Deutsche Konsum REIT-AG Announces Sale of 14 Retail Properties to Focus on Debt Reduction

On March 28, 2024, Deutsche Konsum REIT-AG revealed the notarization of the sale of 14 retail properties within Germany, with an emphasis on using the proceeds to fully repay financial liabilities. The portfolio encompasses about 72,000 sqm across various locations, featuring a mix of free-standing food discounters and regionally dominant retail parks. These properties annually generate EUR 5.5 million in rent, have a 5.0-year lease term remaining, and a vacancy rate of about 6%. The sale price was slightly less than the latest IFRS valuation, but the exact figure remains undisclosed. Transfer of ownership is slated for completion by June 2024.

The assets, acquired between 2015 and 2022 with an initial yield of 10%, achieved over EUR 36 million in rental income during DKR's holding period, with an average annual rent increase of around 10%. The strategic sale will significantly reduce the company's LTV ratio through full repayment of bank liabilities and partial bond repayments. Deutsche Konsum REIT-AG is also exploring further sales to streamline their portfolio and optimize their debt structure.