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1. Company Snapshot

1.a. Company Description

LEG Immobilien AG, together with its subsidiaries, operates as an integrated property company in Germany.The company engages in the performance of services and management of equity investments; property management and location development; performance of services for third parties and housing industry services; and generation of electricity and heat.It also provides IT and management services for third-party.


As of December 31, 2021, the company's property portfolio consisted of 166,189 residential units; 1,576 commercial units; and 45,438 garages and parking spaces in North Rhine-Westphalia.LEG Immobilien AG was founded in 1970 and is headquartered in Düsseldorf, Germany.

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1.b. Last Insights on LEG

LEG Immobilien SE's recent performance was negatively driven by a decline in rental income due to the ongoing economic uncertainty in Germany. The company's Q1 2024 earnings release highlighted a 9.9% decline in rental income, mainly attributed to weaker German retail sales. Additionally, LEG's high expenses and interest rates also contributed to the decline in profitability. Furthermore, the company's efforts to reduce debt were offset by its acquisition of a logistics portfolio in 2022, which added to its debt burden.

1.c. Company Highlights

2. LEG Immobilien's Q3 2025 Results Exceed Expectations

LEG Immobilien's Q3 2025 results demonstrate strong growth, with net cold rent increasing by 6.8% or EUR 44 million, driven by the integration of 9,000 units from BCP and organic growth. The company's EBITDA margin reached 79.2% for the first 9 months, and AFFO increased by 19.3% to EUR 181.3 million, with actual EPS coming in at 8.5, significantly higher than estimates of 1.41. The strong financial performance is a testament to the company's successful integration strategy and operational efficiency.

Publication Date: Nov -16

📋 Highlights
  • Net Cold Rent Growth:: Increased by 6.8% (€44m) in Q3 2025, driven by integrating 9,000 BCP units and organic growth.
  • EBITDA Margin:: Reached 79.2% in the first 9 months of 2025, reflecting operational efficiency.
  • AFFO Growth:: Rose 19.3% to €181.3m, with 10% guidance for 2025 and 5% for 2026, targeting €215–230m AFFO in 2026.
  • LTV Reduction:: Aiming for 45% by 2026 via disposals (€190m from 2,200 units sold so far) and valuation gains.
  • Debt Rating:: Moody’s affirmed Baa2 rating with a positive outlook, citing strong ICR and €1bn cash reserves for 2027 flexibility.

Guidance and Outlook

LEG Immobilien is on track to meet its 2025 guidance, targeting 10% AFFO growth, and guides for an additional 5% AFFO growth in 2026. The company expects rent growth of 3.8% to 4%, an EBITDA margin of 78%, and investments of more than EUR 35 per square meter in 2026. The guidance assumes an average interest rate of around 1.59%, with a cash position of over EUR 1 billion, providing flexibility for 2027.

Deleveraging and Credit Rating

The company aims to achieve an LTV of 45% in 2026, driven by valuation effects and disposals, with over 2,200 units sold for around EUR 190 million so far. Moody's recently confirmed LEG Immobilien's Baa2 rating and revised the outlook to positive, reflecting the company's improving credit profile. Disposals are expected to reach EUR 100-200 million in Q4, with the sale of a plot in Gerresheim, Düsseldorf, and parts of the BCP portfolio in Eastern Germany.

Valuation and Dividend

With a P/E Ratio of 7.94 and a Dividend Yield of 4.23%, LEG Immobilien's valuation appears attractive. The company's focus on AFFO, which is the basis for its dividend, is expected to drive shareholder returns. The guidance ranges for FFO and AFFO consider investments and capitalization rates, providing a clear framework for future growth.

Business Strategy

LEG Immobilien's new development business is winding down, with subsidies decreasing from EUR 20 million this year to EUR 10 million in 2026. The company is only looking into bolt-on acquisitions, focusing on getting its LTV down, with no big acquisitions currently planned. The opportunistic refinancing approach will continue, dependent on market developments, and a full portfolio review will be conducted over the coming months, potentially leading to additional units being earmarked for sale.

