Corporate News

09/08/2012 | Corporate News

Fair Value REIT-AG exceeds FFO-target in the first half year and increases earnings forecast for 2012

  • Occupancy rate increases to 95.0%, rental income up by 7.3%
  • IFRS consolidated net income of EUR 2.1 million (previous year: EUR 3.2 million)
  • Adjusted consolidated net income in accordance with EPRA / FFO on par with previous year at EUR 2.9 million
  • REIT equity ratio increases to 52.2%

Munich, August 9, 2012 – Fair Value REIT-AG achieved total revenues of EUR 6.6 million in the first half of 2012. This exceeded the corresponding previous year figure by EUR 0.2 million or 3.8%. The rise came on the back of rental income which rose by 7.3% to EUR 5.6 million and lower income from operating and incidental costs. The occupancy rate of the properties held by the Group and its participations increased proportionate to Fair Value from 93.8% to 95.0% and therefore returned to its long-term average as of June 30, 2012. The remaining terms of the lease agreements averaged 5.7 years as of the reporting date.

Net rental result for the first half year came in at EUR 4.3 million. The decrease of around EUR 0.1 million or 2% compared to the first half of 2011 is attributable to a rise in expenses for investment properties totalling EUR 0.3 million. This resulted equally from rental-related renovation costs as well as on-going maintenance expenses. On the back of sales and valuation expenses of EUR 1.0 million (previous year: EUR 0.3 million), the operating result for the first six months was EUR 2.1 million, EUR 0.8 million or 27% down on the corresponding period in the previous year (EUR 2.9 million).

Earnings from the equity-accounted associated companies fell by EUR 0.5 million or 16% to EUR 2.6 million. The change was exclusively attributable to the market value changes to interest rate hedges recorded in the income statement, which resulted in a liquidity-neutral positive contribution to earnings totalling EUR 0.1 million (previous year period: EUR 0.6 million).

Overall, Fair Value REIT-AG generated consolidated net income according to IFRS of EUR 2.1 million, or EUR 0.22 per share, in the first six months of 2012. The decrease compared to the previous year period (EUR 3.2 million or EUR 0.34) was largely attributable to the higher earnings contribution from the market valuation of interest rate hedges in the first half of 2011. In addition to that capitalised and amortised renovation costs and the valuation loss on a sold property had an impact on the net income.

The consolidated net income of the Fair Value Group adjusted for changes in market value and sales expenses (EPRA earnings or FFO) came in at EUR 2.9 million in the first half of 2012 or EUR 0.31 per share. This was therefore on par with the previous year and higher than expected for the reporting period.
Group equity as of June 30, 2012, totalled EUR 79.3 million and was therefore 2% up on the mark from December 31, 2011 (EUR 77.5 million). This meant that the balance sheet net asset value per share in circulation totalled EUR 8.51 per share in the first six months of the year (December 31, 2011: EUR 8.31). The equity ratio pursuant to Paragraph 15 of the German REIT Act increased to 52.2% of immovable assets (December 31, 2011: 51.0%).
Frank Schaich, CEO of Fair Value REIT-AG, provides an outlook on future development: “Funds from operations in the first half of the year exceeded our target and we are confident that the positive development can be sustained in the second half of the year. We are therefore now anticipating adjusted consolidated net income of EUR 5.2 million for the full year 2012, instead of the previously forecast EUR 4.8 million. This represents EPRA earnings per share of EUR 0.56. In the coming months, already concluded new lease agreements will have a positive impact on the Group figures, as will the recently finalised property sales. In addition, we would like to make the most of the current strong demand for real estate, which has been additionally stimulated by low interest rates, for further sales from our property portfolio held directly or by associated companies.”

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A REIT – Higher Return for Investors

REIT stands for Real Estate Investment Trust. The assets of these listed companies in Germany consist mainly of real estate and investments in other real estate companies.


At the international level, REITs have been established for many years. On 1 January 2007, they were introduced in Germany as well.


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