Press release BoxID: 467139 (DEMIRE Deutsche Mittelstand Real Estate AG)
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MAGNAT sells residential portfolio in Germany and reports figures for first half of 2011/2012

(PresseBox) (Frankfurt/Main, ) MAGNAT Real Estate AG ("MAGNAT", ISIN DE000A0XFSF0) today signed the contract to implement the disposal of its residential portfolio in Germany. The deal is expected to be closed in two stages at the end of December 2011 and the end of February 2012 and is subject to certain conditions. It has been agreed not to disclose the purchase price. After deducting the transaction costs and the liabilities on the properties, MAGNAT will - directly and indirectly - net a seven-figure amount.

In performing this transaction, MAGNAT is implementing an important part of its ambitious sales programme and of its strategic focus on the countries of the Black Sea region in spite of the currently extremely challenging general economic environment. Presently, the programme is concentrating mainly on generating liquidity.

Including the results of this transaction, MAGNAT generated a net loss for the period attributable to its shareholders of EUR -5.4 million in the first half of 2011/2012 (April to September) after EUR -1.0 million in the previous year. In particular, the decline as against the previous year results from the loss on the disposal of the German residential portfolio of EUR 1.2 million and from a loss as at the end of the reporting period of EUR 1.9 million on a Ukrainian project on account of an ongoing restructuring. The latter will largely be reversed again after the restructuring is complete in the third quarter.

As at 30 September 2011, MAGNAT's cash and cash equivalents amounted to EUR 4.3 million after EUR 5.3 million at the end of the last financial year. The equity ratio remained at a high level of 59.8 per cent after 63.2 per cent. As advised, the full half-year report will be published in the course of 30 November 2011.

Explanations on this disclosure

MAGNAT's residential portfolio comprised around 1,500 apartments with approximately 85,000 m² of rentable space at the locations of Eberswalde, Saalfeld and Rostock. The properties were acquired in 2007 with 30 per cent vacancies by MAGNAT together with a coinvestor, who held a share of 25 per cent. The properties increased in value in the years that followed as a result of, in some cases, highly extensive measures with the result that vacancies were reduced significantly. Most recently, the letting rate stood at 90 per cent. The portfolio therefore achieved a level at which it could be disposed of in line with our "develop & sell" strategy. The planned disposal of the properties had been announced in the 2010/2011 annual report and has now been successfully implemented.