Hello everyone! Many investors are looking for stable cash flows and a certain degree of inflation protection, such as typical Real Estate Investment Trusts (REITs) offer. However, in the USA, here in Europe and elsewhere, there are also companies that do not have REIT status, but in fact have very similar business models. These „REIT-like“ shares invest in real estate or infrastructure, but retain a certain flexibility to retain or reinvest profits in the company. In the blog post "3 exciting REIT-like stocks", I would like to follow up my article Q2 REIT overview I would like to highlight a few companies that I have been focusing on in the current year 2025.
Deutsche Fachmarkt AG
business model
For a change, I would like to start by mentioning a German company which, unlike the rest, is not in decline - quite the opposite in fact. We are talking about the Deutsche Fachmarkt AG (TWS abbreviation: DEF, ISIN: DE000A13SUL5) or in short Defama. The company, based in Berlin, is a classic small cap with a market capitalization of only around EUR 140 million and is not a REIT, but is similar in terms of key figures and valuation criteria.
A note on the share. Due to its low market capitalization, Defama is a very illiquid share, i.e. even "small" orders can have a visible impact on the share price. Therefore always (you should anyway in my opinion) Limit orders use!
Defama acquires and rents out very inexpensive secondary supply centers worth between one and five million euros in small and medium-sized cities. Typical tenants are discounters, drugstores, clothing and non-food retailers, whereby there is often a so-called anchor tenant (usually a grocer). The small size of the property should be seen as an advantage, as institutional investors are not interested. As the properties are generally located in the local supply area, the tenants sign long-term contracts, enabling DEFAMA to generate stable and easily predictable rental income. In 2025, there were already some disposals that led to decent profits. These funds are needed for further acquisitions and investments in existing properties, and a number of acquisitions have already been made.
Kennzahlen
When it comes to the key figures, it is immediately apparent that Defama, like a REIT, uses the Funds From Operations (FFO) applies. This is being steadily increased per share, which is also the declared goal for the future, and the same applies to the dividend (5% on average).
The dividend yield is currently 2%. Based on the FFO per share of €2.09 for the 24 financial year, this results in a P/FFO multiple of around 14x. The company also reports a net asset value (NAV) of €28.81 per share. As the share price is currently quoted at around €30, a slight NAV premium is due here.
What to look out for?
I think it is important for Defama that the tenants have a stable business, especially the anchor tenants in the respective locations. Temporary vacancies do of course occur, but so far we have been able to counteract this very well. Investors should also take a look at debt and upcoming maturities or, specifically for Defama, the expiry of fixed interest rates, as potentially larger refinancing deals are due from 2027. Interesting to know: Defama finances its acquisitions via normal annuity loans with favorable interest rates from local or regional banks and savings banks with a high level of location expertise.
International Workplace Group
business model
International Workplace Group PLC (TWS ticker: IWG, ISIN: JE00BYVQYS01), based in Jersey, is a global leader in the leasing of flexible office space. Under brands such as Regus, Spaces and HQ, IWG operates more than 1,300 centers in over 120 countries. Traditionally, IWG has leased vacant office space on a long-term basis, investing in fit-out and fit-out and subletting the space to companies on a short-term basis. Since the pandemic, however, the Group has changed its strategy to a capital-light model. Since then, buildings have been converted by owners themselves, while IWG provides the brand, booking systems and management and collects a management fee (approx. 16 % of turnover). This transformation is similar to the franchise model of the hotel chains Marriott (TWS ticker: MAR, ISIN: US5719032022) and Hilton. (TWS ticker: HLT, ISIN: US43300A2033) and promises higher margins with significantly lower capital investment in some cases.
Evaluation
In the first half of 2025, IWG achieved a new record of $2.162 billion in system-wide revenue, up from $2.123 billion in the previous year. The Group's adjusted EBITDA increased by 1TP4k to 1TP5k262 million, and the digital and professional services division also grew organically by 1TP4k.
The balance sheet can be described as solid, as there are no refinancing requirements until 2029 and debt remains manageable at 1.5 times adjusted EBITDA. Since March 2025, a total of $59 million has been returned to shareholders, with a share buyback program of at least $130 million planned for the current year.
Free cash flow is expected to increase by % 40 million to at least $140 million in 2025, and the interim dividend amounts to $0.45 per share. The pipeline is developing dynamically, as 338 new centers were opened in the first half of the year, of which 97 % are operated according to the capital-light model, and 413 new managed partnerships were launched. This means that the company already operates 220,000 offices and has a further 186,000 under contract, which are expected to generate annual revenue of around $1.4 billion once they are opened and mature.
