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Adler Group SA reported its second-quarter 2025 earnings, revealing a decrease in net rental income due to portfolio disposals, while maintaining its net rental income guidance for the year. The company’s stock saw a 2.99% decline in pre-market trading, reflecting investor concerns over its financial performance and market conditions. According to InvestingPro data, the stock has shown resilience with a 10.45% gain over the past week, despite experiencing a 30.63% decline over the last six months. Analysis suggests the stock is currently trading below its Fair Value.
Key Takeaways
- Net rental income declined due to asset disposals.
- Stock price fell by 2.99% in pre-market trading.
- Confirmed 2025 net rental income guidance of €127-135 million.
- Continued focus on Berlin residential portfolio with low vacancy rates.
- Executives highlighted stabilization in yielding asset values.
Company Performance
Adler Group’s performance in Q2 2025 was marked by strategic asset disposals, which contributed to a decrease in net rental income. Despite this, the company remains focused on its Berlin residential portfolio, which continues to show strong rental growth and low vacancy rates. The broader residential real estate market in Berlin is experiencing moderate improvement, supporting Adler’s strategic focus.
Financial Highlights
- Net rental income: decreased due to asset disposals.
- Total equity position: €1 billion.
- Loan-to-value (LTV) ratio: increased slightly to 72.1%.
- Cash position: €285 million.
- Adjusted EBITDA from rental activities: €40 million.
Outlook & Guidance
Adler Group confirmed its 2025 net rental income guidance of €127-135 million. The company plans to continue its disposal strategy for development projects and does not expect any material capital market indebtedness until 2028, with 97% of its financial debt maturing in that year or beyond.
Executive Commentary
Dr. Karl Heidezhuber, CEO of Adler Group, stated, "We have passed the valuation turning point and see a stabilization of yielding asset values." He also emphasized the company’s commitment to cost-cutting programs and budget discipline, noting, "We remain focused on our comprehensive cost-cutting programs and budget discipline."
Risks and Challenges
- Continued pressure on rental income due to asset disposals.
- Potential market volatility affecting asset valuations.
- Economic uncertainties impacting the real estate market.
- Challenges in maintaining low vacancy rates amid market fluctuations.
Q&A
During the earnings call, analysts inquired about the composition of rental income and the timelines for project sales. Executives confirmed standard down payment practices for project sales and mentioned the hiring of an advisor to assess options for the Berlin portfolio.
Full transcript - Adler Group SA (ADJ) Q2 2025:
Matilde, Chorus Call Operator: Ladies and gentlemen, welcome to the Adler Group H1 twenty twenty five Results Investor Conference Call. I am Matilde, the Chorus Call operator. And the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.
At this time, it’s my pleasure to hand over to Julian Malliard, Head of Investor Relations and Communications at Adler Group. Please go ahead.
Julian Malliard, Head of Investor Relations and Communications, Adler Group: Thanks, Mathilde. Good morning, everyone, and thank you for joining us for the Adler Group H1 twenty twenty five results call. Speakers today are our CEO, Doctor. Karl Heidezhuber and our CFO, Thorsten Arsan. Both will lead through today’s presentation and then answer your questions.
Please note that this call is being recorded and will be made available on our website where you can also find today’s presentation. And with that, I hand it over to Karl.
Dr. Karl Heidezhuber, CEO, Adler Group: Thank you, Julian. Welcome to all of you. Before we start with the Q2 numbers, let’s have a look at the status of our recent disposals on Page four. As communicated before, the BCP transaction was fully completed in the second quarter. From the €219,000,000 of total cash proceeds, we used €120,000,000 for repayments of our first lien new money facility, while the remainder was added to our disposal holdback basket.
We have also fully completed the disposal of our North Rhine Westphalia portfolio holding entities. We recently exercised the put option in order to transfer the remaining 10.1% stake in the respective propcos to the buyers, Orange Capital Partners and One Investment Management. The closing occurred just a few days ago and proceeds will be fully returned to the investors of our first lien new money facility. We also continue to make progress on the disposals of our development projects. Since the beginning of the second quarter, we have completed the transactions of our two Cologne based projects, Kolona Part and Koloneo III.
