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

Press Release

DIC Asset AG: Two Major Deals Securing Long-Term FFO

Frankfurt, 09.08.2013

• Major 7 years portfolio refinancing with two banks
• Current favourable interest rate level secured long-term
• Lease renewal on a very long-term basis at eBay campus
• Successful letting ensures attractive long-term cash-flow

DIC Asset AG just reported two large and significant business transactions that will play a definitive role in securing the Company’s operative profitability and the high FFO level in the long run.

1. Refinancing Volume of EUR 320 million
In an arrangement with Deutsche Pfandbriefbank AG and HSH Nordbank AG that was negotiated more than a year ahead of maturity, DIC Asset AG obtained refinancing for a bank loan that was taken out for the Company’s largest proprietary portfolio. The loan volume of EUR 320 million and the 7-year term raised the average maturity of DIC Asset AG’s financial debt significantly from currently around 3 years to a highly stable 4.2 years. The credit line secures the average interest rate for DIC Asset AG’s financial debt at the current level of around 4 per cent.

This means that around 80 percent of the 2014 refinancing volume has already been arranged. At the same time, the maturity structure of the total debt has been considerably improved: The share of loans with maturities of more than five years increases from currently around 20 per cent to approx. 50 per cent. The bank loan just negotiated on a non-recourse basis will prospectively replace the existing financing arrangements by the end of Q3 2013.

The portfolio to be refinanced was acquired in 2006, and consists of around 40 attractive office and commercial properties in good to excellent locations and a gross lettable area of around 240,000 sqm. The real estate portfolio reflects the key performance indicators (specifically the average lease term, the rental yield, the occupancy rate, and the interest coverage ratio) of the overall portfolio performance of DIC Asset AG. The assets are predominantly located in the Rhine-Neckar region and in the Rhine-Main metro area, the focus being on Frankfurt. Among the properties’ blue-chip tenants are BASF, Deutsche Börse, the State of Baden-Württemberg, the State of Hesse, as well as high-net-worth retail tenants.

2. Lease Renewal for 20,000 sqm at eBay Campus
Following the report of a major letting contract (6,700 sqm) and the repositioning of the office and commercial property “Bochumer Fenster” last week, DIC Asset AG just signed another major letting contract of key importance. With the expiration of the existing lease of eBay still two years away, the Company just renewed the lease for the Germany headquarters of the online-auction and trading company, which extend over around 20,000 sqm of office space, for the very long term and based on the current market rent. To date, this rental agreement ranks among the top three leases signed this year in the Berlin office market.

The lease renewal shows the occupier’s high level of appreciation for the location and the property at “EUROPARC Dreilinden” near Berlin, as well as for the real estate management provided by DIC Onsite. Having successfully tied a renowned and prospering tenant to the premises long-term, DIC Asset AG also secured an attractive cash-flow for the coming years. The tenant was advised by Jones LangLaSalle.

Raised in 2005, and consisting of three building sections along with 300 parking spaces, this modern office property has been part of the proprietary portfolio of DIC Asset AG ever since. The eBay campus is part of a former 50/50 joint venture portfolio held together with MSREF (Morgan Stanley Real Estate Funds). In late 2011, DIC Asset AG took over the entire portfolio worth EUR 190 million in its Commercial Portfolio. The office complex has been fully occupied by eBay since its completion, with roughly 1,000 employees working here.

Ulrich Höller, CEO of DIC Asset AG: “These two deals will definitively boost the high profitability of DIC Asset AG. The successful signings highlight once again the Company’s robust operative productivity.”


eBay campus near Berlin
 
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. Real estate assets under management currently amount to approx. EUR 3.3 billion, comprising around 260 properties. The Company's investment strategy is geared to the continued development of a high-quality, highly profitable and regionally diversified portfolio. The real estate portfolio is structured in two segments: the Commercial Portfolio (EUR 1.8 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (pro-rata share of EUR 0.3 billion) comprises fund investments, joint-venture investments, and interests in development projects. DIC Asset AG provides a direct service to tenants through its own real estate management teams in six branch offices located at the regional hubs within the portfolio. This provides DIC Asset AG with an edge in terms of market presence and expertise, and builds the foundation for maintaining and increasing income and the value of its real estate assets. DIC Asset AG has been included in the SDAX® 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.

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