DEMIRE: Major shareholders convert 2013/2018 convertible bond into shares

• Apollo-managed funds and Wecken Group convert convertible bonds with a total volume of EUR 10.27 million into DEMIRE shares
• Company's net loan-to-value ratio (net-LTV) declines from 58.1% to around 55% on a pro forma basis after 10% capital increase (registered in April 2018), conversion of the mandatory convertible bond in May 2018 and the current conversion of the convertible bonds
   

Langen, 13 June 2018 ­- Funds managed by affiliates of Apollo Global Management, LLC (NYSE: APO) and the Wecken Group, the two major shareholders of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0), convert convertible bonds with a total volume of EUR 10.27 million prior to their maturity at the end of December 2018 into DEMIRE shares. As a result, the share capital of DEMIRE will increase in June from the current level of around EUR 62.8 million to around EUR 73.1 million. Taking into account the current conversion of the convertible bonds, the conversion of the mandatory convertible bond into shares in May 2018 and the 10% capital increase registered in April 2018 after the last balance sheet date, the net loan-to-value ratio (net-LTV) decreases from 58.1% as of 31 March 2018 to around 55% on a pro forma basis.

Ralf Kind, CEO/CFO of DEMIRE, comments: "With our two major shareholders exchanging their convertible bonds for shares, we are further simplifying our financing structure and coming significantly closer to our goal of reducing the net loan-to-value ratio to around 50%."

The 2013/2018 convertible bond (ISIN: DE000A1YDDY4) has an issue volume of EUR 11.3 million and matures on 30 December 2018. The interest coupon for the convertible bond is 6%. The conversion of the mandatory convertible bonds amounting to EUR 15.0 million into three million new shares already took place upon their maturity on 22 May 2018.
 
DEMIRE 2.0 - Strategy for the Company's Next Growth Phase:
The "DEMIRE 2.0" strategy signifies the Company's next growth phase. The implementation of an integrated action plan - which, among other things, seeks to reduce the financing costs, optimise costs and to streamline the Group structure - is a cornerstone of the plan to expand the current portfolio to a volume of EUR 2 billion.

The business model's focus remains on the acquisition of commercial property in German secondary locations. The cost base will continue to be optimised under this programme through permanent improvements in efficiency and economies of scale in real estate management resulting from the Company's growth. Further optimisation of the financing mix and, specifically, continuous examination of potential refinancing options in the debt and equity markets is expected to bring down the average interest costs and to lower the loan-to-value ratio down to around 50% in the medium term.

In addition to increasing its market capitalisation, DEMIRE also aims to position its risk profile in the "investment grade" category to secure sustainable long-term financing on favourable terms with a view to future growth. DEMIRE's anchor shareholders back the DEMIRE 2.0 strategy and intend moreover to support the growth of DEMIRE.
 
Press Contact
RUECKERCONSULT GmbH
Wallstraße 16
D-10179 Berlin
Phone: +49 30 28 44 987 65
demire@rueckerconsult.de

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
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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 billion by the end of the 2017 financial year.
 
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 pursues an active property management approach out of the conviction that it is the best way to achieve economies of scale and portfolio optimisations. DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are listed in the Prime Standard segment of the Frankfurt Stock Exchange.