Furthermore, we signed a contract to sell our Dusseldorf based project, Upper Nordtower, which will be transferred to the Bayer Nexus investments by year end. As you may have read in the press, the real estate developer Quantum and the Hamburg based housing provider Saga Group have been granted exclusivity to purchase the Holstein Quatier, one of our prime development projects. We are confident to be able to sign a sales contract in the coming weeks. We also expect progress on our development asset sales over the next couple of weeks and months, such as the Wilhelm Benrattegarten, Power I. E.
Campus and Schwambland Tower, just to mention a few. Please let me also mention one significant milestone on our forward sale project, Ostforum in Leipzig. On this landmark building with a total rental area of 20,000 square meters for office, residential and retail, we signed a long term lease contract with the big four audit company, Deloitte, two weeks ago. Deloitte will occupy around 8,000 square meters, more than twothree of the office space available in the building. This is the biggest commercial lease in Leipzig this year.
We are convinced that this would allow us to negotiate further attractive lease contracts for the remaining space and ultimately enable us to successfully sell the project to a long term investor around the completion in ’26. In terms of smaller yielding asset sales, we took the opportunity to dispose around 60 units in Berlin in two transactions at around book value. The larger of these two transactions in the volume of €10,000,000 will close by year end. The other one is already done. We also continued the disposal of our noncore assets in Eastern Germany, thereby reducing the remaining units from $220,000,000 down to 162,000,000 Further disposals of these noncore assets are in the pipeline.
As of now, with €245,000,000 our disposal holdback basket of up to €250,000,000 is almost fully filled. Now we move to Page six. First, to the financial highlights. Compared to the prior year period, net rental income decreased in the first half of the year as a result of the disposals of BCP and the North Rhine Westphalia portfolio. The decrease was partly compensated by rent increases realized on the remaining assets.
We are well on track to reach our 2025 net rent income guidance in the range of 127,000,000 to €135,000,000 The adjusted EBITDA from rental activities amounted to €40,000,000 with a slightly improved margin compared to last year. The adjusted EBITDA total was negative as the Development segment did not contribute material earnings and was impacted by construction costs. Our group’s total equity position amounts to €1,000,000,000 Our LTV increased slightly to 72.1%, as expected. Our cash position amounts to €285,000,000 largely unchanged compared to the last quarter. Thorsten will provide more color on financials later in the presentation.
We are very happy with the performance of our rental portfolio in the recent quarter, particularly with the 3.4% like for like rental growth, and we will have a closer look at all KPIs on the following slides. Let me quickly discuss our H1 revaluation results realized in this quarter. We continue to see a different dynamic for yielding assets and for development projects. Valuations for our yielding assets continue to stabilize with another slight increase in values reported for H1 twenty twenty five. On the other side, values for development projects are still under pressure due to continuously rising construction costs as well as flat values for new built residential apartments in Germany.
Almost half of the negative like for like revaluation of our developments results, well, in the minus 15.5% attributable to the development project, the Wilhelm in Berlin, for which we booked a provision to account for the expected sales price, which we will generate at closing currently expected for September 2025. Now let’s proceed to portfolio and operational performance on Page 8. As of June 2025, our total number of rental units stands at 17,772. It’s a marginal decrease of 136 units compared to March 2025, driven by the mentioned disposals signed in Q2. Our portfolio is fully Berlin anchored with more than 99% Berlin assets.
Only 162 units are located outside of Berlin, and we expect to sell these units within the coming quarters. In terms of value, the JV of our yielding portfolio remains stable at €3,500,000,000 This reflects virtually no change from prior periods as there were no material revaluations and only limited disposals during the second quarter. The JV per square meter increased slightly to €2,843 up from 2,008 and €21 in Q1. Let’s now move on to Page nine to discuss yielding portfolio valuation. As in previous periods, our semiannual portfolio valuation was conducted by CBRE.
After three consecutive years of like for like value declines, the 2025 confirms that the devaluation phase has come to an end. Our portfolio recorded a positive like for like fair value change of plus 1.4% in H1 twenty twenty five. While rental yields continue to expand to 3.5% from 3.4 The realized value uplift stems from our rental growth and is supported by the stabilized interest rate environment. The positive revaluation is also reflected in the results of our market peers. Please join me now on Page 10 to discuss our further operational KPIs.
