- Earnings before interest, tax, depreciation and amortization (EBITDA) is at 180.6 million EUR
- Rental income increased from 67.4 to 86.1 million EUR, Sales revenues at 331.9 million EUR
- Acquisition volumes of 143.8 million EUR
- Investment volumes for portfolio properties at 275.5 million EUR – additional 485.2 million EUR invested for new construction projects
Aurelis Real Estate GmbH & Co. KG (“Aurelis”) increased its result for the third year in a row. The real estate company generated earnings before interest, tax, depreciation and amortization (EBITDA) of 180.6 million EUR, thereby increasing it by 33 percent over the previous year (2015: 135.8 million EUR). As in previous years, this EBITDA is characterized by rental operations and profit generated from real estate sales. The company achieved record results once again this year.
Rental and sales earnings increase
Over the past few years, Aurelis continued to expand its rental portfolio by purchasing commercial properties and investing in its existing portfolio. Accordingly, the company’s rental earnings increased by 28 percent, from 67.4 million EUR to 86.1 million EUR. New and continued rental agreements over the past year totaled annual rental income of 19.3 million EUR.
Earnings from sales grew in 2016 from 307.0 million EUR to 331.9 million EUR. Aurelis benefited from a favorable market environment and from the sale of two newly constructed major projects: By selling a residential building project in Frankfurt’s Europaviertel and the University of Applied Sciences for Public Administration in North Rhine Westphalia in Cologne, Aurelis was able to generate the value of its own project developments on the market.
Expanding the position as portfolio holder and developer
Since 2014, Aurelis has been making targeted investments in its portfolio by purchasing additional commercial properties. In 2016, the company acquired properties with a volume totaling 143.8 million EUR, completing the purchases with notarial certification. These purchases focused on business parks, warehouses and logistics properties in urban areas. For example, Aurelis purchased a logistics property in Dasing with a plot of roughly 47,000 square meters in size and another commercial property in Böblingen. Further major acquisitions included logistics properties in Potsdam and in Bremen’s cargo transport center.
“We want to further expand our position as a portfolio holder and developer of mixed-use commercial properties across Germany,” explains Joachim Wieland, CEO of Aurelis. He indicates the company has sufficient funds from equity and external capital to be able to quickly purchase even major projects or portfolios. “We analyze the potential of each property and buy whenever yield opportunities and risks are balanced over both the medium and long-term,” Wieland emphasizes.
Internally driven growth
One significant element of Aurelis’s strategy is to purchase properties with the potential to increase in value and to develop them for the own portfolio. By revitalizing locations, expanding and refurbishing commercial properties, and building new projects on its own real estate, Aurelis is increasing rental income in the medium term. Integrating refurbished or new properties into its own portfolio allows the company to grow extensively, even organically.
In the past fiscal year, Aurelis had projects with an investment volume of 275.5 million EUR in the pipeline. These will be added to its own portfolio following their expansion, reconstruction, or new construction. Another 485.2 million EUR are earmarked for new construction projects. The company will then realize the value of these projects by selling them on the market. These volumes include all projects that were under contract, realized, or completed in 2016.
Purchases, revitalization, and building construction increase the value of the company’s portfolio. This helped to improve fair value once again in the reporting year, increasing from 1.4 billion EUR to 1.6 billion EUR despite high sales volumes.
Focus on mixed-use commercial properties pays off
In Joachim Wieland’s viewpoint, the company’s strategic focus on mixed-use commercial properties in its own portfolio pays off. “We saw time and time again over the past year that tenants of our mixed-use commercial properties have a high level of loyalty to our properties and respective locations: Long-term, mid-sized business tenants and large Group companies are commissioning us to expand and develop their facilities. Our tenant survey, which we completed in 2016 with the help of an external company, now provides further evidence of this.” About 80 per cent of tenants would recommend Aurelis to others. “This shows that our tenants recognize the value of locations with plenty of flexibility, our services in asset management, and the unique Aurelis market concept,” Wieland summarizes.