Deutsche Mittelstand Real Estate’s boss, Ingo Hartlief, has told the company he wants to leave. The chairman of DEMIRE’s management board will depart at the end of the month, to be replaced by Alexander Goepfert, currently chairman of the supervisory board.
Headquartered in Langen, Germany, DEMIRE is a publicly listed commercial real estate company focussing on offices in secondary locations across Germany. The company's portfolio currently comprises properties valued around €1.7 bn, and a market cap of around €246 mln.
Last year, Apollo-managed funds and Wecken Group, which control over 90% of the shares, mulled a sale of the company amid a strategic review.
More recently, at the end of November this year, rating agency Moody’s downgraded the company to B2, and said the outlook remained negative.
‘The downgrade follows what we perceive as mounting refinancing pressure from a repayment wall under the company's senior unsecured notes maturing in October 2024. Higher economic uncertainty, continuously increasing interest rates and credit spreads will drive future funding cost to a level well above current one at an average of 1.67%,’ said Moody’s.
‘On the other hand, we acknowledge that the company has started targeted asset sales, in order to shore up liquidity and reduce the refinancing wall in 2024, with some of them already in advanced stages. However, we also note that the current market environment raises execution risk as to the pace and conditions for disposals.’
Tribute
DEMIRE paid tribute to outgoing Hartlief, explaining it was his decision to leave and that he would explore new avenues.
‘Ingo Hartlief's track record at DEMIRE includes the value increase of the portfolio, including the Cielo investment, from approximately €1.1 bn to approximately €1.7 bn, the restructuring of the portfolio conducted by 12 acquisitions and 34 disposals, with a premium to book value of approximately 10 % in total.’
Goepfert added: ‘With regret, we take Ingo Hartlief's decision to leave, however, we respect his desire to reach out to new goals. He has played a significant role in the successful development and institutionalisation of the company. It’s to his credit, that DEMIRE is ideally positioned to meet the current challenges.'
'The supervisory board thanks Ingo Hartlief for his consistently excellent work and outstanding performance. Both professionally and privately, the supervisory board wishes him continued success and all the best for the future. We are pleased that he will continue to accompany DEMIRE in an advisory capacity after his retirement.’
As part of the changes, Goepfert’s role as chairman of the supervisory board is to be filled by a judicial replacement appointment of the independent real estate consultant, Markus Hofmann. Hofmann has had a long career in real estate working at firms or serving in an advisory capacity to the likes of Deutsche Bank, The Carlyle Group, Citi Property Investors, Feldberg Capital, and Arminius Group.
Meanwhile, the company is also beefing up management by making a hire from AXA. Ralf Bongers is joining the management team in April 2023. He is head of asset management at AXA Investment Managers Deutschland.
