DEMIRE Deutsche Mittelstand Real Estate AG: Operational business remains robust in the COVID 19 pandemic – key figures further improved

DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Quarterly / Interim Statement/9 Month figures
17.11.2020 / 07:00
The issuer is solely responsible for the content of this announcement.

DEMIRE: Operational business remains robust in the COVID 19 pandemic - key figures further improved

- Rental income up 9.5% to EUR 65.8 million (9M 2019: EUR 60.1 million)

- FFO I (after taxes, before minorities) rises significantly by 23.1% to EUR 30.1 million (9M 2019: EUR 24.5 million)

- High letting performance of 110,000 sqm lowers EPRA vacancy rate to 8.4% (9M 2019: 10.9%) with almost constant WALT of 4.7 years

- Financing costs reduced to 1.75% - Loan to value at 49.9% after dividend payment within target corridor

- CEO Ingo Hartlief: "Despite the renewed corona restrictions, we confirm our 2020 guidance for rental income and FFO I."

Langen, 17 November 2020. Despite the ongoing COVID 19 pandemic, the operating business of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) developed overall robustly during the first nine months of the current year and showed a stable, positive trend as of 30 September 2020. The consistent implementation of the "REALize Potential" strategy, the extensive refinancing and the contribution to earnings made by the acquisitions in the previous year and in March 2020 form the basis for the positive development of DEMIRE. Those achievements are also the key to the medium-term growth of the company.

Rental income and FFO increased - liquidity buffer expanded

The DEMIRE Group's rental income increased by 9.5% in the first nine months of 2020 and amounted to EUR 65.8 million, compared to EUR 60.1 million in the same period of the previous year. At the same time, net rental income improved to EUR 54.0 million compared to EUR 48.9 million in the first nine months of 2019, mainly due to rental increases and the purchase of properties, although property sales had a counteracting effect. The like-for-like rental trend also shows a positive development despite the restrictions on economic activity caused by the pandemic. Although the figure fell marginally year-on-year due to a one-off contract adjustment in favour of the largest tenant, it nevertheless increased by 1.2% after adjustment for this effect.

At 109,600 sqm as of 30 September 2020, letting performance was again high and significantly exceeded the average total annual figure from the past (80,000 sqm). This is also reflected in a further improvement of the EPRA vacancy rate. As of the reporting date, it is down to 8.4% compared with 9.4% as of 31 December 2019. The WALT as of 30 September 2020 is 4.7 years, which is practically constant compared with the end of 2019. Overall, the letting performance in the first nine months of the current financial year is divided into 57.8% new lettings and 42.2% follow-up lettings.

The effects of the Corona epidemic are manageable at the reporting date and beyond. Whereas the rent collection ratio in the second quarter of 2020 was 89% of the agreed contractual rents, this figure normalised to around 97% of rents from July onwards. At present, around EUR 3.6 million of rent is still outstanding due to Corona, while EUR 1.75 million of outstanding rent has already been paid in arrears.

Another significant increase in FFO I

Funds from operations (FFO I, after taxes, before minorities) again increased significantly by 23.1% year-on-year to EUR 30.1 million, compared to EUR 24.5 million in the same period of the previous year. On a diluted basis, this corresponds to an FFO I per share of EUR 0.28 after EUR 0.23 in the same period of the previous year.

Balance sheet ratios after dividend payment solid, financing costs optimised

As of September 30, 2020, total assets decreased slightly by EUR 14.4 million to around EUR 1,663.1 million compared to the end of 2019. This is mainly due to the disposal of nine properties, which is partly offset by the addition of one property in the reporting period, as well as the income for the period.

As a result of the first-time dividend payment, the undiluted net asset value according to EPRA (EPRA NAV) also falls from EUR 684.1 million as of 31 December 2019 to EUR 640.9 million as of 30 September 2020. On an undiluted basis, EPRA NAV as of the reporting date was EUR 6.06 per share (31 December 2019: EUR 6.35 per share). Compared to the end of 2019 (46.7%), the net loan-to-value ratio increased to 49.9% as of 30 September 2020, thus almost reaching the 50% target.

