German real estate investment trust (Reit) Deutsche Konsum Reit (DKR), which recently announced plans to withdraw its secondary listing on the JSE, has confirmed its funds from operations forecast for the full-year.
The company, which owns shopping centres in Stralsund, Ueckermünde, Grimma, Angermünde, Plauen and Stendal, in Germany, said based on current planning, the management board confirms the forecast and expects funds from operations (FFO) for the 2023/2024 financial year to be between €27m and €30m.
Rental income increased slightly by 0.9% to €59.2m in the nine months ended June, while net rental income rose 3.2% to €37.8m, the group said in a statement on Wednesday.
Funds from operations for the period were down 11% to €24.1m, primarily due to increased interest expenses, as well as lower interest income.
Its net asset value per share — or EPRA NTA — rose to €7.69 from €7.64 at end-September. EPRA NTA is calculated in accordance with the best-practice recommendations of the European Public Real Estate Association (EPRA).
At end-June, DKR’s real estate portfolio comprised 183 retail properties with a balance sheet value of about €1bn and a rental area of just over 1-million square metres. The portfolio’s annualised rent during the reporting period is €75.9m.
DKR invests in high-yielding retail centres with grocery anchors. Most rental income is generated by non-cyclical tenants with strong credit ratings, such as large, German food-retail groups, special-item stores, pharmacies and medical facilities. All of these are considered largely independent of the economic cycle.
At the end of June, DKR successfully issued two registered bonds in exchange for three corporate bonds it had previously issued, with a total volume of €145.9m. This transaction extends the maturity of these financial liabilities until the end of September 2025.
In March, the company, which has its primary listing on the Frankfurt Stock Exchange, said it had listed on the JSE in March 2021 with the intention of attracting interested SA investors.
Since then, it has engaged in various initiatives and investor discussions, but those engagements had not yielded the desired results from an SA market perspective.
Because of this, together with the market capitalisation of the company not having grown as anticipated since its listing, DKR said recently that it intended withdrawing its secondary listing on the JSE and refocusing exclusively on its primary exchange and accompanying shareholder base, being the FSE.
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