DEMIRE: Capital increase to fund the potential acquisition of several properties and/or portfolios of properties

• Issuance of 34,512,703 new ordinary bearer shares, representing approx. 47% of the share capital
• Issue gross proceeds of approx. EUR 150 million to finance potential acquisitions with an estimated aggregate gross purchase price of up to approx. EUR 350 million
• AEPF III 15 S.à r.l. has agreed to exercise its subscription rights and purchase any New Shares for which subscription rights of the Company's existing shareholders are not exercised

Langen, October 25, 2018 - The executive board (Vorstand) of DEMIRE Deutsche Mittelstand Real Estate AG (the "Company") resolved today, with the consent of the Company's supervisory board (Aufsichtsrat), to increase the Company's share capital against cash contributions from EUR 73,085,728.00 by EUR 34,512,703.00 to EUR 107,598,431.00 through the issuance of 34,512,703 new ordinary bearer shares with no par value (Stückaktien), each with a notional interest of EUR 1.00 and dividend entitlement as of January 1, 2018 (the "New Shares"), from authorized capital with subscription rights for the existing shareholders of the Company (the "Capital Increase").

The New Shares will be offered to the Company's existing shareholders at a price of EUR 4.35 per New Share and a subscription ratio of 36:17. This means that existing shareholders can acquire 17 New Shares for every 36 shares they hold in the Company. AEPF III 15 S.à r.l. ("AEPF"), the Company's single largest shareholder currently holding approx. 49.58% of the Company's share capital, has agreed to exercise its subscription rights and to directly subscribe for the amount of New Shares attributable to its shareholding based on the subscription ratio. In addition, AEPF has agreed to purchase any New Shares for which subscription rights of the Company's existing shareholders are not exercised. As a result, the Company expects to generate gross proceeds of approx. EUR 150.1 million from the Capital Increase.

Subject to the approval of the securities prospectus by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and to the publication of the approved prospectus, the subscription period for the Capital Increase is expected to start on October 30, 2018, and is scheduled to end on November 12, 2018 (both dates inclusive). No trading of subscription rights will take place.

The Company intends to sell the New Shares and use the estimated net proceeds of the Capital Increase to finance, in part, the purchase price of the potential acquisition of several unrelated properties and/or portfolios of properties primarily in Germany with an estimated aggregate purchase price (including acquisition costs) of up to approximately EUR 350 million. The Company is currently in varying stages of preparation and exclusive negotiations with the respective sellers of such properties and/or portfolios and is aiming to enter into a sale and purchase agreement with respect to one of the portfolios of properties in the near term. However, as of the date hereof, the Company has not entered into any binding commitments in respect of such acquisition opportunities. Should the Company not be able to consummate any or all of such acquisitions, it would apply the net proceeds of the Offering in line with its financial strategy of selective acquisitions of commercial properties primarily in secondary locations in Germany. The Company expects to finance the remaining amount of the purchase price for such potential acquisitions, in the amount of up to approximately EUR 200 million, through additional indebtedness.

It is anticipated that the consummation of the Capital Increase will be entered into the commercial register of the local court of Frankfurt am Main on November 12, 2018, and that start of trading and the inclusion of the New Shares in the existing quotation of the Company's shares on the Frankfurt Stock Exchange and the sub-segment of the regulated market of the Frankfurt Stock Exchange with additional post-admission obligations (Prime Standard) will take place on or about November 13, 2018.     

Ralf Kind, CEO/CFO of DEMIRE: "We are very pleased by the continued commitment of our anchor shareholder in implementing our DEMIRE 2.0 strategy. With the proceeds of the issue, we intend to realise a first significant growth step of up to EUR 350 million. In addition, we have a strong acquisition pipeline that gives us the confidence to achieve our targeted portfolio goal of EUR 2 billion."

Baader Bank is acting as Sole Global Coordinator and Sole Bookrunner for the rights issue.
 
Contact Details
DEMIRE Deutsche Mittelstand Real Estate AG
Robert-Bosch-Strasse 11
D-63225 Langen
Phone: +49 (0) 6103 - 372 49 - 0
Fax: +49 (0) 6103 - 372 49 - 11
ir@demire.ag
www.demire.ag
 
Additional Information
This release does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. The offer will be made solely by means of, and on the basis of, a securities prospectus which is to be published. An investment decision regarding the publicly offered securities of the Company should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and will be available free of charge from DEMIRE Deutsche Mittelstand Real Estate AG, Robert-Bosch-Straße 11, 63225 Langen, or on the Company's website (http://www.demire.ag/en/investor-relations/).
 
The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The securities of the Company have not been, and will not be, registered under the Securities Act.
 
About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE - First in Secondary Locations
DEMIRE Deutsche Mittelstand Real Estate AG has commercial real estate holdings in mid-sized cities and up-and-coming locations bordering German metropolitan areas. The company's specific forte is its focus on these second-tier cities - its claim being "First in Secondary Locations" - and on a range of assets that appeals to both internationally active and regionally rooted tenants. Having expanded rapidly between 2013 and 2016 both by buying single properties and by acquiring equity interests, DEMIRE held a portfolio with a combined lettable area of around 1 million sqm and a fair market value of more than EUR 1.1 billion by the end of the half-year 2018.
 
The portfolio focus on office, retail and logistics assets results in exactly the kind of risk/reward structure that DEMIRE considers appropriate for the business line of commercial real estate. The Company puts a premium on long-term contracts with solvent tenants in anticipation of stable and sustainable rent revenues. DEMIRE has set itself the goal to keep optimising its corporate structure. To this end, it pursue an active property management approach out of the conviction that it is the best way to achieve economies of scale and portfolio optimisations.