Potsdam, Deutsche Konsum REIT-AG (DKR), a real estate entity specializing in German retail properties, has successfully negotiated the sale of 14 retail assets, leveraging the transaction to strategically reduce its financial liabilities. This decision aligns with the company's ongoing efforts to refine its portfolio and enhance its financial structure.
The divested sub-portfolio encompasses a diverse range of property types across various German locales, totaling approximately 72,000 square meters of rental space. These properties, spanning from free-standing food discounters to major retail parks, reflect a strategic cross-section of DKR's holdings. Despite the sale price being marginally below the IFRS carrying value as of September 30, 2023, the transaction is deemed beneficial for the company's financial agility.
The annual rent yield from these properties stands at EUR 5.5 million, with an occupancy rate that boasts a mere 6% vacancy. Moreover, these assets have consistently contributed over EUR 36 million in rental income since their acquisition dates between 2015 and 2022. Notably, DKR has enhanced the annual rental income by approximately 10% during its tenure, affirming the company's asset management efficacy.
Strategically, the sale's proceeds are earmarked for the repayment of bank debts and maturing bonds, promising a significant reduction in DKR's loan-to-value (LTV) ratio. This move not only strengthens the company's balance sheet but also underscores its prudent financial management in navigating the real estate sector's dynamics.
In its forward-looking strategy, DKR is considering additional selective asset disposals to further streamline its portfolio. The intent is to reallocate the generated liquidity towards optimizing debt structures, thereby reinforcing the company's financial health and operational flexibility.
Deutsche Konsum REIT-AG continues to focus on the management and development of essential retail properties, aiming for sustainable growth and value creation. The company's shares are actively traded on the Deutsche Börse's Prime Standard and the Johannesburg Stock Exchange, reflecting its active engagement in the international investment community.
PSG Capital serves as the JSE sponsor for Deutsche Konsum, facilitating its compliance and representation in the South African financial market.