Press Release

DIC Asset AG: Robust Performance Delivers Significantly Enhanced Earnings - 34% Increase in FFO to EUR 43 Million during H1 2019

• Growth in assets under management by 27% to EUR 7.1 billion
  (31 December 2018: EUR 5.6 million)
• Robust performance in property management: lettings for 81,300 sqm achieved
• Funds from operations (FFO) increase by 34% to EUR 43.0 million
  (H1 2018: EUR 32.0 million)
• Financial structure bolstered further by promissory note: lowering the average interest expenses while raising the average maturity of the financial debt
• Acquisition of GEG German Estate Group successfully completed
• Forecast for 2019 raised: EUR 88-90 million in FFO, acquisition target raised again to now c. EUR 1.3 billion
   

Frankfurt am Main, 1 August 2019. DIC Asset AG (ISIN: DE000A1X3XX4), one of Germany's leading listed property companies, continued on its growth trajectory during the first six months of 2019. In addition to the robust operating performance of the real estate management platform, the acquisition of GEG German Estate Group AG ("GEG") contributed to the significant growth in assets under management by 27% to EUR 7.1 billion (31 December 2018: EUR 5.6 billion). The transaction was concluded as planned end of June 2019. The operating segments of DIC Asset AG will focus on two pillars in the future: The Commercial Portfolio segment still holds the proprietary portfolio whereas the newly created Institutional Business segment combines the previous fund segment with the GEG business.

The funds from operations (FFO) grew by 34% to EUR 43.0 million (H1 2018: EUR 32.0 million). Definitive in this context were the significantly increased income from property management and the sizeable net income from associates, not including property developments and sales, whereas the operating expenses went up because of the GEG transaction.

Due to the very positive development of the FFO and despite lower sales proceeds, the profit for the period rose by 8% to EUR 25.9 million (H1 2018: EUR 23.9 million) during the first half-year of 2019. The earnings per share rose to EUR 0.37 (H1 2018: EUR 0.35) while the total number of shares increased by 6%.

Sonja Wärntges, CEO of DIC Asset AG: "We are delighted by the fast growth in earnings during the first half-year of 2019. We took our property management platform to the next level by acquiring GEG in early June - and we expect this to deliver significant and growing contributions to operating income over the next few years. In the medium term, we intend to increase our assets under management to c. EUR 10 billion."
 

High Transaction Volumes and Successful Property Management

Collectively, our investment teams had property acquisitions in a total amount of c. EUR 853 million notarised by the balance sheet date. The sum total breaks down into c. EUR 73 million in the Commercial Portfolio segment and EUR 780 million in the Institutional Business segment (incl. acquisitions transacted through GEG since the start of the year). During the same period of time, c. EUR 23 million in property sales were notarised. The first half-year of 2019 also saw leases signed for an annualised rental income of EUR 12.0 million, matching the excellent level of the previous year. The Commercial Portfolio accounted for roughly 68%, and the Institutional Business for 32%, of the total lettings volume of 81,300 sqm (H1 2018: 98,200 sqm).
 

Commercial Portfolio - Further Strong Increase in Portfolio Quality

As a result of the steady optimisation of our Commercial Portfolio, the gross rental income nearly matched the level of the prior-year period at EUR 49.7 million (H1 2018: EUR 50.3 million). The EPRA vacancy rate in the Commercial Portfolio was lowered by 1.1 percentage points to 7.8% (30/06/2018: 8.9%). At the same time, the weighted average lease term (WALT) went up to 6.2 years (30/06/2018: 5.2 years).
 

Institutional Business - Major Surge in Growth of the Institutional Business

Real estate management fees in the institutional business rose sharply over prior year: At EUR 17.5 million, they topped the previous year by 43% (H1 2018: EUR 12.2 million). The sum breaks down into EUR 7.9 million in fees for asset management and property management (H1 2018: EUR 5.6 million) and EUR 9.6 million in transaction fees (H1 2018: EUR 6.6 million). In June 2019, GEG contributed c. EUR 4.2 million to the property management earnings.

