In This Article:
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Rental Income: EUR50.6 million for the first nine months of 2024, 15% lower than the previous period.
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Annualized Contractual Rent: EUR57.6 million as of September 2024.
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FFO (Funds From Operations): EUR23 million for the first nine months of 2024.
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Net LTV (Loan-to-Value): Decreased due to the completion of the Rostock transaction and repayment of respective financing.
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Vacancy Rate: Increased to 14.7% as of September 2024, up from 14% at the end of June 2024.
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Average Cost of Debt: Expected nominal interest expense excluding shareholder loan at roughly 3.5%.
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Guidance for 2024: Rental income expected between EUR64 million and EUR66 million, with FFO one significantly lower than in 2023.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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DEMIRE Deutsche Mittelstand Real Estate AG (XTER:DMRE) has successfully completed the refinancing of its bond, which will provide financial stability until the end of 2027.
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The company achieved a solid letting performance, with around 60,000 square meters leased, including significant contracts with Deutsche Telecom.
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More than half of the properties have seen an increase in contractual rent since the end of 2023, driven by indexation.
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The company has closed the Rostock transaction and disposed of three smaller assets, with more sales expected by the end of 2025.
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Net Loan-to-Value (LTV) has improved due to the completion of the Rostock transaction and repayment of respective financing.
Negative Points
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Rental income has decreased by 15% compared to the previous period, primarily due to a reduced portfolio size.
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The vacancy rate increased from 14% to 14.7% as of September 2024, partly due to tenant move-outs.
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Operating expenses have not decreased at the same rate as rental income, driven by higher maintenance costs.
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The company expects FFO one to be significantly lower than in 2023 due to bond restructuring and higher interest expenses.
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Average cost of debt is increasing, with expected interest rates on loans rising by about 300 basis points.
Q & A Highlights
Q: Can you elaborate on the volume of the planned disposals set to close by the end of the year and those expected in 2025? A: Ralf Bongers, Chief Investment Officer, stated that three deals are already signed, involving smaller assets. While he did not provide precise numbers, he expressed confidence in achieving an overall disposal volume of EUR50 million by the end of 2025.
Q: Regarding the Leverkusen portfolio, do you expect any cash left after the process? A: Tim Brueckner, CFO, mentioned that while the current market situation might not reflect previous values, they remain confident that there will be something left for DEMIRE. CEO Frank Nickel added that they would be disappointed if nothing resulted from it.