Corporate News

09/04/2015 | Corporate News

Fair Value REIT-AG implements expansion strategy by growing direct investment portfolio


·         Direct purchase of previously indirectly held property in Cologne

·         Property fully rented long-term

·         Around 11 % increase in direct holdings to a total of 14 % of portfolio


Munich, April 9, 2015 – Fair Value REIT-AG ("Fair Value") has successfully advanced its growth strategy further, transferring a fully rented property in Cologne into its portfolio of direct holdings. The company has purchased a warehousing and exhibition hall with office premises in Cologne, Marconistrasse 4–8, for EUR 3.3 million with effect as of March 31, 2015. This price stands around 10 % below the property's market value surveyed as of December 31, 2014. The property offers a rentable building space of 9,640 square metres and achieves annual rental income of currently EUR 365 thousand. The property is rented for a further eight years to one of Germany's leading wood merchants. The building's rooftops are leased for a further 18 years to a photovoltaic plant operator.


The property's seller is a subsidiary of Fair Value REIT-AG, in which Fair Value holds an 80% interest. This company can be quickly liquidated following the sale of this real estate asset, which will lead to around EUR 120 thousand of annual general administrative cost savings.


Frank Schaich, CEO of Fair Value REIT-AG, explains the background: "The transfer of this property in Cologne into our portfolio of direct holdings allows us to not only improve our operating earnings but also reduce our Group's complexity. This most recent investment carries a gross rental yield of 11 % per annum, thereby meeting our investment criteria to a high degree. Incidental purchase costs are low due to our interest in the seller, and they are covered by the market valuation of the property of around EUR 3.7 million. It also boosts the level of our direct investments by around 11 % to reach 14 % of our current portfolio. Further transfers to our portfolio direct holdings will follow over the coming months."


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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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Fair Value REIT-AG