Deutsche Konsum REIT (DKG) Q1 2026 earnings summary

Executive summary

• Rental income declined 4.4% year-over-year to €16.9 million due to asset sales, while FFO rose 57% to €7.4 million, mainly from lower interest expenses.

• Eight properties were sold for €34.7 million, with two sales closed in Q1 and annual rent of €3.2 million.

• The restructuring plan includes a debt-to-equity swap of €118 million, a capital increase, and planned asset sales up to €300 million by September 2027.

• Loss of REIT tax exemption as of October 1, 2025, due to equity ratio falling below 45% for three consecutive years.

• Extraordinary general meeting approved a capital increase, company name change, and reduction of the supervisory board, with implementation pending registration.

Financial highlights

• Net income for the quarter was €3.6 million, up 107% year-over-year.

• FFO per share (undiluted) increased to €0.15, and aFFO per share to €0.14.

• Net asset value per share rose to €6.39, and EPRA NTA per share to €6.17.

• Loan-to-value (LTV) reduced to 56.4% from the prior quarter; pro forma LTV after capital increase expected at 41%.

• Weighted average debt cost dropped to 2.92%, with interest coverage ratio at 2.5x.

Outlook and guidance

• Asset sales are expected to continue, with some sales below book value anticipated.

• Rental income for FY 2025/2026 is forecasted between €58 million and €63 million, reflecting expected property sales.

• FFO is expected to increase, but timing and pricing of asset sales introduce uncertainty.

• FFO per share and NAV per share will be recalculated after the new shares from the capital increase are issued.

• Slight increase in vacancy rate and stable WALT anticipated due to ongoing sales.