DEMIRE Deutsche Mittelstand Real Estate AG

Transcription

1 DEMIRE Deutsche Mittelstand Real Estate AG First in Secondary Locations April 2017 DEMIRE Deutsche Mittelstand Real Estate AG April 2017

2 Agenda and Presentation Team Section Page Company Overview 4 Andreas Steyer (CEO)» Strategy» Business Development / Compliance» Communication / PR Corporate Strategy 10 Financials 18 Outlook 23 Markus Drews (COO)» Acquisitions» Asset and Property Management» Facility Management» Legal & Human Resources Appendix 26 Ralf Kind (CFO)» Capital Markets & Financing» Investor Relations» Treasury, Accounting & Tax» Controlling & Risk Management DEMIRE Deutsche Mittelstand Real Estate AG April

3 DEMIRE: First in Secondary Locations Investment Highlights 1 Well diversified 1bn commercial real estate portfolio in Germany 2 Clear focus on secondary locations which offer more attractive economics and lower volatility 3 Efficient, fully integrated and scalable asset management platform to create shareholder value 4 Experienced management team with proven track record 5 Execution of four major operating strategies in order to create shareholder value: Active portfolio management, optimization of operating efficiency and financing structure and further accretive acquisitions 6 Short-to-medium term value upside to be unlocked by optimizing financing structure and vacancy reduction 7 Strong pipeline for further growth DEMIRE Deutsche Mittelstand Real Estate AG April

4 Company Overview DEMIRE Deutsche Mittelstand Real Estate AG April Office Building, Frankfurter Str , Eschborn

5 1 Well Diversified 1bn Commercial Real Estate Portfolio in Germany With a Clear Focus on Secondary Locations Property Portfolio and Business Locations Property Locations (as of 30/09/2016) Asset Class GAV ( m) % of total TLA ('000 sqm) GAV / sqm ( ) GRI p. a. ( m) (1) GRI ( /sqm) GRI yield EPRA (2) Vac. (%) WALT (3) Office % 569 1, Retail % 174 1, Logistic 52 5% Other 39 4% Total % 1, Portfolio Breakdown (as of 30/09/2016) in phalia Pa land Office Retail Logistic Other Company Offices Office 66% Breakdown according to GRI by asset class Retail 24% Other 5% Logistic 5% Rhine-Ruhr 17% Rhine-Main 7% Lease Expiry Schedule (as of 30/09/2016) (4) 4% 12% 11% 7% 8% 16% 6% 6% Breakdown according to GRI by region 12% 11% Northern 26% Eastern 29% Southern 21% 6% >2025 (1) Annualized contractual rent excl. service charges (2) Based on potential rent p. a. (3) Weighted average lease term based on GRI (4) Based on GRI DEMIRE Deutsche Mittelstand Real Estate AG April

6 1 Key Property And Tenant Overview Top 10 Properties (as of 30/09/2016) (1) # Street & number City Asset GAV % of TLA GAV / GRI p. a. GRI ( / EPRA Class ( m) total (2) ( 000 sqm) sqm ( ) ( m) (3) sqm) Vac. (4) WALT 1 Bonner Talweg 100 Bonn Office 73 7% 38 1, Kröpeliner Str Rostock Retail 65 7% 19 3, Zeitblomstr. Ulm Office 62 6% 48 1, Spohrstr. 2,4 Kassel Retail 56 6% 21 2, Am alten Flughafen 1 Leipzig Logistic 52 5% Berliner Allee 1 Freiburg Office 36 4% 23 1, Bajuwarenstraße 4 Regensburg Office 30 3% 29 1, Wiesenstr. 70 Düsseldorf Office 29 3% 24 1, Frankfurter Str Eschborn Office 27 3% 19 1, ,4 10 Gutenbergplatz 1 Leipzig Office 23 2% 20 1, Subtotal % Others % Total % 1, Top 10 Tenants (as of 30/09/2016) Top 10 Properties by Asset Class Breakdown according to TLA by asset class Top 10 Tenants by Asset Class Retail 8.9 % Logistic 47.4 % Office 43.8 % # Tenant Asset Class GRI p.a. ( m) (3) % of total (2) 1 GMG (Telekom) Office % 2 Deutsche Post Office 2.4 3% 3 HPI Germany Other 2.2 3% 4 BIMA Office 2.0 3% 5 Sparkasse Office 1.8 2% 6 RIMC Other 1.6 2% 7 REWE Retail 1.3 2% 8 BKK Office 1.2 2% 9 Momox Logistic 1.2 2% 10 Comdirect Bank AG Office 1.1 1% Subtotal % Others % Total % Breakdown according to GRI p. a. by asset class Retail 3.5 % Logistic 3.2 % Other 10.3 % Office 83.0 % (1) Based on GAV (2) Differences due to rounding (3) Annualized contractual rent excl. service charges (4) Based on potential rent p. a. DEMIRE Deutsche Mittelstand Real Estate AG April

