DEMIRE Real Estate Management successfully rents properties and reduces vacancy rate
- Integrated management model increases value of existing portfolio
- Sharp rise in rental income from office properties
- Activities in overall holdings to intensify in 2016
Frankfurt/Main, 29. January 2016 – DEMIRE Deutsche Mittelstand Real Estate AG (“DEMIRE”, ISIN DE000A0XFSF0), one of the leading commercial real estate groups for secondary locations in Germany, achieved further success with its integrated real estate management system. As a result of the professional management of the portfolio comprising over 1.1 million m² in rental space, key figures such as rental income and vacancy rates were sustainably improved during the past financial year.
In 2015, e.g. the vacancy rate at four locations was reduced from their combined level of 35.10% to 14.72%. DEMIRE plans to reduce the vacancy rate even further in the current fiscal year. The annual net rental income of these properties, excluding utilities, has risen by EUR 381k from roughly EUR 1,394k to a total of EUR 1,775k at the end of 2015 for an increase of around 27.3%. The property’s current anchor tenants are long-term, prime tenants such as, for example, Deutsche Telekom and municipal authorities. Along with the strong rise in net rental income and the decline in the vacancy rate, the WALT saw a sharp improvement to roughly 4.2 years.
A core aspect of the DEMIRE Group’s strategy is the integrated management system coupled with in-house asset, property, facility and portfolio management. The entire management value chain is cost-efficiently and professionally provided by the Group’s own companies. In addition to the related economies of scale DEMIRE is maintaining a closer relationship to the tenants and can respond to tenant’s requests and solve arising problems more quickly. The reaction time for new rentals is considerably lower and gives the Company a competitive edge.
“By consistently reducing our vacancies, our integrated model is increasing the value of our portfolio, and with that the value for our shareholders. The sustainable and successful management of our holdings is our Company’s core competency. The results we have now achieved reaffirm our strategy and encourage us to continue expanding our expertise in this area in the years ahead”, explained Markus Drews, Executive Board member of DEMIRE.
“The example mentioned here is an excellent illustration of the appreciation potential of our portfolio – particularly in light of the fact that DEMIRE usually never pays more for acquisitions than 13 times the annual net rent to be received. With more than 1.1 million m² and a year-end vacancy rate of around 13%, we have tremendous opportunity to increase the value of our overall portfolio”, remarked Andreas Steyer, Executive Board member DEMIRE.
The Executive Board