Adler - comment

Vonovia have sold a €1.1bn residential portfolio to Apollo at -5% discount to NAV including a buy-back option. We / the market sees this as a strong result. High-quality portfolio - like Adler (Adler have 1.3% vacancy). But Adler assets are valued at -45%…

The German Resi RE market is structurally supported by domestic demand from banks and Insurance companies who enjoy better capital allowances on these assets relative to other options and require a large domestic market to park the majority of their assets locally. Despite “Mietpsiegel”, resi valuations might be dropping only mid-single digits, which is an assessment we have heard from Adler yesterday and also a notion that has generally been taking hold recently.