DIC Asset AG: record result in 2022  

Press release
DIC Asset AG: record result in 2022  

• Stable sources of income expanded for the future
• Stronger-than-ever position in office and logistics sectors
• Assets under management increase by 28%
• FFO rise by 7% to EUR 114.2 million
• Like-for-like rental growth by 5.8%
• Dividend yield of around 9.8% (proposal: EUR 0.75 per share)

Frankfurt am Main, 15 February 2023. DIC Asset AG (“DIC”), ISIN: DE000A1X3XX4, one of Germany’s leading listed property companies, published its consolidated financial statements for 2022 today. The company concluded the 2022 financial year with the highest FFO earnings since its initial public offering, and thereby laid the groundwork for a prosperous future at the same time.

By taking over and integrating the listed company VIB Vermögen AG (“VIB”), DIC strengthened the logistics asset class as its second main pillar in addition to office real estate. At year-end, the existing property portfolio (Commercial Portfolio) was worth EUR 4.5 billion, more than twice as much as the year before. Together with the Institutional Business unit, DIC now has EUR 14.7 billion in assets under management, a year-on-year increase by 28%.

Sonja Wärntges, CEO of DIC Asset AG, commented: “By completing the most successful year in our company’s history, we set a clear signal for the future of our company. This is demonstrated unambiguously by the fact that our position in the logistics and office sectors is stronger than ever, now that we successfully acquired and integrated VIB. With our reliable and predictable sources of income, we are very well positioned. Driven by our ‘spirit to create excellence,’ we will keep generating stable and sustainable values for the benefit of our stakeholders.”

The company will propose to its shareholders at the upcoming annual general meeting to pay out a dividend of EUR 0.75 per share on the basis of its successful performance in 2022. This implies a high payout ratio of around 55%. As in prior years, shareholders will have the choice of a cash or a scrip dividend again. The dividend yield relative to the share price at year-end 2022 approximates 9.8%.
Key indicators and results of the 2022 financial year
Despite the challenges that were created during the financial year by the strained global situation and the changed parameters on the real estate investment market, the company concluded the financial year with the highest FFO result (after non-controlling interests, before taxes) in its history to date, amounting to EUR 114.2 million and thereby implying a year-on-year increase by around 7% (previous year: EUR 107.2 million). The acquisition of a majority stake of currently 68% in VIB, the FFO now contain a significantly higher share of revenues marked by long-term predictability. What contributed to the FFO increase was essentially the gross and net rental income, which grew by around 62% and around 67%, respectively, as well as profit from associates, which more than doubled. The FFO II, with profit from disposals added, equalled EUR 126.9 million and thus maintained the stable level of the year before (previous year: EUR 131.0 million) despite lower sales proceeds. The profit for the period, adjusted for the one-off effects from the VIB transaction, equals EUR 52.2 million, which is c. EUR 17.7 million below the prior-year figure (previous year: EUR 69.9 million) because the profit from disposals was EUR 11.1 million lower and also due to the significant increase in scheduled depreciation of investment properties as a result of the VIB transaction.

Letting performance increased by 21% year-on-year – like-for-like rental growth at 5.8%
The company’s lettings teams achieved signings for a total of 374,900 sqm and thus for a roughly 21% larger floor area total (previous year: 309,100 sqm) and for an annualised rental income of EUR 48.9 million (previous year: EUR 33.0 million) in 2022. Out of the total, the Institutional Business accounted for 61% (EUR 29.7 million) and the Commercial Portfolio for 39% (EUR 19.2 million). Due to the excellent job done by the lettings teams, the annualised rental income from the proprietary portfolio experienced a 3.6% like-for-like rental growth as of the balance sheet date. When including the real estate assets managed for third parties, the like-for-like rental growth came to 5.8%.

Transaction business dominated by VIB takeover
The difficult market conditions in 2022 that were triggered by supply bottlenecks, high inflation, soaring interest rates and Russia’s war of aggression in Ukraine caused a drastic slowdown in transaction activities. Yet despite the difficult market environment, we completed transactions in a volume of EUR 3.3 billion. Approximately EUR 2.3 billion of the AuM growth during the 2022 financial year is attributable to the Commercial Portfolio, and c. EUR 0.9 billion to the Institutional Business. The acquisition of VIB in early 2022 contributed, of course, to the brisk growth of the Commercial Portfolio in a volume of EUR 2.3 billion.

