The rating action follows changes to Adler Group’s business and limitations on its refinancing options. The rating has also been withdrawn for commercial reasons.

The affirmation follows the robust H1 2021 results at Adler Real Estate AG and parent Adler Group S.A. due to the full-period contribution from acquired entities, along with refinancing, portfolio rotation/optimisation and like-for-like rental growth.

The Outlook revision is driven by the expectation of no further improvement in credit metrics and the limited capacity of ADLER`s parent to provide support.

The neutral impact on Scope's current rating case of the process initiated by ADLER to acquire all of the shares in ADO Group Ltd. drives the affirmation.

ADLER’s improved size, asset quality and profitability support the rating affirmation despite the temporary increase in leverage. Scope expects the company to reduce leverage via disposal activity, with proceeds used to pay down debt.

The change in Outlook reflects the anticipated positive impact of the successful acquisition of 70% + one share of the share capital of Brack Capital Properties N.V. (BCP) on the company's business and financial risk profile.

The review for possible upgrade reflects the anticipated positive impact of a successful acquisition of 70% + one share of the share capital of Brack Capital Properties NV (BCP) on the company's business and financial risk profiles.

The upgrade reflects the company’s successful restructuring of debt, expected to improve credit metrics, and the disposal of the volatile trading business (Accentro) to a private partnership, which should stabilise cash flows further.

The instrument ratings are linked to the BB- Corporate Issuer Credit Rating (CICR) of ADLER, assigned on 25 July 2016. Thus the applicable Outlook is Stable.

The BB- rating for ADLER is driven primarily by an adequate business risk profile, which benefits from the size achieved in the fragmented and low-risk German residential real estate industry, and is characterised by a fairly diversified portfolio.