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

Press Release

DIC Asset AG sees further FFO growth in 2015

Frankfurt, 12.05.2015

• FFO of EUR 12.1 million stable at previous year's level (Q1 2014: EUR 12.0 million)
• Unchanged forecast for 2015: FFO to grow to between EUR 48 million and EUR 50 million (by up to 4 per cent)

DIC Asset AG (German Securities ID A1X3XX / ISIN DE000A1X3XX4) today presented its interim report for the first three months of the 2015 financial year. Supported by a stable operating business, the Company performed on schedule and upholds its published full-year targets.  Specifically, it projects FFO to grow to between EUR 48 million and EUR 50 million. Given declining rental income, this will be achieved through the planned continued reduction in leverage, combined with a further optimisation of portfolio structure and financing mix.

Ulrich Höller, Chief Executive Officer of DIC Asset AG said "Our first-quarter results demonstrate the ongoing stability and profitability of our business model."

Summary of results:
Due to sales of properties in 2014, gross rental income of EUR 35.1 million was slightly lower year-on-year (Q1 2014: EUR 36.8 million). Nonetheless, funds from operations (FFO) for the first three months amounted to EUR 12.1 million, slightly higher than the previous year's figure (Q1 2014: EUR 12.0 million). The real estate management fees grew markedly by 27 percent to EUR 1.4 million  due to the growing fund business, compared to EUR 1.1 million  a year earlier. Consolidated net profit for the period ending on 31 March 2015 was EUR 1.3 million (Q1 2014: EUR 2.0 million), mainly reflecting a lower volume of effective sales during the first quarter – and hence, lower profits on property disposals.

Good progress made in optimising the financing structure
Total financial liabilities declined to EUR 1.65 billion as of 31 March 2015 (31 March 2014: 1.73 billion). The average interest rate on all bank loans decreased to a low level of 3.9 per cent as of 31 March 2015, compared to 4.1 per cent a year earlier. The average maturity of DIC Asset AG's financial debt was 3.8 years as of 31 March 2015 (31 March 2014: 4.2 years). Given impending refinancings due around the mid-year point, we expect the average interest rate of all financial debt to decline further, alongside an increase in the overall average term.

The net debt ratio based on the portfolio market value (loan-to-value ratio) declined by approximately 1.2 percentage points year-on-year, to 65.7 per cent (31 March 2014: 66.9 per cent). The net debt equity ratio (based on net liabilities, and adjusted for effects of derivatives) rose to 33.7 per cent as of 31 March 2015 (31 March 2014: 32.8 per cent).

Interest result improved to EUR -15.6 EUR million (Q1 2014: EUR -17.8 million), mainly reflecting the continued optimisation of the financing structure as well as planned disposals to reduce liabilities.

Operating business on schedule
DIC Asset AG's letting performance during the first quarter of 2015 comprised contracts generating aggregate annualised rental income of some EUR 2.0 million (Q1 2014: EUR 6.8 million), including EUR 1.1 million in new rentals and EUR 0.9 million in renewed rental agreements. The vacancy rate at the end of the first quarter of 2015 was 11.4 per cent; given the higher proportion of contract expiries at the beginning of each year, this was as planned. The Company affirms its projection for a reduction in the vacancy ratio to 10.5 per cent by the end of 2015.

Year to date, sales were realised in an aggregate volume of approximately EUR 24 million. DIC Asset AG envisages total property sales of around EUR 150 million to EUR 170 million during 2015, mainly from the Commercial Portfolio which is held directly.  The majority of transactions are scheduled to take place from the mid-year point until the end of 2015.

Forecast for the full year
The Management Board has affirmed its FFO guidance, according to which the Company projects FFO for 2015 to reach between EUR 48 million and EUR 50 million, up by as much as 4 per cent compared to 2014. Assuming a lower vacancy ratio of 10.5 per cent, rental income of  EUR 134 million to EUR 136 million is expected. Regarding the volume of disposals, the Company has affirmed its target range of between EUR 150 million and EUR 170 million. To achieve further growth in the funds business, DIC Asset AG plans to spend between EUR 130 million and EUR 150 million on acquisitions.

Key figures >>

Interim Report Q1 2015 >>

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 236 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 2.2 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (pro-rata share of EUR 0.2 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.

<< back