NuWays AG Reaffirms DEMIRE AG with a Buy Recommendation

NuWays AG has reiterated a "BUY" recommendation for DEMIRE AG, setting a target price of EUR 15.00, following successful refinancing. DEMIRE extended its €600m corporate bond to the end of 2027 with a 5% cash coupon and a 3% PIK coupon due in 2027. The company is obliged to reduce an outstanding notional by €50m in both FY25e and FY26e to avoid penalty fees. Asset disposals are anticipated, impacting rental income, forecasted to decrease to €56.0m in FY25e.

DEMIRE expects rental income to drop due to a reduced asset base, with FFO projected at €17.1m this year and €16.1m the next. Despite this, no additional financing is required, thanks to the prior refinancing. The company's shares are trading at a 76% discount to NAV, maintaining an attractive valuation, suggesting potential upside. However, this is contrasted by potential negative impacts such as increased vacancies.