Ladies and gentlemen, welcome to the Q3 2024-2025 Financial Results Conference Call. I am Matilde, the callers' call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Kyrill Turchaninov, CFO, and to Lars Wittan, CIO. Please go ahead, gentlemen.
Hello, everybody, and welcome to the Deutsche Konsum REIT-AG's Q3 financial results presentation, in which we will cover the nine months of the current financial year, but we'll also touch upon the events which happened in July this year, since they were important, and we will cover those as well. The highlights, which we have here on our page four, cover the main events of the nine months. The substantial impact on the portfolio had our sales of assets. Rental income decreased by EUR 6.5 million, which is 11% compared to the same period of the prior financial year, and it is the same 11% which we had when we reported our six-month half-year results in last quarter. FFO went down by EUR 14.2 million- EUR 9.9 million, and the main impact comes, as I already mentioned, from asset sales as well as the higher interest rates.
Net rental income is down by EUR 8 million, and the entire interest result is EUR 5.3 million lower. There were two parts in our result of the financial result on the interest side. The interest expense went up, unfortunately, by about EUR 2.9 million. However, interest income decreased by EUR 2.4 million as well, to a total of EUR 5.3 million. This year, we did a reevaluation of the portfolio, which is traditionally done by CBRE, as of June 30th, and not as we usually did it to the end of the financial year, September 30th. The reason for that was the transition of, as we mentioned last time, of transition of asset and property management services to a new service provider. We are switching from Elgeti Brothers to GPEP, and also it is better to have the results now in light of the restructuring.
The result is a reduction of about EUR 47 million due to the reevaluation of the portfolio. We have notarized sales and purchase agreements for 17 properties in the nine months of the financial year. Those were spread out. Some took place earlier in the year, some took place late in the year. The annualized rent is EUR 2.8 million, and the purchase price combined is EUR 35.4 million. Some of the assets which were assigned will close or have actually closed at the very end of the quarter. As we already mentioned on prior occasions, at the end of last year, we received EUR 38 million from Obertrieber as a repayment on the loan which was outstanding to Obertrieber.
Therefore, the principal of the loan was repaid in full, and the only outstanding receivable is fully provided for as a net debt accrual, and that is going to be expected to be repaid until the end of 2025. Most of the proceeds from that repayment were used to pay down the financial liabilities. Our loan-to-value is 55.8%. It went up compared to the last quarter, which ended at the end of March this year. However, versus September 2024, it has somewhat decreased from the 57.2%. The net reduction of financial liabilities was EUR 74 million. It included a few items which sort of increased the financial liabilities, and one of the main items was a drawdown of EUR 5 million on the bridge financing, which we reported already in the past. We have, in these nine months, reduced the liabilities by convertible bonds.
They were converted in the amount of EUR 37 million. We repaid EUR 20 million of unsecured notes and obviously did additional debt amortization through asset sales and normal regular amortization. At this time, we will not be providing any guidance for the financial year 2024-2025 due to the preparation and ongoing preparation of the restructuring plan. If we move to the next page, page five, we put together some highlights on the restructuring plan. As we already reported in the past, we have engaged FTI Andersch to prepare a formal restructuring opinion in accordance to the standard of IDW S6. That restructuring opinion was completed in a draft form and expected to be finalized by the end of August.
We also reported that we have entered into standstill agreements with a number of lenders with the maturities of their liabilities of their loans that were in February and March of this year. Those were extended first until the end of May, and then during the course of summer, those were extended also until the end of August. With some of those lenders, we have already reached agreements that we will be extending the loans until the end of this restructuring period. The restructuring period is tentatively, or actually according to our plan, going to be in September 2027. We have secured bridge financing. It is now EUR 18 million with a 5.5% interest. We are expecting it will be prolonged, and we are in discussions, so it will be prolonged after August 2025.
