Adler Group (ETR:ADJ) said it repaid EUR 201 million of debt since the start of 2026 through asset disposals, while reaffirming its full-year net rental income outlook and reporting continued rental growth in its Berlin-focused residential portfolio.
Chief Executive Officer Karl Reinitzhuber said the company completed the sales of Hedemannstraße and Hansastraße, two non-strategic Berlin assets, and received proceeds from the second closing of the Holsten transaction. Proceeds were used partly to repay lending banks and holders of the company’s first-lien new-money facility. Adler also signed agreements to sell 18 Berlin condominium units for a combined EUR 6 million.
Rental income guidance reaffirmed
For the first half of 2026, Adler reported net rental income of EUR 63 million, down from the prior-year period following the disposal of its North Rhine-Westphalia portfolio. The decline was partly offset by rent increases on the remaining properties.
Adjusted EBITDA from rental activities totaled EUR 37 million, with a stable margin compared with the prior year, while total adjusted EBITDA was EUR 29 million. Reinitzhuber said the negative financial impact from the development business should decrease as more projects are sold and the organization becomes smaller.
Adler reaffirmed its 2026 net rental income guidance of EUR 124 million to EUR 129 million. The company also maintained its outlook for like-for-like rental growth above 3.5% for the full year.
Like-for-like rental growth was 3.0% year over year through June. Adler said it had raised rents on more than 30% of its residential units over the preceding 12 months, with 80% of those increases linked to inflation and 20% based on the Berlin Mietspiegel rent index.
A new biannual Berlin Mietspiegel published in June represented an uplift of about 5% for Adler’s portfolio, according to the company. Adler sent rent-increase notices to 2,500 units in June, which are expected to take effect in September, and said another 8,700 increases were scheduled through year-end. About 45% of those remaining increases are Mietspiegel-based.
Berlin portfolio valuation and operations
At the end of June, Adler owned 17,465 rental units, a decline of 18 units from March due to condominium sales. More than 99% of the portfolio was located in Berlin, with only 49 units outside the city. The company said it expects to sell those remaining non-Berlin units in coming quarters.
The gross asset value of Adler’s yielding portfolio was stable at EUR 3.5 billion. Gross asset value per square meter rose to EUR 2,886 from EUR 2,870 at the end of March. CBRE’s semiannual valuation showed a 0.5% positive like-for-like fair-value change in the first half, following an aggregate 1% increase during 2025.
Average monthly rent increased to EUR 8.68 per square meter from EUR 8.45 a year earlier, while operational vacancy declined to 0.9% from 2.0%. Rental yield rose to 3.6% from 3.5% year over year.
Reinitzhuber said the company was also pursuing operational initiatives including a tenant app, an artificial-intelligence hotline, a new ticketing system for property management, outsourcing of minor repairs and investment in heat pumps.
Debt reduction and maturity profile
Chief Financial Officer Thorsten Arsan said Adler’s total gross asset value, including approximately EUR 400 million of development assets, was EUR 3.9 billion at the end of June, unchanged from the first quarter.
During the second quarter, Adler made EUR 160 million of repayments on its first-lien new-money facility. Those payments included EUR 93 million following the Holsten Quartier closing, EUR 11 million tied to Kornversuchsspeicher and EUR 4 million from condominium sales. The company also returned EUR 15 million to other lenders from Hedemannstraße proceeds.
Adler’s nominal interest-bearing debt declined to EUR 3.5 billion at the end of June from EUR 3.6 billion in March. Its loan-to-value ratio increased by 210 basis points during the quarter to 79.2%, mainly reflecting paid and accrued interest expenses. The weighted average cost of debt was unchanged at 7.1%, and the average debt maturity was about 2.9 years.
The company extended a EUR 6 million secured bank loan from a 2026 maturity to the fourth quarter of 2028. Discussions continued regarding EUR 12 million of remaining 2026 bank maturities, though Arsan said Adler expected to reach extensions before those loans mature. Adler said 97% of its financial debt matures in 2028 or later, and it faces no capital-markets debt maturities before the end of 2028.
Disposal market remains challenging
In response to an analyst question, Reinitzhuber said German residential developers, equity partners and lenders remained cautious amid uncertainty around interest rates, inflation and geopolitical developments. He said Adler nevertheless had “good processes” underway and was in advanced discussions regarding several development sales.
The CEO said Adler expected that one or more development sales could be signed before year-end but declined to provide an expected transaction volume or a forecast for further first-lien repayments. He also said the company was continuing to evaluate options for its Berlin residential portfolio and related financing structures with adviser Evercore, without providing further details.
Adler’s cash position stood at EUR 155 million at the end of June. The company said the decline from the end of the first quarter reflected disposal proceeds received in March, followed by related first-lien repayments made in April.
About Adler Group (ETR:ADJ)
Adler Group SA engages in the purchase, management, and development of multifamily residential real estate properties in Germany. It operates through Residential Property Management, Adler RE, Consus, and Privatization segments. The company is involved in the rental and management of residential properties, including modernization and maintenance of residential properties, management of tenancy agreements, and marketing of residential units, as well as It also engages in holding, operating, and selling commercial units; and the modernization, maintenance, real estate investment, development of middle income houses, and management of non-vacant units.