As projected in our Q1 results, we saw our like for like rental growth to pick up again more significantly in the second quarter. For the twelve months to June 2025, rental growth amounted to 3.4%, well in our target of around 3% per year. The main factor was that the contribution from the Mietzpiegel related rents, well, delivered well. The rent increase for almost 4,000 rental units became effective in the second quarter. Over the last twelve months, we increased the rents of more than half of our residential units.
For the twelve month period ending June 2024, we had reported a rental growth of 5.2% for our Berlin assets, which was mainly driven by the strong Mietzpiegel related rent increases in H2 twenty twenty three. Therefore, H2 twenty twenty four was rather flat as the time between the two rent increases is not less than fifteen months by law. Also with inflation being higher at that time, we had an additional extraordinary contribution from the CPI linked rental contracts in Berlin, which account for approximately onethree of our units. That said, we feel comfortable with the 3.4% reported now as this reflects a rather sustainable level in line with our midterm annual target. Our average rent increased from €7.65 per square meter per month reported a year ago to €8.45 in June 2025.
This growth is largely driven by the disposal of the North Rhine Westphalia cosmopolitan portfolio, which had structurally lower rents compared to our Berlin assets. On a like for like basis, the average rent grew from 8.16 to €8.45 per square meter per month. Turning to vacancy. Our operational vacancy rate remains at a very low level of 1.6%, slightly down from 1.8% a year earlier. This confirms the continuous demand for rental apartments in Berlin, driven by continued population growth and the structural limited new housing supply.
Now I would like to hand it over to Thorsten, who will walk you through the financials, starting on Page 12.
Thorsten Arsan, CFO, Adler Group: Thank you, Karl, and also a warm welcome from my side. At the June 2025, our yielding portfolio was valued at approximately €3,500,000,000 and our development portfolio at around €800,000,000 based on externally appraised values. This brings our total JV to about €4,300,000,000 slightly down from €4,500,000,000 at the March ’25. As mentioned before, the development project saw a like for like devaluation of minus 15.5% compared to the previous quarter. This lowered the GMV by around €150,000,000 in H1 twenty twenty five.
This was largely caused by continued increases in construction costs as well as the persisting challenges for residential new build in Germany, as explained by Karl before. Additionally, there was a marginal decrease due to the disposal of the Upper North Tower and office project in Dusseldorf. In yielding assets, the decrease in value resulting from disposals was more or less compensated by the positive revaluation result of 0.4% during the first six months in 2025. Let’s now move on to the financial update section on Page 13. One achievement that we realized in the second quarter was the successful refinancing of the Arnaud Real Estate 2026 bond.
In May 2025, we had launched a cash tender offer to repurchase the outstanding EUR300 million under real estate senior secured notes due in April 2026. The offer closed with a strong participation rate of around 95% with EUR $285,000,000 nominal standard at a purchase price of EUR 98.5 per EUR 100 principal plus accrued interest. To fund the repayment, we upsized our first lien new money facility by €281,000,000 The transaction settled on twenty seventh June twenty twenty five, reducing the outstanding nominal of the Ardlo Real Estate 2026 bond from €300,000,000 to €15,000,000 With the successful refinancing, we have now no material capital market indebtedness maturing before the 2028. Turning to debt repayments and prolongations. We made further partial redemptions of the firstly new money facility in Q2 and Q3 twenty twenty five, thereby returning approximately EUR50 million to the holders in the respective instruments between April and August this year.
The proceeds resulted from the second tranche of the BGP transaction, smaller yielding assets and condo sales as well as the completed sale of the development project, Kolonneo 3. Proceeds in the amount of €21,000,000 received for transferring the remaining 10.1% stake in the cosmopolitan portfolio are scheduled to return to the investors of the firstly new money facility next Monday, September 1. Please let me also mention that we completed the prolongation of EUR 21,000,000 secured loan originally due in June 26 to Q4 twenty twenty eight. As for 2026 maturities, only the remaining EUR 50,000,000 of the Adler real estate bond is due in April 26, and discussions are ongoing with lenders regarding the prolongation of the remaining twenty twenty six bank maturities. Let’s now move on to Page 14 and take a look at our current debt KPIs.
