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Introduction & Market Context
Deutsche Konsum REIT-AG (XETRA:DKG) presented its Q3 2024/2025 financial results on August 14, 2025, revealing continued financial challenges as the company advances its comprehensive restructuring plan. The German retail property specialist reported significant declines in key performance metrics while making progress on debt reduction initiatives.
The company’s stock closed at €2.07 on August 13, 2025, near its 52-week low of €2.00, reflecting ongoing investor concerns about the company’s financial stability. This represents a substantial discount to the analyst target price of €4.70 from Warburg Research, highlighting the market’s cautious stance toward the company’s turnaround efforts.
Quarterly Performance Highlights
Deutsche Konsum REIT reported a substantial decline in financial performance for Q3 2024/2025, with rental income decreasing by 11% to €52.7 million compared to the same period last year. This decline was primarily attributed to asset sales as part of the company’s portfolio optimization strategy.
As shown in the following chart of key financial figures, the company experienced a dramatic 59% decrease in Funds From Operations (FFO) to €9.9 million, significantly impacting the FFO per share, which fell from €0.68 to €0.24:
The company’s property portfolio underwent a significant revaluation by CBRE as of June 30, 2025, resulting in a reduction of €47.2 million. This contributed to the decline in EPRA NTA (Net Tangible Assets) per share, which fell to €6.71 from €11.37 a year earlier.
Detailed Financial Analysis
The income statement reveals the extent of Deutsche Konsum REIT’s financial challenges, with the company reporting a total period loss of €32.6 million for Q3 2024/2025, compared to a profit of €15.7 million in the same period last year. This stark reversal was driven by property devaluations, higher interest expenses, and reduced rental income.
The following condensed IFRS income statement highlights these significant changes:
The company’s FFO reconciliation provides further insight into its operational performance, showing the substantial decline in this key REIT metric:
On the balance sheet side, Deutsche Konsum REIT has made progress in reducing its debt burden, with total financial debt decreasing by 13.5% to €475.4 million compared to September 2024. However, this has been accompanied by an increase in the total debt cost to 5.25% from 4.22%, while the interest coverage ratio (ICR) has deteriorated significantly to 1.1x from 3.3x.
The company’s debt structure and financial KPIs are illustrated in the following chart:
Portfolio and Tenant Analysis
Deutsche Konsum REIT’s property portfolio has contracted to 152 properties with approximately 961,000 square meters of rental space, down from 184 properties a year earlier. The total fair value of the portfolio stands at €824.2 million, representing a decline of 17.3% from September 2023.
The company’s tenant structure remains focused on non-cyclical retailers, with 66% of rental income coming from non-cyclical tenants (79% including DIY stores). This strategy aims to provide stability in rental income despite economic fluctuations.
As shown in the following tenant structure breakdown, food retail represents the largest segment, with major tenants including the Schwarz Group (€11.6 million), Edeka Group (€6.8 million), and Rewe Group (€2.9 million):
However, the company faces challenges with increasing vacancy rates, which have risen to 14.9% from 11.7% in September 2023. The weighted average lease term (WALT) has also decreased to 4.3 years from 5.0 years, potentially indicating future pressure on rental income stability.
Strategic Initiatives
Deutsche Konsum REIT’s primary strategic focus is on implementing its comprehensive restructuring plan. The company has engaged FTI-Andersch to prepare a formal restructuring opinion and has secured standstill agreements with all relevant lenders, extended to the end of August 2025.
Key elements of the restructuring plan include:
1. Bridge financing of up to €18.0 million at 5.5% interest, maturing at the end of August 2025
2. A restructuring agreement with VBL including a debt-to-equity swap of approximately €86 million
3. Several extension/prolongation agreements with lenders until September 2027
4. Preparation for an Extraordinary General Meeting of Shareholders to approve the debt-to-equity swap
The company has also received a repayment of €38.0 million from Obotritia Capital, with the outstanding receivable of approximately €16 million deferred until December 2025 and fully provided for.
The restructuring plan details are outlined as follows:
Forward-Looking Statements
Due to the ongoing preparation of its restructuring plan, Deutsche Konsum REIT has not provided specific financial guidance for the remainder of FY 2024/2025. The company’s focus remains on finalizing and implementing its restructuring initiatives to stabilize its financial position.
The company’s share price has declined significantly over the past year, trading at €2.08 as of August 12, 2025, representing a market capitalization of approximately €105 million. This valuation reflects investor concerns about the company’s ability to successfully execute its restructuring plan and return to profitability.
As shown in the following share information slide, analyst coverage from Warburg Research maintains a Buy rating with a target price of €4.70, suggesting potential upside if the company can successfully navigate its current challenges:
The company’s immediate focus will be on concluding the remaining extensions/prolongations or other solutions with lenders by the end of August 2025, which will be crucial for its financial stability. The next financial calendar event is scheduled for December 19, 2025, when the company will publish its final annual statements for the financial year 2024/2025.
Full presentation:
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