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

Deutsche Immobilien Chancen (DIC) with registered office in Frankfurt am Main was set up in 1998. Today, it is active across Germany and one of the country's leading investment entities for commercial real estate.


Press Release

DIC Asset AG: GEG Acquisition Pays off - with FFO Rising by around 40%

Frankfurt, 30.10.2019

  • FFO of EUR 68.5 million already exceeds the 2018 year-end total after nine months
  • Record-breaking transaction volume of EUR 1.3 billion since the start of the year
  • EPRA vacancy rate in the Commercial Portfolio reduced by 110 bps, down to 7.3%
  • Like-for-like rental income grew by 1.7% in the Commercial Porfolio
  • Real estate management fees rose by 69.1% to c. EUR 38.9 million
  • FFO forecast for 2019 again raised to c. EUR 95 million
  • The NAV when fully factoring in the economic value of the Institutional Business lies between EUR 20.71 and EUR 22.21 per share

Frankfurt am Main, 30 October 2019. DIC Asset AG (ISIN: DE000A1X3XX4), one of Germany's leading listed property companies, sustained its growth trajectory throughout the first nine months of 2019. As of 30 September, its assets under management totalled EUR 7.3 billion for the first time (31 December 2018: EUR 5.6 billion), whereof assets worth EUR 1.8 billion held in the Commercial Portfolio (31 December 2018: EUR 1.7 billion) and EUR 5.5 billion worth of assets held in the Institutional Business (31 December 2018: EUR 3.9 billion).

The funds from operations (FFO) grew by around 40% to EUR 68.5 million (9M 2018: EUR 49.0 million), which is primarily explained by the massively increased income from real estate management and the excellent share of profit of associates, not including property developments and sales, that more than offset the increase in operating costs caused by the acquisition of the GEG. As a result, the 2018 year-end FFO in the amount of EUR 68.0 million was already topped after nine months. The profit for the period rose by 18.0% to EUR 40.0 million (9M 2018: EUR 33.9 million) due to the increase in real estate management fees and the higher share of the profit of associates.

Sonja Wärntges, CEO of DIC Asset AG, commented: "The rapid growth of our earnings figures during the first nine months of the year has vindicated our decision to take over GEG as it raised the future income flows of DIC Asset to a new level. In addition to our rental income from the Commercial Portfolio, the successful interaction of development activities, asset management and property management and the transaction platform in our Institutional Business are paying off. For the first time, we also documented the full economic value added of the Institutional Business unit to the NAV."

 

Transactions at Record Level, Letting Activities Successful

The volume of acquisitions notarised since the start of the year stood at EUR 1.1 billion, with the Institutional Business unit accounting for EUR 914 million and the Commercial Portfolio accounting for EUR 216 million thereof. The transaction team also notarised sales worth a total amount of EUR 58 million from the Commercial Portfolio and sales worth EUR 73 million from the Institutional Business. All in, the company thus achieved a transaction volume of approximately EUR 1.3 billion, topping the record-breaking year-end total of 2018 even at this time.

The letting performance rose to EUR 18.0 million as of 30 September 2019 (30 September 2018: EUR 16.8 million). The average square-metre rent of the leases signed surged substantially by approximately 22%, rising from EUR 9.82 to EUR 12.02.


Visibly Enhanced Quality of the Commercial Portfolio

At EUR 75.6 million, the gross rental income topped the prior-year total (9M 2018: EUR 75.2 million). The annualised rental income in the Commercial Portfolio rose to EUR 103.0 million (30 September 2018: EUR 97.9 million). Like-for-like, the annualised rental income during the same period grew by 1.7% to EUR 93.9 million (30 September 2018: EUR 92.3 million). The EPRA vacancy rate dropped by 110 bps year on year and stood at 7.3% on 30 September 2019 (30 September 2018: 8.4%). The weighted average lease term (WALT) improved noticeably from 5.1 years to 6.2 years.


Institutional Business with Significant Growth

The real estate management fees increased by 69.1% to EUR 38.9 million (9M 2018: EUR 23.0 million), breaking down into EUR 14.2 million fees from asset and property management and development (9M 2018: EUR 8.7 million) and EUR 24.7 million from transaction and performance fees (9M 2018: EUR 14.3 million). The share of profit of associates through co-investments came to EUR 4.8 million (9M 2018: EUR 1.4 million).


