German High Street Properties
A/S
Annual Report 2023
CVR-nr.: 30691644
The Annual Report was presented and adopted
at the Annual General Meeting of the Company
30
th
April 2024.
Chair of the meeting
Michael Hansen
2
Company information
Company
Company registration no.: 3 0691644
Financial year: 1 January – 31 December
Hometown municipality: Gentofte
Executive Management
Michael Hansen
Board of Directors
Hans Thygesen, Chairman of the Board
Walther Thygesen, Vice-chairman of the Board
Jutta Steinert
Claude Olof Nikolaj Zethraeus
Auditor
PricewaterhouseCoopers
State Authorized Public Accountant Partnership Company
Strandvejen 44
DK-2900 Hellerup
Denmark
3
Table of Contents
Company information .......................................................................................................................... 2
Group Structure .................................................................................................................................... 4
Company presentation.......................................................................................................................... 5
Management Report ............................................................................................................................. 5
Strategy ................................................................................................................................................ 8
Key figures (Group) ........................................................................................................................... 10
Management's Statement ................................................................................................................... 35
Independent Auditor's Report ............................................................................................................ 37
Income Statement ............................................................................................................................... 43
Other comprehensive income ............................................................................................................. 44
Balance Sheet ..................................................................................................................................... 45
Statement of Equity (Group) .............................................................................................................. 46
Statement of Equity (Parent company) .............................................................................................. 47
Statement of Cash Flow ..................................................................................................................... 48
Notes .................................................................................................................................................. 50
4
Group Structure
As of December 31, 2023, the group consisted of seven German GmbHs and three holding companies in
Germany, and a newly established Danish limited company as depicted in the following group chart.
German High Street Properties A/S
GHSP Zweite Holding ApS & Co.KG.
GHSP Grundbesitz I GmbH
(Pforzheim)
GHSP Grundbesitz III GmbH
(Aachen)
GHSP Erste Holding GmbH
GHSP Grundbesitz V GmbH
(Braunschweig)
Apreit Two Grundbesitz GmbH
Braunschweig
Frankfurt
Hamburg
Kassel
Koblenz
Rosenheim
GHSP Dritte Holding GmbH
GHSP Grundbesitz IV GmbH
(Essen, Leverkusen)
GHSP Grundbesitz VI GmbH
(Essen)
GHSP Grundbesitz VII GmbH
(Gütersloh)
Minority share-
holders
100%
100%
94%
94%
89
,
6%
10,4%
6%
6%
100%
Hesselvang 11 A/S
(Newly established as of May 31,
5
Company presentation
Management Report
Germany is the world's third-largest economy and has served as Europe's economic engine for decades.
However, while several southern European countries are doing well after the shock from the coronavirus
pandemic, Germany is lagging somewhat. There was a decline in the German economy in 2023, and the
trend also pointed downward at the beginning of 2024. The increasing energy prices have also impacted the
German industry very hard. The German economy is, in general robust, and according to the federal govern-
ment and institutes, the economy is expected to grow by at least 1.3 percent again in 2024.
The Group’s rental income in Germany mainly comes from stores, restaurants, and office leasing and is,
therefore, significantly dependent on the development of the German economy. Even though the growth in
2023 is modest, the general view is that the resilience of the German economy will increase, especially in
2024.
As of December 31, 2023, the group has 13 German properties and one Danish. The Danish property has
been sold as of January 15, 2024.
The 2022 annual report announced an expected result before value adjustments and tax of between EUR 0.4
– 0.8 million for 2023. In the interim report for the first quarter of 2023, a result before tax and value adjust-
ments in the EUR 0.2 – 0.6 million range was announced.
The group's result before value adjustments and tax amounted to EUR 0.3 million in 2023 (EUR 0.9 million
in 2022), in accordance with the latest announced expectations.
The combination of lower rental income than expected for retail premises and a higher yield requirement on
German High Street Properties A/S has led to a decrease in the value of German high street properties. Based
on the valuation report as of December 31, 2023, the Group has written down the value of the German prop-
erty portfolio by EUR 5.0 million, from EUR 96.0 million to EUR 91.0 million.
Development of Rental Income in 2023.
The rental income from January 1 to December 31, 2023, is at the expected level and virtually at the same
nominal level as in the same period in 2022. However, in real terms, rental income has decreased due to in-
flation. The geopolitical situation may continue to negatively impact the business foundation.
6
The following specification is a snapshot of the rental levels at the end of 2022 and 2023, respectively, and
is, therefore, not directly comparable to the year's realized rental income in the income statement.
The leasing activity in the group's German properties has progressed as expected. Rental income at the end
of 2023 is 0.3% lower than at the end of 2022.
In the property in Aachen, the anchor tenant has terminated their lease for vacating on January 31, 2023. A
new 10-year lease has been entered with a German clothing group, but the old tenant has not yet vacated the
premises. There is an ongoing lawsuit about this, as well as negotiations with the old and new tenants for a
solution.
In the Braunschweig, Bohlweg 18 property, a 10-year agreement has been made with a restaurant.
The retail lease at the property in Essen, Limbecker Str. 42, is currently rented on a short-term contract and at
a reduced rent. The lease is expected to be challenging to re-rent in the short term.
In the property in Essen, Limbecker Str. 47-49, one part of the retail lease is rented on a short-term contract,
and the other part is rented to Cinnamood. The office lease has been extended for a 10-year period.
The property in Frankfurt is fully rented at the same rental levels as before. According to stock exchange an-
nouncement no. 251, it is being attempted to be sold as a project offering.
An office lease and an apartment are vacant in the Pforzheim property.
The anchor tenant vacated the property in Rosenheim in October 2022. When re-letting the premises, a sig-
nificantly lower rent is expected. It has proven difficult to re-rent the premises, and it is expected that re-let-
ting will occur at a much lower rental level than before and that investment will be required in the premises
in connection with re-letting.
7
Tenant S. Oliver has indicated that they wish to exit the lease before the end of the contract in January 2026
if an agreement can be reached about this. Currently, there is a search for one or more new tenants. In addi-
tion, there is a vacant retail lease expected to be re-rented in 2024.
In the property in Leverkusen, Schum Euroshop terminated the lease for vacating on August 31, 2024. A new
tenant is being searched for.
