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DEMIRE Deutsche Mittelstand Real Estate AG: Public Takeover Offer for All Shares of Fair Value REIT-AG - Seite 3

segment, this increased transparency will provide better access to the
capital markets. Also expected are around EUR 2 million p.a. from synergies
and economies of scale in the administration and management of the
portfolio by DEMIRE's in-house asset, property and facility management and
general and administrative expenses. Future costs savings can also be
realised in the area of financing.

"Fair Value's diversified portfolio with a current valuation approach of
around 12 times net rent, blends in exceptionally well with DEMIRE's
portfolio. The portfolio includes tenants with good credit, has a positive
cash flow and offers development potential. Furthermore it is financed with
interest rates of an average of 2.7% and an LTV of approx. 50%. Currently,
the intrinsic value of Fair Value is in our view not fully reflected in the
stock price. DEMIRE and Fair Value also follow the same objectives in terms
of strategic positioning. Both companies have lean administration and a
strict cost discipline as well as excellent acquisition channels. Whereas
DEMIRE's core capabilities lie in the acquisition of properties in
"distressed situations", Fair Value has extensive know-how in the
value-creating acquisition and management of closed-end fund structures.
The average interest obligations beyond all liabilities will decline from
the current 4.7% to initially around 4.2%. For the combined platform, we
see excellent conditions to gradually steer the LTV ratio to the desired
range of 50% to 60% and to considerably reduce the interest burden on our
financial debt. Together with the synergies and economies of scale of the
joint organisation that covers the entire value chain of real estate
management, these measures will contribute to a sustainable improvement in
the consolidated profits", explains Markus Drews, member of the Executive
Board of DEMIRE.

The Executive Board

About DEMIRE Deutsche Mittelstand Real Estate AG

Leading holder of commercial real estate

DEMIRE Deutsche Mittelstand Real Estate AG is transforming itself into a
leading holder of German commercial real estate. The core business
activities of the Frankfurt/Main- headquartered real estate group consist
of the acquisition, the management and the rental of commercial real estate
and their further development, for example, through modification,
modernisation or expansion, and increasing their value through their active
portfolio management.

As of the end of July 2015, the commercial property portfolio consisted of