Q3 2024 Demire Deutsche Mittelstand Real Estate AG Earnings Call Transcript
Key Points
- 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.
- The company achieved a solid letting performance, with around 60,000 square meters leased, including significant contracts with Deutsche Telecom.
- More than half of the properties have seen an increase in contractual rent since the end of 2023, driven by indexation.
- The company has closed the Rostock transaction and disposed of three smaller assets, with more sales expected by the end of 2025.
- Net Loan-to-Value (LTV) has improved due to the completion of the Rostock transaction and repayment of respective financing.
- Rental income has decreased by 15% compared to the previous period, primarily due to a reduced portfolio size.
- The vacancy rate increased from 14% to 14.7% as of September 2024, partly due to tenant move-outs.
- Operating expenses have not decreased at the same rate as rental income, driven by higher maintenance costs.
- The company expects FFO one to be significantly lower than in 2023 due to bond restructuring and higher interest expenses.
- Average cost of debt is increasing, with expected interest rates on loans rising by about 300 basis points.
Ladies and gentlemen, good morning, everyone. And welcome to our results presentation for the first nine months in 2024.
With me here is Tim Bruckner ,Demire CFO, Ralf Bongers, Demire CIO and Julius Stinauer, our Head of Investor Relations.
I'm sure you had a chance to look at our results which I would summarize as solid. Rental income and FFO one are both in line with our expectations before going into more details. I'd like to highlight that we wanted to finish the refinancing of our bond yesterday. But as a matter of fact, we are still settling a final transaction as part of the backstop agreement and the finalization can only be a matter of days and until the implementation of our amended and extended bond, this means we will enter into much calmer waters financially since we then have our main financing in place until the end of 2027.
As a company, we will now continue to focus on our core business, the letting and optimizing of real estate and disposals of non strategic or fully optimized assets.
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