Focus
Business model
Real estate is our passion. It guides us every day in the service of our tenants and investors.”
DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial real estate in medium-sized cities and up-and-coming regions bordering metropolitan areas across Germany. We focus on office properties, with retail, hotel and logistics properties also featured in our portfolio. We are constantly increasing the value of our portfolio through ongoing optimisation measures.
As of 31 December 2022, we managed 62 properties with lettable floor space of around 0.9 million m² and a total market value of around EUR 1.3 billion.
We offer our international and regional tenants state-of-the-art, functional properties for long-term use. Our shareholders benefit from an attractive risk-return structure in a stable asset class. This is reflected in our stable performance.
DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are listed in the Prime Standard of the Frankfurt Stock Exchange.
Key data
| in EUR million | 01/01/2022 – 31/12/2022 | 01/01/2021 – 31/12/2021 |
|---|---|---|
| Earnings | ||
| Rental income | 81.1 | 82.3 |
| Profit/loss from the rental of real estate | 62.3 | 67.2 |
| Profit/loss from the sale of real estate | -8.2 | 1.4 |
| EBIT | -72.9 | 101.9 |
| FFO I (after taxes, before minority interests) | 41.8 | 39.8 |
| 31/12/2022 | 31/12/2021 | |
| Balance sheet | ||
| Total assets | 1,537 | 1,706 |
| Equity ratio (in %) | 31.7 | 34.7 |
| Net LTV (in %) | 54.0 | 49.7 |
| Avg. interest costs on the reporting date, (in %, p.a.) | 1.67 | 1.66 |
| Net asset value | 450.2 | 549.0 |
| NAV (basic/diluted) | 526.3/526.8 | 629.0/629.5 |
| NAV per share (basic/diluted) (in EUR) | 4.99/4.97 | 5.96/5.94 |
| Portfolio | ||
| Market value (in EUR Million) | 1,329.8 | 1,412.5 |
| Annualised contractual rents (in EUR Million) | 85.1 | 78.1 |
| Rental yield (in %) | 6.4 | 5.5 |
| EPRA vacancy rate* (in %) | 9.5 | 11.0 |
| WALT (in years) | 4.8 | 4.7 |
*Excluding properties held for sale and project developments
Strategy
REALIZE POTENTIAL
We acquire and hold commercial real estate in regional centres, medium-sized cities and up-and-coming regions bordering metropolitan areas across Germany. This focus is described as the ABBA strategy. ABBA stands for A locations in B cities and B locations in A cities. We also add a targeted selection of properties in prime locations to our portfolio.
In 2019, we established a medium-term strategic plan for the further development of our company, which we summarised as the “REALize Potential” strategy. This plan encompasses the following objectives:
- Increase the portfolio volume to more than EUR 2 billion
- Ensure the Company’s ability to pay dividends in the long run
- Achieve an investment grade rating
In order to achieve these objectives, the Company pursues four central approaches or strategic levers:
Acquisition
Continued purchase of properties in ABBA locations. By making strategic acquisitions, our portfolio value should rise to over EUR 2 billion in the coming years. The expansion of our portfolio helps to expand our earnings base and makes it possible to achieve further economies of scale.
Asset Management
Active and value-oriented property management. We are constantly improving our portfolio structure through the close control of property and facility management. Small, low-yield properties in non-strategic areas are sold. Properties that require restructuring due to changes in market conditions are repositioned.
Financials
Realising cost saving potential. We work constantly to improve our financial performance indicators. In these endeavours, we pay special attention to cost structures. We also look closely to see how we can optimise our financing structure and interest costs.
Processes
Realising optimisation potential in processes and structures. We are optimising our investment structures, driving the digitalisation of our processes forward and enhancing our control instruments. As a result of these efforts, we have, for example, already improved our service charge management.
Business philosophy
In line with our buy-and-hold strategy, we focus on commercial properties that will still be a good fit for their local areas in 15 years’ time. We achieve this through active asset and property management and forward-looking portfolio development.
- Our tenants should be able to make the best possible use of our properties.
- Our investors should see an economic benefit from their successful use.
- Our company should grow and successfully expand its market position with the ABBA strategy.
We are ...
agile
Our success is based on a sound knowledge of real estate that we have built up over many years. We harness this knowledge and grow it constantly. This helps us to make quick and practical decisions.
connected
Real estate markets are complex and are subject to regional cycles. In order to keep our expertise up to date, we maintain close contact with administration bodies, trade associations, estate agents and other regional real estate players.
reliable and cooperative
We want to be a reliable partner to our tenants. We keep in touch with our tenants to stay on top of the issues that are important to them. This means we are able to act quickly to find the right solutions together when crisis situations arise.
efficient
We are deeply committed to our duty towards our investors to generate stable income and to expand our portfolio value successfully. With this in mind we keep our processes efficient and maintain a close eye on costs.
balanced
With our multi-dimensional diversification approach (relating to regionality, asset class and risk profile) we follow a balanced risk/opportunity strategy that gives our business model a high degree of stability.