DEMIRE Deutsche Mittelstand Real Estate (DMRE) Investor Update summary

Company overview and portfolio

• Focuses on office, retail, and hotel properties in secondary German locations, managing a €1.0bn commercial portfolio with 49 assets and 63% office weighting.

• Achieved Gold awards for financial and sustainability reporting from EPRA.

• Tenant base is diversified across 40+ sectors, with 28% public sector tenants and a weighted average lease term of 4.8 years.

• Annualised contractual rent stands at €53.7m, with an EPRA vacancy rate of 18.1%.

• Portfolio reduction and asset disposals have led to lower rental income and FFO.

Financial performance and guidance

• Q1 2025 rental income was €14.0m, down 24.7% year-on-year, mainly due to asset sales and deconsolidations.

• Q1 2025 FFO I after taxes was €2.1m, a 73.7% decrease from the prior year.

• FY 2024 rental income was €65.3m, down 16.9% from FY 2023, with FFO I after taxes at €23.4m, down 36.4%.

• Net LTV remained stable at 40.9% in Q1 2025, with average cost of debt at 4.32%.

• FY 2025 guidance confirmed: rental income €51–53m, FFO I €3.5–5.5m.

Bond refinancing and capital structure

• Successfully extended Bond 19/24 maturity to December 2027, reducing principal from €499m to €252.5m.

• Shareholder support includes up to €100m in deeply subordinated loans for tender offers.

• New bond terms include a 5.0% cash margin, 3.0% PIK interest from 2027, and penalty fees if principal not reduced further.

• Asset sales of at least €50m per year in 2025 and 2026 are required to generate proceeds for bondholders.

• Tightened covenants restrict dividends, equity buy-backs, and property acquisitions above certain thresholds.