The share of the profit or loss of associates climbed by 46% year on year, up to EUR 15.8 million (H1 2018: EUR 10.8 million). The sum includes the investment income from the Institutional Business, which soared to EUR 2.8 million by mid-year 2019, and thus more than doubled over the prior-year period (H1 2018: EUR 0.6 million). Other contributions to operating income resulted from miscellaneous consolidation effects, especially the final disbursement of a dividend by TLG Immobilien AG in the amount of EUR 13.0 million (H1 2018: EUR 10.2 million).

Financial Structure Strengthened Further - Promissory Note Loan with Positive Effects

The loan-to-value (LTV) ratio equalled 50.4%, which means that it dropped by 270 basis points since year-end 2018, primarily because of the proceeds from the TLG shares sold and the associated inflow of cash funds. Inversely, the equity ratio rose slightly to 36.1% since 31 December 2018 (31 December 2018: 36.0%).

The financial results improved by EUR 2.3 million or 12% over prior-year period as they went up to EUR -16.9 million (H1 2018: EUR -19.2 million).

After the balance sheet date, DIC Asset AG accomplished yet another success in the diversification and consolidation of its financial structure by successfully placing its first-ever non-collateralised promissory note in a total volume of EUR 150 million at an average interest rate of 1.58% and an average maturity of 5.4 years.

The average financing costs across all financial liabilities, which equalled 2.5% as of 30 June 2019, will drop pro-forma to 2.1% on average due to the placement of the promissory note loan and the planned repayment of the 14/19 corporate bond by early September 2019. The average maturity of debt increased by 0.6 years, i.e. from 3.9 years to 4.5 years pro forma as of 30 June 2019.

2019 Forecast Raised after GEG Acquisition

The forecast for the 2019 year as a whole was raised after the acquisition of GEG: The FFO bracket anticipated at the start of the year was raised by EUR 18 million from EUR 70 to 72 million to EUR 88 to 90 million. The gross rental income prediction has not changed, with anywhere between EUR 98 and 100 million expected. The announcement of the acquisition of GEG on 05 June 2019 coincided with an increase in the acquisitions target from EUR 500 million to EUR 1 billion. Considering the successful acquisitions during the first half-year of 2019, the acquisition volume for the 2019 financial year has just been raised by another EUR 300 million to EUR 1.3 billion across segments. The sales volume for all segments combined is still expected to amount to anywhere between EUR 200 and 230 million.

The full-length 2019 Semi-Annual Report of DIC Asset AG was published on 1 August 2019 and is available on the company's homepage under the link below:

https://www.dic-asset.de/engl/investor-relations/publications/index.php
 

Invitation to Attend Investor Call / Webcast on 1 August 2019

The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the first half-year of 2019 on 1 August 2019 at 10.00 CEST.

Please use the dial-in numbers below:

Germany: +49 (0)69 2222 2018

United Kingdom: +44 (0)330 336 9411

United States: +1 929-477-0448

France: +33 (0)1 76 77 22 57

The confirmation code is: 7188513#

The webcast (incl. Replay) is available under the link below:

https://webcasts.eqs.com/dic20190801/no-audio

DIC Asset AG at a Glance

*All per-share figures adjusted in accordance with IFRS
** without developments and repositioning properties

About DIC Asset AG:

Benefitting from more than 20 years of experience on the German real estate market, DIC Asset AG maintains a regional footprint on all major German markets through six branch offices, and has 175 assets with a combined market value of c. EUR 7.1 billion under management (as of: 30.06.2019). Taking an active asset management approach, DIC Asset AG employs its proprietary, integrated real estate management platform to raise capital appreciation potential company-wide and to boost its revenues.

In its Commercial Portfolio division (EUR 1.8 billion in assets under management), DIC Asset AG acts as proprietor and property asset holder, and thus generates revenues both from the management of the assets and through the value optimisation of its own real estate portfolio.

In its Institutional Business division (EUR 5.3 billion in assets under management), DIC Asset AG generates income from structuring and managing investment vehicles with attractive dividend yields for international and national institutional investors.

DIC Asset AG has been listed in the SDAX(R) segment of the Frankfurt Stock Exchange since June 2006. The Company's shares are also included in the EPRA index, which tracks the performance of the most important European real estate companies.

IR Contact DIC Asset AG:
Peer Schlinkmann
Head of Investor Relations & Corporate Communications
Neue Mainzer Strasse 20
D-60311 Frankfurt am Main
Phone +49 69 9454858-1492
[email protected]