DIC Asset AG with strong Q1 result – growth course continued

Press Release

DIC Asset AG with strong Q1 result – growth course continued

– Successful sale of share certificates of the DIC HighStreet Balance fund generates EUR 5.9 million transaction fees; income from property management more than doubled

– Consolidated income increased by 21% to EUR 9.2 million;
FFO at EUR 13.6 million

– Assets under management rose to EUR 4.8 billion

– Like-for-like rental income increased by 1.7%

– LTV further reduced to 56.2%

– DIC Asset AG confirms forecast for 2018

Frankfurt am Main, 4 May 2018. DIC Asset AG, one of Germany’s leading listed property companies, continued to see strong and profitable growth during the first quarter of 2018. The consolidated income rose by 21% to EUR 9.2 million, up from EUR 7.6 million during the prior-year quarter. The assets under management stood at EUR 4.8 billion by 31 March 2018, which implies an increase by EUR 0.4 billion since year-end 2017 (31 December 2017: EUR 4.4 billion). This is primarily due to the growing third-party business. Together with the successful sale of the shares certificates of the DIC HighStreet Balance fund to an institutional investor, the fees from real estate management were more than doubled at EUR 8.9 million. At EUR 13.6 million, the FFO was slightly lower than in the previous year as planned (Q1 2017: EUR 15.8 million). The acquisition volume approximates EUR 35 million year to date and includes the recently completed acquisition of a property in Eschborn for the DIC Office Balance IV fund. Sales from the Commercial Portfolio added up to EUR 37 million by 31 March 2018. The Management Board reaffirmed the targets set for 2018.

In the meantime, the option to choose between a disbursement of the cash dividend in the amount of EUR 0.64 per share or payment in the form of new shares, which the annual general meeting on 16 March 2018 resolved to offer to the shareholders for the first time, was successfully approved with an acceptance rate of around 44%. Approximately EUR 19 million remain with the company to boost its continued growth and will thus help to optimise its financial structure.
“The net income during the first quarter, and the high acceptance rate towards our scrip dividend underlines the operative success of DIC, on the one hand, and demonstrates the faith that our investors have in our hybrid business model, on the other hand. Our pipeline is well-filled, making it safe for us to confirm all targets we defined for the 2018 financial year in our various business areas,” said Sonja Wärntges, CEO of DIC Asset AG.

Like-for-like rental income in the Commercial Portfolio up 1.7%
The segment Commercial Portfolio included 110 assets with a market value of c. EUR 1.6 billion as of 31 March 2018. Compared to the first quarter of 2017, the gross rental income dropped to EUR 24.8 million after properties were sold (Q1 2017: EUR 30.5 million), though it should be added that like-for-like rental income actually increased by 1.7% through the successful letting efforts of the in-house asset management. The company succeeded in raising the weighted average lease term (WALT) from 4.3 years in the first quarter of 2017 to 4.9 years in Q1 2018.

Fees from Funds property management more than doubled
In its segment Funds, DIC exploited the positive market environment in the best interest of its investors by successfully placing one of its funds to an institutional investor via a sale of share certificates. For the investors of DIC, it represents an innovative and cost-optimised, alternative exit strategy and a milestone in the further establishment of the DIC fund business as a trading-platform. The disposal of the DIC HighStreet Balance fund, which had been launched in 2012 and whose portfolio consisted of 15 high street properties across Germany, generated EUR 5.9 million in transaction fees. As a result, the income from investment fund business was more than doubled compared to the first quarter of the previous year, as it rose from EUR 3.4 million to EUR 8.1 million. Going forward, it is planned to set up another two funds before the end of the year. Assets under management for the funds totalled by around EUR 1.6 billion as of 31 March 2018.

Growing third-party business in the segment Other Investments
The assets under management in the segment Other Investments increased by EUR 0.3 million since year-end 2017, up to EUR 1.6 billion. More than anything else, the figure reflects the growing third-party business in real estate management. At the moment, DIC has ten properties with a combined lettable area of around 200,000 square metres and a market value of EUR 1.2 billion under management through its in-house property management platform. Joint ventures are being rolled back as planned.

Upward trend in financial indicators during Q1 2018
In early March, DIC took advantage of the favourable market and interest environment to successfully tap its 2017 corporate bond by another EUR 50 million to a new total of EUR 180 million and thus further optimised its funding structure. The net interest result during Q1 2018 equalled EUR -9.1 million overall (Q1 2017: EUR -7.9 million). The loan-to-value, adjusted for warehousing effects, was further reduced during the months following 31 December 2017 and was at 56.2% by the end of Q1.

For more details on DIC Asset AG, go to the internet at www.dic-asset.de.
 

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 around 180 assets with a combined market value of c. EUR 4.8 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 1.6 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 1.6 billion in assets under management) are joint venture investments, equity investments in property developments, strategic financial investments, and the management of properties in which the company holds no equity stakes. 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.

DIC Asset AG at a Glance