Corporate News

22/10/2013 | Corporate News

Fair Value REIT-AG terminates minority interest against settlement at market value


Munich, October 22, 2013 – Fair Value REIT-AG has terminated as of the 2013 year-end its investment in Associated Company BBV 9, in which it holds a 25% interest. As a consequence, the participation will convert as of December 31, 2013 into an interest-bearing receivable due from company BBV 9 equivalent to the participation's market value.  


The participation company BBV 9 holds four retail properties in Bad Salzungen, Eisenach, Naumburg and Weilburg that are rented on a long-term basis, and an office property in Munich that is rented until the end of 2013. The weighted-average residual term of the participation company's rental agreements will then amount to around five years.


Fair Value's proportional market value of the related properties amounted to around EUR 27 million at the end of 2012, or to approximately 13% of the proportional overall portfolio. The IFRS carrying amount reported in the Fair Value consolidated balance sheet as of June 30, 2013 of the equity accounted investment amounts to EUR 11.4 million, and corresponds to approximately 6% of the immovable assets of the Fair Value Group as of this balance sheet date.  


Frank Schaich, CEO of Fair Value REIT-AG, explained the measure and its effects: "The termination of the participation with the lowest voting rights level serves our objective of boosting our influence within our portfolio of participations. Although it is the case that – including the real estate disposals from our direct and participation holdings that have already been reported this year – the proportional rents from our portfolio next year will be around 20% below their previous level, the lower net rental income and participation income will nevertheless be offset by a marked reduction in interest expenses in the future, so that we are maintaining our existing FFO forecasts of EUR 5.3 million and EUR 5.6 million for the current financial year and for 2014 (EUR 0.57 and EUR 0.60 per share respectively). The same applies for our dividend target of EUR 1.2 million for 2013 and 2014 respectively (EUR 0.12 per share)."


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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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