Yes. Good morning, ladies and gentlemen. I'm here together with Hans Richard Schmitz and Christoph Heitmann. We all like to welcome you here to our Q1 earnings call. First of all, to those whom I didn't have the pleasure to meet yet here, let me quickly introduce myself. My name is Niclas Karoff. I joined the company as CEO in March this year. Meanwhile, I'm working in the German commercial real estate market here for more than 15 years. Should you be interested in further details on my professional background, please just have a look at our website, which I will recommend, or please feel free to contact me directly, of course.
Even though I feel proud here working in my new role together with the colleagues in this full year and obviously the remaining team of Hamborner, the immediate start at the company, the immediate start here had been rather sad and unusual. Sad because just before my start, Rüdiger Mrotzek, used to be a member of the board here since 2007, so for a very long time. He passed away completely unexpected. Jointly with Hans Richard, he had a very strong share, obviously, in the success of the company over the last years. For that reason, I would like to use the opportunity here of this introduction to remember him. The unusual part of my initial phase obviously came by the start of the coronavirus crisis here and its consequences for all of us.
With this, just let me go to the slide showing and providing an overview here on the main figures. Despite the operational challenges since the extensive shutdown in the German industry, the company has been able to generate very good results during the Q1 here of 2020. As you can see here in the quarter-on-quarter comparison with last year, the operational business has developed relatively strong, leading to an FFO per share up by almost 9%. On the portfolio level, vacancy remains on a very low level, providing additional stability to the business. Equity and LTV level remain almost unchanged. ICR, by the way, is well above 4.5. NAV per share up by approximately 7%, and Hans Richard will provide you further details now on the next slides. For that reason, I would like to hand over to him at this point in time. Thank you.
Thank you, Niclas. Good morning, ladies and gentlemen, a warm welcome from my side as well. Let us now take a look at our results in more detail. As already mentioned by Niclas, we generated income from rents and leases of EUR 21.8 million by the end of March, an increase of 3.4%, which was mainly due to the investments in the course of the last year as well as the property transfers at the beginning of this year. For the same reason, income from incidental costs charged to our tenants were 4.5% higher and came in at EUR 5.4 million. Current operating expenses rose only slightly compared to previous year's Q1 , with EUR 5.4 million, an increase of 1.6%. The expenses for the maintenance of our property portfolio fell by roughly 17% to EUR 1.2 million. The costs relate to ongoing maintenance and various minor planned activities.
About a quarter of the expenses incurred in connection with the new leases and lease renewals. After deducting the costs, net rental income amounted to EUR 18.7 million, a + 5.7% compared to the previous year. Administrative and personnel expenses increased by 5.1% to EUR 1.6 million in total. Accordingly, our operating cost ratio, which is defined as administrative and personnel costs in relation to income from rents and leases, rose slightly to 7.4% compared to 7.3% in previous year. Other operating income amounted to EUR 0.6 million. The rise in income essentially related to contractually agreed compensation payments due to delays in transferring ownership of the office property developments in Aachen and Bonn. Other operating expenses amounted to roughly EUR 4.5 million in the Q1 of 2020. This item includes legal and consulting fees of EUR 240,000, which mainly relates to expenses in connection with filling the position of our new CEO.
The financial result is nearly unchanged compared to previous year's Q1 as a result of scheduled repayments and the refinancing of loans on better terms following the expiry of the fixed rate interest agreements. The FFO increased by 8.8% and amounted to EUR 13.3 million in the reporting period. The corresponding FFO per share increased to EUR 0.17, EUR 0.02 above the value of EUR 0.15 from the Q1 2019. The further disproportionate rates in FFO compared to rental increase once again proves our cost discipline. The next chart includes a few remarks to the portfolio changes. During the Q1 , two recently completed office property developments in Neu-Isenburg and Bonn were transferred to our portfolio. The total investment volume was EUR 42.1 million.