According to stock exchange announcement no. 250 of December 29, 2023, the property Hesselvang 11,
Grenaa, was sold as a project sale on January 15, 2024.
Development of the Property Portfolio's Value.
As part of the accounting process, as in previous years, the management obtained a market valuation of the
Group’s German properties from a German real estate agent specializing in prime retail properties. The mar-
ket valuation has been included in the board and management's assessment of the market price development
for the group's German properties. The German market for rental properties in 2023 was characterized by a
slightly higher yield requirement from investors and a slowdown in the interest in purchasing properties.
Based on this, the Board and Management have assessed the value of the German portfolio to be EUR 91,0
million, according to note 2 in the annual report.
According to the management's assessment, the above valuation corresponds to the fair value as of Decem-
ber 31, 2023.
Stock Price
German High Street Properties A/S is listed on Nasdaq OMX Copenhagen. The stock was offered at a price
of DKK 100 on September 20, 2007. The stock price for German High Street Properties A/S on December
31, 2023, was DKK 103 (EUR 13.82) and on December 31, 2022, DKK 144 (EUR 19.32)
Investments and Dividends
Re-letting the remaining vacant premises generally requires renovation work to be carried out to some ex-
tent, and expenses for maintenance in 2024 are expected to be somewhat higher than in 2023 for the German
properties. There will be a significant investment need for a couple of properties in connection with tenant
turnover. It remains essential for the Group to have a liquidity reserve considering the need for additional
maintenance, renovation, and re-letting of several of the group's leases; therefore, the board recommends to
the general assembly that the company does not pay dividends for the fiscal year 2023.
Purchase of Own Shares
At the beginning of 2023, the company owned 100,000 shares, corresponding to 3.2% of the share capital.
At the company's extraordinary general meeting on November 30, 2023, a proposal was made to reduce the
share capital to DKK 30,453,830 by canceling 100,000 shares held by the company itself.
8
This proposal was adopted so that, as of December 31, 2023, the company no longer owns any of its shares.
Rules for changing articles of association
German High Street Properties A/S articles of association can be changed by a General Meeting in accord-
ance with the Companies Act §§106 and 107. Resolution on amendment of the Articles of Association are
only valid if the resolution is approved by at least 2/3 of both voting rights and percentage of equity which
are present at the meeting.
Strategy
Business Model
German High Street Properties A/S invested initially in rental properties in major German cities. The proper-
ties, primarily with shops on the ground floor and offices or residential units on the other floors, were ac-
quired in 2007-2008. The property portfolio after that consists of 13 German properties and one Danish prop-
erty (sold as on January 15, 2024).
German High Street Properties A/S is managed by Administrationsselskabet Gambit ApS, which, along with
the Board, focuses on:
Optimizing ongoing operations through rent increases and reducing vacancies.
- Long-term value creation.
- Retaining current tenants.
- Renting out unleased premises.
- Continuously optimizing the company's financing.
- Acquiring properties that generate attractive cash flow.
- Optimizing the Group's other costs.
German High Street Properties A/S is a socially beneficial business that helps to ensure shops, offices, and
homes for ordinary businesses and people in the larger German cities and other markets where German High
Street Properties A/S may establish itself. German High Street Properties A/S aims to contribute to improv-
ing urban renewal in these cities. The development and renovation of the properties help to ensure employ-
ment in the construction industry.
Operational Strategy
German High Street Properties A/S develops and maintains its property portfolio to optimize the properties'
operations. The properties are continually maintained to preserve their current standard. Additional work,
such as investment in redecoration, is undertaken when necessary to attract new tenants or retain a significant
tenant in a property.
9
The management continually assesses whether the operation and use of the properties can be optimized by
converting vacant office spaces into retail spaces, where the rent per square meter is usually significantly
higher, or into residential units, where demand is usually higher and long-term more stable.
The Group’s goal is to increase cash flow by:
- Focusing on long-term value creation
- Retaining current tenants
- Renting out unleased premises
- Continuously optimizing the Group’s financing
- Acquiring properties that create an attractive cash flow
- Continuously optimizing the Group’s costs
Investment Strategy
The board ensures that the Group's capital structure supports the company's strategy and long-term value cre-
ation.
German High Street Properties A/S's investment strategy is to acquire and own retail properties located in
attractive locations on main shopping streets, in central pedestrian environments, or in strong retail and com-
mercial areas. The purchased properties must also be in areas with strong economic and positive demo-
graphic development. The possibility of acquiring or selling individual properties is continuously considered.
10
Key figures (Group)
Income Statement (EUR mio) 2023 2022 2021 2020 2019
Revenue
4.5 4.7 5.0 5.2 6.5
Result before fair value adjustments and interests
1.6 1.6 2.5 3.1 3.8
Fair value adjustment of investment properties
-5.1 -4.7 0.7 -9.5 0.0
Net financial expenses
-1.3 -0.6 -0.6 -1.1 -0.8
Result of continuing activities before tax
-4.8 -3.8 2.6 -7.5 3.0
Result of continuing activities after tax
-4.0 -3.2 2.1 -7.0 2.1
Result of discontinued activities after tax
0.5 0.8 1.3 0.4 0.7
Result for the period
-3.5 -2.4 3.4 -6.6 2.8
Balance sheet (EUR mio)
Investment properties
91.0 96.0 109.3 107.3 117.1
Total non-current assets
92.5 96.7 109.3 107.3 117.1
Total assets
102.1 107.0 115.5 112.7 121.9
Total equity
57.7 61.2 63.6 60.2 66.6
Total non-current liabilities
38.9 42.8 48.7 49.3 51.5
Statement of cash flow (EUR mio)
Net cash flow from operating activities
0.0 -0.2 2.3 1.9 -1.2
Net cash flows from investing activities
-4.9 8.8 0.0 0.0 0.0
Cash flow from financing activities
-0.3 -5.6 -1.6 -2.1 3.5
Net cash flow for the year
-5.1 3.0 0.7 -0.2 2.3
Key figures
Solidity,%
56.5 57.2 55.1 53.5 54.6
Loan to value %
41.4 39.5 39.9 42.1 40.4
Return on equity %
-5.7 -3.8 6.9 -11.4 4.4
Return on property portfolio %
3.3 3.3 4.0 4.1 4.3
Return on equity before value adjustments and taxes
4.5 4.5 4.6 4.6 4.6
Interest coverage ratio
2.6 5.0 4.5 2.5 4.2
Net asset value per share, DKK
140.9 149.2 155.5 147.2 162.7
Net asset value per share, EUR
18.9 20.1 20.8 19.7 21.8
Earnings per share (DKK), continuing activity
-9.8 -7.8 5.1 -16.0 6.9
Earnings per share (EUR), continuing activity
-1.3 -1.1 0.7 -2.1 0.9
Earnings per share (DKK), discontinuing activity
1.2 1.9 3.3 0.0 0.0
Earnings per share (EUR), discontinuing activity
0.2 0.3 0.4 0.0 0.0
Stock price DKK
103.0 144.0 144.0 137.0 145.0
Stock price EUR
13.8 19.4 19.3 18.4 19.5
Number of employees
3 4 2 2 2
Note 1 defines key figures. The company's 16th fiscal year covers the period January 1 - December 31, 2023
11
Grosskölnstrsse 20-28, Aachen
12
INCOME STATEMENT
Revenue
The revenue for the period from January 1 to December 31, 2023, was EUR 4.5 million compared to EUR
4.7 million in the same period from January 1 to December 31, 2023.
