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

Press Release

DIC Group gains Morgan Stanley Real Estate Funds (MSREF) as a strategic investor

Frankfurt, 05.07.2005

Morgan Stanley Real Estate Funds (“MSREF”) is taking a 25.1 % stake in Frankfurt-based DIC Deutsche Immobilien Chancen AG & Co. KGaA (“DIC Group”), it was announced today. The investment represents a further extension of the existing strategic partnership between the two entities and signals DIC Group’s intention to secure a leading position in the German commercial real estate market.

DIC Group and MSREF have been exclusive joint venture partners for commercial real estate transactions in Germany since June 2004. Their most recent joint deal was the acquisition of a portfolio of 57 properties from Frankfurter Sparkasse. The volume of joint transactions announced in the past year amounts to over €250 million.

The MSREF investment will be implemented by way of a capital increase at DIC Deutsche Immobilien Chancen AG & Co. KGaA. In conjunction with the deal, two senior MSREF representatives will be appointed to the Supervisory Board of the DIC Group, namely John A. Carrafiell, European Head of Morgan Stanley Real Estate, and Stephane Theuriau, Managing Director MSREF Europe. The MSREF investment reinforces the shareholder base of the DIC Group, which is composed of private investors, investment companies, institutional investors such as Thurn und Taxis and two Provinzial insurance companies.

Stephane Theuriau commented, “The successes that have defined our relationship with the DIC Group offer excellent perspectives for us to further invest in the German market. We are taking a holding in DIC because we want higher-than-average participation in the German real estate market given the recent gain in momentum.”

Ulrich Höller, CEO of DIC, said, “We are pleased that MSREF, a leading private equity real estate fund, has given its clear backing to our development plans. For us, this is an important step in our strategy for expansion, positioning the DIC Group as a market leader in the German commercial real estate market. Against this background, we offer our services as a competent and experienced partner for commercial real estate disposals, development projects and market placements. This year total volume of real estate assets managed by our companies should exceed €1 billion for the first time.”

Notes on DIC
DIC (Deutsche Immobilien Chancen) was founded in 1998 and, with its innovative investment philosophy and its focus on the German market, is one of the leading and most successful corporations in Germany specializing in commercial real estate transactions. Its business activities include portfolio and asset management, project development and opportunistic investments. The real estate assets managed by the DIC real estate group currently amount to over Euro 700 million.


Notes on Morgan Stanley Real Estate
Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking, and Lending. Since 1991, Morgan Stanley has acquired more than $67.7 billion of real estate assets worldwide and currently manages $36.2 billion in real estate assets on behalf of its clients. Using its own capital, Morgan Stanley also originates upwards of $7 billion in commercial mortgages annually. In addition, Morgan Stanley Real Estate provides a complete range of investment banking services including merger, acquisition and restructuring advisory and recapitalizations, as well as public and private debt and equity financing. Morgan Stanley established its real estate organization in 1969. Morgan Stanley is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

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