Ladies and gentlemen, good morning everyone, and welcome to our results presentation for the first nine months in 2024. With me here is Tim Brückner, DEMIRE's CFO, Ralf Bongers, DEMIRE's CIO, and Julius Stinauer, our Head of Investor Relations. I'm sure you had a chance to look at our results, which I would summarize as solid. Rental income and FFO l are both in line with our expectations. Before going into more details, I'd like to highlight that we wanted to finish the refinancing of our bond yesterday, but as a matter of fact, we are still settling a final transaction as part of the backstop agreement, and the finalization can only be a matter of days until the implementation of our amended and extended bond. This means we will enter into much calmer waters financially since we then have our main financing in place until the end of 2027.
As a company, we will now focus to, we will now continue to focus on our core business, the letting and optimizing of real estate and disposal of non-strategic or fully optimized assets. The organizational and personal changes that we have initiated over the past month are supporting this goal. Despite an ongoing challenging market environment, we see ourselves therefore well positioned to lift an even greater potential of our assets in the future. Let me jump into the presentation and flip to page four. As mentioned, the formal process of the implementation of the new terms and conditions of the bond will be completed in the next few days. The partial redemption and the result of the tender offer will lead to a reduced bond volume of around EUR 253 million.
Our annualized contractual rent as of September 2024 is at EUR 57.6 million, which is lower than the compared year-end 2023, which is mainly a result of the disposal of LogPark and the deconsolidation of the Limes Portfolio. We have achieved a solid letting performance of around 60,000 square meters despite the still challenging market, mainly lease contracts prolonged in Bonn with Deutsche Telekom and the new contract with the Land Freiburg in our Freiburg asset. The EPRA vacancy, as per September 2024, has come down from 14% to 14.7%. Remember, it was 15.5% at the end of June 2024. We have closed the LogPark transaction, and we have further disposed of another three assets, smaller assets, and expect them to be closed until the year-end. We have other assets which are about to be sold, but closing will only happen in 2025.
Our rental income is with EUR 50.6 million, 15% lower than the compared previous period, but the reason is, again, reduced portfolio size. FFO1 is at EUR 23 million, and the net LTV has lowered to 52.3% with an expected further reduction by the end of 2024. As guidance for 2024, we confirm a rental income that is expected between EUR 64 million and EUR 66 million, and an FFO1, which is significantly lower compared to 2023. We can't give you an exact number because the effective date of the bond restructuring is not yet known. For the presentation of the portfolio highlights, I hand over to Ralf Bongers.
Hello, everyone. Yes, some quick words to the portfolio highlights. As already mentioned by Frank Nickel, the annual rent of the portfolio has been reduced from EUR 76.7 million down to EUR 57.6 million, a difference of EUR 19.1 million, which is mainly due to the sale of the asset LogPark and the deconsolidation of the so-called Limes Portfolio. On the other hand, we see more than half of the properties with increasing contractual rent since the end of 2023. This is mainly driven by indexation. Yes, Frank already mentioned the letting performance. We saw here a significant improvement of the letting performance by more than doubling the lease space from the comparative period. And among others, we achieved the prolongation of the rental contract with Deutsche Telekom in our largest asset in Bonn. Coming to the EPRA vacancy, the EPRA vacancy increased in the end of 2023.
This is mainly caused by the move out of the tenant Mein Real, leaving our property in Querfurt. The WALT is still stable. We see a slight decrease. The WALT is slightly lower due to natural reduction and is now 4.4 years. We see this still as a solid level for a portfolio with a clear office overweight. Yes, that's it from my side, and I would like to hand over to our CFO, Tim Brückner. Please take over, Tim.
Thank you, Ralf. Good morning. It's Tim. Let us quickly have a look at the financials in Q3 or the first nine months of 2024. As already said, we had lower rental income of EUR 50.6 million, mainly driven by the disposal and the closing of the LogPark transaction and the deconsolidation of the Limes Portfolio, which also has further rundown effects when we go down the P&L. We see a slight reduction in operating expenses to generate rental income, but not at the same level as the rental income declined, mainly driven by higher maintenance expenses that we have invested in our portfolio over the reporting period. Going down to the profit and loss fair value adjustment in properties, you see an effect of a revaluation of the Limes properties mid-year.
