DEMIRE achieves 2024 guidance for rental income and FFO

DEMIRE achieves 2024 guidance for rental income and FFO

• Rental income of EUR 65.3 million (previous year: EUR 78.5 million) and FFO I of EUR 23.8 million (previous year: EUR 36.7 million) in line with expectations
• Guidance for 2025: rental income between EUR 51.0 million and EUR 53.0 million and FFO I between EUR 3.5 million and EUR 5.5 million

Langen, 20 March 2025.  DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) closed the 2024 financial year with a solid result in line with the guidance despite the continuing difficult economic conditions and a reduced portfolio base.

Lower rental income and FFO in line with expectations

As expected, rental income of EUR 65.3 million was generated in the 2024 financial year despite a further reduction in the portfolio base (previous year: EUR 78.5 million). This means that income is within the announced guidance range of EUR 64.0 million to EUR 66.0 million. Due to the uncertainty at the time of the guidance regarding the exact timing of the conclusion of the extension of the corporate bond and the resulting financial impact, a significantly lower FFO guidance was communicated without a range. FFO I (after taxes, before minorities) reached EUR 23.4 million in the 2024 financial year (previous year: EUR 36.7 million).

CEO Frank Nickel: 'In 2024, we reached an important milestone with the successful refinancing of our bond. We have made strategic adjustments to our portfolio to position DEMIRE for the future. The adjustments to the portfolio structure will have a temporary negative impact on the earnings base.'

Positive development of EBIT due to lower devaluation of the portfolio

Earnings before interest and taxes (EBIT) increased from EUR -187.9 million to EUR -93.0 million in the 2024 financial year. The main driver of the negative EBIT is the result from the fair value adjustment of the property portfolio of EUR -58.7 million (previous year: EUR -176.8 million). This corresponds to a like-for-like devaluation of 4.0% on the portfolio value at the end of 2023 (previous year: -13.2%). This means that the market-related valuation decline is only around a third as high as in the previous year.

The DEMIRE portfolio had a market value of EUR 779.0 million as of 31 December 2024, compared to around EUR 950.0 million at the end of 2023. The decline is due in particular to the opportunistic sale of properties, the exit of the four properties of the Limes portfolio and market-related devaluations of the portfolio. Four properties were sold for a total of EUR 111.0 million and transferred to buyers in 2024. Two further properties were already transferred to new owners in 2025 and a transfer of benefits and encumbrances is planned for another property in 2025 (total sales price: EUR 12.7 million).

CIO Ralf Bongers comments: 'We have clearly focussed on transactions and portfolio streamlining. By focusing on this, we realised the highest sales volume in the company's history in 2024. As a result, we have made a decisive contribution to successful bond financing and portfolio optimisation.'

The diluted net asset value (NAV) fell from EUR 342.0 million at the end of 2023 to EUR 258.1 million as of 31 December 2024. This corresponds to a decrease per share from EUR 3.23 to EUR 2.45.

Net LTV falls significantly

The buybacks below par as part of the extension of the corporate bond and property sales caused the net loan-to-value (Net LTV) to fall from 57.7% to 40.9% at the end of 2024 in accordance with the bond terms. Following the extension of the bond at an adjusted interest rate of 5.00 % p.a., the average interest rate on DEMIRE's debt capital rose to 4.35 % p.a. (previous year: 1.74 % p.a.). In comparison, the average net initial yield in the portfolio is 7.2%.

CFO Tim Brückner adds: 'The successful bond extension not only contributed to the targeted debt reduction and strengthening of DEMIRE's financial stability, but also led to proceeds from bond buybacks below par. We have thus regained more flexibility in a challenging market environment.'

The property sales that have taken place will contribute to a decline in rental income in 2025, which is forecast to be between EUR 51.0 million and EUR 53.0 million. FFO I (after taxes, before minority interests and interest on the shareholder loan) is expected to be between EUR 3.5 million and EUR 5.5 million. The decline in FFO I is mainly due to falling rental income and higher interest expenses.

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Selected Group key figures of DEMIRE Deutsche Mittelstand Real Estate AG

Invitation to the conference call on 20 March 2025

The Executive Board of DEMIRE invites all interested parties to a conference call on 20 March 2025 at 10:00 am (CET) to present the results for the 2024 financial year.

Please use the following registration link:

https://webcast.meetyoo.de/reg/361SdjokqQmC

The presentation of the results will also be broadcast live via webcast. Please use the link https://www.webcast-eqs.com/demire-2024-fy/no-audio

For audio transmission, please use the dial-in via the registration link above. A presentation of the results will be made available for download on the website https://www.demire.ag/en/publications/

About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial properties in medium-sized cities and up-and-coming peripheral locations in metropolitan areas throughout Germany. The company's particular strength lies in realising real estate potential in these locations and focuses on an offering that is attractive to both international and regional tenants. As of 31 December 2025, DEMIRE had a real estate portfolio of 51 properties with a lettable area of around 0.6 million square metres. Taking into account the proportionately acquired Cielo property in Frankfurt/Main, the market value amounts to around EUR 1.0 billion.

The portfolio's focus on office properties with an admixture of retail and hotel properties is appropriate for the risk/return structure of the commercial property segment. The Company attaches great importance to long-term contracts with solvent tenants and the realisation of potential and therefore continues to expect stable and sustainable rental income and solid value growth. DEMIRE's portfolio is to be significantly expanded in the medium term. In expanding the portfolio, DEMIRE will focus on FFO-strong assets with potential, while properties that do not conform to the strategy will continue to be sold in a targeted manner. DEMIRE will continue to develop its operations and processes with numerous measures. In addition to cost discipline, operating performance is being improved through an active asset and portfolio management approach.

The shares of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) are listed in the Prime Standard of the German Stock Exchange in Frankfurt.

Press contact: 

DEMIRE Deutsche Mittelstand Real Estate AG

Julius Stinauer, Head of Investor Relations & Corporate Finance

Robert-Bosch-Straße 11

D-63255 Langen

Telefon: +49 (0) 6103 - 372 49 - 44

Fax: +49 (0) 6103 - 372 49 - 11

[email protected] www.demire.ag