Summit Germany (SMTG), the office, retail and residential landlord operating in Germany, benefited from continued demand for office space in and around the major cities, and while the valuation uplift was lower than the previous year - hence the drop in headline profits - adjusted net asset value (NAV) per share grew by 9 per cent to 100.2¢.
New leases and renewals were secured at rents 12 per cent higher than the previous year, and a total of €18.6m came in from disposal of non-strategic assets, with a further €2.5m disposal after the year-end. This helped to finance €40.5m of acquisitions. As well as providing rental income, freshly acquired assets are also managed in a way that increases rental income and unlocks capital value.
Net annualised income grew to €58.4m, equivalent to a yield of 7.3 per cent. This compares favourably with the cost of debt which, after securing €89m of new and refinanced debt, fell to just 2.7 per cent.
Summit is also tapping into the residential sector through joint ventures, which provide an opportunity to use surplus land on existing sites. In one joint venture, an existing building in Berlin is to be converted into 60 apartments for an investment of €18m, which is expected to generate revenue of €23m.
Prior to these numbers, analysts at Liberum were forecasting adjusted NAV of 112¢ at the year ending December 2017 .
| SUMMIT GERMANY (SMTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 106¢ | MARKET VALUE: | €493m | |
| TOUCH: | 104-108¢ | 12-MONTHHIGH: | 108¢ | LOW: 87¢ |
| DIVIDEND YIELD: | 3.8% | TRADING STOCK: | €2.2m | |
| PREMIUM TO NAV: | 13% | |||
| INVEST PROPERTIES: | €796m | NET DEBT: | 69% | |
| Year to 31 Dec | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢)* |
|---|---|---|---|---|
| 2012 | 48.0 | -37.1 | -13.9 | nil |
| 2013 | 64.0 | 23.8 | 8.1 | nil |
| 2014 | 83.0 | 74.0 | 23.7 | 2.85 |
| 2015 | 88.0 | 70.9 | 13.3 | 3.39 |
| 2016 | 94.1 | 63.9 | 10.5 | 3.99 |
| % change | +7 | -10 | -21 | +18 |
Ex-div- Payment:- *Dividends paid quarterly. Fourth-quarter dividend paid in February | ||||