The remainder of the portfolio hasn't been revalued mid-year, given that the management believes that the portfolio value overall is more or less stable. Profit loss from the sale of real estate is slightly negative due to some purchase price retention of LogPark disposal proceeds that haven't been received yet, but expected to come in in the next few months. Some higher effects also in other operating income or expenses that are connected again to the deconsolidation of the four Limes properties and slightly increased G&A expenses, mainly driven by the restructuring of our corporate bond.
When we go down further to the P&L, we see that we obviously, in the first nine months of the year, haven't executed the repurchase of bonds, so the 12-month numbers will look materially different, given that we have executed, as said before, the partial repayment at par and also the tender process, which will have a material effect on the P&L and also the balance sheet for 12 months of this year. Going down to FFO, we see FFO after nine months of EUR 23 million. And as Frank said before, we haven't put out a guidance yet, and we may not put out one, but we expect that FFO will remain significantly lower than last year, given the effects of the repayment of the bond and the higher interest on the bond and the higher interest expense on the shareholder loan.
Jumping to page 10, we see declining total assets, mainly again due to the Limes deconsolidation. And I don't want to go through all the numbers, but give you a bit of an outlook through year-end values. Obviously, the total assets will go down further, given that we repay further bonds and only partially replace that by the shareholder loan. So you should expect declining total equity and liabilities at year-end. On page 11 of the presentation, you see a positive move regarding net LTV. Net LTV came down versus year-end last year, mainly due to the completion of the LogPark transaction and the repayment of the respective financing and the higher cash position in the company. We expect net LTV to go down further in Q4, given that we buy some bonds back below par. The average cost of debt is obviously increasing.
The numbers shown here are excluding the effect of the shareholder loan. We expect the nominal interest expense, excluding shareholder loan, of being at roughly 3.5%, given the bond size, the expected bond size of roughly EUR 250 million, which will have a coupon of 5%, and the remaining property loans that are still financed on average significantly cheaper. We also have advanced negotiations with the bank about prolongation of maturing mortgage loans in 2024 and 2025, so we remain very confident that we come up with good financing solutions in the future. With this, Frank, I hand back to you.
Thank you, Tim. Coming to page 12 and confirming once again, rental income and FFO1 are expected to come in lower, given that our portfolio is now smaller. We confirm rental income to be in the range of EUR64-EUR66 million and FFO1 being significantly lower than in 2023. That concludes our short outlook. Thank you very much for dialing in and listening. We are happy to answer any questions now.
The first question comes from Philipp Sennewald, NuWays AG. Please go ahead with your question.
Yes, hello. Good morning, guys. Thanks for the presentation. One follow-up on the planned disposals. You mentioned three deals are set to be closed until the end of the year. If you can elaborate a bit on the volume there, and then you also mentioned that some deals are close to be closed but will be closed in 2025. What is the volume of those deals? If you can say anything on this?
Yes. As already mentioned in our presentation, we have three deals which are already signed. I would like to ask for your understanding that I don't want to comment here or don't want to mention precise numbers. These are smaller assets. All three deals are smaller assets, and we have numerous additional deals under negotiation. Again, I don't want to comment here with precise numbers, but we are very confident that we will be able to achieve overall disposal volume of EUR 50 million until the end of 2025.
Thanks. That's very helpful. And maybe another one on the Limes portfolio. You mentioned that you expect a stable valuation there. So do you expect that there's anything left after the end of the process for DEMIRE? Any cash left?
You probably knew what the LTV of the Limes Portfolio was before we failed to negotiate the extension of the loan with the financing bank. Maybe those values do not reflect the current situation of the market, but we remain confident that there will be something left for the DEMIRE.
Yeah. We would be disappointed. We would be disappointed if nothing would come out there.
Very good. That's helpful. Thank you. And maybe one last point, if I may. You mentioned that you are confident you're going to prolong some loans in 2024 and 2025. Tim, if you can, can you say anything on the expected interest rate effect on those?
The loans currently have interest rates between 0.6% and roughly 2.5%, and on average, I would expect those to go up by about 300 basis points.
All right. Thank you. That's it from my side. Thank you, guys.
At the moment, there are no more questions from the audience.
Okay. Then I'll just take it over. So should you have any other questions in the follow-up time, get in touch with us. We are happy to answer them, of course. Thank you very much for dialing in. And have a good day. Bye.