DEMIRE Deutsche Mittelstand Real Estate is in robust shape in the first nine months of 2021 and has once again improved its key earnings figures.
The commercial real estate specialist achieved a high letting performance of around 138,000 sq m, far above the long-term annual average of around 80,000 sq m. These figures include, among others, a lease extension and a lease with Amazon at “Logistikpark Leipzig” a logistics property in Leipzig, the most densely populated city in the federal state of Saxony.
DEMIRE continued to optimise its portfolio with three strategic sales in the third quarter, reducing the number of properties held in the portfolio compared to 30 June 2021 to a total of 67 properties. As a result, the average property size rose to EUR20.7 million after EUR19.2 million at the end of 2020. In addition, the largest transaction in the company’s history was completed in July with the fulfilled purchase of the “Cielo” office complex in Frankfurt am Main. Taking Cielo into account, the value of the portfolio rises to EUR1.6 billion from around EUR1.4 billion at the end of 2020.
The Corona pandemic had only a minor impact on DEMIRE’s business activities in the third quarter of the current financial year. For the first nine months of 2021, rental payments of around EUR1.6 million are outstanding, which corresponds to approximately 1.9 percent of the expected annual rent in 2021.
Funds from Operations I (after taxes, before minorities) increased by 1.1 percent to EUR30.4 million (same period last year: 30.1 million). The NAV per share (basic) decreases after payment of the dividend of EUR0.62 per share to EUR5.52, after EUR5.91 at the end of 2020. The net leverage ratio (LTV) increases as expected to 53.0 percent (end of 2020: 49.2 percent) due to the completed purchase of the Frankfurt office complex “Cielo”. Liquidity as of the reporting date remains comfortable at EUR98.4 million. The average nominal interest rate improved by 5 basis points to 1.66 per cent as at 30 September 2021 compared to the end of 2020.
DEMIRE reported a letting performance of around 138,000 sq m for the first nine months of 2021. 49 percent of the letting performance is attributable to new lettings and 51 percent to lease extensions. The EPRA vacancy rate* of the DEMIRE portfolio was 8.8 percent as of the reporting date, compared to 6.9 percent as of 31 December 2020. The increase in the vacancy rate despite the strong letting performance is primarily due to the fact that some leases were concluded in the reporting period, but their lease term start dates are in the future. WALT decreases slightly to 4.6 years after 4.8 years at the end of 2020.
Taking the portfolio adjustment into account rental income was as expected and amounts to EUR62.3 million, after EUR65.8 million in the previous year. Letting results amount to EUR51.8 million after EUR54.0 million in the same period of the previous year; the Cielo investment is shown below the rental result from real estate. Earnings before taxes (EBT) rose to EUR27.3 …….