DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Real Estate/Disposal
DEMIRE realises potential by selling a real estate portfolio
- 13 properties sold as part of strategic portfolio streamlining
- Sales proceeds of around EUR 85.2 million are above market value and will be used for acquisitions and further portfolio optimisation
- Guidance for the 2020 financial year confirmed despite the transactions
Langen, 29 October 2020. DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has taken advantage of the strong demand from various investors and has sold a total of 13 properties in seven transactions since the beginning of the second half of 2020. Specifically, a commercial real estate portfolio with eight properties has been sold to the RAMFORT Group as part of an asset deal, while the other buildings have been sold in individual transactions. At EUR 85.2 million, the sales proceeds are above the most recently market values. This underlines the resilience of assets at secondary locations. DEMIRE will use these proceeds to expand its portfolio with strategic acquisitions and to realise further potential within the existing portfolio.
Most of the properties are smaller, management-intensive units and are sold as part of a strategic portfolio optimisation. Other properties offer only limited further potential for value creation, after successful repositioning through DEMIRE's active asset management. The properties sold had a vacancy rate of about 26 percent and a Weighted Average Lease Term (WALT) of 3.6 years as of 30 June 2020.
The closing of the disposals, most of which have taken place already or will take place later this year, will result in improvements in DEMIRE's overall portfolio and financial indicators: considering the sales, the WALT will remain constant at 4.8 years compared to 31 December 2019, while the vacancy rate will improve from 9.4 percent to 7.4 percent.
The transactions have no impact on DEMIRE's current guidance for the 2020 financial year. The Management Board continues to assume that rental income will be between EUR 85 and 87 million and Funds From Operations (FFO I, after taxes, before minorities) between EUR 36 and 38 million, thus both above the previous year's figures.
DEMIRE - REALize Potential
DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial real estate in mid-sized cities and up-and-coming locations bordering metropolitan areas across German. The Company's particular strength lies in realising the potential of the properties at these locations while focusing on a range of properties that appeals to both regional and international tenants. As of 30 June 2020, DEMIRE's portfolio contains of 84 assets with lettable space totalling more than 1 million sqm and has a market value in excess of EUR 1.5 billion.
The portfolio's focus on office properties with a blend of retail, hotel and logistics properties results in a return / risk structure that is appropriate for the commercial real estate segment. The Company places importance on long-term contracts with solvent tenants and the realisation of the properties' potential. DEMIRE anticipates continued stable and sustainable rental income along with solid value appreciation and expects the portfolio to grow significantly in the medium term. As it expands its portfolio, DEMIRE is concentrating on FFO-strong assets with potential and, at the same time, disposing of properties that are not in line with its strategy. DEMIRE is taking several steps to further the development of its operations and processes. Next to cost consciousness, the operating performance is set to improve through an active asset and portfolio management approach.
DEMIRE Deutsche Mittelstand Real Estate AG shares are listed in the Regulated Market (Prime Standard segment) of the Frankfurt Stock Exchange.
29.10.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
DEMIRE Deutsche Mittelstand Real Estate AG
Robert-Bosch-Straße 11 im 'the eleven'
63225 Langen (Hessen)
+49 6103 37249-0
+49 6103 37249-11
Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Stuttgart, Tradegate Exchange
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