Press Release
DIC Asset AG: Strong Third Quarter 2018 Reaffirms Guidance Increase
- Funds from operations (FFO) rise to EUR 49.0 million
- Consolidated income grows to EUR 33.9 million
- Income from property management risen by 59% to EUR 23.0 million
- Like-for-like rental income +2.6%, EPRA vacancy rate reduced to 8.4%
- Further growth of Commercial Portfolio
Frankfurt am Main, 08 November 2018. DIC Asset AG, one of Germany's leading listed property companies, demonstrated its profitability once more in all of its business lines during the first nine months of 2018. Especially the dynamic of the fund business, the subsequently growing transaction fees and the quality of the property portfolio drove the FFO of EUR 49 million at the end of nine months (9M 2017: EUR 48.1 million). With EUR 33.9 million, the consolidated income is also higher than in the prior-year period. For the full year, the targets were raised due to the successes already achieved and anticipated yet. The forecast for the gross rental income is up from between EUR 95 and 98 million to between EUR 98 and 100 million now, and the FFO forecast from between EUR 62 and 64 million to now EUR 68 million.
By 30 September, the assets under management reached EUR 5.1 billion, a 24% increase compared to the prior-year period. Especially the assets managed by the fund business continued to increase during this time (+27%) and grew to EUR 1.9 billion through acquisitions and appreciation of existing funds. All in, the acquisition volume to date approximates EUR 322 million, driven by the expansion of the Commercial Portfolio with acquisitions worth c. EUR 268 million and additional acquisitions in the fund business totalling c. EUR 54 million. Sales from the Commercial Portfolio since the start of the year added up to c. EUR 67 million.
"The net income of the third quarter has reaffirmed the profitability of our hybrid model. Outstanding transactions in the fund business, growth of the Commercial Portfolio, rising like-for-like rents and a significant reduction of the vacancy rate - all achieved by our excellent teams - have been and continue to be our success factors," said Sonja Wärntges, CEO of DIC Asset AG.
Like-for-Like Rental Income in the Commercial Portfolio up 2.6%
The Commercial Portfolio segment includes 103 assets with a market value of c. EUR 1.6 billion and a gross lettable area or 906,300 sqm as of 30 September 2018. New assets acquired and a superior letting performance successfully counteracted the reduction in gross rental income to EUR 75.2 million (9M 2017: EUR 85.7 million) that was caused by sales and transfers to new investment funds. Like-for-like, the rental income increased by 2.6%. The average lease term (WALT) went up considerably as it rose from 4.5 years to 5.1 years and the EPRA vacancy rate declined significantly over the prior-year quarter by 330 basis points to 8.4% (30 September 2017: 11.7%).
Successful Transactions Strengthen FFO Contribution
In the Funds segment, DIC Asset AG substantially increased its assets under management compared to the prior-year quarter to a new total of EUR 1.9 billion. Aside from acquisitions and positive valuation effects for the properties of existing funds in the course of the year under review, the structuring of another DIC fund helped to bring this about. As the fund business continues to establish itself as trading platform by successfully implementing acquisitions and sales as well as by regularly launching new funds, the income from the fund business rose significantly year on year, from EUR 13.0 million to EUR 21.4 million.
TLG Dividend Defines the Net Income of the Other Investments Segment
The Other Investments segment comprised EUR 1.6 billion in assets under management as of 30 September 2018 (30 September 2017: EUR 1.1. billion), a trend driven most notably by the growing third-party business in property management. At the moment, DIC Asset AG has eleven properties with a combined lettable area of around 244,000 square metres and a fair market value of EUR 1.3 billion under management through its in-house property management platform. All remaining joint ventures were sold this year as planned. The income from the Other Investments segment climbed by 55% to EUR 11.6 million during the first nine months of 2018 (from EUR 7.5 million the previous year) mainly because of the dividend received from the equity investment in TLG Immobilien AG.
Financing Costs Remain on very Low Level
The net interest result was slightly elevated at EUR -27.5 million by the end of the first nine months of 2018 (9M 2017: EUR -26.2 million), an increase that is essentially explained by the issuance of a fourth corporate bond, 17/22, in July 2017 which was subsequently topped up in February 2018. Most recently, DIC Asset AG placed another corporate bond, 18/23, with great success, which started trading in early October. The subscribed volume of EUR 150 million clearly exceeded the anticipated level of EUR 100 million. Meanwhile, the 13/18 corporate bond was fully repaid in July 2018. The loan-to-value stands at 57.3% (year-end 2017: 57.0%), adjusted for warehousing effects.
For more details on DIC Asset AG, go to the internet at .
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| Contact: |
| Nina Wittkopf |
| Head of Investor Relations & Corporate Communications |
| Phone 1462 |
| Mobile 23 |
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About DIC Asset AG:
DIC Asset AG is one of Germany's leading listed property companies, and specialises in commercial real estate. 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 181 assets with a combined market value of c. EUR 5.1 billion under management. DIC uses a hybrid business model to manage its business divisions Commercial Portfolio, Funds and Other Investments. Taking an active asset management approach, DIC employs its proprietary, integrated real estate management platform to raise capital appreciation potential in its business divisions and to boost its revenues.
In its Commercial Portfolio division (EUR 1.6 billion in assets under management), DIC 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. The Funds division (EUR 1.9 billion in assets under management) generates its revenues by acting as issuer and manager of special real estate funds for institutional investors. Gathered in the business unit Other Investments (EUR 1.6 billion in assets under management) are strategic financial investments, the management of properties in which the company holds no equity stakes, equity investments in property developments and joint venture investments. DIC Asset AG has been included in the SDAX(R) 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.
DIC Asset AG at a Glance
| Financial indicators, in EUR million |
9M 2018 |
9M 2017 |
| Â |
 |
 |
| Gross rental income |
75.2 |
85.7 |
| Net rental income |
63.5 |
72.6 |
| Fees from real estate management |
23.0 |
14.5 |
| Property disposal proceeds |
71.2 |
200.7 |
| Total income |
185.3 |
318.2 |
| Profits on property disposals |
14.0 |
16.4 |
| Net income from associates |
11.6 |
7.7 |
| Funds from operations (FFO) |
49.0 |
48.1 |
| EBITDA |
89.5 |
88.0 |
| EBIT |
67.4 |
64.6 |
| Consolidated net income |
33.9 |
33.4 |
 |
 |
 |
| Financial indicators per share, in EUR* |
9M 2018 |
9M 2017 |
| Â |
 |
 |
| FFO |
0.70 |
0.70 |
| EPRA earnings |
0.62 |
0.65 |
| Net income |
0.49 |
0.47 |
*All per-share figures adjusted according to IFRS
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| Balance sheet ratios, in EUR million |
30/09/2018 |
31/12/2017 |
| Â |
 |
 |
| Loan-to-value ratio (LTV)** in % |
57.3 |
57.0 |
| Investment property |
1,477.8 |
1,437.2 |
| Shareholders' equity |
835.0 |
828.9 |
| Financial debt |
1,338.2 |
1,405.7 |
| Total assets |
2,265.4 |
2,341.3 |
** adjusted for warehoused assets
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| Operating performance indicators |
9M 2018 |
9M 2017 |
| Â |
 |
 |
| Letting performance, in EUR million |
16.8 |
14.8 |
EPRA vacancy rate of
Commercial Portfolio*** in % |
8.4 |
11.7 |
*** not including warehoused assets and property developments
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