Economic Value of Institutional Business Fully Reflected in NAV for First Time

The EPRA net asset value (EPRA NAV) equalled EUR 1,181.5 million (31 December 2018: EUR 1,085.8 million) or EUR 16.36 per share (31 December 2018: EUR 15.40) as of the balance sheet date. The increase is explained primarily by the growth in net income and the additions to the Commercial Portfolio as well as by the simultaneous repayment of debt. However, this ratio, which is acutely focused on the Commercial Portfolio, barely takes the intrinsic value of the cashflow-driven Institutional Business unit into account. When applying the EV/EBITDA multiples between 10.6 (e.g. in the context of the GEG acquisition) and 13.0 observable on the market, the segment returns an additional value of EUR 6.61 to EUR 8.11 per share. If you take the already capitalised goodwill from the acquisition of GEG into account, you get an adjusted NAV across segments of EUR 20.71 to EUR 22.21 per share as of the balance sheet date. The balance sheet equity ratio was 35.8% as of 30 September 2019 (31 December 2018. 36.0%) while the loan-to-value ratio (not including warehousing) stood at 50.4% (31 December 2018: 53.1%).

 

Forecast for 2019 Raised Once More

Given the sound business performance and the successful integration of GEG, DIC Asset AG anticipates even higher funds from operations in the fourth quarter as a result of lower property-related costs, an improved net interest result, higher earnings from the Institutional Business unit and a later-than-assumed transfer of possession, rights and obligations in conjunction with planned property sales. The previously made FFO forecast was therefore raised from EUR 88 to 90 million to c. EUR 95 million. The gross rental income of the Commercial Portfolio is now projected at c. EUR 100 million (up from EUR 98 to 100 million so far) while DIC Asset expects to see its acquisition volume of c. EUR 1.3 billion across segments by the end of the 2019 financial year. The volume of property sales across segments is supposed to be somewhere between EUR 200 million and EUR 230 million.


The full-length 2019 Quarterly Report of DIC Asset AG for the nine-month period was published on 30 October 2019 and is available on the company's homepage under the link below:

<aclass="auszeichnung" href="https://www.dic-asset.de/investor-relations/publikationen/index.php" target="_blank">https://www.dic-asset.de/investor-relations/publikationen


Invitation to Attend Investor Call / Webcast on 30 October 2019

The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the first nine months of 2019 on 30 October 2019 at 09:30 CET. To attend, please use these dial-in numbers:

Germany: +49 (0)69 2222 2018
United Kingdom: +44 (0)330 336 9411
United States: +1 929-477-0448
France: +33 (0)1 76 77 22 57

The confirmation code is: 7188513#

The webcast (incl. Replay) is available under the link below:

https://webcasts.eqs.com/dic20191030/no-audio

 


DIC Asset AG at a Glance

Financial ratios, in mEUR 9M 2019 9M 2018
     
Gross rental income 75.6 75.2
Net rental income 65.5 63.5
Income from property management 38.9 23.0
Property disposal proceeds 47.5 71.2
Total income 178.8 185.3
Profits on property disposals 4.4 14.0
Net income from associates 17.7 11.6
Funds from operations (FFO) 68.5 49.0
EBITDA 96.1 89.5
EBIT 71.2 67.4
Consolidated net income 40.0 33.9
Net cash provided by operating activities 50.4 49.8
     
Financial ratios per share, in EUR* 9M 2019 9M 2018
     
FFO per share 0.96 0.70
Earnings per share 0.56 0.49
EPRA earnings per share 0.88 0.62
     
Balance sheet ratios, in mEUR 30/09/2019 31/12/2018
     
Loan-to-value (LtV) in %** 50.4 53.1
Investment property 1,540.9 1,459.0
Shareholders' equity 929.0 895.9
Financial debt 1,546.0 1,481.1
Total assets 2,593.2 2,490.1
Cash and cash equivalents 280.6 286.9
     
EPRA metrics, in mEUR 9M 2019 9M 2018
     
EPRA earnings 62.7 43.6
EPRA NAV 1,181.5 1,085.8

 

Operating performance indicators 9M 2019 9M 2018
     
Profit/loss for the period, in mEUR 18.0 16.8
EPRA vacancy rate of Commercial Portfolio*** in % 7.3 8.4

 

* All per-share figures adjusted according to IFRS 9M 2019 71,544,743 (9M 2018: 69,766,459)
** not incl. Warehousing
*** not including repositioning properties


About DIC Asset AG:

With around 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through six branch offices, and has 173 assets with a combined market value of c. EUR 7.3 billion under management (as of 30 September 2019). 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 1.8 billion in assets under management), 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 5.5 billion in assets under management), 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
ir@dic-asset.de



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Contact

Deutsche Immobilien Chancen AG & Co. KGaA

Neue Mainzer Straße 20 • MainTor
60311 Frankfurt am Main
Germany

Phone
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Fax
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