DGAP-News: Deutsche Konsum REIT-AG with successful completion of the 2020/2021 financial year

Press release

Deutsche Konsum REIT-AG with successful completion of the 2020/2021 financial year

- Profit almost tripled to EUR 91.4 million (previous year EUR 34.2 million)

- Rental income increased by 24 % to EUR 69.7 million

- FFO increase by 18 % to EUR 41.2 million / FFO per share up by 11 % to EUR 1.17

- FFO Run Rate (due to sales) of approximately EUR 42 million as of 30 September 2021 - increase of 5 % compared to previous year

- Real estate portfolio with a balance sheet value of over EUR 1 billion

- NAV per share grows by 20 % to EUR 13.31 / EPRA NTA per share at EUR 10.10

- Net LTV amounts to 53.2 %

- Dividend proposal of EUR 0.40 per share

- Capital recycling leads to significant one-time returns and increases firepower for acquisitions

Potsdam, 16 December 2021 - Deutsche Konsum REIT-AG (ISIN DE000A14KRD3) has closed the 2020/2021 financial year with significant growth despite the ongoing COVID-19 pandemic.

Solid increase in rental income and FFO

The Company's rental income increased year-on-year by 24 % from EUR 56.2 million to EUR 69.7 million in the 2020/2021 financial year, mainly as a result of the expansion of the property portfolio.

Funds from operations ("FFO") increased by 18 % from EUR 35.0 million to EUR 41.2 million, slightly exceeding the guidance (EUR 40.0 million to EUR 41.0 million). FFO per share rose accordingly by 11 % to EUR 1.17. Despite extensive investments in various revitalisation properties, aFFO (FFO after deduction of capitalised modernisation measures) came to EUR 22.6 million, 14 % above the previous year's level.

The FFO run rate as at 30 September 2021 was EUR 42 million and thus below the forecast of EUR 47 million to EUR 51 million, which is essentially due to the sale of properties.

Balance sheet value of the real estate portfolio exceeds EUR 1 billion

In the past financial year, DKR acquired 13 retail properties with an investment volume of around EUR 120 million and an annual rent of EUR 10.9 million. This is contrasted by the sale of a grocery discounter in Berlin-Pankow, which was sold with a capital gain of EUR 1.7 million (German GAAP).

Furthermore, the annual property valuation by an external and independent appraiser resulted in a valuation gain of approximately EUR 58 million, meaning that the property portfolio is currently valued at around 13.9 times the annual rent.

As a result, the real estate portfolio recognised as at 30 September 2021 comprises 173 retail properties with a balance sheet value of EUR 1.014 billion (30 September 2020: EUR 809.9 million) and generates an annual rent of around EUR 72.9 million (30 September 2020: EUR 63.1 million).

The average acquisition yield of the overall portfolio is currently around 10.3 %.

NAV increases to EUR 13.31 per share / Net LTV amounts to 53.2 %

The NAV per share increased by 20 % to EUR 13.31 as at 30 September 2021 (30 September 2020: EUR 11.11 per share). This is primarily due to the profit, which, in addition to the operating result, is significantly influenced by the property valuation and, in part, by the properties held for sale, whose sales prices are higher than their book values. The EPRA NTA increased by 17.3 % in the financial year and amounted to EUR 10.10 per share as at the balance sheet date (30 September 2020: EUR 8.60 per share).

The net LTV was 53.2 % at the end of the financial year and is thus temporarily slightly above the target value of around 50 %.

First-time sale of a real estate portfolio leads to high capital gains

With notarisation in September 2021, DKR sold a sub-portfolio consisting of seven properties. Furthermore, the sale of the property in Oer-Erkenschwick (North Rhine-Westphalia) was notarised in November 2021. Thus, a total of eight properties with a rental area of around 37,000 sqm (3 % of DKR's portfolio) and an annual rent of around EUR 3.9 million were sold at total purchase prices of around EUR 69.8 million, which corresponds to a sales factor of 18 times the annual rent (this is equivalent to a yield of 5.6 %). DKR has thus taken advantage of the currently favourable market conditions to increase its total shareholder return.

Half of the expected sales profits are to be proposed to the 2023 Annual General Meeting - in accordance with German REIT law - as an additional dividend for the 2021/2022 financial year in the amount of EUR 0.30 to EUR 0.40 per share (based on the current number of shares). The remaining capital gains are to be reinvested in new food-anchored retail properties.

In addition, DKR is continuously reviewing further attractive disposal opportunities.

Dividend proposal for the 2020/2021 financial year of EUR 0.40 per share

The Management Board proposes a dividend of EUR 0.40 per share for the past financial year, unchanged from the previous year.

FFO forecast for the 2021/2022 financial year between EUR 40 million and EUR 44 million

For the new financial year, the Management Board initially expects an FFO of between EUR 40 million and EUR 44 million, assuming a largely constant pandemic development and taking into account the rent reductions of the properties sold, which will be compensated for with a time lag by new properties.

Acquisitions of EUR 31.9 million in Q1 of the current financial year

In the current financial year, DKR has so far acquired a total of seven retail properties with a rental area of around 39,000 sqm and an annual rent of approximately EUR 2.6 million in individual transactions since October 2021 for around EUR 31.9 million, which corresponds to an initial yield of 8.2 % on average. The WALT is just under seven years and the vacancy rate is around 9 %.

Two retail parks in Castrop-Rauxel (North Rhine-Westphalia) and Altenburg/Nobitz (Thuringia) deserve special mention. The anchor tenant of the property in Castrop-Rauxel is Kaufland in combination with attractive other tenants such as TEDi, Deichmann, C&A, a pharmacy and comparable tenants from the healthcare sector. The property in Nobitz is an established retail park with anchor tenants Marktkauf (Edeka), POCO and ALDI. The other properties include two Edeka stores in Frauenstein and Bockau (both in Saxony), a REWE store in Schiffweiler (Saarland) and two smaller properties in Rennerod (Rhineland-Palatinate) and Freiberg (Saxony) with the tenants JYSK and Carglass.

This means that DKR has already reinvested around half of the sales proceeds by the end of the first quarter and through this capital recycling has replaced two thirds of the annualised rental income of the sold properties by means of acquisitions.

In addition, DKR continues to have a broadly filled acquisition pipeline and is in advanced and concrete acquisition processes.

Rolf Elgeti, CEO of Deutsche Konsum REIT-AG:

"The fact that DKR was able to close the financial year with significant growth and only minor pandemic effects despite the difficult overall environment once again underlines the crisis resistance of our business model. We do not expect any significant negative developments here in the future. The selective property sales we have been able to carry out in recent months at very attractive conditions have provided us with extensive liquid funds, which we will invest in the acquisition of further food-anchored local supply properties after meticulous location analysis with proven capital discipline, as our most recent acquisitions show. In short, the growth drivers of our business model remain intact."

Conference Call

Deutsche Konsum REIT-AG will hold an analyst conference (webcast and conference call) on the results for the financial year 2020/2021 today, 16 December 2021, at 14:00 CEST. The corresponding results presentation as well as further information on the webcast and the conference call can be found at https://www.deutsche-konsum.de/en/investor-relations. The Annual Report 2020/2021 is available for download at https://www.deutsche-konsum.de/en/investor-relations/financial-reports.

About Deutsche Konsum

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.

Due to its German REIT status ('Real Estate Investment Trust'), the Company is exempt from German corporation and trade tax. The shares of the Company are listed on the Prime Standard of the Deutsche Boerse (ISIN: DE 000A14KRD3) 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: [email protected]

Phone: +49 (0) 331 74 00 76 - 533