DEMIRE achieves record FFO of EUR 39.8 million

- Record letting performance of 182,700 sqm

- EBIT rises to EUR 101.9 million

- Forecast 2022: Rental income between EUR 78.0 and 80.0 million and FFO between EUR 38.5 and EUR 40.5 million expected

Langen, 17 March 2022: DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) reports record results for funds from operations (FFO I, after tax, before minorities) and letting performance in the 2021 financial year. Despite continuing uncertain economic conditions due to the Corona pandemic, the commercial real estate specialist was able to follow up on the successful previous year. Targeted disposals of non-strategic properties and the consistent implementation of efficiency programmes led to further improvements in key operational and portfolio-related indicators.

REALize Potential strategy ensures high stability

FFO amounted to EUR 39.8 million in the reporting period, an increase of 1.7 percent over the previous year (2020: EUR 39.2 million). After disposals of properties that do not fit DEMIRE's long-term portfolio strategy, the company recorded a decline in rental income of around 5.9 percent to EUR 82.3 million (2020: EUR 87.5 million), thus exceeding the forecast of EUR 80.0 to 82.0 million. This figure does not include the Cielo office building in Frankfurt, as the inflows from the joint venture are reported as financial income due to at equity accounting.

Earnings before interest and taxes (EBIT) increased significantly to EUR 101.9 million compared to the previous year (2020: EUR 27.7 million). The strong increase is due, among other things, to the fair value adjustment of investment property (plus EUR 48.8 million). DEMIRE regards this development as a confirmation of its active asset and portfolio management approach.

The market value of DEMIRE's portfolio remained almost stable at around EUR 1.41 billion despite the sale of eleven properties (2020: EUR 1.44 billion). The diluted NAV increased by EUR 0.05 per share to EUR 5.94 per share as of 31 December 2021 (2020: EUR 5.89) despite the dividend distribution EUR 0.62 per share.

In 2021, DEMIRE once again exceeded the record letting performance of the previous year (2020: 177,000 m²) through new contracts and renewals of around 182,700 m². DEMIRE also strengthened the tenant base by contracts with creditworthy tenants, for example in Leipzig, Dresden and Quickborn. The EPRA vacancy rate of the existing portfolio, excluding properties held for sale and project developments, was 11.0 per cent as at the balance sheet date. The portfolio's weighted average lease term (WALT) remained almost stable at 4.7 years (2020: 4.8 years).

Ingo Hartlief, CEO of DEMIRE, says: "The economic environment in 2021 was challenging due to the pandemic. Hence it is even more satisfying that DEMIRE can once again report stable and solid results. This underlines the robustness of our portfolio and the success of our active asset management."

Financing costs further reduced

"We further optimised our financing structure during the reporting period with two additional mortgage financings. The Company has been able to significantly reduce its financing costs over the past three years, and the first refinancing is not due until 2024," says Tim Brückner, DEMIRE's CFO. The average nominal cost of debt fell by a further 5 basis points to 1.66 percent per annum as at 31 December 2021 compared to the previous year (1.71 percent). At the end of 2018, the figure was still 3.0 percent. The net leverage ratio (net LTV) was 49.7 per cent at the reporting date (2020: 49.2 per cent). "The Moody's downgrade to Ba3 is due to the renewed distribution of a high dividend and not related to DEMIRE's operating performance," says Brückner.

Confident outlook for 2022

Against the backdrop of current economic and geopolitical developments, the outlook is divided. "The economic impact of the Russian war on Ukraine and the further course of the Corona pandemic cannot be fully assessed. However, the Executive Board believes that DEMIRE is resilient even in uncertain times and is therefore confident about the Company's economic development. For 2022, DEMIRE expects rental income of between EUR 78.0 and EUR 80.0 million. On this basis, FFO I is expected to be in the range of EUR 38.5 and EUR 40.5 million.

***

The DEMIRE annual report 2021 is available on the Company's website:

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

End of press release

Invitation to the Conference Call on 17 March 2022

The Management Board of DEMIRE invites all interested parties to attend the presentation of the FY 2021 results at a conference call on 17 March 2022 at 10:00 CET.

Please use the following dial-ins:

Germany +49 69 2222 25197
United Kingdom +44 330 165 4012
united States +1 323 701 0160

The dial-in code is 2312118.

In addition, the conference call will be streamed online:

https://www.webcast-eqs.com/demire20220317

A presentation is available on

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

Selected Key Performance Indicators of DEMIRE Group

* excl. assets held for sale and developments

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 December 2021, 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 Corporate Finance & Investor Relations 
Phone: +49 6103 372 49 44
Email: tegeder@demire.ag