3. NewsRoom

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LEG Immobilien's (ETR:LEG) Earnings Aren't As Good As They Appear

Nov -20

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LEG Immobilien SE (LEGIF) Q3 2025 Earnings Call Highlights: Strong Portfolio Integration and ...

Nov -12

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LEG Immobilien Second Quarter 2025 Earnings: EPS Beats Expectations

Aug -09

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What Does LEG Immobilien SE's (ETR:LEG) Share Price Indicate?

Jun -17

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LEG Immobilien's (ETR:LEG) Earnings Are Of Questionable Quality

May -21

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LEG Immobilien SE (LEGIF) Q1 2025 Earnings Call Highlights: Strong Rent Growth and Strategic ...

May -14

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Calculating The Intrinsic Value Of LEG Immobilien SE (ETR:LEG)

May -14

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LEG Immobilien SE (LEGIF) (Q4 2024) Earnings Call Highlights: Strong Financial Performance Amid ...

Apr -21

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Affordable Living

Expected Growth: 4.83%

LEG Immobilien SE's Affordable Living segment growth of 4.83% is driven by increasing demand for affordable housing, favorable demographics, and government initiatives supporting affordable living. Additionally, the company's strategic focus on modernization and energy-efficient renovations, as well as its strong brand reputation, contribute to its growth momentum.

7. Detailed Products

Residential Rentals

LEG Immobilien SE offers a wide range of residential rental properties, including apartments and houses, in various locations across Germany.

Commercial Rentals

The company provides commercial rental spaces, including offices, retail spaces, and warehouses, to businesses of all sizes.

Property Management

LEG Immobilien SE offers property management services, including maintenance, repairs, and administrative tasks, to property owners and investors.

Real Estate Development

The company develops and constructs new residential and commercial properties, offering modern and sustainable living and working spaces.

Property Sales

LEG Immobilien SE sells residential and commercial properties to individuals, investors, and businesses.

8. LEG Immobilien SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for LEG Immobilien SE is moderate, as there are alternative investment options available to customers, but the company's diversified portfolio and strong brand presence mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is relatively low, as LEG Immobilien SE operates in a niche market with a loyal customer base, and customers have limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as LEG Immobilien SE relies on a diverse range of suppliers, but some suppliers may have significant bargaining power due to their size or specialized services.

Threat Of New Entrants

The threat of new entrants is relatively low, as LEG Immobilien SE operates in a highly regulated industry with significant barriers to entry, including high capital requirements and complex regulatory requirements.

Intensity Of Rivalry

The intensity of rivalry is high, as LEG Immobilien SE operates in a competitive market with several established players, and the company must continually innovate and differentiate itself to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.68%
Debt Cost 3.95%
Equity Weight 44.32%
Equity Cost 8.17%
WACC 5.82%
Leverage 125.63%

11. Quality Control: LEG Immobilien SE passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Scout24

A-Score: 6.2/10

Value: 2.7

Growth: 6.8

Quality: 8.7

Yield: 2.5

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Inwit

A-Score: 6.2/10

Value: 2.5

Growth: 7.2

Quality: 6.1

Yield: 8.1

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Shurgard

A-Score: 5.6/10

Value: 5.4

Growth: 4.9

Quality: 8.0

Yield: 5.6

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
CPI Property Group

A-Score: 5.3/10

Value: 5.8

Growth: 6.0

Quality: 3.5

Yield: 0.0

Momentum: 6.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
LEG Immobilien

A-Score: 4.8/10

Value: 6.1

Growth: 4.0

Quality: 5.4

Yield: 5.6

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
TAG Immobilien

A-Score: 4.6/10

Value: 5.1

Growth: 4.2

Quality: 5.1

Yield: 5.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.4$

Current Price

64.4$

Potential

-0.00%

Expected Cash-Flows