DEMIRE achieves solid results in Q1 2023

DEMIRE achieves solid results in Q1 2023

• Rental income increases by 7.4% to EUR 20.8 million
• FFO I (after taxes, before minorities) decrease by 12.4 % to EUR 9.2 million.
• Notarised property disposals and bond redemptions lead to a reduction of the pro forma net LTV to 47 %
• 2023 guidance confirmed with rental income between EUR 71.0 and EUR 73.0 million and FFO I (after tax, before minorities) between EUR 30.0 and EUR 32.0 million

Langen, 11 May 2023: The results of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) developed in line with management’s expectations in the first quarter of 2023.

Rental income rises significantly, FFO decreases

Rental income increased by 7.4% to EUR 20.8 million (Q1 2022: EUR 19.3 million), mainly due to rent indexations. Earnings before interest and taxes (EBIT) decreased to EUR -14.9 million (Q1 2022: EUR 13.1 million) over the same period. The decrease was predominantly driven by market value adjustments related to the reclassification of properties to assets held for sale (EUR -25.5 million). This development is related to the ongoing property disposal strategy aiming to reduce the net LTV.

FFO I (after tax, before minorities) amounted to EUR 9.2 million in the reporting period compared to EUR 10.5 million in Q1 2022. The decrease is primarily due to higher income tax expenses and impairments on rent receivables, induced by the insolvency of Galeria Karstadt Kaufhof.

The market value of the DEMIRE portfolio remained almost stable at around EUR 1.30 billion and the net asset value (NAV, basic) decreased by EUR 0.19 to EUR 4.80 per share in the reporting period (year-end 2022: EUR 4.99), mainly due to market value adjustments in course of the reclassification of properties as asset held for sale.

Compared to the previous-year period, mainly less available rental space led to a decrease in take-up to 10,200 m² (Q1 2022: 43,000 m²). Furthermore, a lower number of leases will expire in 2023, after a high letting performance in the previous year. The EPRA vacancy rate (excluding properties classified as developments) improved slightly to 9.2% (31 December 2022: 9.5%). The weighted average lease term (WALT) of DEMIRE’s portfolio remained almost stable at 4.6 years (31.12.2022: 4.8 years).

Ralf Bongers, CIO of DEMIRE, said: "Our specific market approach to property disposals is paying off. In addition to the divestments in Leipzig and Ulm, we are currently in promising negotiations for further transactions."

Foreseeable reduction in the net leverage ratio

"The sales in Leipzig and Ulm, as well as the partial buy back of our bond below par in April, have brought us much closer to our goal of reducing the company’s net leverage ratio below 45 %", said Tim Brückner, CFO of DEMIRE. The average nominal cost of debt remained at a low level of 1.67% per annum during the reporting period. The net LTV was 53.9%, slightly below the year-end figure for 2022 (54.0%). Considering notarised disposals, the pro forma net LTV is around 47%. Cash and cash equivalents amounted to a comfortable EUR 73.4 million as of the reporting date.

Guidance for 2023 confirmed

Prof. Dr. Alexander Goepfert, CEO of DEMIRE, said: "DEMIRE is actively adapting to the impact of the new interest level and market conditions. Our divestments, our well-filled sales pipeline and our refinancing activities create a solid basis for the future development of our company. Furthermore, the results of the first three months of 2023 are in line with our expectations."

The Executive Board therefore confirms the guidance for the financial year 2023. Management expects a rental income of between EUR 71.0 and 73.0 million (2022: EUR 81.1 million) and FFO I (after tax, before minorities) between EUR 30.0 and 32.0 million (2022: EUR 41.8 million).

End of the press release

 Invitation to Conference Call on 11^th of May 2023

The Executive Board of DEMIRE is pleased to invite all interested parties to participate in a conference call on 11^th of May 2023, starting at 10:00 a.m. (CET) during which the financial results for the first quarter of 2023 will be presented.

Please use the following registration link:

https://webcast.meetyoo.de/reg/Db2DWRa2alGo

The presentation of the financial results will also be webcasted live via the following link: https://www.webcast-eqs.com/demire-2023-q1/no-audio

To listen to the audio, please use the registration link provided above. The financial results presentation will  be available for download at https://www.demire.ag/en/publications/

About DEMIRE Deutsche Mittelstand Real Estate AG

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 Germany. 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 31 March 2023, DEMIRE's portfolio comprises 62 assets with a lettable space of approx. 0.9 million sqm[DG1]. Including the proportionately acquired Cielo property in Frankfurt/Main, the market value amounts to approximately EUR 1.6 billion.

The portfolio's focus is on office properties with a blend of retail, hotel and logistics properties resulting 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.

DEMIRE aims to expand its portfolio significantly in the medium term. The company focuses on assets contributing strongly to the FFO and properties with the potential for additional value creation. Properties that are not in line with this strategy will be sold. DEMIRE is being further developed operationally and procedurally with numerous measures. The company plans to enhance its operating performance through cost discipline as well as an active asset and portfolio management approach.

DEMIRE Deutsche Mittelstand Real Estate AG AG (ISIN: DE000A0XFSF0) shares are listed in the Regulated Market (Prime Standard segment) of the Frankfurt Stock Exchange.”

Press contact:

Julius Stinauer
Head of Investor Relations & Corporate Finance
DEMIRE Deutsche Mittelstand Real Estate AG
Telefon: +49 6103 372 4944
Email: stinauer@demire.ag