The Real Estate Group LEG Immobilien Significantly Benefited from the Ongoing High Demand for Living Space in German Metropolitan Areas in the First Quarter. Despite industry-wide burdens caused by rising interest rates, the company was able to increase its rental income above average and rose by about 2.4 percent in early trading, making it one of the biggest winners in the MDAX.

The Düsseldorf-based company reported a 3.8 percent increase in net cold rent to around 214 million euros for the quarter ending March. The rental income on a comparable area grew by 3.5 percent to 6.67 euros per square meter. For the entire fiscal year, LEG expects a rent increase of 3.2 to 3.4 percent.

Despite the good current business, the annual forecasts were burdened by the increased interest rates and the lower result from financial transactions, which led to a nearly 40 percent drop in net profit to 57.8 million euros. In the first quarter, LEG also continued its sales program, selling about 2,200 units for around 210 million euros and plans to reduce its debt through further property sales.

Company Chief Lars von Lackum Expressed Optimism About the Development: "In addition to a first noticeable revival in transaction markets, the bottoming out of valuations for real estate adds to the optimism." A slight depreciation of the real estate portfolio of only 1 to 3 percent is expected for the first half of the year.

The Essential Metric for the Company, the AFFO (Cash Flow from Operating Activities Adjusted for Capitalized Investments), Declined by 11.5 Percent to 48.6 Million Euros, Which Was Attributed to Disproportionately Low Capital Expenditures Compared to the Previous Year. LEG Plans Lower Investments This Year of Around 32 Euros per Square Meter, After Investing About 35 Euros Last Year.

Despite Challenges, Management Reaffirms Its Forecast for the Current Year, Targeting an AFFO of 180 to 200 Million Euros. On Wednesday, LEG Shares Temporarily Rose by 2.88 Percent to 83.54 Euros in XETRA Trading.