Profitable sale from Portfolio confirms KWG's business model

- EUR 3.0 mn of realised profit under German accounting standards
- Sale at IFRS book value documents realistic portfolio valuation
- Positive value enhancement confirms KWG's business model

Hamburg, 06 May 2013 - KWG Kommunale Wohnen AG, a long-term oriented property holding company of residential real estate in which Austrian conwert Immobilien Invest SE holds a 76% majority stake, sells 160 of its apartments in Wolfsburg. The price realised for the portfolio of around 9.400 sqm of residential letting space amounts to EUR 9.2 mn and thus is approx. 4.5 mn higher than the price KWG paid at acquisition. It represents a factor of 13.0x current annual rental income and a price of EUR 978 per sqm for the apartment complex situated on leasehold property. The profitable sale at IFRS book value documents KWG's successful business model which aims to sustainably optimise its portfolio through an active approach to asset management.

KWG acquired the property in November 2007 for a purchase price of approx. EUR 4.7 mn (purchase price plus ancillary costs). KWG then invested some EUR 2.1 mn into the property by means of clearly focused refurbishment and modernisation measures. From the successful sale alone compared to the purchase price paid at acquisition KWG realised a Return on Equity of 143.1% and a Return on Investment of 34.3%.

In addition KWG increased the property's Cash Flow substantially. Annual rental income rose by 85% through KWG's clearly focused refurbishment and modernisation measures. The main driver was the increased rental income from the letting of refurbished apartments. Whereas due to a substantial backlog of refurbishment at the time of acquisition vacancies initially amounted to 19%, the property is currently almost completely let.

Torsten P. Hoffmann, management board member at KWG: 'Despite being a long-term oriented property holding company we try to capitalise on opportunities to realise profits at attractive market prices and will continue to focus on our core markets. Going forward we shall focus on the growth regions of Berlin, Lower Saxony, Leipzig, Dresden and North Rhine Westphalia. This sale at IFRS book value confirms our portfolio's realistic valuation.'

KWG's real estate portfolio was valued at EUR 428.9 mn or EUR 713 per sqm as per 31 Dec 2012. With its NNNAV of EUR 11.19 per share as per 31 Dec 2012 KWG's shares currently trade approx. 40% below their book value.

KWG Kommunale Wohnen AG is a residential property company that does business all over Germany. KWG buys property portfolios and also shares in private and public-sector owners. As a property company that holds a portfolio with a view to long-term ownership, KWG aims to constantly develop and improve the value of its properties through appropriate measures. An important contribution here is made by active asset and construction management with renovation and redevelopment work related to increase of rental income and reduction of vacancy and fluctuation.

Contact

KWG Kommunale Wohnen AG
Jan Hutterer
Alstertor 9
20095 Hamburg
Tel.: 040/ 2263088-100
eMail: ir@kwg-ag.de
www.kwg-ag.com

This release was published on openPR.