DÜSSELDORF (dpa-AFX) - After a good fiscal year, real estate group LEG is looking ahead to 2023 with a mixture of optimism and caution. The company increased its earnings target for the current year. Despite the good business development in the past year, however, the LEG Board of Management wants to suspend the dividend. In view of the situation characterized by high interest rates and continuing uncertainty about the valuation of the real estate portfolio, the resulting liquidity should be used to strengthen the balance sheet, the MDax group announced in Düsseldorf on Wednesday evening. On Thursday, the share fell by around 8.5 percent to 62.08 euros in early trading.

For the current year, LEG is now targeting 125 to 140 million euros for Affo, the key earnings indicator from this year. The reason for this is less expenditure on investment projects. Previously, LEG had assumed 110 to 125 million euros. In the case of Affo, the industry-standard FFO 1 figure is adjusted for capital expenditure.

In 2022, FFO 1 had climbed by 13.9 percent to EUR 482.0 million thanks to higher rental income, thus meeting the company's forecast. Rents have been rising for years, particularly in the major cities, but numerous medium-sized cities are now also catching up strongly. Rents rose to an average of 6.33 euros per square meter by the end of December, up from 6.13 euros a year earlier, the Group added. The vacancy rate remained low at 2.9 percent.

Operating profit (Affo) adjusted for investments rose by 18 percent to 108.8 million euros in 2022. In addition to the increase in FFO 1, this was due to lower investment costs. At just under EUR 41 per square meter, these were below both the prior-year figure and LEG's expectations. Net income was a good 237 million euros, compared with 1.7 billion euros in the previous year. This was mainly due to a significantly lower valuation result for the real estate portfolio.

The residential real estate market continues to be characterized by buying restraint and great uncertainty regarding the further development of inflation and interest rates, the company further announced. LEG was able to sell around 600 apartments in 2022. In the process, the Group said it had generated more than the book value. LEG plans to sell more than 5000 apartments. This also included around 1300 units from the Adler portfolio purchased in 2021.

In addition to the annual figures, LEG also announced a change at the top of the finance department. Susanne Schröter-Crossan will step down from the board for family reasons on March 31 and leave the company, it said. She will be succeeded by Kathrin Köhling, who has been managing director of operations./mne/he/men/mis