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Deutsche Konsum Reit-Ag prepares for strong growth and repositions itself
DEUTSCHE KONSUM REIT-AG
(Incorporated in the Federal Republic of Germany)
(Registration number: HRB 13072)
FSE Share Code: A14KRD
JSE Share Code: DKR
ISIN: DE000A14KRD3
LEI: 529900QXC6TDASMCSU89
(“DKR” or “the Company”)
DEUTSCHE KONSUM REIT-AG PREPARES FOR STRONG GROWTH AND
REPOSITIONS ITSELF
Potsdam, 30 May 2023 – In the context of strategic discussions and considerations, DKR has
analysed the further business prospects for DKR and the situation on the real estate market
as well as on the capital markets and derived measures from this.
The Company considers the current situation on the real estate market to be exciting and full
of opportunities and derives positive growth prospects for itself from this. Due to the sharp rise
in borrowing costs in the last three quarters, the Company is feeling the effects of dynamically
increasing interest costs for refinancing and new loans. On the other hand, the ECB's interest
rate hikes in particular are leading to increasingly declining asking prices on the real estate
market, which is reflected in a currently increasingly filling acquisition pipeline with interesting
local supply properties that fit exactly into DKR's purchase profile. The Company expects this
trend to intensify further, especially towards the end of 2023, and derives strong growth
opportunities through a significant purchase volume from this.
After careful consideration, the Management Board has come to the conclusion that in the
current situation it is necessary to maintain the highest possible level of liquidity. On the one
hand, this allows debt instruments that are expiring in the following year already to be gradually
repaid, and on the other hand, growth opportunities that arise can be quickly seized through
further acquisitions.
Furthermore, the Company would like to strengthen its independence and push ahead with
the separation from the founding shareholder and main shareholder Obotritia Capital KGaA.
The Company has derived the following measures to achieve its goals:
Amendment of the dividend proposal and reduction of the dividend distribution for the
financial year 2021/2022 to EUR 0.12 per share
As already announced in advance in an insider information, the Management Board amends
its proposal for the appropriation of profits dated 15 December 2022 for the past financial year
2021/2022 by retroactively allocating a reinvestment reserve in the amount of EUR
12,689,275. This is possible according to § 13 (3) REIT Act in the amount of half of the realised
capital gains from the property sales of the financial year 2021/2022. The remaining
distributable amount shall be distributed as dividend in the amount of EUR 4,218,713 or EUR
0.12 per share (instead of EUR 0.48 per share) and the calculated remaining amount shall be
transferred to the profit carried forward. The reinvestment reserve is then to be used to partially
finance the latest acquisitions.
In order to take into account possible opportunities and risks, the reduction of the dividend
distribution is intended to ensure the highest possible flexibility in the further operational
management of the Company.
The Annual General Meeting must vote on the new resolution on the appropriation of profits.
Termination of short-term investments of surplus cash and cash equivalents
In view of the re-availability of interest on credit balances and in order to increase the directly
available liquidity, the short-term investments were terminated. Since the beginning of the
financial year, no new short-term investments have been made and instead around EUR 40
million has already flowed back directly to DKR. Full repayment of all cash and cash
equivalents is expected by September 2023.
Capital recycling for further growth financing
The Company currently has several purchase offers at attractive purchase price factors for
individual locations, which are currently being reviewed and negotiated. DKR is considering
using attractive sales options, especially in the current situation, in order to invest them in new,
higher-yielding local supply properties in the sense of capital recycling.
The Company currently has an attractive acquisition pipeline with local retail properties valued
at approx. EUR 84 million at an average acquisition factor of 11 times the annual rent (9%
yield), the realisation of which would lead to strong growth in the rental income of the property
portfolio.
Changes in the Supervisory Board and Management Board – Rolf Elgeti moves from
the Management Board to the Supervisory Board
The Chairman of the Supervisory Board Hans-Ulrich Sutter has informed the Company that
he will resign from his mandate as well as from his position as Deputy Chairman of the Audit
Committee at the end of the next Annual General Meeting for personal reasons.
At the same time, the Chairman of the Management Board Rolf Elgeti (CEO) has decided to
resign his mandate with effect from the end of the next Annual General Meeting. In the future,
the operational business activities will be carried out by the Management Board members
Alexander Kroth (CIO) and Christian Hellmuth (CFO). Rolf Elgeti intends to stand for the
chairmanship of the Supervisory Board at the upcoming Annual General Meeting.
Annual General Meeting 2023 on 13th July 2023
The Company will shortly convene the 2023 Annual General Meeting, which will take place in
Berlin on 13 July 2023.
Rolf Elgeti, CEO of Deutsche Konsum REIT-AG:
“We sincerely thank our Supervisory Board Chairman Mr Sutter for his valuable work since
the IPO of DKR and wish him all the best personally. We also want to take this as an
opportunity to take the Company into a new and exciting phase and to reallocate the tasks
ahead. For this reason, I would like to step down from my role as Chairman of the Management
Board in the future and continue to be available to the Company as Chairman of the
Supervisory Board.“
Alexander Kroth, CIO:
“The acquisition pipeline has filled up strongly again in the past two months with attractive
properties that fit our portfolio very well and that were not offered to us at these price levels
two years ago. We think that this trend will continue until the end of the year, which will create
great growth opportunities for us.“
Christian Hellmuth, CFO:
“The change in the resolution on the appropriation of profits and the resulting lower dividend
distribution was not easy for us, but from the Company's point of view it makes a lot of sense
in the current environment, because it increases the financial flexibility for upcoming
refinancing and establishes additional value creation opportunities through investments in the
portfolio and through acquisitions of further retail properties, which is why we are asking the
shareholders for their approval at the Annual General Meeting.“
About the Company
Deutsche Konsum REIT-AG, Broderstorf, is a listed real estate company focusing on German
retail properties for everyday goods in established micro-locations. The focus of the
Company's activities is on the acquisition, management and development of local retail
properties with the aim of achieving a steady increase in value and the lifting of hidden
reserves.
The shares of the Company are listed on the Prime Standard of Deutsche Börse
(ISIN: DE000A14KRD3) and on the JSE (JSE Limited) (South Africa) by way of a secondary
listing.
Contact
Deutsche Konsum REIT-AG
Stefanie Frey
Investor Relations
E-Mail: sf@deutsche-konsum.de
Phone: +49 (0) 331 74 00 76 – 533
Potsdam, 31 May 2023
JSE Sponsor
PSG Capital
Date: 31-05-2023 07:05:00
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