One of the main, or one of the major events since we presented results for the half-year is a restructuring agreement with VBL. That restructuring agreement mainly includes the debt-to-equity swap in relation to the obligations, to the financial liabilities, to the notes or registered bonds that we have in the amount of EUR 86 million. The debt-to-equity swap will be at least, or about, EUR 86 million. Once implemented, it will have a major impact on our KPIs, obviously loan-to-value ratio and current capital ratio. That debt-to-equity swap is a substantial support for the restructuring of the company. It has a positive message, had a positive impact to other lenders in their decision to support the plan. Before debt-to-equity was agreed, however, it is obviously not yet implemented, the restructuring plan envisaged a substantial asset sales. Those asset sales were envisaged to be necessary to reduce our financial liabilities substantially.
Due to the proposed debt-to-equity swap, those sales volume can be reduced to about EUR 300 million- EUR 350 million. The draft restructuring opinion was already presented and discussed with relevant lenders. As I mentioned, several lenders with maturities earlier this year have extended, but also the restructuring plan calls for extension of maturities and some other changes to the loan agreements, to the debt agreements we have maturing in 2026 and the first half of 2027. Those loan agreements are to be, and already to a large extent, are extended until the end of September 2027, as well as some other covenants were changed as well. As of now, there's been no lender who categorically refused to support the restructuring plan. However, with a number of lenders, the discussions are still ongoing. We have been exchanging contracts, and so far, we are on track.
Until the end of August, we expect to conclude the remaining agreements, and then, of course, an important event is an extraordinary general meeting, which should approve the debt-to-equity swap. It is in preparation. The date is still to be determined, and obviously, there are some prerequisites for that as well. We can now move to page eight, where we have some details on our property portfolio. We now have 162 properties with approximately 160,000 square meters. The reduction of 15 assets compared to the 30/ 09/2024 is obviously due to sales. The total purchase price of these assets was about EUR 30 million. A significant impact on our total fair value comes from the reevaluation done by CBRE of EUR 47 million. Obviously, asset sales contributed to the reduction of fair value since those assets were sold. The annualized portfolio rent is at EUR 66.9 million.
Last quarter, it was EUR 70.4 million, and the reduction is driven, as I mentioned before, by asset sales. The growth or the slight increase in vacancy rate to 14.9% from the prior 14% is again driven by sales of assets that were mostly fully leased up. We can now move on and take a look at page 10, where we have some details in our tenant structure. It is important to note that the non-cyclical tenants contribute to a substantial part of our rent, and the cyclical tenants amount to only about 21%. EUR 44 million of non-cyclical tenants is our annualized rent, which is somewhat down from last time. I report from six months' result, which it was EUR 46 million. The total annualized rent is at EUR 66.9 million. We can now move forward and take a look at page 13, where we have put some details on our financing structure.
The first important point to note here is that the graphical representation of loan maturities is a snapshot at the end of the reporting period on June 2025, and that graph arranges, pictures the maturities, which is actually a maturity over the fixed interest rate. It is not the average loan. It is not the end maturity of the loan. Now, obviously, 2025 shows a significant amount. If I break it down a little bit, the two main items here of EUR 40 million and EUR 45.9 million are the registered bonds. Those are exactly the bonds which are held by VBL and are part of the debt-to-equity swap. Therefore, once the debt-to-equity swap is implemented, those bonds will not be there anymore.
An additional positive development here is that as these instruments are secured by real estate assets, those will be released, and a substantial number of assets will be available for the normal business operations. That 2025 also includes unsecured notes, which are already in part extended until the end of September 2027. In either case, we are very close to finalizing that. The real estate secured loans, which are shown here to be either fixing of interest rate ends of 2025 or matures in 2025, were also, some of them were also extended until the end of September 2027, so we are making good progress.
The maturities in 2027, the liabilities of the loans which are maturing in 2027, are also part of the restructuring process, where we have already discussed and already, in some cases, signed with the lenders the extension of the loan agreements until the end of the restructuring period, which is September 2027. In the financial KPIs table below, there are some changes which we have done versus the last time, and one of the notable changes is the average loan maturity in years. Because we feel that this is very important that we show not only the end of the fixed interest rate, but also the actual maturity of the loans, as there are quite a number of loans maturing after September 2027 which do not need to be extended. Participation in the restructuring process for those lenders is quite limited.
