Fair Value REIT-AG

  • WKN: A0MW97
  • ISIN: DE000A0MW975
  • Land: Deutschland

Nachricht vom 18.03.2010 | 07:30

Fair Value REIT-AG reorganizes asset management

Fair Value REIT-AG / Miscellaneous

18.03.2010 07:30

Dissemination of a Corporate News, transmitted by
DGAP - a company of EquityStory AG.
The issuer / publisher is solely responsible for the content of this


- Contractual relationships with IC Real Estate Group restructured 
- Three retail properties and one office property sold
- Rental success reduces vacancies within the group by 50%

Munich, March 18, 2010 - Fair Value REIT-AG has put its asset management on
a new basis. Moreover, a total of four properties were sold as part of an
adjustment of the portfolio. In addition, rental successes have cut the
former vacancies within the Group by half.

In detail the services outsourced to third parties have been reduced and
the contractual relationships with IC Real Estate Group have been
restructured. As part of this restructuring, the former agreement for asset
management and corporate services, which originally had a duration until
the middle of 2011, was replaced by a new service agreement for accounting
with IC Immobilien Service GmbH (ICIS), which has a fixed term through to
the end of 2012. In future, Fair Value REIT-AG will take over the operating
asset management, previously performed by the service provider.

Instead of the hitherto agreed remuneration, which was 20% of the amount to
be disbursed prior to deduction of the remuneration within the meaning of
the REIT Act, both fixed and variable remuneration components have been
agreed to in the new contract. These are geared to the rent actually
received by the proportionate total portfolio. Remuneration in 2010 totals
0.75% of the projected rent due to Fair Value. The total remuneration for
accounting as a percentage of actual rent will hence fall when the
portfolio grows in future. In addition, the property management for the
direct holdings, with which ICIS has also been mandated, has been expanded
at unchanged conditions and now includes additional reporting requirements
for Fair Value's real estate holdings in subsidiaries and associated
companies that are managed by ICIS as well. At the same time, the fixed
period for this agreement has also been extended by around 18 months
through to the end of 2012.

Frank Schaich, Fair Value REIT-AG's CEO, welcomes this restructuring of the
contractual relationships with the IC Immobilien Group: 'In addition to the
strategic asset management, we have decided to take operating asset
management also into our own hands. We are pleased that IC Real Estate
Group was ready to make the corresponding changes despite our existing
agreements.' He highlights the advantages that the new regulation offers
for both parties: 'Fair Value REIT-AG will achieve a further reduction in
general administrative costs as the portfolio grows in future. In addition,
the IC Immobilien Group benefits from the improved ability to forecast
their fee income.'

Three retail properties and one office building sold

In view of the planned reduction of retail properties in the portfolio of
existing properties, three retail buildings in Hamm, Passau and
Seligenstadt and one office property in Aachen were sold to several buyers
for a total price of EUR 8.2 million. Transfer of ownership is expected for
the end of the first quarter of 2010. The sale of the office property was
considered strategically appropriate due to its problematic microlocation
with a resulting vacancy rate of around 50% of the property's floor space.
Around 70% of the funds accruing to the subsidiaries which held the
properties will be used to repay financial liabilities, and the remainder
will be added to cash and cash equivalents.

Rental success halves existing vacancies within the group 

The 8,220 m² of vacant space at the end of 2009 at a logistics property in
Cologne owned by one of the subsidiaries was fully let with effect from May
1, 2010 to an expanding, existing tenant. This allowed 50% of the vacancies
within the Group as of December 31, 2009 to be cut. At the same time, the
same tenant took over the space of tenants with leases coming due later in
2010 and in 2012. As a result, all of the logistics space in the property
is now rented to the one single tenant for five years.

In addition, it was possible to extend a rental agreement with comdirect
bank for an office property in Quickborn held by an associated company
ahead of time. The rental agreement, which was due to expire in May 2012,
was prolongated by a further five year term through to May 2017. As
compensation for the premature extension, the rent was reduced to the
current market level from January 2010 onwards.

Fair Value's CEO Frank Schaich, is very pleased with this proof of the
company's successful, proactive property and asset management: 'Even before
we had a very low vacancy rate of less than 5% of the proportionate
potential rent. Now we have succeeded in cutting this even further. Taking
into account the reduction of vacant space resulting from the sale of the
office property in Aachen, the lease up in Cologne will lead to a 58%
reduction in the total vacant space of our direct holdings and subsidiaries
compared to the end of 2009.' He views these rental successes as further
improvement of the stability of rental income: 'The premature extension of
the rental agreement in Quickborn and the early follow-on rental in Cologne
mean that we have already worked through almost 75% of the rental income
due for extension in 2012.'

Company profile
Munich-based Fair Value REIT-AG focuses on the acquisition, leasing,
property management and sale of commercial properties in Germany. Its
investment activities focus primarily on offices, logistics and retail
properties in German regional centers. As a REIT-AG, Fair Value is not
subject to corporation or trade tax and benefits from the exit tax
privilege when purchasing properties. Fair Value's USP is that - in
addition to investing directly in real estate - it also acquires interests
in closed-end real estate funds.

In its 'Participations' segment, Fair Value currently participates in 13
closed-end real estate funds in a highly diversified portfolio of 48
properties with a total rental area of 415,829 m² and a market value of
around EUR 480 million as of December 31, 2009 (Fair Value's share of this
portfolio totaled around EUR 191 million on December 31, 2009).

In its 'Direct Investments' segment, Fair Value owns a portfolio of 32
commercial properties in Schleswig-Holstein. These have a rental area of
more than 42,948 m² and are mostly used as bank branches. These properties
had a total market value of around EUR 46 million as of December 31, 2009.

On December 31, 2009, the proportion of the entire portfolio due to Fair
Value had a market value of around EUR 236 million. As of December 31,
2009, this proportionate portfolio was 95.5% let in terms of the achievable
annual rent of EUR 20.9 million. The rental agreements had a weighted
remaining term of 6.3 years on December 31, 2009. Around 46% of the
potential rent stems from retail facilities, 40% from offices, 8% is from
logistics facilities and 6% from other facilities.


Investor & Media Relations
cometis AG
Dirk Stauer
Phone: +49(0)611 - 205855-22
Fax:   +49(0)611 - 205855-66 
E-mail: stauer@cometis.de

18.03.2010 Ad hoc announcement, Financial News and Media Release
distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

Language:     English
Company:      Fair Value REIT-AG
              Leopoldstraße 244
              80807 München
Phone:        +49 (0)89 9292 815-01
Fax:          +49 (0)89 9292 815-15
E-mail:       info@fvreit.de
Internet:     www.fvreit.de
ISIN:         DE000A0MW975
WKN:          A0MW97
Indices:      RX REIT All Share Index, RX REIT Index
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in München, Stuttgart
End of News                                     DGAP News-Service

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