DEMIRE Deutsche Mittelstand Real Estate AG has continued its solid performance in the first quarter of 2018. Thanks to successful letting activities and the associated reduction of vacancies, annualised contractual rent rose from EUR 72.1 million as at 31 December 2017 to EUR 72.4 million as at 31 March 2018. On a like-for-like basis, annualised rental income has increased by 1.6 % since 31 December 2017. Funds from operations (FFO I, after taxes, before non-controlling interests) amounted to EUR 5.2 million in the first quarter of 2018 (Q1 2017: EUR 2.0 million) as a result of lower interest expenses and an improved tax charge. In the first quarter, in the context of the planned overall capital expenditure for the 2018 financial year, funds from operations still showed a lower capital expenditure. Earnings before taxes (EBT) rose sharply as against the same quarter of the previous year to EUR 30.5 million (Q1 2017: EUR 3.7 million). The significant increase stems from fair value adjustments in investment properties, reduced finance expenses and lower general administrative expenses.
At 8.6 % as at the reporting date, the EPRA vacancy rate was down 80 basis points compared to the end of 2017. Driven by new lettings and reduced vacancies, the DEMIRE Group generated rental income of EUR 18.3 million in the first three months of 2018, only 1.5 % lower than in the same period of the previous year (EUR 18.5 million) on account of property sales.
