HAMBURG (dpa-AFX) - TAG Immobilien benefited from higher rents and real estate sales in the first quarter. On balance, profits rose by around 60 percent year-on-year to 52.9 million euros, as the MDax-listed group announced in Hamburg on Tuesday. The management confirmed the targets for 2024 that were published in mid-November. The share price fell by almost one percent in early trading.

The slump in the real estate market, which was also triggered by higher interest rates, had weighed heavily on the share price until spring 2023 and pushed it down to an interim low of EUR 5.41. Since then, the share price has more than doubled. Hopes that interest rates will soon fall again have tended to help the share price in recent months.

In the first quarter, TAG's operating profit from the rental business (FFO 1) rose by almost five percent to EUR 44.6 million. Higher rental income in the home country was the main contributor to this, it said. Overall, net rental income rose by 2.5 percent to EUR 88.8 million. The real estate group is still targeting an operating profit of between EUR 170 million and EUR 174 million for 2024.

TAG entered the Polish market at the end of 2019 with the acquisition of project developer Vantage Development and expanded its business in 2022 with the purchase of residential developer Robyg. Most recently, the real estate group also founded a joint venture with a fund company of the financial investor Centerbridge Partners, which is responsible for the purchase of land and the construction and sale of residential units. In Poland, TAG has long-term plans to build up a portfolio of around 20,000 rental apartments.

From TAG's perspective, the real estate market in the neighboring country is doing much better: in the first three months, the company generated more than twice as much as in the previous year from the sale of apartments in the major cities thanks to a sharp rise in sales prices.

Overall, Group FFO II - which includes the Hamburg-based company's sales activities in addition to the rental business - rose by a good quarter to EUR 64.3 million in the first quarter.

In Germany, contracts for the sale of a total of around 780 apartments have been notarized since the beginning of the year. The total sales price amounted to 67.6 million euros, the report continued. The sales are expected to be completed in the second and third quarters.

With its portfolio of around 84,500 properties in Germany, the Hamburg-based group focuses on so-called B and C locations in the wider catchment areas of metropolitan areas and medium-sized cities. The majority of the residential properties are located in eastern Germany in cities such as Gera, Leipzig, Chemnitz, Erfurt and around Berlin./mne/mis/stk