The positive effects of the refinancing activities executed in the previous year are now clearly reflected in the financial result. As of the reporting date, EUR -15.6 million is reported here, which corresponds to a halving of the figure from the same period of the previous year (EUR -30.6 million). After drawing two mortgage loans, the average nominal financing costs continue to fall to 1.75%. DEMIRE's overall liquidity as of the balance sheet date is a comfortable EUR 92.6 million, despite the distribution of the dividend in September 2020.

Ingo Hartlief, CEO of DEMIRE AG, comments: "In the first three quarters of 2020, DEMIRE successfully defied the major challenges of the COVID 19 pandemic and continued its positive development. The resilience of our operating business is due to our 'REALize potential' strategy and our focus on ABBA locations. With the ability to pay a dividend for the first time in the third quarter of 2020, we have achieved one of our strategic goals. We still have a comfortable liquidity position, which allows us to take advantage of any growth opportunities that arise. This is supported by the expected further cash inflow of EUR 72.6 million from the sale of a property portfolio in the near future, which will increase our cash position to more than EUR 165 million. Combined with the opportunities to further increase the value of the portfolio through active portfolio management, we believe DEMIRE is well equipped for the future and aim for further sustainable growth in both the short and medium term".

Management Board confirms increased guidance for rental income and FFO I

Due to the positive development in the first nine months of 2020 and in the expectation that the lockdown in Germany will not be extended any further, the Board of Management confirms the forecast for the 2020 financial year published on 18 August and anticipates an increase in key figures compared with the 2019 financial year. Rental income will be between EUR 85 and 87 million (2019: EUR 81.8 million), and FFO I (after taxes, before minorities) is expected to be between EUR 36 and 38 million (2019: EUR 34.5 million).

The DEMIRE interim report is available on the Company's website for downloading at:

Invitation to the Conference Call on 17 November 2020
The Management Board of DEMIRE invites all interested parties to attend the presentation of the 9M 2020 interim results during a conference call on 17 November 2020 at 10:00 CET.

To dial in, please use the following phone numbers:
Germany:         +49 89 20303 5709
UK:                   +44 330 336 9125
USA:                 +1 929 477 0324

PIN: 7330 633

The presentation of the quarterly financial report will also streamed as a live webcast. Please use the link

A presentation is available on

Selected Key Performance Indicators of DEMIRE Group

Consolidated income statement
(in EURm)
Rental income 65.8 60.1
Net income from the rental of real estate 54.0 48.9
EBIT 39.7 76.3
Financial results -15.6 -30.6
Profit/loss for the period after tax 18.1 37.5
- thereof attributable to shareholders of the parent company 16.5 34.2
FFO I (after tax, before minority interests) 30.1 24.5
FFO II (after tax, before minority interests) 29.4 29.6
Basic/diluted earnings per share (in EUR) 0.28/0.28 0.23/0.23
Consolidated accounts (in EURm) 30.09.2020 31.12.2019
Total assets 1,663.1 1,677.4
Investment properties 1,438.9 1,493.9
Cash and cash equivalents 92.6 102.1
Properties held for sale 73.1 16.3
Shareholders' equity (incl. non-controlling shareholders) 607.2 660.8
Equity ratio (in % of total assets) 36.5 39.4
Undiluted/diluted EPRA-NAV 640.9/641.4 684.1/684.6
EPRA-NAV per share (EUR, basic/diluted) 6.06/6.03 6.35/6.32
Net financial liabilities 755.1 704.8
Net debt-to-equity ratio (net LTV), in % 49.9 46.7
Portfolio key ratios 30.09.2020 31.12.2019
Properties (number) 82 90
Market value (in EURm) 1,491.5 1,488.4
Annualised gross rental income (in EURm) 89.0 90.0
Rental yield (in %) 6.0 6.0
EPRA vacancy rate (in %) 8.4 9.4
WALT (in years) 4.7 4.8


DEMIRE Deutsche Mittelstand Real Estate AG

Michael Tegeder
Head of Investor Relations & Corporate Finance
Phone: +49 6103 372 49 44

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 30 September 2020, DEMIRE's portfolio contains of 82 assets with lettable space totalling more than 1 million sqm and has a market value in excess of EUR 1.4 billion.

The portfolio's focus 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.


17.11.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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