DGAP-News: DIC Asset AG: 55% Rise in Letting Performance and Doubling of Real Estate Management Fees Lead to 18% Increase in FFO

Press Release

DIC Asset AG: 55% Rise in Letting Performance and Doubling of Real Estate Management Fees Lead to 18% Increase in FFO

• FFO rise by 18% to EUR 50.6 million
• Exceptional letting performance during Q2, with a total of 125,800 sqm in new leases (+55% over prior year)
• Real estate management fees more than doubled at EUR 42.1 million
• EUR 8.5 billion in assets under management achieved
• Annual forecast for 2020 confirmed
• Christian Bock appointed to the Management Board as of 1 August 2020

Frankfurt am Main, 29 July 2020. DIC Asset AG (ISIN: DE000A1X3XX4), one of Germany's leading listed property companies, is well on course to achieve its annual target for 2020 after a successful business performance and high earnings strength during the first half-year. The business model with its strong platform of two income streams stood the test of time by proving highly crisis-resilient and flexible. The annual forecast as updated in April was confirmed without reservations at the end of the first six months.

"Our crisp response to the 'new normal' was marked by agility and creativity, and we are optimally positioned for the challenges we face. On the one hand, we are close to our clients while, on the other hand, we minimise risks by making clear strategic decisions. This makes it safe to reaffirm: We are steadily approaching our medium-term growth target of EUR 10 billion in assets under management. DIC Asset AG is synonymous with robustness, continuity and perspective, as the mid-year figures 2020 illustrate once again," said CEO Sonja Wärntges, as she commented on the company's strong and stable position.

Milestones of the First Half-Year of 2020:

- The first half-year of 2020 was characterised by a strong letting performance, as a number of large letting deals involving more than 10,000 sqm each resulted in a take-up of 125,800 sqm, which implies a one-year increase of 55% (81,300 sqm). Especially the second quarter of 2020 experienced a brisk increase in subsequent lettings. On the whole, the rent level negotiated for lease renewals translated into an average increase of 4.9%.

- Its diversified revenue streams have made DIC Asset AG highly resilient against short-term volatilities from external shocks: Even though the portfolio size shrank, the gross rental income increased year on year, rising to EUR 51.4 million (previous year: EUR 49.7 million). Driven by steady growth and by the acquisition of GEG, income from property management more than doubled, rising to EUR 42.1 million (previous years: EUR 17.5 million). On top of that, sales profits in the amount of EUR 2.5 million (previous year: EUR 1.7 million) and a share of the profit or loss of associates in the amount of EUR 6.3 million (previous year: EUR 15.8 million, incl. TLG dividends in the amount of EUR 13.0 million) were achieved.

- The bottom line shows substantial FFO growth by 18% to EUR 50.6 million (previous year: EUR 43.0 million). It was driven primarily by the rapid increase in income from property management and an improved net interest income in the amount of EUR -14.2 million (previous year: EUR -16.9 million), which more than offset the rise in operating costs from the inorganic growth of the Institutional Business segment to EUR 24.4 million (previous year: EUR 16.8 million).

- As of 30 June 2020, the assets under management rose to a total of EUR 8.5 billion for the first time, which implies a 20% increase over the prior-year figure (30 June 2019: EUR 7.1 billion). The Commercial Portfolio accounts for c. EUR 1.9 billion thereof (30 June 2019: EUR 1.8 billion) and the Institutional Business for EUR 6.6 billion (30 June 2019: EUR 5.3 billion).

- Acquisitions of prime Core properties prompted a pro-forma increase of the Commercial Portfolio to more than EUR 2 billion (transfer of possession, benefits and burdens to take place midway through the third quarter). This means the company already cleared the half-way mark of the 2020 acquisition target by mid-year.

- With the full value of the Institutional Business segment factored in, the Adjusted NAV amounted to EUR 22.07 per share as of 30 June 2020 (31 December 2019: EUR 22.26). The EPRA-NAV per share equalled EUR 17.48 (31 December 2019: EUR 17.23). The total number of shares increased by around 9.5% during H1 2020 as a result of the capital increase in January 2020.

- The LTV ratio (loan-to-value) - warehoused assets not included - dropped to 44.3% as of 30 June 2020 (31 December 2019: 47.8%). The Adjusted LTV (also factoring in the full value of the Institutional Business) equalled 38.9% (31 December 2019: 41.8%).

- Cash and cash equivalents totalled EUR 416.6 million as of the reporting date (31 December 2019: EUR 351.2 million).