Commercial Portfolio larger and more diversified
The market value of the Commercial Portfolio surged in 2022, rising from c. EUR 2.2 billion at the beginning of the year to c. EUR 4.5 billion by 31 December 2022. The drastic increase is essentially attributable to the takeover of VIB. Aside from strong growth, the one-year operating performance indicators of the Commercial Portfolio reflect the changed portfolio mix following the VIB consolidation that started in April 2022. In the course of the financial year, the company increased the gross rental income by about 62% to EUR 176.0 million (previous year: EUR 108.4 million), which is largely explained by the first-time consolidation of VIB and by the outstanding letting performance. The net rental income increased analogously by 67% to EUR 152.5 million (previous year: EUR 91.2 million) during the financial year. The EPRA vacancy rate dropped from 5.3% at the start of the year down to 4.3% as of year-end. As a result, the third-party appraisal of the real estate held in the Commercial Portfolio returned a valuation effect of around 1.5% or EUR 66.0 million by year-end.

Institutional Business maintains stable level despite challenging market environment
Difficult parameters in the real estate investment market in combination with delays and the replanning of transactions resulted in a lower transaction total in 2022 than in previous years and consequently in lower transaction-based real estate management fees. The most recently projected annual target for real estate management fees was nearly achieved with a total of EUR 88.4 million (previous year: EUR 101.2 million). Assets under management in the Institutional Business unit grew from EUR 9.3 billion to EUR 10.2 billion during the financial year.

Substantial growth in balance sheet and real estate assets
The net asset position in the 2022 financial year was mainly defined by the full consolidation of VIB. With the properties of VIB added, the real estate assets held in the Commercial Portfolio more than doubled, and now have a total value of EUR 3,673.3 million. The net asset value (NAV) equals EUR 1,520.9 million and thus matches the prior-year level. In addition to the VIB takeover, it reflects the increase in debt for the purpose of financing the transaction (previous year: EUR 1,509.8 million). The net asset value, adjusted to include the full value of the Institutional Business unit (adjusted net asset value), equalled EUR 1,815.9 million by the end of 2022 or EUR 21.84 per share (previous year: EUR 2,046.5 million or EUR 25.00 per share). The decrease in adjusted NAV is attributable mainly to the lower valuation of the Institutional Business segment.

Forecast for 2023 – focus on portfolio and cashflow optimisation¹
In 2023, DIC plans to complete transactions in a volume between EUR 0.7 and 1.5 billion across segments. The planned acquisitions in a total amount of c. EUR 0.3 to 0.8 billion will be exclusively earmarked for the Institutional Business segment, both on behalf of existing mandates and in the context of new mandates and investment vehicles. DIC expects disposals across segments to add up to a volume of c. EUR 400 to 700 million. Out of this total, the Commercial Portfolio will account for c. EUR 300 to 500 million and the Institutional Business for c. EUR 100 to 200 million. With the assets currently in the proprietary portfolio, the planned net take-up, other recognised disposals in the course of the financial year and the consolidation of VIB over an entire year all duly taken into account, DIC expects to see a gross rental income from the Commercial Portfolio in a range of EUR 185 to 195 million. Given the persistently challenging market environment, the transaction-related management fees are expected to be lower than in previous years. It is planned to bring the real estate management fees up to somewhere between EUR 70 and 80 million during the 2023 financial year. DIC’s focus in 2023 will be specifically on the continued portfolio and cash flow optimisation, making it reasonable to expect FFO (after non-controlling interests, before taxes) in a bandwidth of EUR 90 to 97 million.

The full-length 2022 Annual Report of DIC Asset AG was published on 15 February 2023 and is available on the company’s homepage under the link below: https://www.dic-asset.de/en/ir/publications

Invitation to attend conference call on 15 February 2023
The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the fiscal year 2022 at 10:00 CET.

Please use the link below to register for the conference call:
https://webcast.meetyoo.de/reg/Be061mP2FxAK

The webcast (incl. replay) is available under the link below:
https://www.webcast-eqs.com/dic-2022-fy/no-audio
For more details on DIC Asset AG, visit the company’s homepage at
www.dic-asset.de

About DIC Asset AG:
DIC Asset AG is Germany’s leading listed specialist for office and logistics real estate with 25 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 360 assets with a combined market value of EUR 14.7 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.

For more details, go to www.dic-asset.de.

IR/PR Contact DIC Asset AG:
Peer Schlinkmann
Head of Investor Relations & Corporate Communications
Neue Mainzer Str. 20 • MainTor Primus

D-60311 Frankfurt am Main
T +49 69 9454858-1492
ir@dic-asset.de

DIC Asset AG at a glance

*All per-share figures adjusted in accordance with IFRS. (Total no. of shares in 2022: 82,689k; 2021: 81,504k)
** Warehoused assets not included
*** Commercial Portfolio, not including assets to be repositioned
**** incl. full value of the Institutional Business

¹Not included in the forecast is inorganic growth, e. g. via the acquisition or takeover of companies.