7 2 Secondary Locations Offer More Attractive Economics And Lower Volatility Office Market Gross Initial Yield Development ( ) 12% 10% 8% 6% 4% Office Market Rent Development ( ; indexed to 100) Office Market Vacancy Development ( ) 10.3% 5.6% Comments» Secondary locations offer higher yields with moderate volatility compared to the Top-7 locations» Favorable economic conditions particularly in terms of high employment and income levels will have a positive impact on occupier demand» Since there is no speculative development in secondary locations, brokers predict that vacancies will fall and rents will increase further 11% 9% 7% 5% 7.6% 6.0% Top-7 Locations Secondary Locations» Critical success factors are distinct knowledge of the regional markets as well as sound real estate management skills with higher yields, dynamic rental development and lower vacancies Source: Bulwiengesa, DG Hyp, Corpus Sireo DEMIRE Deutsche Mittelstand Real Estate AG April

8 Operational Business Strategy 3 With Our Efficient, Fully Integrated And Scalable Asset Management Platform we Are Well Positioned to Create Shareholder Value DEMIRE» Portfolio Management / Strategy» Risk management / Compliance» Finance and controlling» Legal Property & Asset Management DEMIRE Immobilien Management GmbH Facility Management Praedia Facility Management GmbH» Operational property- and tenantrelated functions» Accounting & IT» Efficient and effective daily operations» Direct tenant relationship» Cost & quality control Integrated platform enables to scale the portfolio while maintaining an efficient and effective corporate structure DEMIRE Deutsche Mittelstand Real Estate AG April

9 4 Experienced Management Team With Proven Track Record Andreas Steyer (CEO) Ralf Kind (CFO) Markus Drews (COO)» In total 23 years of experience in international real estate markets» Previously head of real estate and spokesman for the management board of VB Real Estate Services GmbH» Among other positions Mr. Steyer worked as Partner at Arthur Andersen, Ernst & Young and Deka Immobilien GmbH» Responsible for transactions totaling more than 10bn» 19 years of experience in international real estate» Previously Co-Founder and CEO of Arbireo Capital AG and Managing Partner of Dr. Lübke & Kelber GmbH» 12 years at Barcap (Head of Barclays Real Estate Investment Banking Team for DACH Region, Director of the Structured Finance Team)» Previous functions include Principal Consultant at PwC Unternehmensberatung» In total more than 20 years of professional real estate experience» Previous functions include Head of Real Estate at Colonia Real Estate AG» Responsible for transactions totaling 3bn and assets under management of 3bn DEMIRE Deutsche Mittelstand Real Estate AG April

10 Corporate Strategy DEMIRE Deutsche Mittelstand Real Estate AG April Gutenberggalerie (Retail Property), Gutenbergplatz 1, Leipzig

