- Pressemitteilung BoxID 131009
Fair Value REIT-AG increases nine-month earnings and lifts forecast for 2009
Consolidated net income increases significantly to € 2.4 million (previous year: € 1.4 million) / Guidance for 2009 lifted / Sustained reduction in general administrative expenses / Dividends planned for 2010
Rental income from direct investments and the fully consolidated majority participations in closed-end real estate funds totaled € 7.7 million (previous year: € 9.4 million). The reduction is due to the premature termination of a general rental agreement against receipt of a compensation payment in the fourth quarter of 2008. This was put in place with the aim of generating a long-term increase in the property's value by reducing existing vacancies.
Heating costs increased year-on-year as a result of the weather, which led to increased property-related operating expenses of € 0.3 million. As a result, the funds from operations "FFO" as of September 30, 2009 were lower than in the previous year (€ 0.28) at € 0.23 per share.
However, the Group was able to reduce its general administrative expenses. At the same time, the proportion of earnings from equity-accounted participations in closed-end real estate funds increased from € 2.2 million to € 2.5 million. In addition, the € 2.2 million improvement in the valuation result contributed to the significant increase in consolidated net income.
The operating strengths of Fair Value REIT-AG become obvious when looking at its consolidated income after adjustment for extraordinary factors. Extraordinary factors totaled € 1.9 million in the first nine months of 2009 (previous year: € 3.1 million). 70% of this total is due to adjustments to the carrying amounts of the properties made during the year, and around 15% each are due to one-off compensation expenses and due to expenses for interest rate swaps. This resulted in almost unchanged, adjusted consolidated income of € 4.3 million in the first nine months of 2009 (previous year: € 4.5 million). The sustained reduction in general administrative expenses and the lower net interest expenses as a result of the reduction in financial liabilities almost fully compensated for the fact that net rental income was around € 1.9 million lower than the previous year's figure.
Fair Value REIT-AG thus exceeded its own forecasts in the first nine months of the year. The positive growth in the first three quarters of 2009 has caused the Managing Board to lift its forecast for consolidated earnings before one-off factors and changes in market values for the properties and interest-rate derivatives (IFRS) for 2009 as a whole from the previous figure of € 4.2 - € 4.5 million to € 4.5 - € 4.8 million.
Frank Schaich, the sole member of Fair Value REIT-AG's Managing Board, described the reasons for this and provided an outlook: "We have achieved a great deal during the year to date. Our occupancy rates are very high at 95.1%, and our financing structure is very solid with equity (including minority interests) totaling 50% of our total assets. We have further improved both our costs and earnings. In particular in view of our efforts to sustainably cut the Group's general administrative expenses, which will have their full impact from 2010, we will reach our target of generating net income from operating activities under the German GAAP (HGB). As a result, we intend to pay our shareholders a dividend of 10 cents per share for fiscal year 2010."
A full overview of current business developments can be found in the interim report for the first nine months of 2009, which is available in the Investor Relations section of www.fvreit.de.
Fair Value REIT-AG
Munich-based Fair Value REIT-AG focuses on the acquisition, leasing, property management and sale of commercial properties in Germany. Its investment activities focus primarily on offices, logistics and retail properties in German regional centers. As a REIT-AG, Fair Value is not subject to corporation or trade tax and benefits from the exit tax privilege when purchasing properties. Fair Value's USP is that - in addition to investing directly in real estate - it also acquires interests in closed-end real estate funds.
In its "Participations" segment, Fair Value currently participates in 13 closed-end real estate funds in a highly diversified portfolio of 48 properties with a total rental area of 413,668 m² and a market value of around € 499 million as of December 31, 2008 (Fair Value's share of this portfolio totaled around € 198 million on September 30).
In its "Direct Investments" segment, Fair Value owns a portfolio of 32 commercial properties in Schleswig-Holstein. These have a rental area of more than 42,948 m² and are mostly used as bank branches. These properties had a total market value of around € 47.3 million as of December 31, 2008.
On September 30, 2009, the proportion of the entire portfolio due to Fair Value had a market value of around € 245 million. As of September 30, 2009, this proportionate portfolio was 95.1% let in terms of the achievable annual rent of € 21.0 million. The rental agreements had a weighted remaining term of 6.6 years on September 30, 2009. Around 46% of the potential rent stems from retail facilities, 40% from offices, 8% is from logistics facilities and 6% from other facilities.
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