TAG Immobilien ETR: TEG reported higher funds from operations and stronger Polish apartment sales for the first half of 2026, while outlining plans to deploy proceeds from the July listing of its Polish development subsidiary ROBYG into rental-housing growth.
FFO I, a key measure of recurring operating earnings, rose 9% year over year to €100.2 million in the first half, CFO and Co-CEO Martin Thiel said during the company’s earnings call. FFO II, which combines FFO I with net income from Polish property sales, increased 11%, supported by a 12% rise in net income from sales in Poland.
Following the first-half performance, TAG said it expects full-year FFO I to come in toward the upper end of its previously issued guidance range, or closer to €197 million. Thiel said the company retained some caution due to potentially higher seasonal maintenance costs in the second half, while German acquisitions are expected to contribute mainly from 2027 because most closings are planned near year-end.
Rental growth and portfolio values
TAG reported like-for-like rental growth of 3% in Germany during the first half, including vacancy reduction. Rental growth excluding vacancy reduction was 2.9%, while modernization-related revenue contributed only 0.3 percentage points, according to Thiel.
The German portfolio’s vacancy rate stood at 3.8%. While that was higher than at the beginning of the year, Thiel said the company remained confident in its full-year expectation for vacancy reduction and noted that the rate was 10 basis points below the level recorded in the first half of 2025. Acquisitions accounted for roughly 10 basis points of the vacancy movement, he said.
The value of TAG’s German portfolio increased 1.5% in the first half, including capital expenditures. Excluding capital expenditures, the increase was about 0.7% to 0.8%, Thiel said. The company expects a broadly unchanged valuation at year-end, citing a gross yield of 6.6% that it views as resilient despite higher interest rates.
In Poland, like-for-like rental growth in the pre-existing portfolio was 2.4%, compared with 3.4% in 2025. Thiel attributed the moderation in part to more tenants signing two- or three-year contracts linked to inflation, which has declined to below 3% in Poland. He said the longer contracts reduce tenant turnover, vacancy between leases and related costs. Vacancy in stabilized Polish units was 2.1%.
Resi4Rent integration expands Polish rental platform
TAG completed its acquisition of the Resi4Rent portfolio on May 27 after receiving unconditional antitrust approval. The final purchase price was €575 million, implying a 7.5% gross yield based on expected 2026 net actual rent, according to the company.
The portfolio was revalued at the end of the first half and recorded a 7% value uplift compared with the purchase price. With Resi4Rent included, TAG’s Polish rental portfolio now comprises more than 9,100 units, with more than 1,000 apartments under construction.
Thiel said integration of the portfolio into TAG’s Vantage platform was proceeding smoothly and was expected to be completed shortly. The company has land capacity for roughly 6,000 further units in Poland and expects to begin construction of between 1,500 and 2,000 apartments annually over the next two to three years. Construction could exceed that pace if building permits are obtained more quickly, he said.
TAG also said it acquired about 900 units in Germany at an average gross yield of approximately 7.1%. The acquired portfolios have an average vacancy rate of around 4.3% and are almost entirely located in eastern Germany. The company said it would remain a selective and disciplined buyer rather than pursue growth at any price.
ROBYG IPO brings capital and lowers leverage
ROBYG began trading on the Warsaw Stock Exchange on July 2, after the June 30 balance-sheet date. TAG retained a 67.1% stake in the Polish build-to-sell developer, which had a post-IPO market capitalization of about €860 million on the listing date. TAG valued its remaining stake at approximately €580 million at the IPO price.
Total gross proceeds from the transaction amounted to €282 million, including €188 million at TAG level from the share sale and €94 million at ROBYG level through capital increases. Estimated total transaction costs were about €10 million, implying net proceeds of roughly €272 million, Thiel said.
On a pro forma basis, TAG expects the IPO to add around €55 million, or approximately €0.30 per share, to net tangible assets and reduce loan-to-value by around 320 basis points to 42.2%.
After debt maturities due this year, including a €470 million convertible bond repayment, TAG expects to have more than €450 million in free cash available for investments. Thiel said approximately €300 million would be available at TAG level for rental investments and roughly €100 million at ROBYG level. Fully redeploying the funds would bring leverage back toward TAG’s 45% LTV target, though the company said it would not rush investments.
The company’s average cost of debt stood at 2.7%. TAG received credit-rating upgrades from Moody’s, to Baa2 from Baa3 in May, and from S&P Global, to BBB from BBB- following the ROBYG IPO. Thiel said new financing costs have risen with higher risk-free rates, with five-year financing slightly below 4% and 10-year financing slightly above 4.5%.
Polish home sales expected to accelerate later in year
TAG sold 1,350 Polish residential units in the first half, up from 1,158 units a year earlier. The company maintained its expectation of selling between 2,800 and 3,000 units for the full year, citing healthy demand and sales prices that remain at high levels.
Thiel said the majority of handovers and revenue recognition are expected in the third and particularly fourth quarters. He estimated that 90% to 95% of apartments scheduled for handover this year have already been sold, limiting exposure to future sales-market conditions.
TAG expects to provide further guidance on ROBYG’s sales volumes with its next results. Thiel noted that ROBYG sold more than 4,000 apartments in 2021 and said the platform could potentially return to that level over the medium term as IPO proceeds support purchases of additional land plots and growth.
About TAG Immobilien (ETR:TEG)
TAG Immobilien AG, a real estate company, acquires, develops, and manages residential real estate properties in Germany. It also rents commercial real estate properties, as well as operates serviced apartments. The company was formerly known as TAG Tegernsee Immobilien-und Beteiligungs-Aktiengesellschaft and changed its name to TAG Immobilien AG in September 2008. TAG Immobilien AG was founded in 1882 and is headquartered in Hamburg, Germany.
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