11 Gross Rental Income (GRI) (2) ( m) Gross Asset Value (GAV) (1) ( m) 5 Whereas we Have Mainly Focused on Portfolio Growth Since Our Strategic Realignment in 2013 Legacy Change in Strategy Transformation Acquisitions (3) /12/ /12/ /12/ /06/ /12/ /03/ /09/16 0,7 1,3 26, ,2 72, ,1 4,3 4,0 4,0 14, ,8 49,0 31/12/ /12/ /12/ /06/ /12/ /03/ /09/16 Total Office Retail Logistics Others 2016:» Kurfürsten-Galerie Kassel ( 55m) 2015:» 77.7% in Fair Value REIT-AG increasing group portfolio ( 288m)» T6 Portfolio ( 181m)» Logistik-Park Leipzig ( 47m)» Gutenberg Galerie Leipzig ( 24m) 2014:» Alpine Portfolio ( 25m)» Condor Portfolio ( 254m)» Alpha Portfolio ( 87m) Since Total the change in Office strategy our portfolio Retail has grown Logistics from 24m to almost Others 1bn in only 27 months (1) Investment properties and properties held for sale (2) Annualized contractual rent excl. service charges (3) Numbers in brackets reflect GAV of properties as of 31/03/2016 DEMIRE Deutsche Mittelstand Real Estate AG April

12 5 we Have Now Entered a New Growth Phase by Following Four Major Operating Strategies in Order to Create Shareholder Value 1» Increase rental cash flow and reduce vacancy Active Portfolio Management» Extend WALT» Streamline portfolio by selling non-core assets 2» Generate economies of scale through in-house asset, property and facility management 3 4 Operating Efficiency Optimization of Financing Structure Further Accretive Acquisitions» Execute targeted capex programs» Optimize operating cost structures» Restructure existing debt» Reduce average cost of debt to < 4%» Improve LTV towards 50% (mid-term)» Direct investments (via asset- and/or share deal)» Indirect investments (via the purchase of shares in closed-end real estate funds) Operating strategies will drive growth in both FFO and NAV DEMIRE Deutsche Mittelstand Real Estate AG April

13 6 We Have Continuously Improved Our KPIs (1) Since Our Strategic Realignment LTV (%) Avg. Cost of Debt (%) 87.4% 83.1% 76.7% 74.6% 67.5% 64.8% 6,4% 6.3% 5.9% 6.0% 5.2% 4.4% 31/12/14 31/03/15 30/06/15 30/09/15 31/12/15 30/06/ /09/16 31/12/14 31/03/15 30/06/15 30/09/15 31/12/15 30/06/ /09/16 EPRA Vacancy (%) (2) EPRA NAV Per Share (diluted) ( ) (3) 14.7% 16.5% 17.0% 18.8% 12.8% 10.5% , ,42 31/12/14 31/03/15 30/06/15 30/09/15 31/12/15 30/06/ /09/16 31/12/14 30/06/15 31/12/15 30/06/ /09/16 (1) KPI = Key Performance Indicator (2) Based on potential rent incl. concluded rental contracts p. a. (3) Diluted number of outstanding shares: 31/12/14: 25.19m - DEMIRE Deutsche Mittelstand Real Estate AG April

14 6 And Will in Particular Focus on Further Optimizing Our Debt Structure And Vacancy Reduction in The Short-to-Medium Term Debt Structure in m (1) Targeted short-to-medium-term restructuring measures Targeted KPIs (FY2016): Short-term progress Q1/2016 Target Convertible Bond Mezzanine Loan Bond 2014/ » Mezzanine Loan» Issuer: DEMIRE Deutsche Mittelstand Real Estate AG» Value: 32m» Maturity: 31/12/2018» Coupon: 9.5%» Collateral: Portfolio T6 & Kassel LTV 66.3% 60% 31/03/2016 FY16E Promissory Notes Bank Debt » DEMIRE Bond 2014/2019» Issuer: DEMIRE Deutsche Mittelstand Real Estate AG» Nominal Value: 100m» Maturity: 16/09/2019» Coupon: 7.5%» Collateral: no» Issuer Call: 16/09/2017 at 104%, 16/09/2018 at 102% Avg. Cost of Debt EPRA Vacancy 5.1% % 31/03/2016 FY16E 12.6% 10% 31/03/2016 FY16E (1) As of 30/09/2016 excluding the Mandatory Convertible Bond ( 15m), which will be converted into equity on 22/05/2018 DEMIRE Deutsche Mittelstand Real Estate AG April

