annual report 2009 - bei der Hamborner REIT AG

Representation of the individual risks
to our sHareHolders management report Financial statements supplementary inFormation
We describe below the risks that can have serious repercussions on the net worth, financial
position and earnings of the company.
Risks of future macroeconomic development
HAMBORNER is affected by the economic and political environment. The German economy
is in a recovery phase after the deep downturn, the sustainability of which is still very uncertain
however. Against this background, the market environment also continues to be difficult
for our company. By virtue of our business model and our capital position, we certainly
consider ourselves well positioned even under these economic conditions, which are generally
still unsatisfactory.
Risks of the market in the property sector
We expect good demand again for the current financial year for our properties in A1 locations
of the pedestrian zones. It remains to be seen how the general economic environment
will develop for office buildings in 2010. There are still vacancy risks for outdated office
spaces or properties in second-rate locations used for retail trade.
Regardless of economic risks, the property industry is subject to distinct market cycles,
which can have an adverse impact on the retention of value and rentability of the properties
held in the portfolio. We try to anticipate this risk through intensive observation of the market
and close contact with our tenants, and endeavour to minimise risks of a loss of rent by
concluding contracts with as long a term as possible with tenants with a good credit rating.
General letting risks
Through the broad regional dispersal of our property portfolio over 40 locations at the
moment, we attempt to keep the consequences of specific negative local influences, as can
arise through the construction of oversized shopping centres, for example, to a minimum
for the entire portfolio. In addition, a good location and the greatest possible flexibility of
use are important criteria for us when purchasing properties. Moreover, we endeavour to
limit the letting risks through regular monitoring and improvement of the structural quality
of the properties. The self-management of all the stock properties enables us to react quickly
to a probable change of tenant with selective subsequent lettings.
The aforesaid measures for the minimisation of the letting risk have contributed to the fact
that we have been able to achieve a very high occupancy rate in past years. The vacancy rate
amounted to 3.5 % on average in the financial year 2009, which represents a low level. We
ensure a good occupancy rate in the case of new investments. Furthermore, rent guarantees
cover letting risks in some cases.
Risks of a loss of rent
We reduce the risk of rent losses, particularly due to tenants' inability to pay, by means of an
efficient debt management system, the regular monitoring and review of the creditworthiness
of our tenants and the agreement of rent securities that are appropriate to the risk.
Uncollectable receivables amounted to approximately€ €36,000 in the 2009 financial year
and thus represented 0.2 % of our annual rental income. An increase in uncollectable receivables
cannot be ruled out for the current financial year, depending on ongoing economic
developments. However, major rent losses are not discernible at present due to our tenant
structure. The Kaufland Group is our biggest single tenant with a share of approximately
22.6 % of the total rental volume. In view of the creditworthiness of this tenant and the
location of the properties, we consider the resulting risk to be manageable.
annual report 2009 | Hamborner reit ag
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