DEMIRE gets off to robust start into 2022

- Letting performance of almost 43,000m² well above multi-year average

- Average nominal financing costs held at low level of 1.66% p.a. – liquidity at comfortable level of EUR 137.0 million

- Company confirms 2022 outlook with full-year rental income between EUR 78.0 and 80.0 million and FFO I between EUR 38.5 and EUR 40.5 million

Langen, Germany, May 11, 2022.  DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has announced financial results for the first quarter of 2022 in line with management expectations. Following year-end 2021 record results for Funds from Operations I (FFO I, after tax, before minority interests) and letting performance, the company was able to demonstrate its resilience once again despite a high level of uncertainty with regard to the macroeconomic environment. Through the targeted optimisation of the existing portfolio and the consistent implementation of efficiency programmes, key operating and portfolio-related indicators were stabilised.

DEMIRE stands for stability

FFO I amounted to EUR 10.9 million in the reporting period, compared to EUR 11.2 million in the prior-year quarter. After portfolio adjustments for properties that do not fit in DEMIRE's long-term strategic orientation, the Company recorded a decline in rental income to EUR 19.3 million (Q1 2021: EUR 21.1 million), as expected. The Cielo office building in Frankfurt is not included in this figure, as the inflows from the joint venture are reported as investment income and in the financial result due to "at-equity accounting".

Earnings before interest and taxes (EBIT) fell to EUR 13.1 million in the same period (Q1 2021: EUR 16.6 million). This development is largely due to the reduction in rental income as a result of the portfolio optimisation.

The market value of DEMIRE’s portfolio remained stable at approx. EUR 1.41 billion, with net asset value (NAV, undiluted) increasing by EUR 0.07 to EUR 6.03 per share during the first quarter (year-end 2021: EUR 5.96).

In terms of letting performance, DEMIRE was likewise able to post a strong and significantly above-average result for the first quarter, with new and extended leases signed totalling 42,915 m². (Q1 2021: 23,265 m²). Active portfolio management and the successful repositioning of various properties reduced dependency on individual tenants while further diversifying the tenant base. The EPRA vacancy rate for the existing portfolio (excluding developments and assets held for sale) remained constant at 11.0 per cent. The weighted average remaining lease term (WALT) for the entire portfolio was 4.7 years, unchanged from the end of 2021.

“Our portfolio optimisation and the operational efficiency programmes as part of our REALize Potential strategy are paying off for the long term,” says Ingo Hartlief, Chief Executive Officer of DEMIRE. “We have shown our resilience, even through the current economic turbulence, and we are ready for whatever the future brings.”

Consistently low financing costs

“We have been able to significantly reduce financing costs over the past three years and, with no significant maturities until 2024, have put the company in a solid position for the medium term and beyond,” explains Tim Brückner, Chief Financial Officer of DEMIRE. “Our average nominal borrowing costs remained at a low level of 1.66 per cent per year during the reporting period. Our net loan-to-value (LTV) ratio was 49.5 percent and thus slightly below year-end 2021 (49.7 percent). As of the end of the first quarter, cash and cash equivalents amounted to EUR 137.0 million.”

Full-year 2022 outlook confirmed

“These results for the first three months of 2022 add to our confidence that the company’s full-year results will be in line with plan,” adds Ingo Hartlief. “We do not expect the ongoing COVID-19 situation or the Ukrainian conflict to have a significant impact on our business activities. Based upon generally prevailing conditions in the commercial real estate market and expectations for the capital markets, specifically including possible interest rate hikes by the ECB, and based upon DEMIRE’s stable positioning, we can assume that our company’s financial performance will remain solid for the foreseeable future.”

On this basis, the Executive Board confirms the outlook for fiscal year 2022, with full-year rental income between EUR 78.0 and 80.0 million (2021: EUR 82.3 million) and FFO I (after taxes, before minority interests) between EUR 38.5 and 40.5 million (2021: EUR 39.8 million).

Ends

Invitation to the Conference Call on 11 May 2022

The Management Board of DEMIRE invites all interested parties to attend the presentation of the Q1 2022 interim results at a conference call on 11 May 2022 at 10:00 CEST.

Please use the following dial-ins:

Germany +49 69 2222 25197
United Kingdom +44 330 165 4012
United States +1 646 828 8073

Dial-in code: 3873756.

In addition, the conference call will be streamed online:

https://www.webcast-eqs.com/demire20220511

A presentation is available on

https://www.demire.ag/en/publications/

Selected Key Performance Indicators of DEMIRE Group

About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE – REALize Potential

DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial real estate in mid-sized cities and up-and-coming locations bordering metropolitan areas across German. The Company's particular strength lies in realising the potential of the properties at these locations while focusing on a range of properties that appeals to both regional and international tenants. As of 31 March 2022, DEMIRE's portfolio contains of 64 assets with lettable space totalling about 1 million sqm. Including the proportionately acquired Cielo property in Frankfurt/Main, the market value amounts to so approximately EUR 1.7 billion.

The portfolio focuses on office properties with a blend of retail, hotel and logistics properties results in a return / risk structure that is appropriate for the commercial real estate segment. The Company places importance on long-term contracts with solvent tenants and the realisation of the properties' potential. DEMIRE anticipates continued stable and sustainable rental income along with solid value appreciation and expects the portfolio to grow significantly in the medium term. As it expands its portfolio, DEMIRE is concentrating on FFO-strong assets with potential and, at the same time, disposing of properties that are not in line with its strategy. DEMIRE is taking several steps to further the development of its operations and processes. Next to cost consciousness, the operating performance is set to improve through an active asset and portfolio management approach.

DEMIRE Deutsche Mittelstand Real Estate AG shares are listed in the Regulated Market (Prime Standard segment) of the Frankfurt Stock Exchange.

Contact:

DEMIRE Deutsche Mittelstand Real Estate AG

Michael Tegeder
Head of Investor Relations & Corporate Finance
Phone: +49 6103 372 49 44
Email: tegeder@demire.ag