The newly purchased property at Hesselvang 11, Grenaa, contributed EUR 0.1 million in revenue from Sep-
tember 2023 until December 31, 2023. The revenue from the German properties decreased by EUR 0.1 mil-
lion compared to 2022. The German properties' rental income declined due to missing rental income and a
decreasing rental level upon re-letting.
Result Before Value Adjustments
The gross profit from January 1 to December 31, 2023, amounted to EUR 3.0 million after operating costs of
EUR 1.6 million, compared to a similar gross profit of EUR 3.1 million after operating costs of EUR 1.5 mil-
lion in 2022.
The result from January 1 to December 31, 2023, before value adjustments and financial items, was EUR 1.6
million, the same as EUR 1.6 million in 2022.
Result Before Financial Items
The result from January 1 to December 31, 2023, before financial items, was a loss of EUR -3.5 million after
a net value adjustment on the property portfolio of EUR -5.1 million.
In the same period in 2022, the result before financial items was also a loss of EUR -3.1 million after a EUR
-4.7 million value adjustment on the property portfolio.
Result of Continuing Operations Before Tax
The result from January 1 to December 31, 2023, before tax, amounted to a loss of EUR -4.8 million after
financial items of net EUR -1.3 million.
In the same period in 2022, the loss was EUR -3.7 million after financial items of net EUR -0.6 million.
Result of Continuing Operations After Tax
The result after tax from January 1 to December 31, 2023, is a loss of EUR -3.9 million compared to a loss of
EUR -3.2 million in 2022 for the same period.
Given the current economic conditions, interest rate developments, and market conditions in Germany, the
management considers the result as expected.
13
BALANCE SHEET
Assets
The management assessed the value of investment in German properties at EUR 91.0 million as of December
31, 2023, compared to EUR 96.0 million as of December 31, 2022, according to stock exchange announce-
ments no. 244 of November 1, 2023, and no. 252 of February 19, 2024.
The group's investment properties were increased by a total of EUR 5.4 million from January 1 to December
31, 2023, which relates to property improvements in general and the purchase of the property Hesselvang 11,
Grenaa, according to stock exchange announcement no. 250 of December 29, 2023. This property has been
classified as “Assets held for sales” in the Balance sheet.
As of December 31, 2023, total assets amounted to EUR 102.1 million, compared to EUR 106.9 million at
the beginning of the year.
Equity and Liabilities
As of December 31, 2023, equity was EUR 57.7 million, corresponding to a solvency ratio of 56.5%. As of
December 31, 2022, equity was EUR 61.2 million, corresponding to a solvency ratio of 57.2%. Equity de-
creased in the period from January 1 to December 31 due to a loss of EUR -3.5 million.
Financial debt obligations as of December 31, 2023, were EUR 37.6 million (EUR 37.9 million December
31, 2022). According to stock exchange announcement no. 228 of November 16, 2022, the financial debt ob-
ligations increased by EUR 3.0 million during the year due to the purchase of the property Hesselvang 11,
Grenaa, and were reduced by loan repayments of EUR 3.3 million in the same period.
CASH FLOWS
The year's cash flows from operating activities after interest and taxes paid, from January 1 to December 31,
2023, amounted to EUR 0.0 million, compared to EUR -0.2 million in the same period in 2022.
Cash flows from investing activities from January 1 to December 31, 2023, were EUR -4.9 million, relating
to the purchase of the property Hesselvang 11, Grenaa, compared to EUR 8.8 million in the same period in
2022.
Cash flows from financing activities net for the period from January 1 to December 31, 2023, were EUR -0.3
million, related to repayments of the group's financial debt obligations of EUR 3.3 million and taking on a
new loan concerning the purchase of the property Hesselvang 11, Grenaa of EUR 3.0 million, compared to -
EUR 5.6 million in the same period in 2022.
14
SUBSEQUENT EVENTS
According to stock exchange announcement no. 250 of December 29, 2023, the property Hesselvang 11,
8500 Grenaa was sold in January 2024.
According to stock exchange announcement no. 251 of February 1, 2024, the Company's Board of Directors
has decided to attempt to offer the property Schillerstrasse 4, Frankfurt am Main, as a project sale through
Kartago Capital A/S. The project tender will take place for a limited period until 30 September 2024 and at a
sales price of EUR 19.0 million.
As of December 31, 2023, the DSCR (Debt Service Coverage Ratio) has been calculated to be 1.03. The bor-
rower has therefore in March 2024 secured a deposit of EUR 1.5m until January 2025 with the lender to
waive this DSCR clause, as described on page 25 “Refinancing and Liquidity risks”.
Expectations for 2024
The management still expects a minor slowdown in 2024 for specific industries. Rent levels, vacancy levels,
and interest expenses at the same level as at the end of 2023 will mean that the Group’s result for 2024 be-
fore value adjustments and tax is expected to be in the range of 0.0 - 0.3 million, according to stock exchange
announcement 249 of December 29, 2023. The expectation is given with a reservation for a higher interest
rate than expected, just as the general geopolitical situation may negatively affect the result.