Including the two additions, the company had a portfolio of 81 properties with a fair value of around EUR 1.64 billion as the end of March. The two assets will contribute to rents with EUR 2.3 million per year, increasing the annualized rental income to EUR 87.7 million. Considering the tough environment on investment market during the previous month, the gross initial yields of 5.5% and 5.3% are very attractive. The properties are located at established and well-connected office locations and are characterized by a modern building design with a high energy sustainability. They have been built using high-quality materials and meet the very latest standards. The office in Neu-Isenburg is currently in the process of being certified by the German Sustainable Building Council, DGNB. It has already been pre-certified at the DGNB's highest level, platinum.
The anchor tenants of both assets, the insurance company BARMER and the IT service provider UBL, are established companies with strong financial standing and entered long-term lease agreements. The transfer of the newly built office property in Aachen, which was originally scheduled for the Q1 , is still pending due to a delay in completion of the building and ongoing contract negotiations of the developer with an additional anchor tenant. The asset with a gross initial yield of 5.2% is already predominantly leased to the BARMER insurance. Transfer of ownership is scheduled for this month. Moving to the next slide to give you further information on the NAV development. As a result of the portfolio additions, net asset value according to EPRA increased to EUR 932 million as at the end of the Q1 , + 7.1% compared to the corresponding point of the previous year.
NAV per share amounted to EUR 11.69. Considering the share price development during the last weeks, the current NAV discount is around 30%. The next slide gives an overview of our letting situation. The weighted remaining term of our rental agreements for the whole portfolio amounts to 6.6 years. The average maturity of our retail contracts is 7.6 years, while the average term of our office leases is 4.8 years. Having a look at the lease expiry schedule, we see that expiries are evenly distributed throughout the next years. Regarding the rent agreements ending in 2020, we achieved a number of letting success in Q1 and signed follow-on leases for most of the expiries. The remaining share of leases expiring until the end of this year accounts for just around 1% of the total rental income of the company.
The outstanding extensions basically refer to office contracts which expire at the end of the year. On the next slide, a short look at our tenant structure. There were no changes in our top 10 tenant list since the beginning of the year. Hamborner is currently benefiting from its high share of tenants in systematically relevant areas. EDEKA, Kaufland, REWE, and real are still leading our top 10 list with a share of around 28% of our total annual rental income. In sum, food retailers currently account for around a third of the company's total rental income. Other retail tenants, drugstores, pharmacies, or do-it-yourself stores, including the European market leader OBI, contribute around 12% of our rental income. Our office tenants, including medical care facilities, medical practices, educational institutions, and public authorities like the Bundesagentur für Arbeit, generate around a third of total rental income.
Our solid tenant structure is the basis for our cash inflows, even in economically difficult times such as these. With the upcoming transfer of the office in Aachen, the BARMER insurance, another tenant of high creditworthiness, will move to our top 10 list. With the next chart, a few words to our financing situation. Despite the current global crisis, the company's financial and liquidity situation is still comfortable. REIT equity ratio amounts to 56.7% and LTV to 42%. At the end of March, Hamborner had cash and cash equivalents of EUR 43.6 million. The company had another financing commitments or credit facilities of EUR 32 million. Furthermore, we hold various unencumbered properties that can be used to generate additional funds if necessary. For the first time, average cost of debt is below the level of 2% at 1.98%, while the remaining term of our loans slightly decreased to 5.3 years.
We also do not have any pressure due to financial covenants. In the past, we didn't accept any covenants on our mortgage loan agreements. In connection with the EUR 75 million bonded loan taken out in 2018, we have given the creditors assurances that we will comply with an EBITDA to interest coverage ratio of at least 1.8. Currently, the ratio is around 4.5. Moreover, there are no further financing requirements in 2020 as all loan agreements scheduled for refinancing have already been refinancing. Activities for 2021 debt maturities are already in progress. Far, my explanations to our Q1 results, and I would like to hand you back to Niclas for an overview of the current business situation.
