DEMIRE Deutsche Mittelstand Real Estate (DMRE) Q2 2025 earnings summary

Executive summary

• Letting performance improved significantly, exceeding 40,000 sqm, despite a challenging real estate market and higher vacancy, with annualized contractual rent at €54.5 million as of June 2025.

• Rental income declined 21.7% year-over-year to €27.8 million due to asset disposals and a smaller portfolio.

• FFO I after taxes dropped 67.9% to €5.0 million, reflecting lower rental income and higher impairments.

• Net loss for the period widened to €45.8 million, mainly due to higher interest expenses and impairments.

• Asset disposals completed or pending, with expected proceeds of around €40 million, supporting debt reduction.

Financial highlights

• Rental income for H1 2025 was €27.8 million, down 22% year-over-year due to disposals.

• FFO I reached €5.0 million for H1 2025, a 67.9% decrease year-over-year.

• EBIT was negative at €-24.9 million, down from €-14.1 million in H1 2024, due to lower rental income and higher write-downs.

• Net LTV increased to 42.4% from 40.9% at year-end 2024.

• NOI margin stabilized at 67%, with a target to improve to the low 70s.

Outlook and guidance

• Full-year 2025 rental income guidance raised to €52–54 million, FFO I to €5–7 million.

• Little to no FFO contribution expected in H2 2025 due to further disposals and increased maintenance costs.

• Net LTV expected to decrease to about 40% by year-end with further disposals.

• Guidance reflects expectations of continued challenging market conditions but improved operational performance.