15 Successful Refinancing of 148m Promissory Note in February 2017 Creates Shareholder Value Maturity Date» Extended from 2019 to 2022 Interest Payments» Reduced from 5% p.a. to 4% p.a. as of 01/01/2017» No prepayment penalty! Option» Further Reduction of interest payments to 3.5% p.a. possible against one-time payment Company Average Cost of Debt» Reduced from 4.4% as of 30/09/16 to 4.1% pro forma FFO Impact» FFO will be increased by 1.45m p.a. as of FY 17 Proceeds from Asset Disposals» Can be reinvested without early repayment requirement for the note (Proceeds from Disposals: 22m as of February 2017) (2) Based on potential rent p.a. (3) bps = basis points DEMIRE Deutsche Mittelstand Real Estate AG April

16 6 Debt Maturity Profile Debt Maturity Profile (1) as of 28/02/2017 ( m) Overview of Debt Composition 10% 0.1% 30% 17% 8% 36% Type Amount ( m) % of Total 250 Convertible Bond % Mezzanine Loan Bond 2014/ % 15% Promissory Notes % ,4 64,8 56,1 43,9 0,4 11,3 34, > 2021 Bank Debt Promissory Note Bond Mezzanine Convertible Bank Debt Total % 100.0% % of Total (1) Excluding the mandatory convertible bond ( 15m), which will be converted into equity on 22/05/2018 DEMIRE Deutsche Mittelstand Real Estate AG April

17 7 Strong Acquisition history Acquisition Opportunities (1) since 2014 ( m) Examined Analyzed in more detail Due Diligence Bids Signed Closed Auctions Off-market (1) Based on GAV DEMIRE Deutsche Mittelstand Real Estate AG April

18 Financials DEMIRE Deutsche Mittelstand Real Estate AG April Office Building, Kuhberg / Kieler Straße 1, Neumünster

19 Improved KPIs Selected KPIs ( m) 30/09/ /12/ /12/2014 (1) EPRA NAV (diluted) ( m) Gross Asset Value Number of properties (#) % % 1% Total lettable area ( 000 sqm) 1,054 1, GRI p. a. (2) GRI yield (%) EPRA Vacancy (%) (3) WALT (years) (4) Avg. Cost of Debt (%) Avg. Maturity of Debt (years) /12/ /12/ /09/ /06/2016 EPRA NAV per share (diluted) ( ) % 2% 50% LTV (Loan-to-value) (%) /12/ /12/ /06/ /09/2016 EPRA NAV (diluted) EPRA NAV per share (diluted) ( ) % (23%) 67.5% 64.8% (2%) 4% LTV (Loan-to-value) (%) 64.8% /12/ /12/ /09/ /06/2016 (1) Abbreviated financial year (04/14 12/14) (2) Annualized contractual rent excl. service charges (3) Based on potential rent p. a. (4) Weighted average lease term based on GRI DEMIRE Deutsche Mittelstand Real Estate AG April

20 Selected Income Statement Items Income statement ( m) 9M /12/ /12/2014 (1) 1 Profit/loss from the rental of real estate Profit/loss from the sale of real estate companies Profit/loss from the sale of real estate (0.1) Profit/loss from investments accounted for using the equity method 0.0 (0.5) (1.0) Other operating income and other effects General and administrative expenses (10.6) (11.3) (3.6) Other operating expenses (14.5) (6.4) (2.9) Earnings before interest and taxes (EBIT) Financial result (35.4) (25.7) (2.9) Profit/loss before taxes (EBT) Income taxes 0.7 (4.1) (9.8) Net profit/loss for the period Of which attributable to: Non-controlling interests Parent company shareholders Comments 1» The increased profit/loss from» General and administrative rental of real estate in 9M 2016 expenses of 9M 2016 include reflects the rental income from one off costs of 3.2m acquired properties in » Other operating expenses include non-current items» Financial result does not fully incorporate recent refinancing efforts yet and also includes minority interest of co-investors in Fair Value REIT subsidiaries (1) Abbreviated financial year (04/14 12/14) DEMIRE Deutsche Mittelstand Real Estate AG April

