DIC Asset AG realises early refinancing of the Commercial Portfolio

Press Release

DIC Asset AG realises early refinancing of the Commercial Portfolio

– Roughly EUR 1 billion refinanced over seven-year term

– Substantial reduction of Commercial Portfolio financing costs to circa 1.7 percent and amortisation rate to around 1 percent

– Funds from operations (FFO) and cash flow boosted as of the
2017 financial year

– FFO between EUR 55 and 60 million expected from 2017

– Sustainable long-term continuity of dividends secured

Frankfurt/Main, December 14^th 2016. DIC Asset AG (WKN A1X3XX / ISIN DE000A1X3XX4) announced today the signing of a credit arrangement for EUR 960 million for the Commercial Portfolio. The new loan with an overall term of seven years will be used to prematurely repay the existing financing arrangements signed with several banks for the Commercial Portfolio. The new financing arrangement was underwritten by Deutsche Hypothekenbank AG (EUR 510 million) as joint lead manager as well as by Berlin Hyp AG (EUR 250 million) and HSH Nordbank AG (EUR 200 million). For Deutsche Hypothekenbank AG it is the largest financing transaction in their history. Within the framework of its business plan, the new credit arrangement gives DIC Asset AG a high degree of planning security and already takes into account the transaction volumes planned with regards to the continuous optimisation of the Commercial Portfolio in the years to come. Jörg H. Becker of Bögner, Hensel and Partners provided legal counsel to DIC Asset AG for the transaction.

Substantial reduction of financing costs down to circa 1.7 percent

The newly negotiated credit arrangement lowers the interest rate on the Commercial Portfolio’s bank loans to circa 1.7 percent, a drop of 170 basis points compared to the previous financing conditions. The amortisation rate additionally falls from around 3 percent to approximately 1 percent p.a. This puts DIC Asset AG at the head of its field of competitors. The existing financing arrangements are expected to be almost entirely repaid in January 2017. The premature repayment of the old debt will trigger certain one-off expenses not recognised in the FFO, including but not limited to the payment of early termination penalties of approximately EUR 59 million. For the 2016 financial year, DIC Asset AG therefore anticipates a one-time negative consolidated income after tax which will amount to approximately EUR 35 million. The company intends to disburse, as planned, an attractive dividend on the level of previous years for the 2016 financial year.

Increased FFO and cash flow as of the 2017 financial year

Closing these transactions will be instrumental in strengthening the future financial and earnings position of DIC Asset AG. The estimated cash flow will increase by up to circa EUR 40 million p.a. ceteris paribus in 2017. This includes anticipated interest expense savings of up to EUR 20 million per year. With the further planned development of the Commercial Portfolio and Fund Business divisions taken into account, the company projects FFO between EUR 55 million and EUR 60 million in the 2017 financial year.

“This financial transaction, which is quite significant for us, significantly strengthens our future profitability and the cash flow from our commercial real estate portfolio. The new financing structure and the funds it releases will enable us to expand the company’s planned growth and to accelerate it further in 2017,” said Sonja Wärntges, CFO at DIC Asset AG.

Press contact

DIC Asset AG
Andre Zahlten
Head of Corporate Communications
Neue Mainzer Strasse 20 – MainTor
D-60311 Frankfurt am Main
Phone +49 69 9454858-1435
Fax +49 69 9454858-9199
pr@dic-asset.de

Investor Relations

DIC Asset AG
Peer Schlinkmann
Head of Investor Relations
Neue Mainzer Strasse 20 – MainTor
D-60311 Frankfurt am Main
Phone +49 69 9454858-1221
Fax +49 69 9454858-9399
P.Schlinkmann@dic-asset.de

About DIC Asset AG:
Established in 2002, DIC Asset AG, with registered offices in Frankfurt/Main, is a real estate company with an investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. The Company’s investment strategy is geared to the continued development of a high-quality, highly profitable and regionally diversified portfolio. Real estate assets under management comprise circa 210 properties with an aggregate market value of EUR 3.2 billion. The real estate portfolio is structured in two segments: the Commercial Portfolio (EUR 1.7 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (EUR 1.5 billion) comprises fund investments (accounting for a share of EUR 1.2 billion), joint-venture investments, and interests in development projects. In-house real estate management teams provide a direct service to tenants, working out of six different locations in each of the portfolio focus regions. This market presence and expertise creates the basis for preserving and enhancing earnings and real estate values. 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.