Press release
Deutsche Konsum REIT successfully completes first half of 2017/2018 and increases profitability / Strong growth secured for the second half of the year
- Rental income up by 53% to EUR 13.6 million
- FFO EUR 7.3 million / aFFO EUR 1.7 million
- Result for the period at EUR 6.4 million (before real estate valuation)
- Balanced real estate assets grew to EUR 297.6 million
- WALT rises to 5.2 years
- EPRA NAV increased to EUR 6.80 per share
- Net LTV at 39.3%
Broderstorf, 15 May 2018 - Deutsche Konsum REIT-AG (ISIN DE000A14KRD3) successfully continued its growth course in the first half of the 2017/2018 financial year ("H1 2017/2018").
FFO is rising faster than rental income
In the first six months of the 2017/2018 financial year, rental income of the company increased by 53% from EUR 8.9 million to EUR 13.6 million compared to the same period of the previous year.
Thus, funds from operations ("FFO") increased by 62%, from EUR 4.5 million to EUR 7.3 million, which was significantly higher than rental income. This shows the increasingly resulting economies of scale, which further strengthen the profitability of DKR.
Due to ongoing value-adding construction and modernisation measures at the revitalisation properties in Greifswald, Hohenmölsen, Bitterfeld and Stralsund amounting to EUR 5.5 million (Capex), the aFFO (FFO after deducting the capitalised modernisation measures) in the first six months of 2017/2018 was EUR 1.7 million (H1 2016/2017: EUR 3.6 million). After completion of the measures, significantly higher rents and increases in the value of the properties are expected.
Real estate portfolio has grown to around EUR 300 million - Book value of proforma portfolio at around EUR 400 million
As a result of the transfer of benefits and encumbrances on eight retail properties in the first half of the year, the reported real estate portfolio increased to EUR 297.6 million as of 31 March 2018 (30 September 2017: EUR 275.4 million). The purchase yield of the entire portfolio is 12.1% as of the reporting date 31 March 2018.
A further 19 retail properties with a total investment volume of around EUR 91 million were certified and the transfer of benefits and encumbrances will take place in the third and fourth quarters of the financial year. Thus, the secured real estate portfolio (pro forma) currently comprises 89 properties with a book value of around EUR 400 million and generates annualised rental income of around EUR 34.8 million, which will be reflected successively in future quarterly results.
As a result, DKR has already invested EUR 107 million in the first seven months and exceeded its purchase target. The company is in further concrete acquisition processes and expects further acquisitions in the current financial year. There are currently a further EUR 30 million Firepower available.
The next portfolio valuation will take place on 30 June 2018, which is expected to show a significantly positive valuation result.
WALT rises to 5.2 years
In addition to its successful acquisitions, DKR has also worked on the operational business development and prematurely extended the largest lease with the main tenant, real,- hypermarket until 2033. Thus, as of 31 March 2018, the WALT of the overall portfolio increased significantly to 5.2 years. Furthermore, long-term leases with new tenants were concluded for the revitalisation projects in Rostock, Greifswald and Hohenmölsen, which will further increase the WALT after the completion of the revitalisation work.
EPRA NAV increases to EUR 6.80 per share / Net LTV at 39.3%
On 8 December 2017, the Company successfully completed a non-subscription-based 10% cash capital increase for EUR 10.00 per share. As a result, the share capital of the company increased by around EUR 2.48 million to EUR 27.24 million. As a result of the cash capital increase, the company received net proceeds of EUR 24.2 million. Due to the positive net income for the period and the capital increase, EPRA NAV increased by EUR 0.55 per share or around 9% to EUR 6.80 as of 31 March 2018.
With the taking up of a loan, the net LTV increased to around 39.3% as of 31 March 2018 compared with the previous quarter (31 December 2017: 36.5%).
In April and May 2018, DKR also took up further loans totalling EUR 33.8 million at significantly better terms and targeted the desired increase of the LTV to 50%. In addition, the refinancing of current loan liabilities is imminent. After refinancing, the average loan interest rates will drop significantly from 2.4% p.a. to below 2.1% p.a. while increasing loan maturities to 5.8 years.
Forecasts for the 2017/2018 financial year confirmed
Based on the positive first half of 2017/2018 as well as the transfer of ownership of 19 properties in the second half of the year and the continued widespread acquisition pipeline, the Management Board confirms the forecast for the 2017/2018 financial year, an FFO of between EUR 16 million and EUR 20 million and a FFO run rate of EUR 23 million as at 30 September 2018.
Rolf Elgeti, Chairman of the Board and CEO of Deutsche Konsum REIT-AG: "In the first half of 2017/2018, we set the course for further strong growth in addition to the good operating performance and increased profitability. We will continue to work hard on this in the second half of the year and are already expecting a very positive overall year. "
Publications for the first half of 2017/2018
The half-yearly financial report 2017/2018, the earnings presentation as well as further information about the Company can be found under www.deutsche-konsum.de.
About Deutsche Konsum
Deutsche Konsum REIT-AG based in Broderstorf is a listed real estate company focusing on retail properties in Germany for goods required for daily use in established micro-locations. The focus of the company's activities is on the management and development of real estate with the aim of achieving a steady increase in value and the realisation of hidden reserves. The steadily increasing current property portfolio of Deutsche Konsum comprises of 89 retail properties with an annualised rent of EUR 34.8 million.
Due to its REIT status ('Real Estate Investment Trust'), the company is exempt from corporation and trade tax. The shares of the company are listed on the Prime Standard of the Deutsche Boerse (ISIN: DE 000A14KRD3).
Contact:
Deutsche Konsum REIT-AG
Stefanie Frey
Investor Relations
E-Mail: sf@deutsche-konsum.de
Phone: +49 (0) 331 74 00 76 - 533
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