21 Selected Income Statement Items Adjusted (FFO) IFRS Adjustments FFO Income statement ( m) 9M2016 9M2016 adj. Profit/loss from the rental of real estate Profit/loss from the sale of real estate Other operating income and other effects 23.0 (21.2) 1.8 General and administrative expenses (10.6) 3.1 (7.5) Other operating expenses (14.5) 11.4 (3.2) Earnings before interest and taxes (EBIT) 41.3 (4.2) 37.1 Financial result (35.4) 9.2 (26.2) Profit/loss before taxes (EBT) Income taxes Net profit/loss for the period 6.5 (4.5) 11.0 Of which attributable to: Non-controlling interests Parent company shareholders Comments 1» Valuation result 14.4m + other» Aperiodic and one-off items» Besides deferred tax also one-offs 6.8m which mainly (transaction cost, valuation income tax was adjusted due to include non-current items expenses etc.) existing tax losses carried forward 2 3 4» FFO before minority interest of co-investors DEMIRE Deutsche Mittelstand Real Estate AG April

22 Selected Balance Sheet Items Balance Sheet ( m) 9M /12/ /12/2014 (1) ASSETS Investment Properties Properties held for sale Cash and cash equivalents Total assets 1,059 1, LIABILITIES Subscribed capital Reserves Equity attributable to parent company shareholders Interest of non-controlling shareholders Total shareholders equity Comments 1 Non-current financial debt Current financial debt Total liabilities Total equity and liabilities 1,059 1, » Investment properties have nearly tripled since the end of » Financial Debt has increased due to recent portfolio acquisitions 3 4 (1) Abbreviated financial year (04/14 12/14) DEMIRE Deutsche Mittelstand Real Estate AG April

23 Outlook DEMIRE Deutsche Mittelstand Real Estate AG April Office Building, DEMIRE Headquarters, Robert-Bosch-Str. 11, Langen

24 Guidance/Outlook 2016 / 2017 Gross Rental Income» Rental income of 75m in FY16 and 77m in FY17 Streamline Portfolio» Sale of non strategic assets» Already performed: Disposal of about 84 non-core assets (GAV < 0.5m each / <2% of total GAV) EPRA Vacancy 2016» Reduction from 12.2% (Q2) to 10.0% (31/12/2016 pro forma = 10.4%) Average Cost of Debt 2016» Reduction from 4.8% (Q2) to % (28/02/2017 pro forma = 4.1%) LTV 2016» Further reduction from 66.1% (Q2) (30/09/16 = 64.8%) FFO 2016» Before minorities (without sales) of 7m - 8m» Before minorities (with sales) of 12m - 13m FY16» After minorities (without sales) of 2m - 3m» After minorities (with sales) of 7m - 8m (2) Based on potential rent p.a. (3) bps = basis points DEMIRE Deutsche Mittelstand Real Estate AG April

25 DEMIRE: First in Secondary Locations Investment Highlights 1 Well diversified 1bn commercial real estate portfolio in Germany 2 Clear focus on secondary locations which offer more attractive economics and lower volatility 3 Efficient, fully integrated and scalable asset management platform to create shareholder value 4 Experienced management team with proven track record 5 Execution of four major operating strategies in order to create shareholder value: Active portfolio management, optimization of operating efficiency and financing structure and further accretive acquisitions 6 Short-to-medium term value upside to be unlocked by optimizing financing structure and vacancy reduction 7 Strong pipeline for further growth DEMIRE Deutsche Mittelstand Real Estate AG April

