DEMIRE Deutsche Mittelstand Real Estate (DE:DMRE) is an investor in German commercial property focused on secondary locations. It has grown significantly over the last two years and has a portfolio valued at €984m with annual contracted rental income of €71.7m (31 March 2017). Further efficiency gains as acquisitions are integrated are likely to increase profitability and provide a stable platform for further growth. A diverse portfolio of income streams and potential for capital growth may make this an attractive way to access the German property market at a discount.
Proven ability to grow
After a strategic realignment in 2013, DEMIRE has transformed its business and built a portfolio of German commercial property valued at nearly €1bn in two years. Rental income more than doubled in 2015 and 2016, with further growth expected in 2017. DEMIRE has also built a significant and efficient facility and property management operation to run its assets. At the same time, the loan-to-value (LTV) ratio and the cost of debt have been reduced, increasing profitability and NAV per share. This has been achieved in part through the acquisition of 77.7% of Fair Value REIT (FVI), which maintains its separate listing, and of Krüger Immobilien, a property management company, as well as refinancing more expensive debt.
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