Overall, that restructuring process has significantly affected, obviously, our financial landscape. Also, transition to a new asset and property manager is a significant effect, and the asset and property management services will be fully transferred to GPEP as of the 1st of October, though, of course, the year-end closing will be done together with Elgeti Brothers. That pretty much concludes our presentation, and we will be opening for questions now. Operator?
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only headsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Josef Pschorn from XAIA. Please go ahead.
Yes, good morning. Thanks for taking my question. Just for understanding this right, does this mean that you will push out all the maturities from 2025 until 2027 until September 2027? Is the pushing out of all the maturities, so including bank debts, but also other forms of financing, necessary to conclude the restructuring?
That is mostly correct. There are some loans which are, by their nature, by amortization plan, run out in 2025 and in 2026. During the normal amortization of these loans, they will just be completely paid off because the remaining balance is relatively low. Those which do have balances and maturities in the period which you just described, correct, those will be pushed to the end of September 2027.
Okay, so you will have a balloon of all the payments of 2025, 2026, and 2027 at the end of September 2027?
Not exactly. The plan, the restructuring plan, envisaged that in that period, until the end of September 2027, we will be executing certain sales. Once those sales are executed, obviously, they are secured with real estate loans. We will be amortizing those loans as we receive the sales proceeds, which will take care of the real estate secured loans. The unsecured notes with maturities in that period of time are indeed pushed until the end of September 2027, at which point we will accumulate as planned in the current plan or in the current draft of the restructuring opinion. We will amortize those unsecured loans.
Okay, understood. That's very helpful. What if some of your lenders don't agree? Do you need an agreement of 100% of your lenders, or is it also like, I don't know, like 95% necessary, or do all of the lenders until 2027 need to agree to the restructuring plan or to the prolongation of their liabilities?
Understood. I can offer, you know, for more detail, I can refer you to the risk section of our quarterly report, which we put online this year. In short, as we obviously have to disclose all possible potential risks, yes, it is possible that a lender might not agree. It is not completely out of the realm of possibility. That will be rather unpleasant. However, we are carefully confident that we obviously know how things are progressing, that, as I mentioned previously, no lender has flat out refused to support the plan. We are confident that we will get all lenders on board. In such cases, as you know, there is a principle of the equal treatment of the lenders of the same ranking. No lender can receive a preferential treatment.
That's obviously where a very reputable restructuring expert, FTI Andersch, comes aboard, who supports us in discussions with the lenders and explaining how the restructuring opinion works.
Understood. Every lender needs to essentially agree, otherwise the restructuring plan falls through.
Yes, that is correct.
Okay, perfect. That's very helpful. Thank you.
You're welcome.
As a reminder, if you wish to register for a question, please press star and one on the telephone. The next question comes from the line of Keillen Ndlovu from Independent Property Analyst. Please go ahead.
Hello, good morning. Last year in March, you mentioned that you intend to delist from the Johannesburg Stock Exchange, your secondary listing. How is that happening, or is that put on hold?
That is correct. We still intend to end our secondary listing on the Johannesburg Stock Exchange. That process is progressing slower than we expected. There is one remaining shareholder who holds the shares in South Africa. While there are certain legal constraints as to what we can do and what we cannot do, the idea is that we will be discussing that indirectly with the shareholder and will end the listing on the Johannesburg Stock Exchange.
Okay, good. Thank you.
Sure.
Once again, to ask a question, please press star and one on your telephone. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Kyrill Turchaninov, CFO, and to Lars Wittan, CIO, for any closing remarks.
Thank you, everyone, for your attention and interest during this call and for your questions. I hope we were able to answer those correctly. We did answer those correctly. I hope that we made clear and transparent the current situation and the progress of the company. Once again, thank you, everybody. That ends our call. Goodbye.
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