26 Appendix DEMIRE Deutsche Mittelstand Real Estate AG April Logistics Park Leipzig, Am alten Flughafen 1, Leipzig

27 Price DEMIRE Share Information Overview Share Performance since 2015 Key Share Data (as of 10/02/2017) 7,0 6,0 5,0 4,0 3,0 2, Volume (000s) ISIN Symbol / Ticker Stock Exchange Market Segment DE000A0XFSF0 DMRE Deutsche Börse Frankfurt (FSE); XETRA Prime Standard Subscribed Capital (31/01/2017) EUR 54,255,944 1,0 100 Number of shares (31/01/2017) 54,255,944 0,0 Jan 15 Volume Price (EUR) - Oct-16 Daily Trading Volume (90-Day) Market Capitalisation 24,160 EUR 210 million Shareholder Structure (as of 20/01/2017) (1) Wecken & Cie. (26,5 %) Obotritia Capital KGAA (11.9 %) Freefloat (Holdings <5 %) (61,6 %) (1) Source: Free Float Publicly Definition available gemäß information Deutsche Börse DEMIRE Deutsche Mittelstand Real Estate AG April

28 Largest Properties by GAV (as of 30/09/2016) Bonn Rostocker Hof Ulm Street & number Bonner Talweg 100 City Bonn Portfolio T6 Use Office Acquisition date June 2015 GAV ( ) 73,060,000 Total lettable area (sqm) 38,353 GAV / sqm ( ) 1,905 GRI p. a. ( ) (1) 5,401,454 GRI / sqm / m ( ) 11.7 EPRA Vacancy (%) (2) 0.0 WALT (years) (3) 8.5 Street & number Kröpeliner Str City Rostock Portfolio FVR Use Retail Acquisition date December 2015 GAV ( ) 65,000,000 Total lettable area (sqm) 19,307 GAV / sqm ( ) 3,378 GRI p. a. ( ) (1) 4,379,543 GRI / sqm / m ( ) 19.3 EPRA Vacancy (%) (2) 1.9 WALT (years) (3) 5.2 Street & number Zeitblomstr. City Ulm Portfolio Pink (Condor) Use Office Acquisition date November 2014 GAV ( ) 65,000,000 Total lettable area (sqm) 47,541 GAV / sqm ( ) 1,305 GRI p. a. ( ) (1) 4,245,209 GRI / sqm / m ( ) 7.6 EPRA Vacancy (%) (2) 10.6 WALT (years) (3) 7.9 (1) Annualized contractual rent excl. service charges (2) Based on potential rent p. a. (3) Weighted average lease term based on GRI DEMIRE Deutsche Mittelstand Real Estate AG April

29 Largest Properties by GAV (as of 30/09/2016) - cont d Kurfürstengalerie Kassel Logistics Park Leipzig Freiburg Street & number Spohrstraße 2,4 City Kassel Portfolio Kurfürstengalerie Use Retail Acquisition date January 2016 GAV ( ) 56,040,000 Total lettable area (sqm) 21,450 GAV / sqm ( ) 2,613 GRI p. a. ( ) (1) 3,755,949 GRI / sqm / m ( ) 15.7 EPRA Vacancy (%) (2) 8.6 WALT (years) (3) 8.3 Street & number Am alten Flughafen 1 City Leipzig Portfolio LogPark Use Logistic Acquisition date April 2015 GAV ( ) 51,820,000 Total lettable area (sqm) 218,697 GAV / sqm ( ) 237 GRI p. a. ( ) (1) 3,669,329 GRI / sqm / m ( ) 2.1 EPRA Vacancy (%) (2) 41.0 WALT (years) (3) 2.1 Street & number Berliner Allee 1 City Freiburg Portfolio T6 Use Office Acquisition date June 2015 GAV ( ) 35,720,000 Total lettable area (sqm) 22,674 GAV / sqm ( ) 1,575 GRI p. a. ( ) (1) 2,620,889 GRI / sqm / m ( ) 9.6 EPRA Vacancy (%) (2) 0.0 WALT (years) (3) 4.5 (1) Annualized contractual rent excl. service charges (2) Based on potential rent p. a. (3) Weighted average lease term based on GRI DEMIRE Deutsche Mittelstand Real Estate AG April

