DIC Asset AG Acquires the GEG German Estate Group

Press Release

DIC Asset AG Acquires the GEG German Estate Group

• DIC Asset AG acquires one of the fastest-growing German property investment and asset managers as it takes over GEG German Estate Group
• Increase in assets under management to more than EUR 5 billion in the institutional fund business alone
• Direct and significant increase in profitability per share
• FFO guidance for 2019 raised from EUR 70 – 72 million to EUR 88 – 90 million

Frankfurt am Main, 05 June 2019. DIC Asset AG (“DIC”), one of Germany’s leading listed property companies, will be buying the GEG German Estate Group AG (“GEG”), a fast-growing, sustainably profitable German property investment and asset manager with strong portfolio development competence from the internationally active investment company KKR Kohlberg Kravis Roberts & Co (“KKR”) and from TTL Real Estate GmbH (“TTL”). The purchase price equals EUR 225 million and will be paid entirely from existing cash.

“GEG perfectly complements our business model and will significantly accelerate our planned growth in the institutional fund business. We are considerably strengthening our investor base and expanding our spectrum of investment products for our clients,” elaborated Sonja Wärntges, CEO of DIC.

“We are pleased to be selling our interest in GEG to DIC and to place it in an environment highly suitable for attractive further development. Moreover, we have been and continue to be connected to the company as clients, and look forward to continuing our great collaboration,” said Johannes Huth, Head of Europe at KKR.

GEG is an investment and asset management platform specialised in commercial real estate, and invests in highly profitable, stable-valued core-/landmark properties in Germany’s key markets for commercial real estate that are placed with institutional investors inside and outside Germany via tailored investment structures. It takes care of the asset management and, if required, of the property development for investors. Since its foundation in 2015, it expanded its assets under management to more than EUR 3.6 billion. The portfolio includes several well-known landmark properties such as Sapporobogen (Munich), Garden Tower and Villa Kennedy (Frankfurt) as well as Business Campus am Park (BCP) in Düsseldorf.

Ulrich Höller, Chairman of the Supervisory Board of GEG, who will support the integration in the coming months, commented: “The future of GEG as an important part of the listed company DIC Asset AG creates the best possible prerequisites for continuing the company’s clearly above-average track record that an excellent team achieved.”

Bolstering Market Position and Boosting Further Growth
The acquisition enables DIC to strengthen its market position as specialist in the commercial real estate segment with a focus on office properties while also increasing its assets under management to c. EUR 7.0 billion. As is, DIC already handles the property management for the majority of GEG’s assets. With the takeover, DIC will moreover expand its institutional investor basis to include investors that are already committed in about 20 assets in investment funds, club deals and single mandates. Additionally, the takeover significantly strengthens DIC’s capacity in the development business. With the Global Tower and Riverpark development projects in Frankfurt, GEG is currently demonstrating its competence as property developer in sophisticated landmark properties.

Second Strong Segment next to the On-Balance Sheet Portfolio
The purchase of GEG will significantly expand the current Fund segment. With now more than EUR 5 billion euros in assets under management, it will make a similar contribution to profitability as the Commercial Portfolio going forward.

Future Segment Reporting of DIC Asset AG
Within the framework of the transaction and following its completion, DIC will focus its reporting on two segments, one of which is the DIC Commercial Portfolio, the other being the DIC Institutional Business. Both segments will benefit from the existing property management platform and the significantly expanded property development expertise. The organisational structures of DIC and GEG complement each other in optimal ways and will permit a swift expansion of the operating activities in the highest possible quality.

FFO Guidance for 2019 Raised
The current FFO guidance for 2019 in the amount of EUR 70 – 72 million will be raised to EUR 88 – 90 million on the back of the acquisition of GEG.

In this transaction, DIC Asset AG was advised by Bankhaus Lampe KG, White & Case LLP, Rödl & Partner GmbH and PricewaterhouseCoopers GmbH.

DIC Asset AG will invite interested investors and analysts to a conference call scheduled for today, 5 June 2019, 15:00 CET, shortly.

About DIC Asset AG:

DIC Asset AG is one of Germany’s leading listed property companies, and specialises in commercial real estate. With around 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through six branch offices, and has 169 assets with a combined market value of c. EUR 5.6 billion under management. DIC uses a hybrid business model to manage its business divisions Commercial Portfolio, Funds and Other Investments. Taking an active asset management approach, DIC employs its proprietary, integrated real estate management platform to raise capital appreciation potential in its business divisions and to boost its revenues.

In its Commercial Portfolio division (EUR 1.7 billion in assets under management), DIC 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. The Funds division (EUR 1.6 billion in assets under management) generates its revenues by acting as issuer and manager of special real estate funds for institutional investors. Gathered in the business unit Other Investments (EUR 2.3 billion in assets under management) are strategic financial investments, the management of properties in which the company holds no equity stakes, equity investments in property developments and joint venture investments. DIC Asset AG has been included 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. (as of: 31/03/2019)

More detailed information about DIC Asset AG is available on www.dic-asset.de.

Media contact DIC Asset AG:

DIC Asset AG
Nina Wittkopf
Head of Investor Relations & Corporate Communications
Neue Mainzer Strasse 20
D-60311 Frankfurt am Main
Phone +49 69 9454858-1462
ir@dic-asset.de

About GEG German Estate Group AG:

Based in Frankfurt/Main, GEG German Estate Group AG maintains one of the leading German investment and asset management platforms for commercial real estate. Its investment focus and policy are concentrated on three segments: Institutional Business, Opportunistic Investments, and Project Development. Since its establishment in 2015, and within the framework of this clearly-defined strategy, GEG has consistently pursued opportunities to build an extensive and diversified real estate portfolio, comprising some EUR3.6 billion in assets under management, distributed over the whole of Germany. Besides several high-rise building properties in Frankfurt/Main (the IBC Campus, luxury hotel Villa Kennedy, Japan Centre, Global Tower and the RIVERPARK Tower), the portfolio comprises the Sapporo Circle and the “Junges Quartier Obersendling” development in Munich, as well as (most recently) the “Pressehaus” building on Berlin’s Alexanderplatz.

The long-standing track record and outstanding reputation of senior management, together with a highly qualified and experienced team, provide the foundation for a leading market position. The two shareholders of GEG German Estate Group AG are TTL Group and KKR Kohlberg Kravis & Roberts, a leading global investment house with exposure to asset classes such as private equity, infrastructure, as well as real estate.

More detailed information about GEG is available on www.geg.de.

Media contact GEG:

Haussmann Pfaff Kommunikation
Höchlstrasse 2
81675 Munich, Germany
Phone: +49 89 99249650
Mobile: +49 172 8312923
kontakt@haussmannpfaff.de