The crisis-ridden real estate group Adler Group recorded a significant drop in earnings in the first half of the year. Rental income and the operating result fell, and because of the rise in interest rates, Adler – like other companies in the industry – had to devalue its real estate portfolio. The fair value of the portfolio including development projects amounted to 6.4 billion euros as of Tuesday June 30, after 7.4 billion euros at the end of the year. The net loss was a good one billion euros after 604 million a year earlier.
Net rental income fell in the first six months year-on-year from 131 million to 108 million euros, as the company announced on Tuesday in Luxembourg. The key operating earnings indicator FFO I from rentals, which is important for the industry, fell from EUR 50 million to EUR 8 million. The decline reflects the significantly reduced rental portfolio after portfolio sales and increased financing costs, it said. The monthly average rent of the rental portfolio rose to EUR 7.69 per square meter, a like-for-like rental growth of 3.1 percent.
The transaction markets are currently “dried up”, explained CEO Thierry Beaudemoulin. That’s why Adler is concentrating on liquidity management. The group’s focus remains on deleveraging through asset and portfolio sales.
The real estate group has been in crisis for some time. Adler was targeted by the financial regulator Bafin after short seller Fraser Perring made serious allegations against Adler. Among other things, it was about the valuation of real estate projects. The auditing company KPMG later refused Adler the attestation for the 2021 balance sheet. Last year, the Adler Group wrote a loss of around 1.7 billion euros.
In April, a court gave the group the green light to restructure. At the end of June, the public prosecutor’s office in Frankfurt and the Federal Criminal Police Office searched the offices of the subsidiary Adler Real Estate on suspicion of incorrect accounting, market manipulation and breach of trust.
