03. März 2010 
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TAG Immobilien AG announces operational turnaround
The two halves of the year 2009 were as different as can be for TAG. After the CEO changeover at the end of the first half, the management decided for reasons of transparency to simultaneously adjust the value of the properties by EUR -15.3 million and of the discontinued lines of business by EUR -9 million. These items resulted in a pre-tax loss (EBT) of EUR 28.4 million at the end of the first half of 2009. In contrast to this, the second half of 2009 was dominated by vacancy reductions and cost cuts. TAG saw initial successes from these measures during Q3/2009, and was able to build on them in Q4 by maintaining the required focus. The uptrend is evident in the quarterly results. For example, in Q3/2009 TAG had EUR 3.0 million in pre-tax earnings (EBT), followed by EUR 0.7 million in Q4. Due to the non-cash expenses from the first half, earnings before taxes (EBT) for the full year came to EUR -24.7 million.
The aggressive vacancy reduction was a direct contributor to the positive second-half performance. Vacancy was cut by 40% across the Group. In residential property alone, vacancy was reduced by nearly half, bringing the vacancy rate down from 16.4% to 10.1%. In Berlin, rental activities brought vacancy down to currently 14% (2008: 25.6%). This successful vacancy reduction is reflected in the rental profit, which at EUR 35 million at year-end 2009 is on par with that of the previous year – even given a high (property) sales volume of EUR 73 million in 2009. On an annualised basis, the vacancy reduction added EUR 2.4 million to the net income, which would be equivalent to a rise in NAV of 1 EUR per share.
Consolidation within the Group is largely completed and the operational turnaround has been achieved – in other words: all of the Group’s costs can be covered with the rental income alone. As planned, there were no more write-downs during the second half of 2009, and future personnel costs as well as non-property-related costs were reduced significantly. In addition, the portfolio was optimised with a focus on cash flow and yields.
As part of its operational development, TAG Immobilien AG took the strategic step of increasing its holdings in Bau-Verein from 71% to 91% at the end of the year, thereby underscoring its focus on the residential segment.
The aggressive vacancy reduction was a direct contributor to the positive second-half performance. Vacancy was cut by 40% across the Group. In residential property alone, vacancy was reduced by nearly half, bringing the vacancy rate down from 16.4% to 10.1%. In Berlin, rental activities brought vacancy down to currently 14% (2008: 25.6%). This successful vacancy reduction is reflected in the rental profit, which at EUR 35 million at year-end 2009 is on par with that of the previous year – even given a high (property) sales volume of EUR 73 million in 2009. On an annualised basis, the vacancy reduction added EUR 2.4 million to the net income, which would be equivalent to a rise in NAV of 1 EUR per share.
Consolidation within the Group is largely completed and the operational turnaround has been achieved – in other words: all of the Group’s costs can be covered with the rental income alone. As planned, there were no more write-downs during the second half of 2009, and future personnel costs as well as non-property-related costs were reduced significantly. In addition, the portfolio was optimised with a focus on cash flow and yields.
As part of its operational development, TAG Immobilien AG took the strategic step of increasing its holdings in Bau-Verein from 71% to 91% at the end of the year, thereby underscoring its focus on the residential segment.
