Corporate News

10/08/2017 | Corporate News

Fair Value REIT-AG increases profit significantly in the first half of 2017


·         EBIT increases to EUR 9.8 million compared to EUR 6.6 million in the previous-year period

·         Group net profit increases from EUR 2.7 million to EUR 4.7 million

·         FFO improves from EUR 3.1 million to EUR 3.7 million

·         Increase in net rental income and lower net interest expenses

·         Annual forecast for 2017 confirmed with target dividend of EUR 0.25 per share


Graefelfing, 10 August 2017 – Fair Value REIT-AG (WKN A0MW97) increased its profit significantly in the first half of 2017 and confirms its annual forecast for 2017. The operating result (EBIT) improved to EUR 9.8 million in the first six months of 2017 compared to EUR 6.6 million in the previous-year period. There was also a significant increase in group net profit from EUR 2.7 million to EUR 4.7 million. Funds from operations (FFO) after non-controlling interests increased to EUR 3.7 million in the reporting period compared to EUR 3.1 million one year prior. This corresponds to FFO per share of EUR 0.27 compared to EUR 0.22 in the previous year.


This increase resulted from further successful optimisation of the real estate portfolio, which now comprises 31 properties with a market value of EUR 293 million. Despite the sale of properties, rental income was maintained at the previous-year level of EUR 11.4 million, while net rental income increased from EUR 8.0 million to EUR 8.8 million. This was positively influenced by the reduction in vacancies, higher service charge income as well as lower property-related expenses. In addition, interest expenses were reduced further and at EUR 1.4 million were down on the previous-year figure of EUR 2.1 million.


As of the end of the first half of 2017 the weighted average lease term (WALT) remained unchanged at 5.2 years compared to 31 December 2016. At the same time, the occupancy rate increased slightly to 91.4% as of 30 June 2017 compared to 90.6% on 31 December 2016. The occupancy rate stands at 92.6% if the lease agreements already entered into for vacant space that is shortly to be handed over to tenants are taken into account.


Due to the dividend paid out in June 2017, which at EUR 5.6 million was up on the previous-year distribution of EUR 3.5 million, equity in the Fair Value Group was down somewhat compared to 31 December 2016. As of 30 June 2017, equity stood at EUR 119.7 million compared to EUR 120.6 million as of year-end 2016. This results in a net asset value (NAV) per share of EUR 8.53 compared to EUR 8.60 as of 31 December 2016. As of the reporting date, the REIT equity ratio came to 61.9% of immovable assets compared to 62.7% at year-end 2016.


Fair Value REIT-AG is confident that it can continue this positive business development over the rest of the year and reaffirms its forecast for 2017. Based on the existing real estate portfolio and without any changes in the share of directly owned properties, the Group expects FFO before non-controlling interests to range between EUR 9.6 million and EUR 10.2 million and after non-controlling interests between EUR 6.1 million and EUR 6.4 million in the fiscal year 2017. This corresponds to between EUR 0.43 and EUR 0.46 per share. At the same time, the targeted dividend of EUR 0.25 per share for the current fiscal year is confirmed.


Patrick Kaiser, CEO of Fair Value REIT-AG, commented on the business development in the first half of 2017 as follows: “Once again we have generated a significant profit increase and were able to raise net rental income despite selling properties. This reflects the success of our active asset management including the constant optimisation of the portfolio. I am optimistic about business development going forward and reaffirm our annual targets for 2017”.


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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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