DEFAMA’s Acquisition and Rental Success

Deutsche Fachmarkt AG (DEFAMA) has concluded a number of contracts and agreements and purchased a property, which will lead to an overall increase in annualized net rents of around € 240 thousand.

DEFAMA signed a purchase agreement for another property in Barsinghausen (Lower Saxony), around 30 kilometers west of Hanover. The purchase price is € 1.4 million, which is 11 times the annual net rent. The rentable area amounts to around 900 square meters. The property is in a prime location right on the market square in the pedestrian zone. The ground floor is rented to Rossmann, and there is a driving school on the upper floor.

In addition, DEFAMA has concluded new long-term rental contracts in some existing properties. A long-term contract to expand NORMA into the previous Takko area in Sonnefeld was signed in August. The renovation will take place in the first quarter of 2022. In Albstadt DEFAMA was able to win a medical supply store for the free beverage market area as a new long-term tenant and in Staßfurt DEFAMA rented the last remaining empty space to the Association of Statutory Health Insurance Physicians.v In Gardelegen, a new contract with a chain store for pet supplies covering around 800 square meters is about to be signed. The corresponding renovation has already started and will be completed in the first quarter of 2022.

Furthermore, in the past few weeks the anchor leases have been extended by an average of 4 years in a number of properties. No investments were necessary for this. This was done partly through the exercise of options, partly through supplements. ALDI extended in Brand-Erbisdorf, REWE in Wittenburg and NORMA in Puderbach. Including the early contract extension announced by another grocery anchor tenant, the contracts in question correspond to around 6% of DEFAMA’s total annualized annual net rents.

Overall, DEFAMA will increase rental income by around € 240,000 p.a. with the investments made in the amount of € 2 million. The annualized FFO thus rises to over € 8.2 million or € 1.87 per share. Including the contract extensions, annual rental income totaling almost € 1 million is secured in the long term. In relation to the respective terms, this corresponds to rental income totaling over € 6 million.

Published by:

Dr. Oliver Everling

Independent since 1998, he is Managing Director of RATING EVIDENCE GmbH. As visiting professor of Capital University of Economics and Business in Beijing, former chairman of the supervisory board of a rating agency, advisory board member, advisor, member of rating committees, chairman of ISO-TC Rating Services, author or publisher of books and a magazine, Independent Non-Executive Director under EU Regulation on Credit Rating Agencies, he has been or is involved in ratings from a variety of perspectives. Previously, he was for 6 years department director at Dresdner Bank and, until 1993, managing director of the Projektgesellschaft Rating mbH after a doctorate at the banking and stock exchange seminar of the University of Cologne.

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