DEMIRE: AGM 2017 – HIGH DEGREE OF APPROVAL FOR ALL AGENDA ITEMS
- All agenda items approved with a large majority
- Frank Hölzle and Dr Thomas Wetzel confirmed as Supervisory Board members
- Mr Markus Drews supersedes Hon.-Prof. Andreas Steyer as CEO
- “DEMIRE 2.0”: Strategic package of measures for further company growth presented
- New forecast for 2017: FFO I (after taxes, before minority interests) of EUR 8–10 million
Langen, 29. June 2017 – The Annual General Meeting of DEMIRE Deutsche Mittelstand Real Estate AG [German Securities Code Number (WKN) A0XFSF/ISIN DE000A0XFSF0] today approved all of the proposed agenda items with a large majority. With 29.6 percent of the share capital represented, this year’s Annual General Meeting ended after 3.5 hours at 2:25 p.m. In the elections to the Supervisory Board, Frank Hölzle and Dr Thomas Wetzel were confirmed in their current positions as Supervisory Board members. Markus Drews will take over as CEO following the departure of Hon.-Prof. Andreas Steyer with effect from 30 June 2017. This means the two members of the Executive Board from 1 July 2017 will be Markus Drews (CEO) and Ralf Kind (CFO). As announced, the Executive Board reported to the Annual General Meeting on the strategic review of the company that was initiated in April 2017 and issued a new forecast for funds from operations (FFO I) and the development of other key performance indicators for the current 2017 financial year on this basis.
“DEMIRE 2.0” programme forms the basis for further growth
Under the name “DEMIRE 2.0”, the company has defined specific targets for its further growth that it intends to achieve in the medium term by realising a comprehensive package of measures including cost optimisation, a more streamlined group structure and reduced financing costs. The cornerstone of the programme is the planned further expansion of the current portfolio of around EUR 1 billion to EUR 2 billion. The business model will continue to focus on commercial real estate acquisitions in secondary locations in Germany. The cost base will also be reduced further thanks to permanent efficiency improvements and economies of scale in real estate management as a result of the planned growth. The ongoing implementation of the programme and the further optimisation of the financing mix (in respect of which the Company is continuously considering potential refinancing options, including debt and equity capital markets transactions) are expected to reduce average interest costs in the medium term, with the loan-to-value ratio declining from the current level of 62.5 percent (as of 31 March 2017) to around 50 percent as a result. With regard to communications and capital market access, DEMIRE is intensifying its active and transparent dialogue with existing and new investors. As well as increasing its market capitalisation, DEMIRE is aiming to position its risk profile as investment grade in order to sustainably secure the financing of its future growth at favourable conditions in the long term.
Forecast for 2017
DEMIRE expects to generate FFO I (after taxes, before minority interests) of EUR 8–10 million in 2017. The Executive Board is also anticipating a further significant increase in FFO from 2018 following the successful implementation of the “DEMIRE 2.0” strategy programme. Based on its current real estate holdings, the company is forecasting rental income of EUR 72–73 million in the 2017 financial year.
In the Executive Board’s report to the Annual General Meeting, Markus Drews, designated CEO of the DEMIRE Group, noted: “The company’s development in recent years has been characterised by strong growth. With the ‘DEMIRE 2.0’ programme, we are aiming to further expand and sustainably establish our position on the German real estate market, particularly in secondary locations. We are harnessing the high efficiency of our integrated real estate platform in order to leverage the identified earnings and optimisation potential for DEMIRE in the short to medium term while further accelerating the company’s growth.”
The voting results of DEMIRE’s Annual General Meeting can be found here: Voting results at a glance [German; PDF-file]