Deutsche Konsum REIT : with strong nine-month results 2017/2018 / Refinancing completed and borrowing costs reduced

Press release

Deutsche Konsum REIT with strong nine-month results 2017/2018 / Refinancing completed and borrowing costs reduced

- Rental income up by 52% to EUR 20.9 million

- FFO amounts to EUR 11.4 million / aFFO amounts to EUR 4.2 million

- Result for the period is EUR 25.4 million

- Balanced real estate assets grew to EUR 352.4 million

- WALT rises to 5.2 years

- EPRA NAV increases to EUR 7.50 per share

- Net LTV increases to 47.3%

- Borrowing costs lowered to 2.0% p.a.

Broderstorf, 14 August 2018 - Deutsche Konsum REIT-AG (ISIN DE000A14KRD3) has continued to increase its value in the first nine months of the 2017/2018 financial year ("9M 2017/2018").
 

Rental income and FFO rise profitably

The rental income of the Company increased significantly by 52% to EUR 20.9 million compared to the same period of the previous year (previous year: EUR 13.8 million).

The derived funds from operations ("FFO") increased even more strongly by 61% to EUR 11.4 million (previous year: EUR 7.1 million). This again shows the profitable growth of the Company, which is monetised by economies of scale in the course of further portfolio expansion.
 

Real estate portfolio grows to 94 properties with a book value of > EUR 410 million (pro forma) - valuation gains of around EUR 15 million from the current valuation

As a result of asset and liability transfers of 22 retail properties in 9M 2017/2018, the reported real estate portfolio increased to 84 properties with a book value of EUR 352.4 million as of 30 June 2018 (30/09/2017: EUR 275.4 million). This includes valuation gains from the regular valuation of the real estate portfolio in the amount of EUR 15.4 million, which resulted in particular from the revitalisation projects in Greifswald, Rostock and Rüdersdorf.

The purchase yield of the reported real estate portfolio 2018 is approximately 11.9% as of the reporting date of 30 June 2018.

Another 10 retail properties with a total investment volume of around EUR 61 million had or will have their transfer of benefits and encumbrances in the Q4 of the 2017/2018 financial year. This applies in particular to the acquired large retail parks in Elsterwerda ("Elster-Center"), Weißwasser ("Südpassage") and Werdau ("Pleissen-Center").

It also includes five other objects, which DKR recorded in June and July 2018. On the one hand there are four wholesale markets with tenants METRO GASTRO in Uelzen (Lower Saxony), Wolgast (Mecklenburg-West Pomerania), Rudolstadt (Thuringia) and Salzwedel (Saxony-Anhalt) and on the other hand a local supply centre in Reinsdorf (Saxony) with the anchor tenants Nah & gut (EDEKA) and the local savings bank. The annualised rent of these properties totals around EUR 0.5 million with an investment volume of around EUR 5.1 million.

Thus, the secured real estate portfolio (pro forma) currently comprises 94 properties with a book value of around EUR 415 million and generates annualised rental income of around EUR 36.0 million.

As a result, DKR has already invested EUR 112 million in the current financial year and clearly exceeded its purchase target. The Company remains in concrete acquisition processes and expects further acquisitions shortly. There are currently EUR 25 million firepower available.


EPRA NAV increases to EUR 7.50 per share

Equity increased by around EUR 49.5 million as a result of the ten percent cash capital increase in December 2017 from which DKR received approximately EUR 24.1 million and the positive nine-month result of EUR 25.4 million. As a result, the EPRA NAV increased to EUR 7.50 per share or around 20% as of 30 June 2018 (30/09/2017: EUR 6.25).


Refinancing carried out - Net LTV at 47.3%

Furthermore, DKR has optimised its debt capital side. New loans, loan refinancing and the issue of a corporate bond raised borrowings of around EUR 90 million. As a result, the net LTV increased to around 47.3% as of 30 June 2018 (30/09/2017: 42.6%), thus approaching the target of around 50%.

At the same time, borrowing costs have decreased to 2.0% p.a. (30/09/2017: 2.4% p.a.) with simultaneous increase in loan maturities to 5.6 years (30/09/2017: 4.9 years).

For the issuance of the corporate bond, DKR received a BBB rating from the rating agency Scope (investment grade). The Company rating is "BB stable".
 

Forecasts for the 2017/2018 financial year confirmed and outlook for the following financial year

Based on the positive results for the first nine months of 2017/2018 and the transfer of ownership of the larger acquisition properties in the fourth quarter, the Management Board confirms the forecast to achieve a FFO of at least EUR 16 million but adjusts the upper end of the range to EUR 18 million. Furthermore, the Management Board confirms the forecast to achieve a FFO Run Rate of EUR 23 million as of 30 September 2018.

On the basis of the current planning, this results in a FFO of between EUR 25 and 28 million as well as a FFO Run rate of about EUR 33 million for the following financial year 2018/2019 (as at 30 September 2019).

Rolf Elgeti, CEO of Deutsche Konsum REIT-AG: "We are very satisfied with the successful development in the current financial year and we were able to significantly increase all relevant key figures and improve our profitability. Thanks to the successful refinancing of our borrowed capital, we are now well positioned in this area compared to the peer group, from which our shareholders benefit. "
 

Publications for 9M 2017/2018

The quarterly statement for the third quarter of 2017/2018 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 94 retail properties with an annualised rent of EUR 36.0 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