The DIC Group is one of the leading investors in the German market for commercial real estate

Press Release

DIC Asset AG acquires real estate portfolio of the FAY Group, plus majority stake in real estate management company

Frankfurt, 27.08.2006

DIC Asset AG, the exchange-listed real estate investor based in Frankfurt, has acquired the entire real estate portfolio of FAY Group, comprising 55 properties with a total rentable area of 292,000 sqm. Total investment volume was around Euro 585 million.

Moreover, DIC Asset AG also acquired a 74.9% stake in FAY Property Management GmbH. Led by an experienced management team, the company has been very successful in providing real estate, asset, and facility management services for more than 10 years. FAY Property Management employs 25 staff between its Mannheim headquarters and a branch office in Düsseldorf. FAY will retain a 25.1% stake. The acquired majority holding represents an ideal extension of DIC Asset AG’s business activities, and a first-class platform from which to grow its franchise.

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, commented that “DIC Asset AG has realised its growth and expansion plans, as announced at the time of the IPO in the spring of 2006, much quicker than anticipated. A large share of the funds raised with the capital increase earlier this year has already been invested, with this transaction and five others involving individual investments and real estate portfolios.” As a result of this transaction, DIC Asset AG has doubled its portfolio to approx. 750,000 sqm floor space, with real estate assets under management of around Euro 1.8 billion. The expansion gives the company a solid foundation for an even more active portfolio management approach. Hypo Real Estate Bank advised DIC Asset AG and Investment bankers Drueker & Co advised FAY on the transaction.

Almost two-thirds of the acquired portfolio consists of office and administration properties, with the remainder comprising retail and mixed-use properties. Approximately 40% of the portfolio is concentrated in the Rhine-Neckar region in Southern Germany, with sites in Mannheim, Ludwigshafen, and Heidelberg. A further 45% is located in the Rhine-Main region including Frankfurt.

The properties are in top inner-city locations, featuring sophisticated architectural design and high construction quality. Almost 90% are currently rented out – many to first-class tenants, and with long-term contracts: the average rental period for the overall portfolio is above 6.5 years. Actual rental income amounts to approximately Euro 39 million per annum. The most prestigious properties include various sites used by Deutsche Börse, the Steubenhaus, and the Palais 22 neighbouring the new Villa Kennedy luxury hotel in Frankfurt; the Central Park Office/NH Hotel complex in Düsseldorf, plus various office buildings in the prime Augusta-Anlage location in Mannheim. Tenants include top names such as Deutsche Börse, the German State of Baden-Württemberg, various local authority facilities, the NH Hoteles Group, plus a variety of first-class retail tenants.

About DIC Asset AG
Established in 2002, DIC Asset AG, with registered offices in Frankfurt/Main, is a real estate company with a dedicated investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. To date, DIC Asset AG’s real estate portfolio included just under 460,000 sqm of floor space, spread over 158 properties. The portfolio is divided into three segments: the Core portfolio includes the proprietary portfolio held on a long-term basis and offering stable, attractive rental yields; the Value-Added portfolio contains real estate with promising performance potential over the medium term, while the Opportunistic Co-Investments portfolio is comprised of real estate investments that have a more pronounced risk/return profile, which will be placed with third parties following a repositioning under an individual business plan. Excluding the transaction at hand, the real estate portfolio under management totalled approximately Euro 1.2 billion, including properties such as eBay’s headquarters in Germany, the real estate portfolio of Frankfurter Sparkasse (the Frankfurt savings bank), and the ‘Stadtbadgalerie’ in Bochum. Furthermore, the Company also holds an interest in a highly diversified portfolio spread across Germany, acquired from MEAG in late 2005 together with Morgan Stanley Real Estate Funds (MSREF). DIC Asset AG has been included in the SDAX segment of the Frankfurt Stock Exchange since June 2006.

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