DEMIRE successfully starts the financial year and reaffirms forecast for 2018

DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Quarterly / Interim Statement/Quarter Results

30.05.2018 / 07:00
The issuer is solely responsible for the content of this announcement.

DEMIRE successfully starts the financial year and reaffirms forecast for 2018
  • FFO I (after taxes, before minorities) of EUR 5.2 million more than doubled (up 160 %)
  • Net Loan-to-Value reduced to 58.1 %
  • EPRA vacancy rate falls further 80 basis points to 8.6 %
  • Forecast for 2018 confirmed, anticipated FFO I between EUR 16 and EUR 18 million
Langen, 30 May 2018 - DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has continued its solid performance in the first quarter of 2018. Thanks to successful letting activities and the associated reduction of vacancies, annualised contractual rent rose from EUR 72.1 million as at 31 December 2017 to EUR 72.4 million as at 31 March 2018. On a like-for-like basis, annualised rental income has increased by 1.6 % since 31 December 2017. Funds from operations (FFO I, after taxes, before minorities) amounted to EUR 5.2 million in the first quarter of 2018 (Q1 2017: EUR 2.0 million) as a result of lower interest expenses and an improved tax charge. In the first quarter, in the context of the planned overall capital expenditure for the 2018 financial year, funds from operations still showed a lower capital expenditure. Earnings before taxes (EBT) rose sharply as against the same quarter of the previous year to EUR 30.5 million (Q1 2017: EUR 3.7 million). The significant increase stems from fair value adjustments in investment properties, reduced finance expenses and lower general administrative expenses.

At 8.6 % as at the reporting date, the EPRA vacancy rate was down 80 basis points compared to the end of 2017. Driven by new lettings and reduced vacancies, the DEMIRE Group generated rental income of EUR 18.3 million in the first three months of 2018, only 1.5 % lower than in the same period of the previous year (EUR 18.5 million) on account of property sales.

Net Loan-to-Value falls by 200 basis points to below 60 %
At EUR 6.47 (basic, up 8.5 %) and EUR 5.29 (diluted, up 7.1 %), the figures for EPRA NAV per share were higher than at the end of 2017 (EUR 5.96 and EUR 4.94 respectively). The net loan-to-value ratio improved significantly by a further 200 basis points as against the end of 2017 (60.1 %) to 58.1 % as at 31 March 2018. The average interest costs are unchanged at a low level of 3.0 % p.a.

CEO/CFO Ralf Kind commented: "After successfully completing the 2017 financial year, we were able to seamlessly continue on the path taken with our DEMIRE 2.0 strategy in the first quarter of 2018. Our focus in the current fiscal year will therefore be on the gradual expansion of the real estate portfolio and the continued optimisation of our Group structure."

Forecast for year as a whole confirmed
The Executive Board is reiterating the forecast for the 2018 financial year of FFO I between EUR 16 million and EUR 18 million. On the basis of the current property portfolio, the company is anticipating rental income of approximately EUR 71 million to EUR 73 million for the year as a whole.
Press Contact
Rueckerconsult GmbH
Wallstrasse 16
D-10179 Berlin
Phone: +49 30 28 44 987 65

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
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 pursue 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.

Selected consolidated key performance indicators for DEMIRE Deutsche Mittelstand Real Estate AG
Consolidated income statement (EUR m) 1 Jan. 2018 to 31 Mar. 2018 1 Jan. 2017 to
31 Mar. 2017
Rental income 18.3 18.5
Profit/loss from the rental of real estate 13.2 13.8
Gain or loss on fair value adjustments of investment properties 32.1 0.2
General administrative and other operating expenses -4.3
EBIT 42.2 9.2
Financial result -11.7 -5.5
Net profit/loss for the period 20.8 0.9
- thereof attributable to parent company shareholders 18.2 0.1
FFO I (after taxes, before minorities) 5.2 2.0
FFO II (after taxes, before minorities) 5.2 1.8
Basic/diluted earnings per share (EUR) 0.33/0.27 0.0/0.0
Consolidated statement of financial position (EUR m)

31 Mar. 2018

31 Dec. 2017
Total assets 1,180.1 1,147.1
Investment properties 1,053.6 1,021.8
Cash and cash equivalents 69.5 73.9
Real estate held for sale 12.7 12.3
Equity (including non-controlling interests) 339.8 319.1
Equity ratio (in % of total assets) 28.8 27.8
EPRA NAV attributable to DEMIRE shareholders (EUR, basic/diluted) 351.2/362.2
EPRA NAV per share (EUR, basic/diluted) 6.47/5.29 5.96/4.94
Net financial liabilities 619.6 621.0
Net Loan-to-Value ratio in % 58.1 60.1
Portfolio key performance indicators 31 Mar. 2018 31 Dec. 2017
Properties (number of) 86 86
Market value (EUR m) 1,066.3 1,034.1
Annualised contractual rent (EUR m) 72.4 72.1
Rental yield (in %) 6.8 7.0
EPRA vacancy rate (in %)* 8.6 9.4
WALT (in years) 4.8 4.9
* non including properties held for sale

30.05.2018 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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