Some commercial tenants have argued that, according to provisions in German legislation, they were entitled
to a rent reduction if they were prevented from conducting their commercial activities due to the COVID-19
crisis. The company's lawyer has rejected the tenants' claims. However, once legal precedent has been clari-
fied, claims for 2020, 2021, and part of 2022 may arise from a number of commercial tenants. The company
has set aside an amount to address potential claims.
The anchor lessee, Appelrath Cüpper GmbH, in the property in Aachen has terminated the lease with effect
from January 31, 2023, but the lessee, despite numerous requests, has not vacated the lease. Appelrath Cüp-
per GmbH continues to pay rent and requires payment for decor and shop fittings in connection with moving
out. The company's lawyer has rejected the claim and has issued a writ of summons against Appelrrath Cüp-
per GmbH.
Management expects that re-letting levels will continue to be under pressure and that investments in improv-
ing several leases will be required in connection with re-letting and tenant change.
Accounting Reporting Process
To ensure high quality in the group's financial reporting, management has adopted several procedures and
guidelines for accounting and internal controls, which must be followed by the subsidiaries in their reporting,
including:
Quarterly follow-up on achieved goals and results at the group level.
15
- Prepared estimates for income statements, balance sheets, cash flows, and key figures at the group
level.
- Ongoing follow-up on projects, including handling of risks and accounting treatment thereof.
- Accounting closing instructions.
- Reporting instructions.
16
17
Statement on Management Issues
Good Corporate Governance
The board of German High Street Properties A/S considers safeguarding the company's—and thereby the
shareholders'—long-term interests its most important task. The guidelines for the company's overall manage-
ment are described in its statutes, objectives, and strategy. They are based on values that stem from generally
recognized principles of good corporate governance.
The board and the executive team have the overarching responsibility for the company's risk management
and internal controls in relation to financial reporting, including compliance with relevant legislation and
other regulations concerning financial reporting. The company has established risk management and internal
control systems to ensure that the internal and external financial reporting is accurate and free from
18
significant misinformation. The executive team has established a reporting process that includes budget and
periodic reporting, including explanations for variances and periodic updates of the year's estimates. In addi-
tion to the comprehensive income statement, balance sheet, and liquidity forecast, the reporting also includes
supplementary information.
Corporate Governance Code
The Committee on Corporate Governance published the Recommendations for Good Corporate Governance
on December 2, 2020, based on the "comply or explain" principle. Nasdaq Copenhagen has implemented the
recommendations in the "Rules for issuers of shares." The recommendations can be requested from the Com-
mittee on Corporate Governance's website, www.corporategovernance.dk.
The board of German High Street Properties A/S annually assesses the company's rules, policies, and prac-
tices in relation to the Committee on Corporate Governance's recommendations. The board is of the opinion
that the company substantially follows the recommendations, although it assesses that company-specific cir-
cumstances make it impractical or irrelevant to fully follow certain recommendations.
For a mandatory statement of the reasons for this, refer to the company's website, according to
The company currently does not follow and does not expect to follow any corporate governance codes other
than the ones mentioned above in the foreseeable future.
Evaluation of the board and executive management
The Group’s board conducted a board evaluation in 2023. All board members participated in the evaluation.
The main conclusions of the board evaluation were that there was consensus among the board members
about the group's strategic priorities and that the board possesses the relevant competencies in relation to the
group's activities and strategic focus areas. The conclusions from the board evaluation will be used as a basis
for future searches for relevant board candidates.
Remuneration Policy
The Group’s board is compensated with a fixed honorarium and does not receive incentive-based remunera-
tion.
The base honorarium for the board is set at a market-conforming level that reflects the demands on board
members.
Effective January 1, 2023, the board remuneration amounts to an annual basic honorarium per member of
EUR 30.3 thousand. The chairman receives the basic honorarium three times.
19
The board determines the salary and employment conditions for the executive management at least once a
year based on a recommendation from the chairperson. The director is not part of any incentive scheme. Mi-
chael Hansen received EUR 120,000 in 2023.
The employment contract for Michael Hansen follows the notice period of the Employee's Act. In addition,
no board and executive management members are entitled to compensation upon termination of employ-
ment.
The company believes that the remuneration of the board and executive management supports the company's
strategy and is in accordance with its interests, good practices, and recommendations for good corporate gov-
ernance.
Annual remuneration:
T.EUR
2023
2022
Board of directors:
Hans Thygesen
90.0
90.0
Jutta Steinert
30.0
20.0
Marner Jacobsen (stepped down
from the board on April 30, 2023)
10.0
30.0
Walther Thygesen
30.0
30.0
Claude Olof Nikolaj Zethraeus
(joined the board on December 1,
2023)
2.5
0.0
Executive Management:
Michael Hansen
120.0
120.0
20
21
Special Risks
IT Security
With the increased use of digitalization in business, digital threats and risks also increase. German High
Street Properties A/S continuously discusses the development of risks and threats. We follow the develop-
ments and ensure we are as well-prepared as possible to handle the current threat landscape.
Risk Management
The group is exposed to several risks, some of which are beyond the group's control, while others can be in-
fluenced or managed as part of the daily operations. Significant risks beyond the group's control include gen-
eral economic development, pandemics, geopolitical unrest, natural disasters, energy supply, and demand for
22
retail and office rentals in the cities and areas where the group's properties are located, changing trade pat-
terns, legislation, and access to financing. Changes in general economic conditions can lead to falls or in-
creases in property values, increased vacancies, falling rental incomes, and slower tenant payments. The
group cannot change these fundamental conditions but can seek to organize rental and investment activities
to minimize the adverse effects of economic cycles.
Other Risks
Active risk management is part of the group's strategy to optimize earning opportunities. The group seeks as
far as possible to address and manage risks that its actions can influence. The property market is sensitive to
economic cycles, which is reflected in periodic significant property price fluctuations.
The overarching framework for the group's risk management is continuously assessed by the board and man-
agement based on, among other things, reporting from the group's partners in property management.