Thanks, Richard, let me continue with my explanations on the next slide. Business situation. As pointed out before, I think it's fair to say that Q1 overall has been a successful start here for the company. Because of the ongoing social restrictions and economic uncertainties concerning the Corona crisis here, we decided to withdraw the forecast, to postpone our AGM, and to put the dividend amount here also under reservation. If I look to other market participants here, we find ourselves, I think, in good company with this careful approach. Nevertheless, I can assure you that this hasn't been an easy discussion for us. As most of you know, Hamborner has a long track record here of reliable predictions and announcements. This is precisely why we decided as we did.
We still don't have a reliable picture yet how the Corona effects are going to develop in the next weeks and months. We still think it's best to wait until we have a bit more visibility here on the relevant drivers, especially letting and investment market. On the next slide, which you can see now. We would like to provide you with an additional short update here concerning the previous effect here of the pandemic on our operational business. Regardless of the major public shutdown, including obviously large parts here within the commercial real estate market, we think that our defensive portfolio so far has presented itself comparatively resilient. In April, as you can see here on the overview, we received approximately 85% of our contractual rents.
As you can imagine, our asset management here had numerous additional conversations on top of their regular communication here with our tenants and is working extremely hard in finding individual solutions here within this unique situation. With reference concerning the group of tenants who haven't transferred the rents. The overview shows also here a split up by sector, which I hope will be helpful for you to get a better understanding here. Hardly surprisingly, the vast majority here containing the tenants who didn't pay their rent yet, concentrates on the non-food retailers, which next to the restaurant business, obviously, have been hit especially hard here by the ordered restrictions. Overall, we are convinced that the strong portfolio focus here on market-leading food retailers and on the other hand, office tenants here with strong financial profiles, will help to find a good way through the current situation here.
After the recent loosening of shopping restrictions just a couple of days ago here across Germany. Currently, 95% of our total annual rents are not or only partially affected by closures. We think that this is a pretty interesting additional information. We all know, it still will be a way back to normal business. I hope we get this across as well, supported by these numbers here, we remain confident.
Last but not least, just a quick outlook. A few words on this topic. As pointed out before, once we have more clarity here, more visibility on the lasting effects from COVID, we'll get back, obviously, with an update on forecast, and AGM, and including obviously as well, dividend. Until then, we will further focus here on our day-to-day business tasks, including, for instance, as mentioned before, an intensive and hands-on tenant management, as well as, for instance, the finalization here of the remaining refinancing for next year. In addition, we intend to use these unusual market conditions to develop our strategy further. In any case, with a clear goal to grow the company further. With this, I would like just to sum up here.
We hope that this is a good overview for you, providing you some additional information on the current status here of Hamborner. Happy to receive your additional questions from now. Thanks so much.
We will now take your first question from Gerhard.
Morning, Hans. That's from Düsseldorf. I have one question first regarding your vacancy development. It's interesting that the vacancy rate, including rent guarantees, came down 1.6%, while not including rent guarantees, the vacancy rate is up. Is this due to the guarantees from the new acquisitions? If there's some vacant space in it.
Yeah, that's correct. This depends from our new acquisitions in Neu-Isenburg and in Bonn. That's correct.
What amount of space needs to be filled in these two buildings?
Sorry, we haven't understand this, Gerhard .
How many square meters need to be filled in these buildings, or what's the vacancies in these two new buildings?
In the meantime, in Bonn, we have, at the moment, around 25% vacancy, and in Neu-Isenburg, it's around 12%.
Okay. Central. I have a question regarding your maintenance expenses. It's very low. We expect the usual pattern that there is some more later this year? Is this due to the current situation with probably less tenant turnover, that there is a general reduction against the previous year?
No, this is not a general reduction. This is, I would say, normal that you see over the year, different amounts for this type. Refurbishment and so on. That's mainly a part what we have due for tenants, for example, and the demand in the first three months was not so high.