Effective as of 1 August 2020, the Supervisory Board of DIC Asset AG appointed Christian Bock as new member of the Management Board. In this role, Christian Bock will be in charge of the Institutional Business. He has been on the Management Board of GEG German Estate Group AG since 1 April 2019.

"With the appointment of Christian Bock to the Management Board of DIC Asset AG, we are reaffirming the significance of our Institutional Business segment and of our third-party asset management business. Christian Bock has worked in the real estate industry for 14 years. During this time, be played a definitive part in the successful expansion of the assets under management. His long-term experience and his personal track record have convinced the Supervisory Board that Christian Bock, together with the other members of the Management Board, will successfully implement our medium-term growth target of EUR 10 billion in assets under management," said Prof. Dr. Gerhard Schmidt, Chairman of the Supervisory Board of DIC Asset AG.

Outlook for the Remainder of the Year and Confirmation of the 2020 Forecast

DIC Asset AG will continue to respond quickly, flexibly and creatively to economic shifts and to new client expectations. Recent talks with our clients have shown that the strong demand for office accommodation is here to stay. However, offices must come with options to restructure their layout. The portfolio of DIC Asset includes many flexible units on the periphery of prime locations that will see a serious surge in demand.

In addition, DIC Asset AG will adapt its mix of asset classes to reflect the "new normal" and step up its commitments in the office and logistics segments. This will inversely bring down the share of retail assets.

Plus, DIC Asset AG will clearly keep focusing on investments in Germany. Its prudent handling of the pandemic has bolstered Germany's reputation among investors and corporates as a safe haven. So, this is the market where DIC Asset AG intends to keep expanding. The company has a sound letting pipeline as well as an excellent acquisition pipeline.

At the moment, more than EUR 500 million in committed equity capital from investors is available to DIC Asset AG in the Institutional Business segment. Going forward, this will permit the acquisition and day-to-day management of additional real estate on a scale of over EUR 1 billion. On top of that, DIC Asset AG derives considerable financial strength from the cash and cash equivalents available for financing its growth in the Commercial Portfolio and thus for the continued expansion of attractive rental cash flows from existing properties.

Accordingly, DIC Asset AG reaffirms its annual forecast for 2020: All things considered, the company expects EUR 94-96 million in FFO, EUR 94-98 million in gross rental income, and EUR 80-90 million in property management revenues by year-end. On the acquisition side, it expects to spend a total of EUR 700 million to EUR 1.1 billion for the Commercial Portfolio, and EUR 500 million to EUR 800 million for the Institutional Business unit. Out of the planned disposals, which add up to EUR 400 million, assets from the Commercial Portfolio account for c. EUR 100 million, assets from the Institutional Business for c. EUR 300 million.

Invitation to Attend Investor Call / Webcast on 29 July 2020


The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the first half-year of 2020 on 29 July 2019 at 10.00 CEST.

Please use the numbers below to dial in: Dial-in numbers:

Germany: +49 (0)69 2222 2018

United Kingdom: +44 (0)330 336 9411

United States: +1 323-794-2597

The confirmation code is: 1718673#

The webcast (incl. replay) is available under the link below:
https://webcasts.eqs.com/dic20200729/no-audio

For more details on DIC Asset AG, visit the company's homepage at www.dic-asset.de.

About DIC Asset AG:

With more than 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through seven branch offices, and has 187 assets with a combined market value of c. EUR 8.5 billion under management (as of 30/06/2020).

Taking an active asset management approach, DIC Asset AG employs its proprietary, integrated real estate management platform to raise capital appreciation potential company-wide and to boost its revenues.

In its Commercial Portfolio division (EUR 1.9 billion in assets under management, as of 30/06/2020), DIC Asset AG 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.

In its Institutional Business division (EUR 6.6 billion in assets under management, as of 30/06/2020), which operates under the name GEG German Estate Group, DIC Asset AG generates income from structuring and managing investment vehicles with attractive dividend yields for national and international institutional investors.

DIC Asset AG has been SDAX-listed since June 2006.

IR Contact DIC Asset AG:

Peer Schlinkmann

Head of Investor Relations & Corporate Communications

Neue Mainzer Strasse 20

D-60311 Frankfurt am Main

Phone +49 69 9454858-1492
[email protected]

DIC Asset AG at a Glance

*All per-share figures adjusted in accordance with IFRS. (Total number of shares H1 2020: 78,234k; H1 2019: 71,205k)

** Not including warehoused assets