International News

Deutsche Konsum REIT-AG reports solid operating performance during Q1 of its 2021/2022 financial year

DKR's Nahversorgungszentrum in Altentreptow, Germany.

Retail-focused Deutsche Konsum REIT-AG has reported an increase of 13% in rental income from €16.2 million to €18.3 million during the first quarter of its 2021/2022 financial quarter (when compared to the same quarter of the previous year) due to the purchase of additional properties. Net rental income was up by 20% (€13 million).

Funds from operations (FFO), however, rose slightly less by 6% from €10.1 million to €10.7 million, resulting from approximately €1 million higher net financial expenses. Funds from operations per share was €0.30, also increasing by 6%.

Adjusted Funds from Operations (AFFO) were €7.6 million, 53% above the previous year’s level due to less cost-intensive investments in various properties.

DKR’s portfolio, recognised at the end of December 2021, comprises of 173 retail properties with a balance sheet of around €1.02 billion (31 December 2020: €831.6 million) and a rental area of around 1,023,000 square metres, including sold assets whose transfer of benefits and encumbrances are not expected until March and April 2022.  

The average acquisition yield of DKR’s total portfolio is currently around 10.3%.

Since the beginning of the new financial year, the German REIT has acquired a further 10 retail properties with an investment value of around €38 million and an annual rent of €3.2 million. One of these properties has already been transferred to DKR with transfers of the remaining properties expected to take place between now and April 2022.

Excluding the sale of a sub-portfolio, with 7 properties notarised at the end of the previous financial year, the sales of its assets in Oer-Erkenschwick, Neumünster and Beratzhausen, with a total annual rent of €1.5 million, were additionally notarised for €27.3 million during the first quarter of the current financial year. Overall, the company expects gross inflows of around €75 million from the disposals to date with a simultaneous decline of around €4.1 million in annual rent.

When considering all notarised acquisitions and sales, its pro forma portfolio comprises of a total of 173 properties with a total lettable area of approximately 1,025,000 square metres and a balance sheet value of €984 million, generating an annualised rent of €72 million.

DKR is in the process of acquiring further assets.

EPRA NTA per share increased by 2% to €10.29 as at the 31st of December 2021 (30th September 2021: €10.10 per share) with its net loan-to-value amounting to 52.5% as of the balance sheet date.

The company’s board expects funds from operations of between €40 million to €44 million during its current financial year, considering the reduction in rent of its properties sold.