30 Largest Properties by GAV (as of 30/09/2016) - cont d Regensburg Düsseldorf Eschborn Street & number Bajuwarenstraße 4 City Regensburg Portfolio T6 Use Office Acquisition date October 2015 GAV ( ) 29,970,000 Total lettable area (sqm) 29,219 GAV / sqm ( ) 1,026 GRI p. a. ( ) (1) 2,466,775 GRI / sqm / m ( ) 7.0 EPRA Vacancy (%) (2) 0.0 WALT (years) (3) 4.5 Street & number Wiesenstr. 70 City Düsseldorf Portfolio Purple (Condor) Use Office Acquisition date November 2014 GAV ( ) 28,960,000 Total lettable area (sqm) 24,308 GAV / sqm ( ) 1,191 GRI p. a. ( ) (1) 1,843,803 GRI / sqm / m ( ) 9.3 EPRA Vacancy (%) (2) 30.4 WALT (years) (3) 4.7 Street & number Frankfurter Str City Eschborn Portfolio Orange (Condor) Use Office Acquisition date November 2014 GAV ( ) 27,350,000 Total lettable area (sqm) 18,774 GAV / sqm ( ) 1,457 GRI p. a. ( ) (1) 1,956,987 GRI / sqm / m ( ) 8.7 EPRA Vacancy (%) (2) 0.0 WALT (years) (3) 8.4 (1) Annualized contractual rent excl. service charges (2) Based on potential rent p. a. (3) Weighted average lease term based on GRI DEMIRE Deutsche Mittelstand Real Estate AG April

31 Disclaimer This document is for informational purposes only. This document is not intended to form the basis of any investment decision and should not be considered as a recommendation by DEMIRE Deutsche Mittelstand Real Estate AG (the Company ) or any other person in relation to the Company. This document does not constitute an offer to sell, a solicitation of an offer of the sale or purchase of securities or an invitation to purchase or tender for the Company. Securities of the Company shall not be offered or sold, in any jurisdiction in which such an offer, solicitation or sale would be unlawful. This document and its contents are confidential and not meant for forwarding, transmission, publication, duplication, or disclosure (in whole or part) to other persons. Outside of Germany the distribution of this document may be restricted by applicable laws. This document and the information contained therein may not be distributed in the United States of America, Canada, Australia, Japan or other jurisdictions, in which such offer, respectively, such invitation to make an offer to buy or subscribe for securities is not allowed. This document does not constitute an offer to sell securities in the United States. Securities, including the bond of the Company may not be sold or offered for sale within the United States or to or for the account of / in favour of US citizens (as defined in Regulation S under the U.S. Securities Act of 1933 in the current version (the "Securities Act") unless they are registered under the regulations of the Securities Act or unless they are subject to an exemption from registration. Neither the Company nor any other person intend to register the offer or a part thereof in the United States or to make a public offer of the securities in the United States. Certain information in this document is based on management estimates. Such estimates have been made in good faith and represent the current beliefs of applicable members of management. Those management members believe that such estimates are founded on reasonable grounds. However, by their nature, estimates may not be correct or complete. Accordingly, no representation or warranty (express or implied) is given that such estimates are correct or complete. This document includes 'forward-looking statements'. Forward-looking statements are all statements which do not describe facts of the past but contain the words "believe", "estimate", "expect", "anticipate", "assume", "plan", "intend", "could", and words of similar meaning. These forward-looking statements are subject to inherent risks and uncertainties since they relate to future events and are based on current assumptions and estimates of the Company, which might not occur at all or occur not as assumed. They therefore do not constitute a guarantee for the occurrence of future results or performances of the Company. The actual financial position and the actual results of the Company as well as the overall economic development and the regulatory environment may differ materially from the expectations which are assumed explicitly or implicitly in the forward-looking statements and do not comply to them. Therefore, investors are warned to base their investment decisions with respect to the Company on the forward-looking statements mentioned in this document. DEMIRE Deutsche Mittelstand Real Estate AG April