NuWays AG Issues Buy Recommendation for DEMIRE AG Amid Q1 Results Release

NuWays AG has reaffirmed its "Buy" recommendation for DEMIRE AG following the release of their Q1 2025 financial results. Despite a 25% year-on-year decline in rental income to €14.0 million, the figures align with expectations, reflecting asset base reductions. These results stem from significant sales and portfolio changes, notably the "LogPark" in Leipzig and "LIMES" portfolio, impacting annual rent by €17.5 million.

The net operating income (NOI) margin also weakened to 64.5%, primarily due to the increased vacancy rate, heightened by Deutsche Telekom vacating certain spaces. Contrarily, strong letting activities during Q1 are expected to reduce this rate ahead. The Q1 funds from operations (FFO) stood at €2.1 million, exceeding projections but marking a 74% decline year-on-year due to increased corporate bond interest payments and a weakened NOI margin.

DEMIRE AG's management has upheld its fiscal year 2025 guidance of €51-53 million in rental income and €3.5-5.5 million FFO. However, NuWays AG projects higher figures with €54.6 million for rental income and €5.6 million for FFO, citing stronger-than-anticipated Q1 results. Despite operating performance challenges, DEMIRE AG's stock is considered undervalued, offering investment potential.