DEMIRE bond 2019/2027: Initial rating B from Fitch

Core Viewpoint - Fitch Ratings has assigned DEMIRE Deutsche Mittelstand Real Estate AG an issuer rating of 'CCC+' and a bond rating of 'B', reflecting the company's commercial portfolio and debt restructuring efforts [1][2][3]. Group 1: Company Overview - DEMIRE Deutsche Mittelstand Real Estate AG focuses on acquiring and holding commercial properties in medium-sized cities and emerging peripheral locations in metropolitan areas across Germany [5]. - As of March 31, 2025, DEMIRE's real estate portfolio consists of 49 properties with a lettable area of approximately 594,000 square meters, and the market value of the portfolio is around EUR 1.0 billion [5]. - The company emphasizes long-term contracts with solvent tenants and aims for stable rental income and solid value growth [6]. Group 2: Financial Strategy and Performance - Following a debt restructuring supported by the main shareholder in the second half of 2024, DEMIRE aims to reduce its outstanding bond debt [2]. - The loan-to-value ratio is approximately 35% as of the end of 2024, indicating a focus on strengthening rental and financial stability [3]. - The company plans to expand its portfolio significantly in the medium term, focusing on assets with strong funds from operations (FFO) potential while selling properties that do not align with its strategy [6]. Group 3: Market Position and Future Outlook - The bond rated 'B' by Fitch Ratings matures at the end of 2027, and the rating will be monitored and reviewed annually [2][3]. - The portfolio's focus on office properties, along with retail and hotel properties, is deemed appropriate for the risk/return structure of the commercial property segment [6]. - CFO Tim Brückner expressed satisfaction with the ratings from Fitch and Scope, indicating a commitment to improving transparency and ratings further [4].