Corporate News

31/03/2011 | Corporate News

Fair Value REIT-AG records strong sales and earnings growth in 2010

  • IFRS consolidated net profit of € 2.2 million (previous year: net loss of € 2.9 million)
  • German GAAP (HGB) retained earnings of € 1.0 million (previous year: net loss of € 2.8 million)
  • Proposed dividend of 93.5% of HGB retained earnings (€ 0.10 per share)


Munich, 31 March 2011 – The final figures for the financial year 2010 show a marked improvement in both revenues and earnings of Fair Value REIT-AG. Revenues increased to € 14.4 million from € 12.2 million in the previous year. Consolidated net profit amounted to € 2.2 million, which improved by € 5.1 million compared to a net loss of € 2.9 million recorded in the previous year. The 2010 annual report, which includes the complete consolidated financial statements of Fair Value REIT-AG is available on the Internet at from today.

The Group's net rental result increased from € 8.5 million to € 9.5 million, representing a year-on-year growth of 12%. This positive development is the result of the first-time consolidation of earnings of the IC 13 subsidiary, which was previously included in income from participations. At EUR 2.9 million, the operating result increased by EUR 3.6 million over the EUR -0.7 million reported in the previous year. In addition, earnings from associated companies increased substantially to € 3.9 million thus contributing to the success of Fair Value REIT-AG in 2010 (previous year: € 1.4 million).

The main reason for the increase in earnings was the significantly improved valuation result of the real estate portfolio, as well as cost savings. On balance, there was a valuation loss of around 2%, which was mainly due to temporary vacancies in individual properties. Compared with the previous year (-4%), the valuation result improved by 50%.

The consolidated net income of € 2.2 million, translates into earnings of € 0.24 per share for the reporting period. This represents an improvement by € 0.55 compared to € -0.31 per share recorded in the previous year.

The operating cash flow (so-called “Funds from Operations”, FFO) of the Fair Value Group amounted to € 4.8 million or € 0.51 per share in the year under review. This increase of € 1.9 million over the previous year (€ 2.9 million) is largely due to higher inflows from the associated companies. As of the balance sheet date, the Group's cash and cash equivalents amounted to € 12.0 million (previous year: € 8.2 million).

The consolidated net income (EPRA result) adjusted for changes in market value and other one-off effects, increased to € 5.8 million compared to the full-year forecast raised in November 2010 to € 5.1 million. This was mainly due to savings in maintenance and rental costs. The slight decrease in adjusted consolidated net income in comparison to the € 6.0 million recorded last year was due to the disposal of properties sold in the previous year.

As of the balance sheet date, consolidated equity amounted to € 74.6 million (31 December 2009: € 72.7 million). As a result, net asset value (NAV) per shares in circulation increased by around 3% to € 8.00 per share (previous year: € 7.78). Equity pursuant to § 15 of the REIT Act, including minority interests in subsidiaries, rose to 49.6% of immovable assets
(31 December 2009: 45.5%).

With respect to the 2010 German GAAP single-entity financial statements, the target for retained earnings of around € 1.0 million has been achieved. The Management Board and Supervisory Board will, therefore, submit a proposal to the Annual General Meeting on 31 May 2011 for a dividend payment of € 0.10 for 2010. This represents a payout ratio of 93.5% (the requirement under § 13 of the REIT Act is at least 90%).

Frank Schaich, CEO of Fair Value REIT-AG, believes that the stable earnings base is the main reason for the positive performance of the Group. "In 2010 we were able to maintain a high occupancy rate of around 94%, which remained close to previous year's level. At the same time, we managed to realize about 75% of the expiring lease volume in 2010 through re-letting and new leases. This led to savings in rental costs, which contributed to the significant increase in our adjusted consolidated net income compared to forecasts."

Adjusted consolidated net income of € 4.3 million or € 0.46 per share is forecasted for 2011. The forecast includes re-letting and new lease expenses relating to lease agreements expiring during the year and in addition to that expenses for letting the entire current vacancy in the portfolio. If such expenes turn out to be lower than expected, the final result may be higher than forecasted, as was the case in previous years. For 2012, Fair Value is predicting adjusted consolidated net income of € 5.1 million or € 0.55 per share

With respect to the non-consolidated financial statements of Fair Value REIT-AG under the German Commercial Code, we seek to achieve retained earnings, which will support a dividend payment of at least € 0.10 per share in 2011 and 2012. In order to reach this target, income from portfolio adjustments will be required, which has not been secured yet. However, on the back of the improved investment climate for real estate we believe this to be achievable.

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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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