GAGFAH : 2014 - Promised and Delivered

GAGFAH S.A. / Key word(s): Final Results

2015-03-03 / 07:00

Press Release: March 3, 2015
GAGFAH S.A.
2-4, rue Beck
L-1222 Luxembourg

ISIN: LU0269583422
Frankfurt Stock Exchange (Ticker Symbol: GFJ)
Regulated Market (Prime Standard)

GAGFAH 2014 - Promised and Delivered

- Strong operational results with 2.7% rent growth and 3.4% vacancy rate

- EUR189.9 million Recurring FFO (EUR0.88 per share)

- EUR14.39 EPRA NAV per share

- Proposed dividend of EUR0.35 per share

2014 was a very successful year for GAGFAH. The Company had set ambitious targets for 2014 and has fully delivered on its promises. The final results underline the strong performance during the previous year and clearly demonstrate GAGFAH's progress.

Operations
Net cold rent grew 2.7% (like-for-like: 2.6%) to EUR5.35 per square meter in 2014. The vacancy rate declined by 70 basis points in the course of 2014 and came out at 3.4%. Excluding the impact from the ca. 6,300 units acquired in the fourth quarter, the vacancy rate was 3.2%. GAGFAH invested a total of EUR151.2 million (+25%) or EUR17.59 per square meter.

Sales
GAGFAH closed the sale of 766 condo units and 4,168 non-core units for a total of EUR222.0 million and signed sales agreements for an additional 165 condo units plus 1,543 non-core units. While the non-core units were sold broadly in line with their respective carrying values, the gross margin on the condo sales was 26.2% and the net cold rent multiple was 20.2x.

Financial Results
The net operating income (NOI) in 2014 was EUR390.7 million (+4.9%), which represents an NOI margin of 69.5% and an NOI yield of 5.1%. The adjusted EBITDA was EUR349.7 million (+4.3%) and reflects a margin of 4.5% on the average property value in the course of 2014. Supported by higher rental income, broadly stable property and overhead expenses and substantially lower interest expenses, the Recurring FFO was EUR189.9 million or EUR0.88 per share (+47%). Based on the 2014 year-end EPRA NAV, the Recurring FFO yield is 6.1%.

The improved cash flows of the business supported the EUR161.9 million gain from the fair value measurement of investment property (+2.1% compared to Dec. 31, 2013 values). GAGFAH's portfolio is valued at EUR895 per square meter, with a 13.4x target-rent multiple and a 13.8x in-place-rent multiple. The EPRA NAV as of Dec. 31, 2014 was EUR14.39 per share (+10.1%).

Based on the strong results of 2014, the Board of Directors of GAGFAH S.A. has decided to propose a cash dividend of EUR0.35 per share to the next Annual General Meeting of Shareholders.

Thomas Zinnöcker, CEO of GAGFAH GROUP commented, "2014 was a very successful year for GAGFAH. We were able to achieve the goals we had set for ourselves, and we overachieved on the Total Shareholder Return target with our NAV per-share growth of more than 10%. I am glad to announce that for the first time since 2010, the Board of Directors has proposed a cash dividend of EUR0.35 per share, which is fully funded by the cash available for distribution that we generated in 2014. We are looking ahead with optimism, and I am convinced that our joining forces with Deutsche Annington will enable us to create the best of both worlds to the advantage of all of our stakeholders."

The management will host an earnings call today at 12:00 noon Luxembourg time. All interested parties are welcome to participate in the live call. You can access the conference call by dialing

- 1 866 966 9439 from the U.S.

- 0800 694 0257 from the U.K.

- 8002 7512 from Luxembourg

- 0800 101 4960 from Germany

- [phone] from all other countries

ten minutes prior to the scheduled start of the call. Please refer to " GAGFAH S.A. Full Year 2014 Earnings Call ". The conference ID will be 89509220.

A live virtual audio webcast of the conference call will be available at www.gagfah.com. A replay will be available for twelve months following the call. The full year 2014 report and management presentation are available as PDF downloads on www.gagfah.com.

Contact
GAGFAH S.A.
Investor Relations
Rene Hoffmann
2-4, rue Beck
L-1222 Luxembourg
Tel.: [phone]
[e-mail]
www.gagfah.com
R.C.S. Luxembourg B 109.526

Media
Dirk T. Schmitt
[phone]
[e-mail]

About GAGFAH S.A.

GAGFAH S.A. is a joint stock corporation organized under the laws of the Grand Duchy of Luxembourg qualifying as a securitization company under the Luxembourg Securitization Law of March 22, 2004. The core business of GAGFAH S.A.'s operating subsidiaries is the acquisition, ownership and management of a residential property portfolio located in Germany.

GAGFAH is a leading owner and operator of residential real estate in Germany. Our portfolio includes more than 144,000 own residential units that are mostly located in the large German cities and their respective commuter belts. We believe that our size, our significant presence in the key residential markets and our scalable operating platform make us one of the leading providers of affordable housing for low- to medium- income households in Germany. Our operating subsidiaries are full-scale service providers for a broad range of property and facility management services.

Our objective is to generate shareholder value through sustainable and growing cash flows, increasing net asset value and sustainable dividends by efficiently managing our portfolio, carrying out value-enhancing property investments, pursuing accretive growth opportunities, and realizing value through selected asset sales.

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