Press Release

DIC Asset AG: 2019 Annual Report confirms outstanding results of last year

• Real estate platform grows to EUR 7.6 billion in assets under management
• Funds from operations (FFO) rise by 40% to EUR 95.0 million
• At EUR 2.2 billion, transaction volume exceeds original target
• Gross rental income of Commercial Portfolio slightly above forecast at EUR 101.9 million
• Adjusted NAV confirmed at EUR 22.26 per share
• Loan-to-Value ratio (LTV) down to 47.8% after dropping 530 basis points
• Forecast 2020: substantial growth in FFO to between EUR 104 million and EUR 106 million

Frankfurt am Main, 05 February 2020. DIC Asset AG (ISIN: DE000A1X3XX4), one of Germany's leading listed property companies, published its 2019 annual report today whose figures confirm the provisional financials the company had previously released on 20 January 2020.

Assets under management climbed to a new peak level of EUR 7.6 billion as of 31 December (31/12/2018: EUR 5.6 billion). The sum total breaks down into EUR 1.9 billion worth of assets in the Commercial Portfolio (31/12/2018: EUR 1.7 billion) and EUR 5.7 billion in assets managed by the Institutional Business unit (31/12/2018: EUR 3.9 billion). The funds from operations (FFO) grew by 40.0% to EUR 95.0 million (2018: EUR 68.0 million). The growth was caused by a substantial increase in the real estate management fees in the wake of the GEG Group takeover in June 2019, among other reasons. Other positive drivers included increased gross and net rents and the optimisation of the financial structure with an improved net interest result of EUR -32.4 million (2018: EUR -36.8 million). The profit for the period jumped up by 70%, up to EUR 80.7 million (2018: EUR 47.6 million). In addition to the rise in total funds from operations, the earnings growth was generated primarily by an increase in sales profits. The earnings per share increased by 66% to EUR 1.13 (2018: EUR 0.68), while the average number of shares in circulation grew by 1,755,408 units.

Sonja Wärntges, CEO of DIC Asset AG, commented: "Our annual report published today is once again one of the first and shows that the 2019 financial year was extremely successful and we intend to continue this in 2020. We have set ourselves ambitious goals and want to continue to grow in all business areas."

For the 2019 financial year, the Management Board will propose a dividend of EUR 0.66 per share at the annual general meeting on 17 March 2020 and, like last year, will give shareholders the choice between a cash or scrip dividend. The dividend yield relative to the year-end 2019 share price thus equals around 4.2%.

Transaction Volume Far Exceeds Annual Target at EUR 2.2 Billion

The notarised acquisitions volume added up to c. EUR 1,882 million by the end of the year, with the Institutional Business accounting for c. EUR 1,581 million and the Commercial Portfolio for c. EUR 301 million thereof. Moreover, sales worth a total amount of EUR 154 million from the proprietary portfolio and sales worth EUR 132 million from the Institutional Business portfolio were notarised. On average, the sales margin across segments exceeded the most recently appraised market values by an average of 32%. The company thus achieved a transaction volume of EUR 2.2 billion overall, far exceeding the record-breaking year-end total of EUR 1.2 billion reported at the end of 2018. The letting performance equalled EUR 32.7 million as of 31 December 2019 (31 December 2018: EUR 35.7 million). The average square-metre rent of the leases signed jumped up by around 14%, rising from EUR 11.27 to EUR 12.88.

Commercial Portfolio: Appreciation and Portfolio Optimisation

The gross rental income rose by 2% year on year to a total of EUR 101.9 million (2018: EUR 100.2 million) and thus matched the forecast range of EUR 98-100 million. The robust result is primarily due to successful asset management as it accomplished a 2.0% like-for-like increase in annualised rental income from our proprietary portfolio as of the balance sheet date. As a result, the third-party appraisal of the Commercial Portfolio returned a valuation effect equal to 7% or EUR 124.2 million by year-end.

Due to reduced property-related costs-most notably a reduction in vacancy costs-the net rental income outpaced the gross rental income and achieved a one-year growth of 4% as it totalled EUR 87.9 million (2018: EUR 84.7 million). The EPRA vacancy rate dropped by 70 basis points year on year and stood at 6.5% on 31 December 2019 (31 December 2018: 7.2%). The weighted average lease term (WALT) improved from 5.8 years to 6.0 years.

Institutional Business: Fast-Rising Income from Management Fees

The acquisition of GEG and the growth in assets under management from EUR 3.9 billion to EUR 5.7 billion in our Institutional Business unit, real estate management fees went up by no less than 87% to EUR 62.9 million (2018: EUR 33.6 million). Fees collected for asset management, property management and development services increased by 62% to a total of EUR 21.0 million (2018: EUR 13.0 million). Transaction and performance fees (fees for acquisitions and dispositions, for setting up and structuring investment products as well as the outperformance of set target returns through successful property management) doubled as they reached EUR 41.9 million (2018: EUR 20.6 million) and did so not least as a result of the outstanding work of our investment team, which signed contracts for a transaction volume of c. EUR 1.7 billion in the Institutional Business unit. The share of the profit of associates through co-investments in the Institutional Business unit equalled EUR 5.4 million (2018: EUR 5.6 million).