As of June 2025, our total nominal interest bearing debt stood at approximately EUR 3,800,000,000.0 broadly unchanged from March 25. This reflects the offsetting effects of the tender of the other real estate, 26 bond funded through an upsizing of the firstly new money facility and ongoing partial debt repayment from disposal proceeds. Our LTV increased to 72.1% with the revaluation of our development assets being the main driver. The weighted average cost of debt increased to 7.1% at the June due to the refinancing of the other restate bonds in terms of the existing first lien new money facility. Our average debt maturity continues to stand at around four years, the majority of maturities concentrated in 2028.
Following the settlement of the Adler Real Estate bond tender offer, S and P revised its ratings on the Adler Group and Adler Real Estate instruments on thirtieth June twenty twenty five. The issue rating on the firstly new money facilities was downgraded from B plus to B due to the upsizing volume. The ratings on the 1.5 lien secured notes and the remaining after real estate senior unsecured notes were successfully downgraded from CCC plus to CCC. The rating on the second 2L notes due 2030 remained unchanged at CCC. The issuer credit rating of Adler Group remains at D minus with a stable outlook.
Let’s turn to the debt maturity schedule on Page 15. As told in Q1 results, there is no financial debt maturing this year. Looking ahead, our next maturities are in 2026, where we have a total of EUR42 million due, comprising EUR15 million of the remaining Ardlovides de bond maturing in April 26 and EUR27 million of bank debt maturing between March and December 26. Discussions with the lenders of the 26 bank maturities are ongoing and we are confident that those will be addressed well ahead of maturity. As you can see on this slide, 97% of our financial debt matures in 2028 or beyond.
Let’s turn to the LTV on the next page, Page 16. As projected last quarter, the LTV increased again this quarter mainly due to three drivers. First, the negative H1 revaluation result for our development projects, including the provision booked for the Honoris contract in regards to the Willem project. Second, the usual impact from interest expenses both paid and accrued. And third, CapEx expenses for our yielding and development asset portfolio.
As always, as a reminder, kindly notice that our bond covenant LTV with the threshold of 90% is calculated differently, leading to a lower figure than stated here. Let’s continue with cash on the next Page 17. At the end of the second quarter, our cash position stood at €285,000,000 which is no material change compared to the last quarter. As you might know, we invest our cash holdings usually in money market funds and call money in order to generate interest income. You see the development of the cash position in the usual format on the slide.
On the cash inflow side, we realized proceeds from various disposals. Yielding asset disposals, including a multi family house that we signed in December as well as several condo sales. Development asset disposals, including the completed sale of the Corona Park development project. And third, the remaining tranche of the PCP transaction. As projected in our last call, payments relating to our restructuring costs have been declined significantly.
The EUR 29,000,000 debt repayment in Q2 was from the second part of the PPP transaction and the sale of a Berlin yielding asset. Further redemptions were made post Q2 balance sheet date. Kindly note that the repayment of the tender Adler Real Estate 2026 bond is netted with the upsizing of the firstly new money facility in the amount of €281,000,000 And with that, back to you, Karl.
Dr. Karl Heidezhuber, CEO, Adler Group: Thank you, Thorsten. Let me now conclude this presentation with some final remarks. Experts see a moderate improvement in the residential real estate market, more on standing assets than in new building activity. This is in line with our current experience at Adler. We have passed the valuation turning point and see a stabilization of yielding asset values, which is not yet true for development assets.
Overall, it is the market expectation that yields will no longer expand. We are able to capture rental growth with our strong 3.4% like for like growth in line with our expectations, and we confirm our net rental income guidance for 2025. We have completed the BCP and North Rhine Westphalia portfolio transactions and remain fully focused to dispose or complete all remaining development projects. In the current market for this particular asset class, this remains a challenge, but we are making good progress as a credible and trustable partner, for example, when it comes to the Holzmann Quartier in Hamburg. On the capital structure side, we successfully refinanced the €300,000,000 Adler real estate bond and are now facing no material capital market indebtedness before 2028.
Just as Torsten said, 97% of our financial debt matures only in 2028 or beyond. It goes without saying that we remain focused on our comprehensive cost cutting programs and budget discipline to ultimately preserve our liquidity position. And with that, I would like to thank you for dialing in. We are now looking forward to your questions. Julian, back to you for the Q and A.
Thank you,
Julian Malliard, Head of Investor Relations and Communications, Adler Group: Karl and Thorsten. And I hand it over to operator, Mathilde and Thorsten for Q and A.
