HAMBORNER REIT AG brings first half of year to successful conclusion and sets strategic course for further growth

Press Release

HAMBORNER REIT AG brings first half of year to successful conclusion and sets strategic course for further growth

- Income from rents and leases up by 3.7% and funds from operations (FFO) by 1.5%

- Positive development in incoming rent ratios; rental payments already almost at pre-crisis levels in July

- Fair value of property portfolio €1.63 billion after revaluation; NAV per share €11.27

- Solid accounting ratios: REIT equity ratio of 54.7% and LTV of 43.1%; liquidity resources still comfortable

- Updated forecast for 2020 assumes rising income from rents and leases and FFO to virtually match high prior-year level

- Virtual Annual General Meeting on 8 October 2020; Confirmation of original dividend proposal of €0.47 per share

- Company presents adjusted business strategy for future growth

SUCCESSFUL FIRST HALF OF 2020

Duisburg, 30 July 2020 - HAMBORNER has continued the positive business performance of the first quarter and once again ended the first half of 2020 with growth in revenue and earnings. Income from rents and leases amounted to €43.9 million, up €1.6 million or 3.7% on the previous year's level. Funds from operations (FFO) climbed by 1.5% to €27.0 million in the first six months. FFO per share rose accordingly to €0.34. The vacancy rate remained at a very low level of 1.8% in the first half of the year. The company's financial and liquidity situation is still comfortable. The REIT equity ratio was thus 54.7% as at 30 June 2020 and the loan-to-value (LTV) ratio 43.1%. Cash funds amounted to around €29 million. Furthermore, HAMBORNER currently has financing commitments and credit facilities of around €50 million.

Given the effects of the coronavirus pandemic, the company commissioned a third-party expert to reappraise its property portfolio as at 30 June 2020. The revaluation resulted in the fair value of the properties already in the portfolio as at 31 December 2019 being reduced by 3.3% in the first half of the year. The reduction essentially related to retail properties in city centre locations that were hit particularly hard by the coronavirus pandemic. Taking into account the revaluation and the property additions in the first half of the year, the fair value of the portfolio as a whole was €1,631.0 million as at 30 June 2020. NAV per share declined slightly by 2.8% as against the end of 2019 to €11.27 (31 December 2019: €11.59).

The company has continued to make sales in recent weeks as well, and signed the contract to sell a city centre retail property in Osnabrück in the middle of July as part of its portfolio optimisation. The sale price is €5.9 million. With a residual carrying amount of €3.1 million, the book profit will be around €2.8 million. Ownership is expected to be transferred at the end of the third/start of the fourth quarter.

CURRENT BUSINESS SITUATION

After a promising start to the 2020 financial year, the past few months have been dominated by the effects of the coronavirus pandemic. The far-reaching restrictions on public life and the associated impact on individual tenant groups notwithstanding, the HAMBORNER portfolio has proved highly robust. Across the portfolio as a whole, the share of rental payments (including ancillary costs and VAT) amounted to 90.0% of total monthly rent in April 2020. However, this figure has risen in the intervening months to July to currently 97.7%, thereby almost reaching pre-crisis levels.

Regarding the rent payments outstanding on account of the pandemic, HAMBORNER is still engaged in a trusting dialogue with the tenants concerned and is working intensively on individual and fair solutions. As a result, mutual agreements have already been reached with a number of tenants. Temporary rent reductions (waiver) of currently around €0.5 million or 0.6% of HAMBORNER's total annual rent as well as rent deferrals in an amount of €0.3 million (0.4% of annual total rents) are offset by a large number of renewals of the leases in question. The average term of the leases affected (weighted according to rental income) was thus increased by around 19 months.

The stability of HAMBORNER's tenant structure is also reflected in the low number of tenant insolvencies to date. Just two smaller retail tenants (share of HAMBORNER's total annual rent: 0.15%) have recently applied to open insolvency proceedings.

FORECAST FOR 2020

Taking the positive business performance of recent weeks into account, the company meanwhile made an updated forecast for the current financial year:

- Income from rents and leases: €87 to €88 million (previous year: €85.2 million)

- Funds from operations (FFO): €52 to €54 million (previous year: €54.3 million)

- NAV per share: Decline in a single-digit percentage range (assumption: unchanged number of shares)

The forecast for the year as a whole is subject to there being neither a significant tightening of the restrictions due to COVID-19 (such as another shutdown with HAMBORNER tenants being ordered to close) nor currently unforeseen insolvencies among the tenant base. The forecast also does not take into account the possible effects of acquisitions or disposals in the remainder of the year.

ANNUAL GENERAL MEETING & DIVIDEND

The company's Annual General Meeting originally scheduled for 6 May 2020 is now expected to be held on 8 October 2020. Contrary to the original planning and with official restrictions on public gatherings still in place, the Annual General Meeting will be held in virtual form. The Management Board and the Supervisory Board of HAMBORNER REIT AG yesterday reviewed their proposal for the appropriation of profits for the 2019 financial year and unanimously resolved to honour its original dividend proposal of €0.47 per share.

REVISION OF BUSINESS STRATEGY

"Notwithstanding the current crisis environment, the company remains very well positioned, has an excellent property portfolio plus a solid accounting and financing structure. At the same time, we have used the past quarter to revise our corporate strategy in coordination with the Supervisory Board, and to modify some elements under consideration of current market circumstances. The results will lay the foundation for HAMBORNER's further value-creating growth," says CEO Niclas Karoff.

The key elements of the updated strategy will be presented at today's press and analyst conference. This presentation will also be available in the Investor Relations section of the HAMBORNER website at https://www.hamborner.de/en/investor-relations/ir-downloads.html.

OVERVIEW OF KEY FIGURES FOR THE HALF OF 2020

The full half-year financial report for 2020 is available for download at https://www.hamborner.de/en/investor-relations/financial-reports.html.

ABOUT HAMBORNER REIT AG

HAMBORNER REIT AG is a public company listed in the SDAX that operates exclusively in the property sector and is positioned as a portfolio holder for high-yield commercial properties. The company generates sustainable rental income on the basis of a diversified portfolio of properties distributed throughout Germany with a total value of around €1.6 billion. The portfolio focuses on modern office properties as well as local supply properties as large-scale retail assets, retail parks, DIY stores and attractive high street properties in major German cities and mid-sized centres.

HAMBORNER REIT AG is distinguished by its many years of experience on the property and capital market, its consistent and sustainable dividend policy and its lean and transparent corporate structure. The company is a registered real estate investment trust (REIT) and benefits from corporation and trade tax exemption at company level.

CONTACT INVESTOR RELATIONS & PUBLIC RELATIONS

Christoph Heitmann

Tel.: +49 203 54405-32

Fax: +49 203 54405-49

E-mail: c.heitmann@hamborner.de

Web: www.hamborner.de