Deutsche Konsum REIT-AG, DE000A14KRD3

Deutsche Konsum REIT-AG, DE000A14KRD3

14.02.2019 - 07:02:29

Deutsche Konsum REIT: Strong growth in FFO and NAV in the first financial quarter of 2018/2019

Press release

Deutsche Konsum REIT: Strong growth in FFO and NAV in the first financial quarter of 2018/2019

- Rental income increases by 45% to EUR 9.5 million

- FFO up by 84% to EUR 6.3 million or EUR 0.22 per share

- Real estate portfolio increased to EUR 444.4 million as at 31/12/2018

- EPRA NAV increased by 22% to EUR 8.18 per share (31/12/2017: EUR 6.68 per share)

- Net debt reduced to 44.9%

Broderstorf, 14 February 2019 - Deutsche Konsum REIT-AG ("DKR"), ISIN DE000A14KRD3, continued to grow profitably in the first quarter of the new financial year 2018/2019 ("Q1 2018/2019") as expected. For the first time, the effects of the extensive real estate purchases and refinancing of the previous year also had a significant positive impact on all financial key figures in the balance sheet.  

For the first time, rental income rises to almost EUR 10 million in the quarter / FFO increases by 84% Due to the significantly increased real estate portfolio, DKR's net rents in the first quarter of the financial year 2018/2019 amounted to approximately EUR 9.5 million and thus increased by around 45% compared to the same period of the previous year. Rental income increased by 60% to EUR 7.7 million in the first quarter. The disproportionate increase in rental income is attributable not only to lower vacancy rates, but also to further improvements in the operating costs of properties that have been in use for a long time and where consequently operational improvements could be achieved through better management.

Funds from operations ("FFO") increased to EUR 6.3 million or 84% (Q1 2017/2018: EUR 3.4 million) and thus almost doubled the increase in rental income. Reduced interest expenses, which resulted from refinancing as well as the significantly improved terms of convertible bonds, also contributed to this. Today, the average interest cost of the Company is only 1.8% p.a. with an average residual maturity of around six years.

This underscores DKR's continuously growing profitability due to economies of scale, professional asset management and more favourable financing conditions.  

Real estate portfolio grows to EUR 0.5 billion As of 31 December 2018, the real estate portfolio comprises 98 retail properties with a carrying amount of EUR 444.4 million, which have already been transferred to the DKR through the transfer of benefits and encumbrances (30 September 2018: EUR 418.7 million). As of the balance sheet date, the transfer of benefits and encumbrances of another eleven properties with an investment volume of around EUR 46 million and an annual rent of around EUR 4.2 million were already in place in January and February 2019, with the exception of four properties. At the same time, the sale of a smaller property in Berlin took place on 1 December 2018 with a capital gain of EUR 0.4 million at the book value and purchase price of EUR 0.6 million in 2016.

Considering recent acquisitions, the real estate portfolio (pro forma) increased to 109 retail properties with a book value of around EUR 490 million and an annualised rent of EUR 42 million. The purchase yield of this total portfolio is 11.6%.

The Company is also involved in further concrete acquisition processes.  

Successful capital increase in November 2018 On 22 November 2018, DKR successfully completed a cash capital increase without subscription rights for EUR 11.00 per share in a difficult stock market environment. As a result, the share capital of the Company increased by EUR 2,723,631.00 to EUR 29,959,944.00. As a result of the cash capital increase, the Company received net proceeds of EUR 29.3 million, which will be used for further acquisitions.  

EPRA NAV increases to EUR 8.18 per share / Net LTV at 44.9% As a result of the positive net income for the period and the capital increase, EPRA NAV increased by EUR 0.48 per share or around 6% to EUR 8.18 in Q1 2018/2019.

As a result of the capital increase, the net LTV has also reduced to around 44.9% (30 September 2018: 51.2%) and thus once again offers scope for borrowing up to the target of around 50% to finance further purchases.  

Outlook

Based on the results of Q1 2018/2019 and the positive acquisition pipeline, the Management Board confirms the forecast for the 2018/2019 financial year of achieving an FFO of between EUR 26 million and EUR 29 million. The FFO run rate is still expected around 33 million p.a. at the end of the financial year.

Rolf Elgeti, CEO of Deutsche Konsum REIT-AG: "The results of the first quarter show that DKR is growing very profitably as planned. Through economies of scale and strong asset management, the already very strong and profitable external growth will be fuelled by a significant margin expansion. In addition, the Company's increased size and track record, which is now clearly visible, will lead to significantly more attractive refinancing costs, which will further accelerate profitability and FFO growth. On this basis, and given the very well-stocked acquisition pipeline, a profitable development and increase in value of DKR is already apparent."Publications for the first quarter of 2018/2019

The quarterly statement for the first quarter of 2018/2019 financial year, 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 109 retail properties with an annualised rent of EUR 42 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 Börse (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

14.02.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

Language: English Company: Deutsche Konsum REIT-AG August-Bebel-Str. 68 14482 Potsdam

Germany Phone: +49 (0)331 740076517 Fax: +49 (0)331 740076520 E-mail: ch@deutsche-konsum.de Internet: www.deutsche-konsum.de ISIN: DE000A14KRD3 WKN: A14KRD Listed: Regulated Market in Berlin, Frankfurt (Prime Standard); Regulated Unofficial Market in Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange   End of News DGAP News Service

775725  14.02.2019 

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