Matilde, Chorus Call Operator: We will now begin the question and answer session. The first question comes from the line of Vols Kang from Saria. Please go ahead.
Wolfgang Kang, Analyst, Saria: Yes, good morning. Thank you very much for your presentation. I really only have one question and that relates to your operating income, which is relatively low this year, if not largely flat. What’s been weighing on that, please? I’m afraid I might have missed it if you’ve said it.
Thorsten Arsan, CFO, Adler Group: Wolfgang, it was quite difficult to understand. Usually, if I understood you correct, you basically refer to the development of the net rental income, where we basically have the effect that in the first six months of 2024, we had the rental income for the Berlin portfolio, six months BCP and six months Cosmopolitan, whereas if we look at our net rental income in the first six months of this year, it’s only six months Berlin, two months Cosmopolitan and no contribution from BCP since we sold it at the second January this year. So basically, what we can see is that remaining focused and executing our strategy, I. E, focusing on the value portfolio also is now reflected in our numbers in the P and L and in the balance sheet.
Wolfgang Kang, Analyst, Saria: But would you therefore say that your operating cash flow as per Slide 17, the first item, should that remain flat going forward then? Or is there
Thorsten Arsan, CFO, Adler Group: something you can give No, about your this mean that we continue to have a cash balance of shy above CHF 300,000,000? Most likely not because, I mean, we have certain costs from the development area, which are right now not being covered by the rental income. So basically, going forward, we expect that the cash balance, which was at $285,000,000 by the June, should go down by quarter by quarter. Ideally, with, let’s say, reducing decrease, but at the end, going forward, we expect that the cash balance will be lower than as it is or as it was by the June.
Wolfgang Kang, Analyst, Saria: Okay. I might follow-up separately. Thank you very much. The
Matilde, Chorus Call Operator: next question comes from the line of Armin Akhavan from Schonfeld. Please go ahead.
Armin Akhavan, Analyst, Schonfeld: Hi, can you hear me well?
Dr. Karl Heidezhuber, CEO, Adler Group: Yes, very good.
Armin Akhavan, Analyst, Schonfeld: Okay, perfect. The rental guidance that you’ve given, is that like for like versus the 123,000,000 of rent you showed for as of Q2? Or does that include rent from disposed assets during Q1?
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. This includes two months of our North Rhine Westphalia portfolio, January and February, and twelve months from our build in portfolio.
Armin Akhavan, Analyst, Schonfeld: Got it. How much is the two months of the customer portfolio?
Thorsten Arsan, CFO, Adler Group: One second.
Dr. Karl Heidezhuber, CEO, Adler Group: Yes, 6,000,000? All right. Yes, it’s EUR 6,000,000. Got
Wolfgang Kang, Analyst, Saria: it. Okay.
Dr. Karl Heidezhuber, CEO, Adler Group: You Thank can find it on Page 24.
Armin Akhavan, Analyst, Schonfeld: Perfect. Thanks. The questions a couple of questions on your projects. You show in the presentation, a breakdown of the appraised values by Citi, which sums up to EUR $934,000,000. How does that compare?
And then obviously, like earlier in the presentation, you show a total value of 800,000,000. Can you just help me bridge the gap between those two numbers?
Wolfgang Kang, Analyst, Saria: Hello?
Dr. Karl Heidezhuber, CEO, Adler Group: Okay. Now the €934,000,000 on Page 23 includes three projects: Grand Central, Eurowhaus and Upper North Tower that are already sold where the SPA has been signed, but which have not closed to this day. Our JV of €830,000,000 does not include these three projects. That’s the bridge.
Armin Akhavan, Analyst, Schonfeld: Okay. That’s helpful. All right. Got it. Thank you.
When looking at your GAAP for the forward sales, the €137,000,000 does that reflect any provisions you might have taken because of cost overruns or lower than initially expected rental income?
Dr. Karl Heidezhuber, CEO, Adler Group: To what number, 137,000,000, what are you referring to?
Armin Akhavan, Analyst, Schonfeld: The forward sales. You have two forward sales. Think the gap for the two together €137,000,000 just a sum. And I think, I just wanted to check like in case you have taken any provisions because costs are just higher than initially expected or rental results are going to be lower than initially expected. Would that be reflected in that number?
