Deutsche Annington to beat peers on dividend -analyst report

FRANKFURT, June 13 Thu Jun 13, 2013 10:46am EDT

FRANKFURT, June 13 (Reuters) - Deutsche Annington, which is planning a flotation worth over 1 billion euros ($1.33 billion), aims to pay out a higher proportion of its earnings as a dividend than its peers, according to a report from Morgan Stanley.

The management of the German residential real estate company plans to pay out 70 percent of its recurring earnings as a dividend from the 2014 business year onwards, Morgan Stanley analyst Bart Gysens said in the report, dated June 10.

Morgan Stanley and JP Morgan are managing the listing.

A spokeswoman for Deutsche Annington, which with 180,000 flats is Germany's largest residential real estate firm, declined to comment on the report, saying that the company would release information on the payout ratio at a later stage.

The payout would represent a higher proportion of earnings than that handed to investors by its other listed peers.

LEG, which went public earlier this year, and GSW Immobilien aim to hand out 65 percent of "Funds from Operations 1", while Deutsche Wohnen has a strategy to pay out 50 percent.

Funds from operations is net income including depreciation and amortization but excluding profits from divestments and is considered the operating income of real estate companies.

Deutsche Annington's payout ratio for 2013 will be in line with its listed dividend-paying peers, before rising from 2014, Gysens said.

The company said on June 10 it will float about a quarter of the stock held by private equity owner Terra Firma, and issue new shares worth 400 million euros, the proceeds of which it will use to cut debt.

The fact that Terra Firma will likely remain a key shareholder in the medium term could mean that Deutsche Annington shares trade at a discount to peers, the Morgan Stanley analyst said.

LEG Immobilien was the first German property company to list its shares this year, raising 1.3 billion euros in January.

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