Below are the risks considered to potentially negatively impact the group’s future growth, activities, financial
position, and results. This description is not exhaustive and does not prioritize the listed risk factors.
Operational Risks
The operation of the property portfolio can be affected by changes in realized rental income and costs for op-
eration and maintenance.
Management manages risks based on ongoing reporting and only entering administration agreements with
recognized partners.
Rental Income
Investing in real estate is associated with a leasing risk. The leasing risk mainly concerns the development of
the rent level and the development of vacancy rents. Such deviations can particularly be due to factors re-
lated to a tenant's ability to pay rent, the group's ability to adjust the rent, general and specific demand and
supply development in local markets, development in vacancy rates, and the development of market rent lev-
els for German and Danish properties.
The group's management and administrator closely monitor rent developments through periodic and system-
atic reporting. This is to focus on leasing vacant premises, managing the duration of new contracts, avoiding
concentration of expiration dates, ensuring stability, and minimizing the vacancy rate as much as possible.
In the short term, it cannot be ruled out that some tenants may demand a rent reduction due to external
events. Expected court decisions regarding previous operating years may affect the result if the set-aside
amount is insufficient.
23
Costs of Operation and Maintenance
Management assesses that the planned expenses for operation and maintenance are sufficient to maintain the
current rental income and the current technical condition of the property portfolio. However, there is a risk
that actual expenses may be higher than expected. External factors can also affect actual maintenance costs,
including weather conditions, technical conditions, regulatory requirements, commercial decisions, develop-
ment in general price levels, and lack of capacity in the market for labor and materials.
The environmental impact of operating the portfolio is attempted to be reduced through minimizing energy
consumption where economically justifiable and where it can lead to a reduction in operating costs. On the
other hand, changes in regulatory requirements for environmental conditions can increase operating costs.
Risk Regarding Property Administration
The group's ability to efficiently manage the portfolio will affect the development of rental income and its
planned optimization.
Effective July 1, 2023, a new administration agreement has been entered into with STRABAG Property and
Facility Services GmbH to manage the property administration of the German properties. STRABAG Prop-
erty and Facility Services GmbH is a medium-sized property administrator in Germany with broad geo-
graphic coverage.
24
Interest Rate Risk
The company has financed itself with the following loans:
Loan tranche 1 is a 10-year loan initially amounting to EUR 46,0 million with a variable interest rate, with a
current interest rate as of December 31, 2023, including the interest margin, of approximately 5.4% p.a. (as
of December 31, 2022, the interest rate including the interest margin was approximately 3.5% p.a.)
The nominal remaining debt on the loan is EUR 34,6 million as of December 31, 2023 (as of December 31,
2022, it was EUR 37,9 million).
A change of 1.0 percentage point in the general interest rate level would result in a change in the group's an-
nual interest expense before tax of 346 T.EUR.
The company repays EUR 1.4 million annually on the loan.
Loan tranche 2 was established in August 2023 and is a 20-year annuity loan initially amounting to DKK
23.0 million (EUR 3.1 million) with a variable interest rate. The current interest rate is approximately 6.4%
p.a. as of December 31, 2023, including an interest margin.
The nominal remaining debt on the loan as of December 31, 2023, is DKK 22.6 million (EUR 3.0 million).
A change of 1.0 percentage point in the general interest rate level would result in a change in the group's an-
nual interest expense before tax of TDKK 226.0 (T.EUR 30.3).
The company repays the loan annually with DKK 1.1 million (T.EUR 155.0). The loan was fully redeemed
in January 2024 in connection with the sale of the property Hesselvang 11, Grenaa and is therefore classified
as a current liability in the balance sheet.
25
2023
Change in rate of interest (in %)
+1.0
Base
-1.0
Yearly financial expenses EUR
000
1,925
1,549
1,173
Change in Yearly financial ex-
penses EUR 000
376
0
-376
2022
Change in rate of interest (in %)
+1.0
Base
-1.0
Yearly financial expenses EUR
000
1,008
624
574
Change in Yearly financial ex-
penses EUR 000
384
0
-50
As a result of its operations, investments, and financing, the group is exposed to changes in interest rates.
The board closely follows developments in the financial markets.
26
Political Risks Regarding Danish and German Tax and Duty Legislation
The group is subject to the prevailing laws regarding taxes and duties, and no assurance can be given that tax
and/or duty legislation changes will not occur - including changes in the double taxation agreement between
Denmark and Germany. Significant changes in law or practice regarding taxes and duties could affect the
group's financial position and results.
German companies that have no other activities than renting out real estate are, as a starting point, exempt
from paying German trade tax of 15-19%. As the rules regarding local German trade tax are complex, full
assurance cannot be obtained that the conditions for exemption from local German trade tax will always be
met. Suppose the German tax authorities challenge the conditions for exemption. In that case, this will lead
to additional unbudgeted tax payments, partly because the deduction right for interest on long-term debt un-
der the German rules on trade tax is limited to 50%. In collaboration with German tax advisors, the manage-
ment assesses that it will be possible to avoid German trade tax.
Board of Directors and Management
Board and Executive Management
The management of German High Street Properties A/S consists of a board of four members and an execu-
tive management with one member who handles the daily operations. The board was elected at the annual
general meeting on April 28, 2023, and at the extraordinary general meeting held on November 30, 2023.
Administrator
The company's administrator is Administrationsselskabet Gambit ApS (Administrationsselskabet Kartago
ApS), which performs the company's administrative tasks in relation to investors, general meetings, lenders,
the stock exchange, public authorities, advisors, registries, etc. As payment for Administrationsselskabet
Gambit ApS’s services under the administration agreement, the company pays a quarterly honorarium of
0.18% of the properties' book value. The company's executive management also receives an annual remuner-
ation of EUR 120,000.
The company has a financial manager who handles the company's liquidity management, accounting, finan-
cial reporting, budgeting, cost control, etc. In addition, the company in Germany has an Asset Manager who
handles the optimization of operations for the German properties and development tasks, optimization, and
outreach work in connection with the re-letting of commercial leases.
27
Executive management
Michael Hansen, Managing Director, born on January 3, 1962
Education HD R and state authorized real estate agent
Position COO for Kartago A/S
Chairman of the Board in the following companies Ejendomsselskabet Kartago ApS, K/S Linköping III,
K/S Svedengatan- Linköping.