Or would that be gross of any provisions? Because I think in your annual report, you had some provisions for forward sales?
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. Well, let’s say, the cost structure of the project would not be reflected in the JV, yes? But we have added, if you see the columns further right on Page 32, The CapEx for up to the date of June 25 and the remaining CapEx for the six months, July to December 25, which will give you an indication of the cost situation of the project. We can say that we have a slight cost overrun compared to last quarter in Quatijerholm in Dresden, but are well stable on the other assets.
Armin Akhavan, Analyst, Schonfeld: Okay, helpful. On your upfront sales, for some of the projects, seems like you sign and you close relatively quickly. For others, the time between signing and closing can be fairly long period of time. You just a little bit what that is driven by? Like why do some projects take much longer to close than others?
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. Well, we have, let’s say, quite different starting points for the different projects, particularly with regard to the situation of planning permit and building permit. So in some cases, where we take a longer time, most in these cases, some discussions with the authorities will have to take place to give the buyer comfort on the cornerstones of the planning permit going forward. So this is taking some time. And for this reason, some of the projects, we have quite significant time between signing and closing.
Armin Akhavan, Analyst, Schonfeld: Understood. So for example, for the Holsten project, you mentioned that you expect to sign that in the near term. And I think if we believe the numbers in the press, it would be a meaningful disposal. But Well, it on seems
Matilde, Chorus Call Operator: like
Dr. Karl Heidezhuber, CEO, Adler Group: Holsten, we have not signed yet, right? We expect signing in September, and we would then expect maybe six months to closing.
Armin Akhavan, Analyst, Schonfeld: Six months. Okay. All right. Got it. And then last question for me.
If we look at the five projects where you that you have under exclusivity, but you haven’t signed yet, Can you tell us what the aggregated appraised value for these assets is? So not by projects, just like the aggregated for the five?
Dr. Karl Heidezhuber, CEO, Adler Group: Well, we do not report individual JVs or individual also, let’s say, numbers for subgroups of assets. So I’m sorry. No.
Wolfgang Kang, Analyst, Saria: Okay. Thank you.
Matilde, Chorus Call Operator: We now have a question from the line of Antonio Casari from NordLight. Please go ahead.
Antonio Casari, Analyst, NordLight: Hi, good morning. Thank you very much for taking my question. I actually had the same question that the previous person had. I can try to ask it in a different way. You provide the land plot and the area for the projects in Slide 31.
And if I calculate the five projects in exclusivity represents roughly either 33% of the land plot or 45, 46% of the area excluding the first four projects. Is the percentage somehow reflective of how much value they represent of the €130,000,000 gap that you disclosed?
Dr. Karl Heidezhuber, CEO, Adler Group: Well, again, we are not reporting the individual JVs of projects or subgroups. So I’m sorry.
Antonio Casari, Analyst, NordLight: So but just in general, is the land plot or the area is
Dr. Karl Heidezhuber, CEO, Adler Group: Well, don’t
Antonio Casari, Analyst, NordLight: It’s the only thing that you report.
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. It’s true, yes. But well, I would say we have a different status of maturity, if you like, on different projects, right? Have different levels of planning permit or building permit. And in some cases, like on the Wilhelm, for example, there is an excavation pit already in the ground, yes.
So I think it’s difficult. But let’s say, as this is maybe the best proxy we have, I guess, you have to do with it, yes.
Antonio Casari, Analyst, NordLight: Okay. Perfect. And just confirming, once you sign the contract, do you receive any payment? Or is there any penalty for the buyer in case it does not?
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. Our standard in our SPAs is that there is a down payment of at least 10% to escrow with signing. And in case the buyer doesn’t eventually close, that would work as a penalty. But we don’t have we don’t see really any cases where the buyer would not close.
Antonio Casari, Analyst, NordLight: No, it was in with reference to the you mentioned six months of between signing and closing. So six months is a fairly long time and a lot of things can happen in this respect. That’s why I wanted to
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. But this six months is, I would say, let’s say, for Germany, if you buy a land plot or an asset, it would always take you up to six months with all the conditions precedent for the like the municipalities right for first refusal and so on. So it takes quite some time for the conditions to be fulfilled.
Antonio Casari, Analyst, NordLight: Perfect. Thank you very much.
