividend of 50 percent of FFO, and a 2014 dividend of about 60 percent of FFO, according to the statement.
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