Lumo Homes Holds Steady on 2026 Targets Amid Rising Rental Yields

Lumo Homes confirmed its forecast for the full year 2026, buoyed by a 3.2% increase in like-for-like rental growth during the first quarter. This uptick came alongside an improved occupancy rate, signaling a gradual stabilization in the rental market.

The property investment firm anticipates total revenue between €484 million and €497 million for the year, marking a growth range of approximately 6.3% to 9.2% compared to 2025. Funds from operations (FFO) are projected between €147 million and €157 million, excluding one-off expenses.

First-quarter results showed a 3.1% dip in overall revenue to €110.8 million, largely impacted by asset disposals completed last July that trimmed €5.4 million from the top line. Net rental income also slipped by 4.6%, settling at €59.9 million in Q1.

Vacancy rates improved by 80 basis points since December 2025, down to 4.4%, and were 280 basis points lower than a year ago. Management highlighted that while a surplus in supply remains, the market is gradually rebalancing. Notably, Lumo Homes does not have any apartments under construction, as new builds are expected to slow.

The company's net tangible asset value per share inched up by 0.8%, standing at €18.46. Meanwhile, the loan-to-value ratio dropped by 150 basis points to 42.5% year-on-year, helped by the recent disposals.

Lumo's interest coverage ratio held firm at 2.4 times, though the average interest rate edged up slightly by 10 basis points to 3.3% as of the end of 2025.

Funds from operations in Q1 declined 8.7% to €21.2 million, partly due to a 21.8% increase in modernization and repair costs, which rose to €10.6 million during the period. Asset valuations saw a small 0.6% dip year-over-year, affected in part by changes to property age calculations. The net initial yield tightened by 20 basis points, now at 3.7%.

This blend of steady rental growth, tighter vacancies, and disciplined capital management paints a picture of a company navigating market headwinds with cautious optimism.