Matilde, Chorus Call Operator: The next question comes from the line of Nikolay Kutzmanov from Jefferies. Please go ahead.
Nikolay Kutzmanov, Analyst, Jefferies: Hi, good morning. Page four, the free to ask questions. I have a couple, but maybe if you can start with a continuation of the net rental income and kind of like the $123,000,000 shown on the portfolio overview table, which drives the implied rental yield of 3.5%. And then kind of like the annualized 2Q number, which should not include not line risk value because of portfolio anymore. What is driving that delta?
And can we sort of see either further valuation upside going forward or based on this run rate 2Q twenty twenty five net rental income that you reported or effectively a widening of the implied yield, which sort of my understanding was based on peers as well you’re not expecting? And then I have another follow-up question on the building portfolio. Thank you.
Thorsten Arsan, CFO, Adler Group: Yes. Thank you for your questions. The first one with regards to the net rental income. So if we annualize the June rental income of the Berlin portfolio, I. E, you multiply it by 12, we will be at around EUR 123,000,000 annualized.
Nikolay Kutzmanov, Analyst, Jefferies: Okay. So if I look then
Thorsten Arsan, CFO, Adler Group: What you can see in our guidance is €6,000,000 contribution from the Cosmopolitan, I. E. So you can deduct EUR 6,000,000 from the guidance. And if we then basically take the Schuhn rent, where we already have some rent increases that we conducted within the first six months of the year, I. E, taking the two times 12 is EUR 123,000,000.
Nikolay Kutzmanov, Analyst, Jefferies: Okay. I was using the 31,500,000.0 the income statement, which gives me EUR 126,000,000. It was kind of like the number that I was
Thorsten Arsan, CFO, Adler Group: number do you
Nikolay Kutzmanov, Analyst, Jefferies: refer So the 31,500,000.0 or 31,484,000.000 times four. So is that the whole of the second quarter rather than just the June monthly?
Thorsten Arsan, CFO, Adler Group: Maybe I think it’s getting too technical. Maybe we can take this out separately or bilaterally after the call.
Nikolay Kutzmanov, Analyst, Jefferies: Okay. Thanks, thanks. And then on Berlin, there was some media reports earlier this quarter talking about potentially the company thinking about winding down that portfolio next year and preparing for that potential hiring advisors. Is there a timing on when you think some Berlin sort of portfolio sales might happen whether the whole 17,000 plus apartments or subsets of that? Has there been any progress around that?
Dr. Karl Heidezhuber, CEO, Adler Group: Well, we don’t comment on these rumors, but what we can say is that we hired an adviser to assess the options on for our Berlin portfolio, but we are far from taking any decisions. So this is what we can say at this point.
Nikolay Kutzmanov, Analyst, Jefferies: Is there any timing on when you’d be in a position to comment?
Dr. Karl Heidezhuber, CEO, Adler Group: No, there is not.
Nikolay Kutzmanov, Analyst, Jefferies: Good. Thank you. And then my other question, just a final one, third one maybe sort of a little bit in relation to all these disposals and obviously you’ve been paying down from proceeds the first lien. Once if we think about the deal and the wholesale criteria, this will be a few more sort of sizable development sales, which hopefully should reduce the first lien further and the sort of the debt burden. Have there been any thoughts around potential refi of the first lien and 1.5 lien after sort of the non core of the 1.5 lien has lapsed?
Thorsten Arsan, CFO, Adler Group: No. I mean, there are as of today, no specific plans to, again, refinance the first lien and the 1.5 lien. I mean, as you just mentioned, our whole book is more or less fully filled, $245,000,000 of the €250,000,000 And so whenever we now generate disposal proceeds, they will be used to repay the first lien, respectively. But as such, there are currently no plans to do another refinancing as of today.
Nikolay Kutzmanov, Analyst, Jefferies: Okay. All right. Thank you very much.
Matilde, Chorus Call Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Karl Rheinetschubert for any closing remarks.
Dr. Karl Heidezhuber, CEO, Adler Group: Yes. Thanks, everyone, for joining today. We will publish our Q3 report on November 27, and the respective results presentation will take place on the same day. Thorsten and I look forward to speaking with you then. All the best for everyone.
We close the call.
Matilde, Chorus Call Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
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