Financial and Capital Structure Strengthened with a View to Further Growth
Another thing accomplished during the 2019 financial year was the further diversification of external debt sources via the first-time placement of a promissory note loan in a total volume of EUR 180 million at an average rate of 1.55%. The average interest rate across all financial liabilities declined to 2.0% as of the balance sheet date (31 December 2018: 2.5%), one of the main reasons being the repayment of the 2014/2019 bond with EUR 175 million at a coupon rate of 4.625% in September 2019 as scheduled. The average maturity of debt remained unchanged at 3.9 years (31 December 2018: 3.9 years).

The EPRA net asset value (EPRA NAV) equalled EUR 1,244.2 million (31 December 2018: EUR 1,085.8 million) or EUR 17.23 per share (31 December 2018: EUR 15.40) as of the balance sheet date. The increase is primarily the result of the earnings growth and another robust valuation effect equal to +7%. The value of the property management services provided by the Institutional Business unit is not fully reflected in the EPRA-NAV as reported in recognition of the added goodwill from the acquisition of GEG. As of year-end 2019, the EPRA-NAV was supplemented for the first time with this economic value added that was appraised by a third-party auditor. This brought the total value of the adjusted NAV up to EUR 1,607.2 million or EUR 22.26 per share as of the balance sheet date. The balance sheet equity ratio continued to go up year on year, rising by 0.5 percentage points from 36.0 % to 36.5 %. The increase in property values in particular enabled us to reduce the loan-to-value ratio (LTV) by 5.3 percentage points from 53.1% to 47.8% (in either case adjusted to exclude warehoused assets).

In a bid to finance its further growth, DIC Asset successfully placed a cash capital increase from authorised capital with the exclusion of shareholders' subscription rights after the balance sheet date. Overall, a total of 6,857,774 new shares were issued at a price of EUR 16.00 to this end. The gross proceeds in the amount of c. EUR 110 million will be used to fund the future growth strategy, specifically for financing the acquisitions for the Commercial Portfolio, and for general corporate purposes.

Forecast for 2020
DIC Asset's plans for the 2020 financial year call for substantial growth in either business segment. On the acquisition side, DIC Asset anticipates a volume of c. EUR 1.6 billion to EUR 1.9 billion, of which c. EUR 500 million to EUR 600 million are earmarked for the Commercial Portfolio, and c. EUR 1.1 billion to EUR 1.3 billion for the Institutional Business. On the dispositions side, it is planned to notarise sales in a volume of c. EUR 400 million, which will break down into c. EUR 100 million in disposals from the Commercial Portfolio and c. EUR 300 million in disposals from the Institutional Business portfolio. The gross rental income is expected to reach EUR 102 million to EUR 104 million towards year-end. In the Institutional Business, it is planned to bring the real estate management fees up to somewhere between c. EUR 85 and EUR 95 million. The funds from operations (FFO) is expected to see a significant increase by around 10% year on year and to a range between EUR 104 million and EUR 106 million.

The full-length 2019 Annual Report of DIC Asset AG was published on 05 February 2020 and is available on the company's homepage under the link below:

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

Invitation to Attend Investor Call / Webcast on 05 February 2020
The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the 2019 financial year on 5 February 2020 at 10.00 CET.

Please use the numbers below to dial in:

Germany: +49 (0)69 2222 25574
United Kingdom: +44 (0)330 336 9125
United States: +1 929-477-0402
France: +33 (0)1 70 72 25 50
The confirmation code is: 3112251#

The webcast (incl. Replay) is available under the link below:
https://webcasts.eqs.com/dic20200205/no-audio
For more details on DIC Asset AG, visit the company's homepage at www.dic-asset.de.
 

About DIC Asset AG:

With more than 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through seven branch offices, and has 180 assets with a combined market value of c. EUR 7.6 billion under management (as of 31/12/2019). 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 1.9 billion in assets under management, as of 31/12/2019), 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 5.7 billion in assets under management, as of 31/12/2019), which operates under the name GEG German Estate Group, DIC Asset AG generates income from structuring and managing investment vehicles with attractive dividend yields for national and international institutional investors.

DIC Asset AG has been SDAX-listed since June 2006.

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]

DIC Asset AG at a Glance

*All per-share figures adjusted according to IFRS (Total no. of shares 2019: 71,713k; 2018: 69,958k)
** adjusted for warehousing
*** without repositioning properties