DEMIRE Q1 2026 Earnings

German commercial property group DEMIRE Deutsche Mittelstand Real Estate AG reported via Benzinga on Thursday that DEMIRE rental income slipped sharply in the first quarter of 2026. The decline followed a deliberate reduction in the company’s property portfolio through asset disposals. Despite the weaker top-line performance, management reaffirmed its full-year financial targets.

Rental Income and FFO Fall on Reduced Portfolio

First-quarter rental income came in at EUR 11.6 million, down 17.3% from EUR 14.0 million in the same period last year. The company attributed the drop almost entirely to properties sold from its portfolio rather than any deterioration in occupancy performance. Funds from operations (FFO I, measured after tax and before minority interests) fell to EUR 0.3 million from EUR 2.1 million a year earlier. That decline also traced back to the smaller asset base following completed disposals.

On the positive side, earnings before interest and taxes swung firmly into the black. EBIT reached EUR 2.7 million, reversing a EUR 3.4 million loss recorded in Q1 2025. The prior-year figure had been dragged down by larger negative fair value adjustments across the portfolio.

Background: A Shrinking Portfolio by Design

DEMIRE has been actively slimming its portfolio as part of a broader strategic repositioning. During the first quarter, the company completed handovers of properties in Flensburg and Bonn to their respective buyers. Those assets had been sold during 2025 but formally transferred this year.

The market value of the remaining portfolio fell to roughly EUR 670.2 million at the end of March, down from EUR 688.3 million at the close of 2025. Net asset value per share (undiluted) slipped by EUR 0.11 to EUR 1.48 over the same period.

Vacancy Rises as Leasing Activity Slows

The EPRA vacancy rate climbed to 21.0% from 16.4% at year-end 2025. Several lease agreements expired during the quarter, and new leasing activity slowed substantially, reaching just 2,700 square metres against 25,500 square metres in Q1 2025. Management cited a difficult economic backdrop as the main drag on leasing demand.

One constructive data point emerged on lease duration. The weighted average lease term for the full portfolio extended to 5.2 years, up from 4.7 years at year-end 2025. That lengthening reflects DEMIRE’s efforts to lock in longer commitments across its remaining assets.

Full-Year Guidance Unchanged

Management stood by its 2026 targets. Rental income is expected to land between EUR 41.5 million and EUR 43.5 million, compared with EUR 53.5 million generated in 2025. FFO I guidance remains in a range of EUR -1.0 million to EUR 1.0 million, versus EUR 10.1 million last year. The company will host an investor call later today to walk through the results in detail.

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