What to look out for?
For IWG, investors should bear in mind that the flexible office solutions business remains cyclical despite all the growth potential and that an economic downturn can have a negative impact on capacity utilization. The strategic transition to a capital-light franchise model must be successful, as delays in new partnerships or lower profitability could slow down the targeted growth. There are also plans to switch to US GAAP accounting and aim for an IPO in the USA (the company is currently listed on the London Stock Exchange), which will open up a larger investor base, but is also likely to entail higher administrative costs in the short term.
Helios Towers
business model
Helios Towers (TWS ticker: HTWS, ISIN: GB00BJVQC708) is also listed in London. The company operates more than 14,500 mobile phone masts in Africa and the Middle East and leases the passive infrastructure to mobile phone providers. In principle, this is the same business model as American Tower (TWS ticker: AMT, ISIN: US03027X1000) and Peers. Co-location (several tenants per tower) increases profitability considerably, and these are de facto natural monopolies, as the construction of parallel towers is economically unattractive. Helios concludes long-term contracts (often 10-15 years) with MNOs (Mobile Network Operators), indexes rents to inflation and energy prices and generates a large part of its income in hard currency. This mix makes the business model resilient, even though it operates in emerging and frontier markets.
Evaluation
Helios Towers increased adjusted EBITDA by around % to approximately $226 million in the first half of 2025, the operating margin has remained stable thanks to efficient cost reductions and operating cash flow has also increased significantly. The regular rent indexations and >1,200 additional tenants led to revenue growth, which had a very positive impact on free cash flow. Strictly speaking, after deducting investments for maintenance, taxes and lease liabilities, free cash flow amounted to just under $30 million. At the same time, net debt was reduced to 3.8 times EBITDA by cutting expensive loans and average financing costs were reduced to 1TP4k 6.9. For the full year 2025, management is targeting adjusted EBITDA of $460-470 million, free cash flow of $40-60 million and a further reduction in debt to around 3.5 times.
In addition to the operating figures, investors should of course pay attention to the valuation. Despite the double-digit growth in sales and cash flow, Helios Towers is currently valued on the stock exchange at only around 5 times the expected EBITDA. In comparison, European competitors tend to be valued at 8 to 10 times and US peers are sometimes valued significantly higher. Even on the basis of the free cash flow expected for 2026/2027, the yield is in the high single-digit to low double-digit range, meaning that attractive total returns are possible even without an increase in the valuation multiples. The strong growth path, increasing cash generation and moderate deleveraging thus make HTWS one of the most favorable players in the global telecom infrastructure sector.
What to look out for?
At Helios Towers, the focus is particularly on country and currency risks, as the company operates in politically rather unstable markets in which government intervention or currency devaluations can affect cash flows, even though many rental agreements are concluded in hard currency. In addition, the capital requirement is high, i.e. the debt level is still around 4 times EBITDA and further investments in the expansion of the mast sites are necessary, which is why the announced debt reduction should be closely monitored. Last but not least, technological developments such as satellite internet could change the demand for radio masts in the long term, even if they are currently seen as a supplement rather than a competitor.
Options trading
I myself am also active as an options trader, but almost exclusively as a so-called "Style holder". Therefore, I am naturally also interested in these REIT-like shares to see which options are suitable for additional cash flow or for a favorable entry by means of a tender offer. Unfortunately, no option chains are available for any of the three companies presented. But perhaps that will change in 2026 if the International Workplace Group actually goes public in the US.
Conclusion
It is worth looking beyond the traditional US REITs. With Defama, IWG and Helios Towers, I have presented three companies that do not have REIT status but nevertheless generate stable cash flows from real estate or infrastructure. What they all have in common is a significantly more favorable valuation compared to their respective peer groups, but each company also has its own special features.
- Defama impresses with its focus on local shopping centers and long-term rental agreements, which will allow both FFO and the dividend to continue to grow. However, the share should be monitored closely due to the certain illiquidity and upcoming refinancing.
- IWG is benefiting from the trend towards flexible working and is systematically expanding its capital-light business model. It will be interesting to see whether the switch to a US listing and the expansion of managed partnerships succeeds as planned.
- Helios Towers is growing with a robust infrastructure portfolio in Africa and the Middle East, but remains exposed to a political and currency environment that investors and interested parties should not underestimate.
These examples show that there are exciting opportunities outside the traditional REIT universe. As always, the key lies in thorough analysis and an awareness of the risks involved. The companies listed are just a small selection of what there is to discover in the international real estate and infrastructure sector. Those who delve deeper will find further niches with attractive opportunities.
