DIC Asset AG: Letter to the Shareholders

Letter to the Shareholders

– MainTor Quarter: DIC markets another two major construction stages

– Total investment volume EUR 150 million

– DIC Asset AG benefits from early marketing success

Dear Shareholders, Ladies and Gentlemen,

Today, it is with pleasure that we bring you excellent news concerning your commitment in DIC Asset AG. In a single transaction, DIC Group just marketed another two sub-projects of its 'MainTor Quarter' development in Frankfurt. With construction not yet started, it sold the building complexes 'MainTor Panorama' (office space) and 'MainTor Patio' (rental apartments) within the framework of a forward deal to Ärzteversorgung Westfalen-Lippe (ÄVWL), a German pension fund. The investment volume totals approximately EUR 150 million. Construction of both projects is scheduled to start sometime during the first half of 2013.

This is also a great piece of news for shareholders of DIC Asset AG (German Securities Code Number WKN 509840/ ISIN DE0005098404), which holds a 40-percent interest in the project. The transaction will permit DIC to move ahead with the development of the MainTor Quarter much quicker than planned: With approximately EUR 340 million committed, more than 50 percent of the project volume are either marketed or under construction now. Accordingly, this step marks a significant milestone in this urban quarter development.

A sale of this magnitude to a renowned German investor well ahead of the start of construction highlights once again the great window of opportunity that MainTor Quarter implies. Moreover, the transaction implies other positive entrepreneurial and financial effects beyond the successful sale of the two construction stages:

– Following the forward sale of 'MainTor Primus' in 2011, and the 70-percent forward lease commitment for 'MainTor Porta' at the beginning of this year, this latest transaction secures our exit from these two sub-projects while implying a further substantial reduction of the project risk.

– Due to the agreed purchase price instalments, the construction of the two building complexes may go ahead without bank financing. The investment loan included in the purchase price are granted at very favourable conditions, not least when compared to the current financing market.

– As a result of the transaction structure, the realisation of the two construction stages will require no additional equity.

– In addition, the pro-rata financing of the MainTor area will be repaid earlier than planned. The first instalment of the purchase price will be used to redeem the existing financing for the two sub-projects, significantly lowering the debt exposure of the project.

– Successful early lettings for 'MainTor Panorama' and 'MainTor Patio' could help the company to incrementally realise a net profit for DIC Asset AG even during the construction phase.

Here are additional details on the transaction:

The pension fund has earmarked the two properties for the pools of segregated assets of specialised KAG funds by IVG Institutional Fund ('MainTor Panorama') and Patrizia Wohninvest ('MainTor Patio'), which will handle the asset and property management. DIC retains the overall responsibility over project development, construction execution, and letting.

The office property 'MainTor Panorama' provides 13,500 sqm in commercial space and 70 parking spaces in an underground car park. The architecture is realised by the architectural firm of Professor Christoph Mäckler Architekten. DIC plans to have the 'Panorama' building completed and ready for occupation by mid-2015.

'MainTor Patio', an asset located at the plaza of the MainTor Quarter, comprises around 6,000 sqm in lettable area and 134 underground car park slots. Around 5,200 sqm are intended for more than 90 rental units. Another 800 sqm in commercial area are set aside for gastronomy, wellness and a children's day-care centre, creating a convenient supply infrastructure for the residents of the entire MainTor Quarter. The project is handled by the architectural firm of KSP Jürgen Engel Architekten. DIC intends to have the 'Patio' complex completed and ready for occupation by the end of 2014.

In a parallel effort, preparations are under way for selling around 80 condominiums with a total residential area of 9,800 sqm at the sub-project 'MainTor Palazzi' to owner-occupiers and investors, with the marketing scheduled to kick off at the beginning of next year. Construction of these housing complexes directly on the bank of the Main river is to begin in summer of 2013.

This successful and innovative marketing transaction has confirmed the positive expectations regarding the MainTor project. The market appreciates the concept of independently realised sub-projects for different groups of occupiers and investors. We are convinced that the realisation of this prominent urban quarter development in its unique riverfront location in Frankfurt's financial district will continue to proceed swiftly and according to schedule.

Kind regards,

Ulrich Höller (CEO)                           Markus Koch (CFO)

P.S.: For more information about DIC Asset AG, please visit us on the Internet at www.dic-asset.de. For details on the MainTor project, please go to www.maintor-frankfurt.de.