Original-Research: DEMIRE AG - from NuWays AG
15.08.2025 / 09:01 CET/CEST
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Classification of NuWays AG to DEMIRE AG

Q2 Rental income in line & FFO better than expected / Chg.

Yesterday, DEMIRE reported Q2 results, which were in line with our estimates on rental income but stronger than expected at the bottom-line. In detail:

Q2’25 rental income declined 18% yoy to € 13.8m (eNuW: € 13.5m) following the disposals of larger assets like the LogPark Leipzig, the deconsolidation of the “LIMES” portfolio as well as several smaller disposals. In total, this should have affected DEMIRE’s annualized contractual rent by c. € 20m (eNuW). On this basis, the NOI also decreased to € 9.6m (Q2’24: € 11.4m), however implying an improved margin of 69.8% (+ 2.3pp yoy).

Strong letting performance. In Q2, DEMIRE was able to achieve a letting performance of 15k sqm, which led to a sequentially improved vacancy level of 17.3% (-0.8pp qoq) While this is still a very high level (+7.8pp vs FY22), we regard the letting successes in Rostock and Langenfeld as a positive sign. Yet the company is still far from <10% vacancy, which should be a level one can expect from a commercial real estate player.

Q2’25 FFO came in at € 2.9m (-62% yoy), which is significantly ahead of our estimated € 1.7m. This is mainly explained by better than expected cost control as well as the stronger than expected NOI margin (eNuW: 65%). It should be noted that the interest related to the shareholder loan, which DEMIRE capitalizes, is not included in this FFO figures.

Guidance upgrade. Based on these results, the company upgraded its FY25 guidance to rental income of € 52-54m (old: € 51-53m) and FFO of € 5-7m (old: € 3.5-5.5m). While we were positioned slightly above the new guidance even before (eNuW new: € 54.9m), we regard the new FFO guidance as reasonable (eNuW new: € 6.9m). H2 FFO is seen to come in softer compared to H1 due to planned investments.

Moreover, management struck an optimistic tone, that it will be able to avoid the 3% penalty fee (if DEMIRE repays less than € 50m of corporate bond in FY25). Yet, the company will need to sell 2-3 further mid-sized assets in H2 to fund this, which is however reflected in our estimates.

Despite the ongoing muted operating performance, shares remain undervalued trading at a 66% NAV discount, which we regard unjustified despite the challenging situation for the company. We hence reiterate BUY with a new PT of € 1.20 (old: € 1.30) based on our NAV model.

You can download the research here: demire-ag-2025-08-15-previewreview-en-309c7
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NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
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