DEMIRE: Portfolio grows to around EUR 1.3 billion – four office properties purchased for approximately EUR 167 million

DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Acquisition/Real Estate

02.11.2018 / 07:30
The issuer is solely responsible for the content of this announcement.

DEMIRE: Portfolio grows to around EUR 1.3 billion - four office properties purchased for approximately EUR 167 million
  • Real estate purchases made for an investment volume of around EUR 167 million
  • Core+ and Value-Add properties in attractive real estate locations with a creditworthy tenant mix
  • Increase of approximately EUR 8.6 million in net cold rent p.a. based on total rental space of around 89,000 m² and a WALT of roughly 3.5 years
  • Transfer of ownership, benefits and obligations expected in Q1 2019
Langen, 02 November 2018 - DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) today announced the conclusion of a purchase agreement for the acquisition of four office properties in Essen, Cologne, Aschheim (catchment area Munich) and Bad Vilbel (catchment area Frankfurt) with a combined investment volume (including ancillary purchase costs) of around EUR 167 million.

The four office properties acquired feature total lettable space of around 89,000 m² and are a perfect fit for DEMIRE's active asset management approach. The portfolio currently generates net cold rent of approximately EUR 8.6 million annually (EUR 11.20 per m² on average) with a planned FFO contribution of EUR 3.5 million p.a., which is anticipated to increase to around EUR 6 million p.a. in 2023 based on the planned rental performance. Based on the values as at 30 June 2018, the market value of the DEMIRE Group's real estate portfolio will increase to approximately EUR 1.3 billion with the transaction's completion. The transfer of ownership, benefits and obligations is expected in Q1 2019.

Office properties with strong cash flow
The largest property purchased is the multi-tenant office property "Office Park Bredeney" with lettable space of 45,600 m². It is located in the economically robust city of Essen and is well-connected to public transportation and the nearby motorway, and has a direct link to the Dusseldorf airport, the city centre and the main train station. thyssenkrupp AG is currently the largest tenant, and the current occupancy rate is 88%.

The office property in Cologne is a two-storey office complex, built in 2006. The property features lettable space of roughly 5,200 m² and is close to full occupancy (97%). The main tenants are the city of Cologne, which operates the only vehicle registration office in Cologne at this location; and EHA Autoschilder GmbH, Germany's oldest sign printer with more than 80 branches nationwide. The property has easy access to central public transportation hubs.

The office property in Aschheim-Dornach in the Humboldtpark commercial area is located directly at Munich's north-eastern city limits. The property has lettable space of 12,200 m² and a well-diversified tenant mix. The current occupancy rate is around 89%. The industrial park is easily accessible with both public and private transportation. Aschheim-Dornach has established itself as a new service location based on its good infrastructure and beneficial trade tax.
Real estate with the potential for strong appreciation through repositioning
The fourth acquisition property in Bad Vilbel, located northeast of Frankfurt am Main, offers the greatest optimisation potential. The former single-tenant property has five sections with total lettable space of roughly 26,000 m². The building also has an excellent IT infrastructure and parking facilities. With a current vacancy rate of around 69%, the property offers strong appreciation potential through its conversion into a multi-tenant property.

Ralf Kind, CEO/CFO of DEMIRE, comments: "With these real estate purchases, we are implementing the core of our DEMIRE 2.0 strategy, which is to grow to EUR 2 billion in the medium term. We are already in advanced talks to secure further attractive targets from our acquisition pipeline."

Press Contact                                                            
RUECKERCONSULT GmbH                                     
Nikolaus von Raggamby                                              
Phone: +49 30 28 44 987 40                                     
Investor Relations
DEMIRE Deutsche Mittelstand Real Estate AG
Peer Schlinkmann​
Phone: +49 6103 372 49 44​

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 first half of 2018.
The portfolio focus on office, retail and logistics assets results in precisely 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.

02.11.2018 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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