Board Member in the following companies Kartago Capital – Storkøbenhavn A/S, Kartago De-
velopment ApS, Kartago Capital – Energihuset A/S
Kartago Global II ApS, Drot ApS, Marsk ApS, Kar-
tago Botkyrka Holding AB, Administra-
tionsselskabet Gambit ApS, Kartago Capital –
Storkøbenhavn II A/S, Kartago Capital – Grenå Re-
tail A/S, Kartago Capital Stockholm A/S, Kartago
Capital – Stockholm ABog datterselskaber til GHSP
A/S. Kartago Capital - Grenå Retail II A/S
Managing Director in the following companies Kartago Property ApS, Kartago Hannibal ApS, Kar-
tago Capital – Energihuset A/S, Kartago Capital A/S,
Ejendomsselskabet Industribuen 7 ApS, Ejendoms-
selskabet af 19.10.2004 ApS, Kartago Capital –
Storkøbenhavn II A/S, Komplementarselskabet
Charlottenlund Centrum ApS, Holdingselskabet
Frederiksborggade 22 ApS, Kartago Capital –
Storkøbenhavn II A/S, Komplementarselskabet Lin-
köping III ApS, Utvecklingsbolaget Svågertorp AB,
Kartago Capital – Grenå Retail, Kartago Capital –
Stockholm A/S, Kartago Capital – Stockholm AB og
datterselskaber i GHSP A/S. Kartago Capital - Grenå
Retail II A/S
No. of shares in the company 200
Independent Michael Hansen is not considered independent due to
his employment with the company's administrator,
which is owned and operated by the company's main
shareholder.
28
Board of Directors
Hans Thygesen, Chairman of the board, born on May 18, 1950
Education Cand. jur. and cand. polit.
Position Group CEO for IM15 Invest AG
Chairman of the Board in the following companies
besides German High Street Properties A/S
Kartago Capital – Storkøbenhavn II A/S, Kartago Hanni-
bal ApS, Administrationsselskabet Gambit ApS, Kartago
Capital A/S, Kartago Capital – Storkøbenhavn A/S og
Ejendomsselskabet Industribuen 7 ApS, Kartago Capital
– Grenå Retail A/S, Kartago Capital – Stockholm A/S,
Kartago Capital – Stockholm AB, Drot ApS og Marsk
ApS. Kartago Capital - Grenå Retail II A/S
Board Member in the following companies Kartago Development ApS, Kartago Botkyrka Holding
AB, K/S Linköping III, K/S Svedengatan-Linköping og
datterselskaber i GHSP A/S
Managing Director in the following companies Administrationsselskabet Gambit ApS
Joint the board Oktober 5, 2015
No. of shares in the company 0
Independent Hans Thygesen is not considered independent due to his
close relationship with controlling shareholders in Ger-
man High Street Properties A/S.
Walther Thygesen, Vice-chairman of the board, born on May 18, 1950
Education Civil Engineer and MBA
Position Board Member
Chairman of the Board in the following companies Kartago Development ApS
Board Member in the following companies besides
German High Street Properties A/S
K/S Køge and Kartago Property ApS
29
Managing Director in the following companies Ejendomsselskabet af 18/5 1985 ApS, Komplemen-
tarselskabet Køge ApS and Kartago Property ApS
Joint the board April 30, 2015
No. of shares in the company 0
Independent
Walther Thygesen is not independent due to his close
relationship with controlling shareholders in German
High Street Properties A/S.
Jutta Steinert, born on April 4, 1964
Education Master Business Administration/Consulting
Position Board member
Chairman of the Board in the following compnaies N/A
Board Member in the following companies besides
German High Street Properties A/S
N/A
Managing Director in the following companies N/A
Joint the board April 30, 2022
No. of shares in the company 0
Independent Jutta Steinert is independent
30
Claude Olof Nikolaj Zethraeus, born on May 9, 1968
Education
IFU Diplomas, Försäkringsakademien
Position Board member
Chairman of the Board in the following compnaies N/A
Board Member in the following companies besides
German High Street Properties A/S
N/A
Managing Director in the following companies N/A
Joint the board December 1, 2023
No. of shares in the company 0
Independent Claude Olof Nikolaj Zethraeus is independent
All board members are up for election every year at the company's annual general meeting.
The general meeting elects the board. The board determines the company's purpose, objectives, and strate-
gies and makes decisions on matters of great importance or unusual nature.
Share Information
German High Street Properties A/S, following the decision at the general meeting on November 30, 2023,
reduced its share capital to a nominal DKK 30,453,830 divided into 3,045,383 shares by canceling 100,000
of its own shares. The shares are distributed among approximately 170 shareholders.
Following the consolidation of A-shares and B-shares in 2018, the company has only one class of shares. All
its shares are listed on Nasdaq Copenhagen under the short name GERHSP and ISIN code DK0060093524.
Change of Control
Loan agreements and other agreements are not changed due to a change of control.
31
Dividend Policy
It is the company's policy to pay dividends in accordance with the rules of the Companies Act and consider
the maintenance of an appropriate liquidity reserve. Dividend payments must also be made responsibly, con-
sidering the group's financial position.
The company's solvency ratio is 56.5% as of December 31, 2023, with liquid holdings of EUR 2.6 million.
Interim Financial Statements
German High Street Properties A/S publishes half-year and interim reports for the 1st and 3rd quarters.
General Meeting
The ordinary general meeting will be held on April 30, 2024.
Ownership and Related Parties
According to the Companies Act § 55, the following shareholders have reported owning more than 5% of the
share capital at the end of the accounting period:
Municipality
Sharecapital
Kartago Property ApS Gentofte 39.87%
Olav W. Hansen A/S Horsens 15.54%
Sparekassen Danmark Hjørring 15.33%
Kartago ApS Gentofte 11.99%
OTK Holding Hjørring 6.24%
The group is controlled by Alexander and Kristoffer Thygesen through Drot ApS and Marsk ApS, which to-
gether are the controlling shareholders in Kartago Property ApS and Kartago ApS, owning respectively
39.87% and 11.99% of the share capital, totaling 51.86% of the share capital in German High Street Proper-
ties A/S.
