DIC Asset AG: annual forecast for 2022 adjusted

Press release

DIC Asset AG: annual forecast for 2022 adjusted

• Fewer transactions and lower property management revenues expected
• Unchanged growth in rental income in proprietary portfolio forecasted
• New FFO forecast of EUR 114 to 117 million (previously: EUR 130 to 136 million) still 7% to 10% above prior-year level

Frankfurt am Main, 2 November 2022. DIC Asset AG (“DIC”), ISIN: DE000A1X3XX4, has adjusted its forecast for the ongoing financial year of 2022, and within the framework of its adjusted income forecast now expects its funds from operations (FFO) (before tax, after non-controlling interests) to amount to EUR 114 to 117 million (previously: EUR 130 to 136 million) and real estate management fees to amount to EUR 90 to 95 million (previously: EUR 105 to 115 million). The reason for the move are the changed parameters on the real estate investment market.

Given the significantly changed interest environment, the increase in inflation caused by war-related reasons among others, and the uncertain impact of the anticipated recession on the demand for real estate in Germany, planned acquisitions and disposals are being delayed and rescheduled.

In the case of DIC, this concerns the Institutional Business (third-party business for institutional investors) whose revenues and earnings from management fees depend more strongly on the transactions market than the Commercial Portfolio (real estate held in the proprietary portfolio) whose revenues are essentially generated by rent payments.

The company still expects to conclude the 2022 financial year with a significant FFO growth year on year. During the entire year to date, DIC has witnessed strong demand for lettable space and lease renewals, and it will post a considerably higher gross rental income in 2022 than in 2021, as expected. This is not least the consequence of the major strategic management decision to keep expanding the logistics exposure and to acquire a majority interest in VIB Vermögen AG.

“With the acquisition of the majority stake in VIB, we sustainably boosted our current revenues while making our cash flow less dependent on transactions. Accordingly, we expect to see our funds from operations to keep growing in 2022. Moreover, I expect the contemplated transactions to be moved into the next year. This means we will maintain our efforts to generate value-added for all of our stakeholders even in times like these, which are a challenge for the entire economy,” commented Sonja Wärntges, CEO of DIC.

In addition, like-for-like rents will continue to see growth over prior year, not least because revenues from indexed lease agreements are increasing due to the inflation surge. This development will also contribute to the rental income growth anticipated in the months ahead.

The company has not changed its mind about moving ahead with a fund launch before the end of 2022. Yet the company will postpone the launching of any other investment products until 2023.

The adjusted forecast in detail:

• For the FFO (before tax, after non-controlling interests), DIC now expects EUR 114 to 117 million (previously: EUR 130 to 136 million).
• Real estate management fees are now expected to amount to EUR 90 to 95 million (previously: EUR 105 to 115 million). The adjustment is due primarily to the lower transaction fees total expected by year-end 2022.
• DIC anticipates a gross rental income in the unchanged amount of EUR 170 to 180 million.
• For the Commercial Portfolio, DIC continues to expect an acquisition volume of EUR 2.3 billion and disposals worth EUR 400 to 500 million.
• For the Institutional Business, DIC is now planning to transact acquisitions in a total amount of EUR 650 to 700 million (previously: EUR 0.9 to 1.0 billion) and no further disposals (previously: EUR 400 to 600 million).

About DIC Asset AG:

DIC Asset AG is Germany’s leading listed specialist for office and logistics real estate with more than 20 years of experience on the real estate market and access to a broad-based network of investors. Our business is based on a regional and inter-regional real estate platform with nine offices on the ground in all major German markets (with VIB Vermögen AG included). We currently manage a total of 357 assets with a combined market value of EUR 14.2 billion on site, always close to our properties and their occupiers.

The Commercial Portfolio segment comprises real estate held for our own account. Here, we generate steady cash flows from stable rent revenues on long-term leases while also optimising the value of our portfolio assets through active management, and realising gains from sales.

In the Institutional Business segment, we earn recurrent fees from real estate services we provide to national and international institutional investors by structuring and managing investment products that return attractive dividend yields.

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
ir@dic-asset.de