SGL Summit Ger

 

TIDMSGL 
 
RNS Number : 6595L 
Summit Germany Limited 
15 January 2009 
 

Summit Germany Limited 
 
 
Trading Update 
 
 
Summit Germany Limited ('Summit' or the 'Company'), the AIM-listed German 
commercial property investment company, provides the following trading update. 
 
 
Letting Update 
 
 
Since the beginning of 2008 the Company has signed 51 new agreements for the 
lease of 46,000 sqm. of net lettable area which was previously vacant, 
generating additional income of approximately EUR3.7 million per year. During the 
same period, the Company renewed 27 of its lease agreements, covering 39,000 sqm 
and generating net annual income of EUR2 million. Expired leases in the period 
extended to 42,000 sqm which generated net income of EUR3.4 million. 
 
 
Property Portfolio 
 
 
Our current portfolio has a net letable area of 928,000 sqm and generates an 
annual net rent totaling EUR 65.3 million. The average length of our existing 
lease agreements is 6.5 years. The average length of the new and renewed lease 
agreements mentioned above is 7 years. 
 
 
Tenant Base 
 
 
Most of Summit's tenant base is relatively securely financed, we believe, and on 
long leases mainly with tenants such as Deutsche Telekom and a number of German 
government entities. The Company continues to let to strong covenants and major 
new leases are with the Berlin State Hospital and with DAK, which is a 
government health insurance company. 
 
 
Unavoidably, however, part of Summit's income comes from small companies and a 
percentage of these must be expected to experience some difficulty in the 
current recession, with likely negative consequences for Summit's income. 
 
 
Financing 
 
 
The scope of the Company's debt to financing institutions is approximately 
EUR742 million, with a remaining term of approximately 5.3 years and fixed average 
interest rate of 5.4% per annum. 
 
 
In the current difficult climate when property capital valuations are coming 
under severe pressure, most of our debt facilities are currently close to the 
upper limit of their respective loan to value ("LTV") covenants. Should market 
conditions not improve, we expect to enter into a dialogue with our creditors. 
We believe that our positive cash flow and the Company's substantial cash 
balances which amount to approximately EUR45 million at the parent company level, 
would be available to help resolve any potential issues. 
 
 
Dividends 
 
 
To the extent the Company requires funds for its activity or for improving its 
position with the banks, it will postpone or suspend the distribution of 
dividends until its financing situation and cash flow needs become clearer. 
 
 
John Lamb, Chairman commented: 
 
 
"We are in a difficult period in general and in the real estate business. We are 
faced with risks of decreasing income due to financial difficulties of tenants, 
declining demand for properties and decreasing valuations resulting in potential 
breach of LTV covenants." 
 
"On the other hand, I believe that our management team has proven its competence 
through aggressive lettings of vacant space and other improvements to our 
properties, which steps have contributed to enhancing or preserving the values 
of our properties. In addition, we have reserved a substantial amount of cash, 
which, together with accumulating our ongoing cash flow, will assist us in 
dealing with any difficulties and risks we face in these times." 
 
 
-ends- 
 
 
Date: 15th January 2009 
 
For further enquiries contact: 
 
 
Summit Germany 
John Lamb, Chairman 
07802 440 714 
 
 
City Profile 
Jonathan Gillen / William Attwell 
020 7448 3244 
 
 
Fairfax I.S. PLC 
Jeremy Porter 
020 7598 5368 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 TSTCKQKKOBKDODD 
 

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