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

Press Release

Q1: DIC Asset AG posts a profitable start also to 2008, in a difficult market

Frankfurt, 13.05.2008

DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first quarter of the 2008 financial year. With consolidated net income of EUR 3.3 million (Q1 2007: EUR 4.9 million) and a higher operating profit (EBDA) of EUR 10.2 million (Q1 2007: EUR 9.0 million), DIC Asset AG successfully generated an attractive return, matching its projections in a market environment that continues to be challenging. The decline in net income compared to the first quarter of 2007 was largely due to higher financing expenses as well as gains on disposals in the previous year.

At EUR 39.1 million, total revenues for the first quarter of 2008 almost doubled compared to the same period of the previous year (Q1 2007: EUR 21.8 million). Rental income was up strongly, by 78 per cent, to EUR 33.8 million (Q1 2007: EUR 19.0 million), reflecting the benefit of the significant expansion in the real estate portfolio to more than 1.3 million square metres (comprising 64 per cent office space, 13 per cent retail, 4 per cent hotels and restaurants, 16 per cent other commercial use such as logistics and others, and 3 per cent residential).

At the same time, the increase in total expenses, to EUR 17.2 million (Q1 2007: EUR 9.8 million) was clearly lower than revenue growth. The increase was due to the expansion in operating activity, and to continued growth in the real estate portfolio, from EUR 1.1 billion (Q1 2007) to EUR 2.0 billion (Q1 2008). The fact that the increase in expenditure fell short of earnings growth reflects enhanced profitability, and the successful realisation of synergy effects.

DIC Asset AG’s total assets slightly increased, to EUR 2.3 billion as at 31 March 2008.

Long-term assets rose from EUR 1.9 billion to EUR 2.1 billion. Long-term fixed interest rate agreements or hedges are in place for 89 per cent of financial debt of EUR 1.6 billion, with around 60 per cent having a maturity of over five years. Maturities in the years 2008 and 2009 only amount to approx. EUR 16 million and EUR 36 million, respectively.

EBITDA (earnings before interest, income taxes, depreciation and amortisation) rose by 78 per cent, to EUR 28.8 million (Q1 2007: EUR 16.2 million). Cash flow from operations doubled to EUR 31.9 (Q1 2007: EUR 15.7 million), whilst cash flow from operating activities (after interest and taxes) rose by 16 per cent, to EUR 10.4 million (Q1 2007: EUR 9.0 million).

FFO (funds from operations, comprising earnings before depreciation, taxes, profits from disposals and development projects) was up year-on-year, to EUR 11.0 million (Q1 2007: EUR 10.4 million). Operating profit before depreciation and amortisation (EBDA) rose by 13 per cent, to EUR 10.2 million, equivalent to operating profit per share of EUR 0.33 (Q1 2007: EUR 0.31). Reflecting the development of consolidated net income, earnings per share declined to EUR 0.11 (Q1 2007: EUR 0.17).

Looking ahead on the current year 2008, DIC Asset AG plans to further grow its business from the existing portfolio. This will be supported by active asset and property management, together with realised profits from sales of real estate. DIC Asset AG will further expand its nationwide presence with the opening of a Munich branch office. Approx. 124,000 square metres of commercial floor space – equivalent to annual rental income of EUR 13.5 million – was let via the DIC ONSITE real estate management platform in 2007. During the first three months of 2008, further new rentals amounting to around 49,000 square metres (generating EUR 5.8 million in annual rental income) were contracted via the platform.

DIC Asset AG also realized the next significant steps in its project developments (having partly nationwide attention). Recently the so called MainTor-project in Frankfurt (the former Degussa areal) entered its next phase as the City of Frankfurt has decided to start the development plan.

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, said that the company’s real estate portfolio “has now reached the critical size to generate a relevant level of continuously growing rental income, as a core source of income”. He added: “This enhances the company’s operational freedom, even in times of difficult markets, whilst our shareholders benefit from a continually attractive return that provides them with a significant cushion against market volatility. We will continue to pursue our acquisition and selling activities in 2008. Besides exploiting attractive buying opportunities as they arise, we will be able to place properties from our portfolio in order to realize an attractive performance.”

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. DIC Asset AG’s real estate portfolio includes around 1.3 million m² of floor space, spread over approx. 350 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 are placed with third parties following a repositioning under an individual business plan. Real estate assets under management currently amount to approx. EUR 3.6 billion. DIC Asset AG has been included in the SDAX® segment of the Frankfurt Stock Exchange since June 2006.

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