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

Press Release

DIC Asset AG enters the final lap for 2010 with strength in its operating business

Frankfurt, 09.11.2010

• FFO stable, at EUR 33.1 million
• Rentals of 193,000 sqm up 9 per cent year-on-year
• Real estate sales up strongly, reaching EUR 107 million to mid-October
• First real estate fund in place

Key results at a glance:

DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first nine months of the 2010 financial year. The Company performed well in its operating business, in a market environment that continues to be challenging, following up on the good results achieved during the first two quarters of the year to date. FFO (funds from operations, defined as earnings before interest and taxes, excluding profits from disposals and development projects) of EUR 33.1 million was slightly lower than the figure for the same period of the previous year (9m 2009: EUR 35.6 million). FFO per share for the first nine months amounted to EUR 0.91 (9m 2009: EUR 1.16). Results were boosted by the volume of new rentals (up 9 per cent), and by the renewed reduction in net interest expenses, whilst the lower portfolio size (on account of disposals) and the fact that the Company has not yet fully replaced some lease expiries. Profit for the period was EUR 9.5 million (9m 2009: EUR 11.5 million). The Company was also successful in sustainably improving its financing structure, by refinancing several obligations early.

Detailed review of results for the quarter:

DIC Asset AG’s total revenues for the first three quarters of 2010 amounted to EUR 135.9 million, a 6.6 per cent increase compared with the first nine months of 2009 (9m 2009: EUR 127.6 million). The main factor contributing to this increase was the markedly higher volume of sales: during the reporting period, this led to proceeds of EUR 23.2 million being recognised in income (9m 2009: EUR 10.2 million). The aggregate volume of sales stood at EUR 107 million by mid-October, which already clearly exceeded the original full-year target of EUR 60 million.

Despite difficult market conditions for rentals still prevailing, DIC Asset AG again performed strongly during the third quarter, bringing the total letting volume for the period ending 30 September 2010 to 193,900 sqm (Q3 2010: 77,600 sqm), significantly exceeding the previous year's figures (9m 2009: 178,300 sqm). Follow-up rentals accounted for 115,300 sqm (9m 2009: approx. 100,000 sqm), whilst new rentals of 78,600 sqm virtually matched the 78,500 sqm achieved during the first three quarters of 2009. New rentals during the first nine months of 2010 were equivalent to annualised rental income of EUR 20.4 million (9m 2009: EUR 17.3 million). The marked increase reflected a strong increase in the share of office rentals, which account for higher average rents.

Net interest expense of EUR 54 million was down by a marked 4.2% (9m 2009: EUR 56.3 million), with the average interest rate at 4.50 per cent (9m 2009: 4.65 per cent). Administrative expenses for the period decreased to EUR 5.9 million (down 14.5 per cent), whilst staff expenses increased by 7.1 per cent, to EUR 7.1 million, as projected.

Operating profit before depreciation and amortisation (EBDA) of EUR 33.1 million was slightly lower than the EUR 34.2 million figure posted for the first nine months of the previous year. Profit for the period of EUR 9.5 million (9m 2009: EUR 11.5 million) is equivalent to earnings per share of EUR 0.26 (9m 2009: EUR 0.37).

DIC Asset AG’s total assets amounted to approx. EUR 2.2 billion as at 30 September 2010. Long-term assets remained stable, at EUR 2.1 billion. Medium-term or long-term fixed interest rate agreements or hedges are in place for 83 per cent of financial debt of EUR 1.6 billion. Only approx. 15 per cent of overall financial debt will fall due within the next 24 months. During the third quarter, the Company renewed two portfolio financings with an aggregate size of approx. EUR 85 million prior to maturity, with another EUR 104 million early prolongation closed in October.

More than 75 per cent of the EUR 117 million equity for the announced debut "DIC Office Balance I" fund has been already placed by the end of September 2010. Backed by this high level of initial placements, the fund already commenced operations on 15 October, with the transfer of real estate assets to the fund. The fund was subscribed to by institutional investors, predominantly pension funds, foundations, insurance companies and family offices, expanding DIC Asset AG's investor base to include additional long-term business partners. Further investors will be invited to subscribe to DIC's debut special investment fund within the scope of the final marketing round. Investors in the fund gain exposure to a EU 211 million portfolio of first-class real estate in metropolitan regions throughout Germany. All properties are let to prime tenants under long-term agreements, thus allowing investors to benefit from distributions from the very beginning. DIC Asset AG will retain a minority shareholding of 20 per cent, and will provide its renowned investment and real estate management services to the fund. On top of investment income, the new business segment will generate regular and stable income from the services rendered.

Outlook for 2010: DIC Asset AG affirms its most recent FFO forecast of EUR 41-43 million for the full year 2010.

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, said: "The renewed strong set of operating results for the third quarter affirms our forecast that we will exceed our projections for the year 2010 as a whole. The successful launch of our debut fund marks the starting point for new growth in recovering markets.

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 3.2 billion. DIC Asset AG’s real estate portfolio includes around 2 million square metres of floor space, spread over approx. 300 properties. The portfolio is divided into three segments: the 'Core plus' 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. DIC Asset AG has been included in the SDAX® segment of the Frankfurt Stock Exchange since June 2006.

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