GSW Immobilien Says FFO Rose After Berlin Home Rents Climbed

GSW Immobilien AG, Germany’s fourth-largest residential landlord by market value, said funds from operations rose 13.4 percent after the company added apartments and rents in Berlin climbed.

FFO excluding sales, a measure of a property company’s ability to generate cash, increased to 64.2 million euros ($83 million) or 1.35 euros a share, from 56.6 million euros or 1.44 euros a year earlier, the Berlin-based company said in a statement today. The company had forecast FFO of 61 million euros to 64 million euros. An average of 5 analysts surveyed by Bloomberg forecast FFO of 1.28 euros a share.

GSW owns 60,000 apartments, mainly in Berlin, and is benefiting from rising rents as the population in the German capital grows. The company added 7,000 apartments this year.

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

GSW shares were little changed at 30.9 euros at 9:25 a.m. in Frankfurt trading. They have gained 27 percent in the past 12 months while the FTSE EPRA/NAREIT Index of German property stocks has climbed about 21 percent.

Rising Rents

The company said it will pay an unchanged dividend of 90 cents a share, and predicted FFO of 73 million euros to 78 million euros this year.

GSW’s net income rose 36 percent to 143.3 million euros from 105.1 million euros a year ago, as the company earned higher net rental income and tripled its profit from selling homes. The company raised its like-for-like rents 2.7 percent to 5.22 euros a square meter from 5.08 euros, while reducing vacancies to to 2.7 percent from 3.4 percent.

Chief Executive Officer Thomas Zinnoecker will leave his position on April 15, to be replaced by Bernd Kottman who previously served as chief operating officer and chief financial officer at IVG Immobilien AG, GSW said.

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