32
The group's related parties also include the parent company's board of directors and executive management,
as well as these persons' close family. Related parties also include companies where the aforementioned
group of persons has control or significant influence.
In addition to the above-mentioned shareholdings controlled by Alexander and Kristoffer Thygesen, the
board of directors, executive management, and companies where this group has a controlling influence hold
a total of 200 shares.
Investor Relations
Stock exchange announcements, annual reports, etc., are published on the company’s website:
https://www.germanhighstreet.com/
Financial calendar 2024
March 19, 2024
Deadline for submission of proposals for voting at the company's
annual general meeting
April 8, 2024 Annual Report 2023
April 8, 2024 Expected date for convening the annual general meeting.
April 30, 2024
Holding of the annual general meeting/or notification of the gen-
eral meeting.
May 31, 2024 Interim report for the period January 1 to March 31, 2024.
August 30, 2024 Half-year report for the period January 1 to June 30, 2024
November 29, 2024 Interim report for the period January 1 to September 30, 2024.
33
Company Announcements
February 16, 2023 Property value adjustment and earnings expectation for 2022
March 30, 2023 Annual report 2022
March 30, 2023 Notice of ordinary general meeting 2023
April 28, 2023 Minutes of the ordinary general meeting 2023
May 31, 2023 Profit expectation 2023
May 31, 2023 Planned project sale of property Hesselvang 11, Grena
May 31, 2023 First quarter interim report 2023
August 31, 2023 First half-year report 2023
October 31, 2023 Notice of extraordinary general meeting November 30, 2023
November 1, 2023 Value adjustment of properties
November 30, 2023 Minutes of the extraordinary general meeting November 2023
November 30, 2023 Third quarter interim report 2023
December 1, 2023 Major Shareholder Notification
December 4, 2023 Financial calendar 2024
December 29, 2023 Profit expectation 2024
December 29, 2023 Sale of property, Hesselvang 11, Grenaa
February 1, 2024 Planned sale of the property Schillerstrasse 4 Frankfurt am Main
February 29, 2024 Value adjustment of properties
March 27, 2024 Results 2023
March 27, 2024 Financial calendar 2024
34
The property Braunschweig Münzstrasse
35
Executive Management
Board of Directors
36
Property Koblenz
37
Independent Auditor's Report
Report on the audit of the Financial Statements
38
39
40
41
42
CVR no 33 77 12 31
43
Income Statement
Group
Parent company
EUR 1.000 Note
2023
2022
2023
2022
Revenue
259
296
Property operation expenses
-1,564
-1,526
0
-12
Operating income
259
284
Staff expenses
4
-528
-487
-387
-427
Administrative expenses
5
-844
-1,081
-775
-1,004
Result before fair value adjustments and interests
-903
-1,147
Gain/losses from subsidiaries
0
0
-2,648
-1,848
Fair value adjustment of investment properties 7
-5,111
-4,702
0
0
Result before interests and tax
-3,512
-3,134
-3,551
-2,995
Financial income
138
0
Financial expenses
8
-1,470
-624
-290
-118
Result of continuing activities before tax
-4,844
-3,758
-3,703
-3,113
Tax of continuing activities
9
232
278
Result of continuing activities after tax
-3,993
-3,212
-3,471
-2,835
Result of discontinued activities after tax
6
0
428
Result for the period
-3,501
-2,424
-3,471
-2,407
The Parent Company’s shareholders
-3,471
-2,407
-3,471
-2,407
Non-controlling interests
-30
-17
0
0
Result for the period
-3,501
-2,424
-3,471
-2,407
Earnings per share (EUR), continuing activity 11 -1.31
-1.05
Earnings per share (EUR), discontinuing activity 11 0.16
44
Other comprehensive income
Group
Parent company
EUR 1.000
2023
2022
2023
2022
Result for the period
-3,501
-2,424
-3,471
-2,407
Items that may be reclassified to profit/loss for the
year
Exchange differences on translation of foreign opera-
tions
0
0
Tax on other comprehensive income, income/ex-
pense
0
0
Other comprehensive income, net of tax
0
0
Total comprehensive income for the year
-3,501
-2,424
-3,471
-2,407
The Parent Company’s shareholders
-3,471
-2,407
-3,471
-2,407
Non-controlling interests
-30 -17 0 0
Total comprehensive income for the year
-3,501
-2,424
-3,471
-2,407
45
Balance Sheet
ASSETS
Group
Parent company
EUR 1.000 Note
2023
2022
2023
2022
Investment properties 12
0
0
Investments in subsidiaries 14
0
0
61,206
63,824
Other receivables
1,307
1,329
Deferred tax assets 15
223
278
Total non-current assets
62,736
65,431
Assets held for sales 13
0
0
Trade receivables 16
0
0
Income tax receivables
116
0
Other receivables
782
153
Receivables from group entities 17
0
0
1,630
0
Cash 18
34
2,556
Total current assets
2,562
2,709
Total assets
65,298
68,140
EQUITY AND LIABILITIES
Group
Parent company
EUR 1.000 Note
2023
2022
2023
2022
Share capital 19
4,082
4,216
Foreign currency translation reserve
341
341
Share premium
0
0
Reserve for net valuation under the equity method
0
0
23,841
23,841
Retained earnings 10
29,341
32,678
Equity attributable to shareholders of the Parent Com-
pany
57,605
61,076
Non-controlling interests
0
0
Total equity
57,605
61,076
Borrowings 20
0
0
Deferred tax liabilities 21
0
0
Other payables
0
0
Total non-current liabilities
0
0
Borrowings 22
0
0
Trade payables
88
40
Payables to group entities 17
0
0
7,438
7,008
Other payables
167
16
Total current liabilities
7,693
7,064
Total equity and liabilities
65,298
68,140
46
Statement of Equity (Group)
Group
Share
capi-
tal
Foreign
currency
translation
reserve
Share pre-
mium
Retained
earnings
Equity at-
tributable to
shareholders
of the Parent
Company
Non-cont-
rolling in-
terests
Total
equity
T.EUR
Total equity beginning
2022
Result for the period 0 0 0 -2,407 -2,407 -17 -2,424
Other comprehensive in-
come, net of tax
Total equity ending 2022 4,216 13 42,317 14,530 61,076 134 61,210
Shares cancelled in 2023 -134 0 0 134 0 0
Result for the period 0 0 0 -3,471 -3,471 -30 -3,501
Other comprehensive in-
come, net of tax
Total equity ending
2023
47
Statement of Equity (Parent company)
Parent company
Share ca-
pital
Foreign
currency
translation
reserve
Reserve
for net
valuation
under the
equity
method
Retained
earnings
Total
equity
T.EUR
Total equity beginning
2022
4,216 341 25,690 33,236 63,483
Result for the period 0 0 -1,849 -558 -2,407
Other comprehensive in-
come, net of tax
0 0 0 0 0
Total equity ending 2022 4,216 341 23,841 32,678 61,076
Shares cancelled in 2023 -134 0 0 134 0
Result for the period 0 0 0 -3,471 -3,471
Other comprehensive in-
come, net of tax
0 0 0 0 0
Total equity ending
2023
4,082 341 23,841 29,341 57,605
48
Statement of Cash Flow
Group
Parent company
EUR 1.000
2023
2022
2023
2022
Profit/loss for the period
-3,501
-2,424
-3,471
-2,407
Gain/losses from subsidiaries
0
0
2,648
1,848
Fair value adjustment of investment properties
0
0
Fair value adjustment from assets held for sales
-629
-426
0
0
Financial income