Regarding the high depreciation, you mentioned there are some EUR 960,000 impairment losses, probably then on the valuation of properties?
That's right. That's related to a couple of smaller, non-strategic assets here, for which we have processed additional information, possibly an ASR . In total, if you see that it splits up into it's very small.
Then you mentioned you are working on your new strategy. Am I right to assume that you currently do not have an acquisition portfolio or acquisition pipeline? Sorry.
The acquisition itself, is regular business here within Hamborner. I think, you have to differentiate here a little bit. Concerning further acquisitions, obviously, we are currently scanning the market. We have assets and opportunities we have a closer look to, no, nothing under exclusivity at the moment. Obviously, we are a little bit shy at the moment because the market is not fully transparent, the investment market, as I pointed out before. We're clearly looking forward, want to acquire further assets. That's for sure. The other topic is strategy in general, and that's more what I was referring to with my comments that I said, okay, we want to use this COVID crisis here as well a bit on reflecting on
The strategy and see if there might be points where we like to change looking forward. That's something we are discussing here at the moment internally and once we came to conclusions, we would communicate this of course.
Regarding the development on four more openings. Now I've heard restaurants in Lower Saxony are allowed to open probably. Can we expect that probably in summer you will get then nearly 100% of your contractual rents? Are there any clients where you think there is substantial difficulties for them to paying rents even in case that the business reopens?
Yeah, I think that's obviously difficult for us at the moment to do any real reliable predictions. Please consider that the numbers we presented to you here only reflect the rents we received for the month of April. The rents for the month of May are just coming in at the moment. Within the next couple of days, as any other landlord, I think we will have a better view on this. As we don't know how the corona crisis is going to continue, it's at this moment pretty tough to make a call here because obviously we have so many different influencing factors. The formal restrictions from the public authorities are one thing, but on the other hand, obviously, the business for each of the retailers is different.
It will, I think also depend on how their operational business is really coming back to normal and what you can call normal. Yeah. There are different influencing factors. It's not just the formal setting of the authorities, to open the shop or not. That's my guess, where you can directly, on a linear basis, can try to evaluate how many rents will be paid. I think this would be a jump. It would be too easy. That's my personal guess. I think with 85% coming in in April, I think that's a pretty, considering the overall situation, it's a pretty good number. Yeah, let's see how this is going to further develop here within the next couple of weeks.
Thank you.
Thank you. We'll now take your next question.
Yes. Good morning. It's Kai Klose from Berenberg. I've got three quick questions. The first one is regarding the recent acquisitions on page four of the presentation, shown on page four of the presentation. Could you indicate if all of those three properties have already been refinanced in the mortgage loans and what kind of terms you have negotiated? Second question would be on the debt expiry schedule here for 2021, particularly with 9.5% of debt due. Just out of interest to extend this just to extend by mortgage loans or would you consider to increase the portion of unsecured debt, and then repay the loans and then take up, for example, a bond or promissory note? Last question would be on the CapEx spend on page three shown in the presentation. Could you just indicate the reduction compared to Q1 2019?
I think there might be a bit of an overflow from 2018 into 2019. That's why CapEx in Q1 not
This month, there's nothing to do. This is an average interest rate of around 1%. Second question was acquisitions.
Expiration. Loan expiry is in 2021.
Loan expires in 2021 here. Here we work on this and hopefully then we will have a solution in the summer. I'm very optimistic here that we can do this, and we will do this with secured debt, not unsecured. Unsecured is more than an option for further growth.
Thank you.
Thank you. Ladies and gentlemen, if you'd like to ask a question, please press the star one on your telephone keypad. Once again, ladies and gentlemen, if you'd like to ask a question, you may press star one on your telephone keypad. It appears there are no further questions. I would like to turn the conference back to you, sir. Please go ahead.
Yeah. Thanks so much. On behalf of the Hamborner team here, thanks for your attendance, and looking forward to continue our conversations with you. Yeah. Thanks, have a good week and, please stay healthy. Bye-bye.