DEMIRE: Successful sale of an office property from the portfolio of Fair Value REIT– further optimisation of Group’s structure
- DEMIRE’s key participation Fair Value REIT-AG sells office property owned by subsidiary IC Fonds & Co. Büropark Teltow KG (IC 07)
- Sales proceeds total EUR 11.5 million, or roughly 24 % higher than the market value determined as of 30 June 2017
- Sale signifies further streamlining of DEMIRE’s Group structure: liquidation after completion of property sale leads to first reductions in administrative costs
Langen, 08. September 2017 – Yesterday, DEMIRE’s key participation Fair Value REIT-AG, in which DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) currently holds 77.7 % of the voting rights, announced the sale of an office property by the subsidiary IC Fonds & Co. Büropark Teltow KG (IC 07) in Teltow, Brandenburg. Fair Value REIT-AG holds 78.16 % of IC Fonds & Co. Büropark Teltow KG (IC 07). The level of the interest has gradually increased in recent years through a public offer as well as attractive purchases on the secondary market.
The buyer of the property located south of Berlin is a family office from Berlin. At EUR 11.5 million, the sales proceeds of the unencumbered property exceed the market value determined as of 30 June 2017 by around EUR 2.25 million or around 24 %. The property in Teltow was the sole property held by the IC 07 subsidiary. This subsidiary will be dissolved once the purchase contract has been settled. In addition to the liquidation of the IC 07 fund, there are also plans to liquidate the Immobilien-Fonds Nr. 6 GmbH & Co. KG (BBV 06) real estate fund following the transfer of two properties into direct ownership and the recently completed sale of a fully let retail park in Krefeld at market value. The planned liquidation of both funds will later lead to administrative cost savings of around EURk 400 p.a. at the Group level of DEMIRE Deutsche Mittelstand Real Estate AG. This demonstrates that DEMIRE is successively streamlining its Group structure as well as optimising its cost structure, as planned, under its DEMIRE 2.0 programme.
The DEMIRE 2.0 programme represents the Company’s next growth phase. The implementation of a holistic action plan, including a reduction in financing costs, cost optimisation and streamlining the Group’s structure, is a cornerstone in the continued expansion of the current portfolio to a volume of around EUR 2 billion. The focus of the business model continues to be acquisitions of commercial real estate in German secondary locations. The Company also plans to further optimise its cost base by means of permanent increases in efficiency as well as economies of scale in real estate management in the course of its planned growth. A continued improvement in the financing mix based, in particular, on a thorough examination of the financing options should reduce average interest costs and achieve a net loan-to-value of around 50% in the medium term. In addition to increasing its market capitalisation, DEMIRE is also striving to position its risk profile in the area of “investment grade” in order to sustainably secure the financing of its future growth on favourable terms for the long term.