-138
-138
0
Financial expenses
290
118
Tax for the yea
r
-75
-462
-232
-278
Net cash flow from operating activities before
change in net working capital
-903
-719
Change in receivables
-1,667
-1,828
-618
Change in trade and other payables
-1,045
474
-93
Net cash flow from operating activities before in-
terest and taxes paid
-2,257
-1,430
Finance expenses – ne
t
-1,332 -705 -152 -118
Income tax paid/received
Net cash flow from operating activities after in-
terest and taxes paid
-174
-2,177
-1,548
Sale of investment property
0
0
Purchase of investment property
-4,745
-345
0
Additions during the yea
r
-111
0
0
Sale of shares in subsidiary
0
0
0
5,183
Net cash flows from investing activities
-4,856
-345
5,183
Proceeds from borrowings 23 3,040
0
0
Repayment of borrowings 23 -3,328
-5,586
0
-1,168
Cash flow from financing activities
-288
-5,586
0
-1,168
Net cash flow for the year
-5,139
-2,522
2,467
Cash and cash equivalents 1 January
2,556
151
Effects of exchange rate changes on cash and cash
equivalents
0
0
0
-62
Cash and cash equivalents 31 December
34
2,556
49
The property at Schillerstrasse, Frankfurt
50
Notes
Note 1 – Material accounting policy information .............................................................................. 52
Note 2 - Significant Accounting Estimates and Judgments ............................................................... 60
Note 3 – Segment Information ........................................................................................................... 61
Note 4 – Staff expenses ...................................................................................................................... 63
Note 5 - Fee to the auditor elected by the general assembly .............................................................. 64
Note 6 - Result of discontinued activities after tax ............................................................................ 64
Note 7 - Value adjustment of investment properties .......................................................................... 65
Note 8 – Financial expenses............................................................................................................... 65
Note 9 - Tax ........................................................................................................................................ 65
Note 10 - Allocation of profits ........................................................................................................... 66
Note 11 - Earnings per share (EUR) .................................................................................................. 67
Note 12 – Investment properties ........................................................................................................ 68
Note 13 – Assets held for sales .......................................................................................................... 70
Note 14 - Equity interests in subsidiaries .......................................................................................... 71
Note 15 – Deferred tax asset .............................................................................................................. 72
Note 16 – Receivables from tenants .................................................................................................. 72
Note 17 – Accounts receivable/payable with subsidiaries ................................................................. 73
Note 18 – Cash ................................................................................................................................... 73
Note 19 – Share capital ...................................................................................................................... 74
Note 20 – Financial liabilities ............................................................................................................ 76
Note 21 – Deferred tax liability ......................................................................................................... 77
Note 22 - Financial instruments ......................................................................................................... 77
Note 23 – Change in debt obligations ................................................................................................ 79
Note 24 – Currency exposure ............................................................................................................. 80
Note 25 - Cash management and other risks ...................................................................................... 80
Note 26 - Contractual obligations ...................................................................................................... 80
Note 27 - Pledges and security arrangements .................................................................................... 81
Note 28 – Contingent liabilities ......................................................................................................... 81
51
Note 29 - Related parties .................................................................................................................... 81
Note 30 – Fair value hierarchy for investment properties and financial instruments ........................ 82
Note 31 - Subsequent events .............................................................................................................. 83
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
Note 10 - Allocation of profits
Parent company
EUR 1.000
2023
2022
Available for allocation as of Janu-
ary 1
32,678
33,236
Total comprehensive income for the
year
-3,471
-558
Shares cancelled in 2023
134
0
Carried forward result as of De-
cember 31
29,341
32,678
67
68
69
70
71
Note 14 - Equity interests in subsidiaries
Parent company
EUR 1.000
2023
2022
Cost price January 1
39,982
45,425
Currency exchanges
30
63
Disposal
0
-5,506
Cost price December 31
40,012
39,982
Value adjustments January 1
23,842
25,690
The year's result in subsidiary compa-
nies
-2,648
-1,848
The year's other comprehensive income in subsidiary companies
0
0
Value adjustments December 31
21,194
23,842
Equity interests in subsidiaries December 31
61,206
63,824
Equity interests in subsidiaries include 100% of GHSP Erste Holding GmbH. This company's net asset value
was EUR 60.6 million as of December 31, 2023 (2022: EUR 64.0 million).
It is assessed that the net asset value corresponds to the recoverable amount, as significant assets and liabili-
ties are measured at fair value through other comprehensive income.
72
73
Note 17 – Accounts receivable/payable with subsidiaries
Parent company
EUR 1.000
2023
2022
Payables to group entities
-7,438
-7,008
Receivables from group entities
1,630
0
Total accounts receivable/payable with subsidiaries
-5,808
-7,008
74
75
76
77
78
79
80
81
82
83
84
Property in Leverkusen