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Letter to Shareholders: DIC commences share buyback programme

DIC Asset AG / Share BuybackRelease of a Corporate News, transmitted by DGAP - a company of EquityStoryAG.The issuer / publisher is solely responsible for the content of this announcement.----------------------------------------------------------------------Dear Shareholders,like all of us, you will without doubt currently be keeping a watchful eyeon the dramatic extent to which the crisis on the international financialmarkets is also putting pressure on stock exchanges around the world.Besides securities, real estate shares too are being particularly badlyaffected by this. The shares of our company are likewise not immune to thistrend; this is because analysts and investors have virtually no chance todifferentiate clearly between the individual securities given the newdevelopments which are occurring on a daily basis.Of course, we have no influence over developments on the financial andcapital markets. However, the management of our company is actively takingup these challenges and displaying its capacity to act in terms ofoperations. We would therefore like to inform you in detail of our latestmeasure, how the company is performing at present and also notify you ofthe steps we are taking:• Against the background of the very negative performance of our shareprice at present, which – as a result of market uncertainty - has movedsharply away from the intrinsic value of the shares and from our NAV whichwe anticipated, we have agreed with our Supervisory Board to implement ashare buyback programme, and published this yesterday evening in the formof an ad hoc disclosure. We will buy back own shares amounting to up to 5percent of our share capital, via the stock market. This share buyback islimited to 10 February 2009. By taking this measure, we as a company aresafeguarding the interests of our shareholders by seeing a good opportunityto increase our equity value per share. However, at the same time we wouldlike to therefore point out that the current share price has moved a longway from the fundamental data and company’s sustained performance over anumber of years. Because our business policy has always been conservativeand guided by high quality standards, we are consequently able to maintainthe necessary freedom to take action and make decisions.• With our business model focused on the German commercial real estatemarket, we are active in a market which – in comparison to theinternational market situation – remains the most robustly positioned.• Rentals on the German commercial real estate market are currently stable;despite the increase of the last two years, letting figures in the varioussub-markets are falling well short of their highest level and are insteadon a par with those of the mid-90s. As of 30 September 2008, we were ableto let 158,000 sqm in total, and we expect this positive trend to continuefor our company and our portfolio as well. Our broadly diversified tenantstructure in this context serves as the best possible basis for solid andsustainable cash flows which have always been a permanent feature of ourbusiness model.• In the first three quarters of this year, we expect to generate rentalincome of around EUR 100 million based on the successful lettingactivities, equivalent to an increase of 55 percent as compared to the sameperiod last year. This illustrates the fact that, in these challengingmarkets especially, DIC Asset AG’s active property management andinternally-managed business model has proved successful in operating terms.• Even though the sharp fall in the overall number of real estatetransactions is a trend which we too have had to take into account in thelast few months, we have nevertheless managed to complete 12 sales to date,raising a total of EUR 55 million in the process. In the last three monthsin particular, the sale of six smaller to more medium-sized propertiesshowed that a change to the sales strategy coupled with direct marketproximity will pay off, even in these difficult markets.• Because sales volumes per se do not represent a quality criterion, we arefocusing exclusively on transactions which – in terms of volume and thefinancing capacity of the buyers - are adjusted to the current marketconditions, and with which adequate profits for our company can beachieved. The aforementioned sales, of which a share of EUR 28 million isaccounted for by DIC Asset AG, gave us profits of some EUR 5 million intotal in the third quarter, thereby allowing us to exceed our most recentmarket value assessment. Furthermore, following repayment of thecorresponding loans, these sales resulted in a capital inflow of around EUR8 million for our company.• In the current financial market turbulence, we would like to emphasise inparticular our stable financing with long-term guarantees. In the past, wehave always agreed long-term fixed interest periods, and only three percentof our financing volume is due for refinancing within the next two years.In the subsequent third and fourth years too, this figure will only standat two and nine percent respectively. This highlights our more than solidpositioning with our financing structure and shows that during theseturbulent times, we are able to focus first and foremost on operatingbusiness.• Finally, our own equity situation is strong and will keep on gettingstronger thanks to the sales mentioned above and cash inflows from lettingactivities.All of the experts assume that the financial crisis will bring aboutstructural changes worldwide. We are confident that DIC Asset AG is one ofthe companies that will come through the crisis in a stable condition andwill then be able take advantage in the long term of the resultantpossibilities in a consolidating market. The developments and results fromour operating activities which we have outlined are evidence that we willbe able to publish a set of results for the third quarter on 12 Novemberwhich will correspond positively to the expectations we have set.In recent days especially, we have received many enquiries fromshareholders asking us for our view of the market conditions and theeffects on our company. We are pleased that these matters are beingdiscussed and we will continue to discuss them with you in an open andtransparent manner over the coming months.Yours faithfullyUlrich Höller Markus Koch Dr. Jürgen Schäfer (Members of the boards of DIC Asset AG)10.10.2008  Financial News transmitted by DGAP---------------------------------------------------------------------- Language:     EnglishIssuer:       DIC Asset AG              Eschersheimer Landstr. 223              60320 Frankfurt              DeutschlandPhone:        +49 69 9454858-0Fax:          +49 69 9454858-99E-mail:       info@dic-asset.deInternet:     www.dic-asset.deISIN:         DE0005098404WKN:          509840Indices:      S-DAXListed:       Regulierter Markt in Frankfurt (Prime Standard), Hannover,              Hamburg; Freiverkehr in Berlin, Düsseldorf, München,              Stuttgart End of News                                     DGAP News-Service ---------------------------------------------------------------------------