DGAP-News: DIC Asset AG: Letter to the Shareholders
(firmenpresse) - DGAP-News: DIC Asset AG / Key word(s): Miscellaneous
DIC Asset AG: Letter to the Shareholders
17.01.2012 / 08:01
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Letter to the Shareholders
- FFO forecast for 2011 confirmed: EUR 40 to 42 million
- Vacancy rate significantly reduced
- Another office property acquired for EUR 22 million
Dear Shareholders,
With the new year just started, it is our pleasure to brief you on the main
transactions completed before the end of the year as well as on the
preliminary figures from the operating activities that are now available
for the 2011 reporting year of DIC Asset AG (German Securities ID 509840/
ISIN DE0005098404).
Retrospective: The year 2011 stood under the sign of a stabilising recovery
of real estate markets. DIC Asset AG benefited from the development on the
basis of the significantly smaller portfolio volume, achieving, and to some
extent exceeding, the objectives set for the operative real estate
business.
The letting result of DIC Asset AG added up to around 245,000 sqm in 2011,
nearly matching the previous year's level taking into account the
significant portfolio reduction (2010: 256,600 sqm). Our activities focused
on new rentals which, at roughly 120,000 sqm, equalled a year-on-year
increase by 16 per cent (2010: 103,200 sqm). Given the lower number of
expiring leases, follow-up rentals remained on a high level in 2011 at
around 125,000 sqm (2010: 153,400 sqm). The strong re-letting result and
the increase in new rentals translated into a significant reduction of the
vacancy rate well below 13 per cent (2010: 14.3 per cent); this is a
substantial improvement, as one percentage point was expected in 2011. A
preliminary estimate suggests that the like-for-like rental income rose by
around 1.5 per cent in 2011. After an extra 0.5 per cent in 2010, we can
report a significant advancement here as elsewhere.
The crowning achievement of 2011 is the major letting contract over roughly
14,000 sqm at MainTor Quarter to Union Investment which enabled us to
realise the MainTor Porta sub-project faster than expected. On 10 January
2011, we already briefed you in depth on the high forward commitment rate
of 70 per cent at this property. The financing by the consortium headed by
Deutsche Hypothekenbank ('Deutsche Hypo') is in place now.
This means that, with the MainTor Primus asset already sold, the
construction for the two commercial sub-projects, which complement each
other in planning and structural terms, will start within six months of
each other, and the northern end of the compound facing the inner city will
be the first to be completed in the coming two years. Accordingly, two out
of the up to six sub-projects will be in the realisation stage as early as
the beginning of 2012, representing roughly one third of the commercial
project volume. The demolition work is progressing according to plan and
within the projected budget, as does the development of the MainTor Primus
sub-project now underway.
Acquisitions: In order to put our continued growth path on sound footing,
we strengthened our capital basis by way of a capital increase and a
corporate bond in 2011. This enabled us to acquire real estate in a volume
of approximately EUR 300 million, achieving the upper end of our planning
bracket (EUR 200-300 million). The transfer of legal titles for the two
transactions in September were effected as planned duringQ4 of the year
concluded: in the case of Marktforum Duisburg for EUR 16 million as at 30
November 2011, and in the case of the two office properties in Karlsruhe
and Leipzig for the 'DIC Office Balance I' real estate fund for EUR 62
million as at 31 December 2011.
As late as December 2011, we acquired an office property at Frankfurt
Airport for approximately EUR 22 million, and it is planned to transfer the
title in the course of Q1 2012. The recently completed property has a
lettable area of around 11,500 sqm, an average lease term of seven years at
the moment, and will generate EUR 1.6 million in annual rental income.
The real estate acquisitions of the previous year will increase the
portfolio volume of DIC Asset by a pro-rata amount of approximately EUR 250
million, and contribute a total of approximately EUR 8.5 million annually
to the FFO. This lays a solid foundation for another robust and stable FFO
result in 2012.
With a view to the portfolio growth planned for 2012, we had contemplated a
lower disposal volume in 2011. The transaction volume added up to
approximately EUR 72 million in 2011 (2010: EUR 132 million). In addition,
the MainTor Primus sub-project was sold before construction had even
started. As in previous years, we continued the effort to optimise our
portfolio structure in 2011 by disposing of 24 predominantly small
properties. All things considered, the real estate portfolio of DIC Assets
grew by approximately EUR 200 million after acquisitions and disposals, and
now totals approximately EUR 2.2 billion.
Financing: The maturity structure of the financial debt with its average of
around 3.5 years was consolidated further through planned and signed
refinancing deals in the year concluded. The largest refinancing deal
involved two office properties worth approximately EUR 55 million, and was
signed as planned during Q4 2011. It had a volume of approximately EUR 37
million and a term of 5 years. The interest expenses undercut previous
financings by around 120 basis points, and at less than 4% remained far
below the average interest rate of around 4.45% across the entire financial
debt. The interest expenses have also dropped for another two prolongations
signed for two office properties, totalling approximately EUR 33 million.
On top of that, we arranged for fresh financing over a total amount of more
than EUR 200 million for the acquisitions undertaken by DIC Asset and for
the 'DIC Office Balance I' real estate fund, and for the MainTor Porta
development. This, too, documents the acceptance of our business model
among our banking partners, and our financial performance. The funds called
down for the acquisition of DIC Asset have an average maturity of more than
9 years, with average interest expenses roughly matching the previous
level. This, also, will have a positive influence on our financing
structure. In 2012, a total of only approximately EUR 160 million in
short-term financial debt will come up for renewal, specifically breaking
down into three distinct and independent financing arrangements.
We are rather delighted with these preliminary figures from operating
activities that remain fully within the framework of our plans dating back
to early 2011. At this time, we assume that the FFO results for 2011 will
range in the forecast bracket of EUR 40 to 42 million, as predicted. On 13
March 2012, we will publish the full-length annual results for 2011 with a
detailed outlook for the ongoing year.
Kind regards,
Ulrich Höller (CEO) Markus Koch (CFO)
P.S: For more details on DIC Asset AG, please visit us on the Internet at
www.dic-asset.de.
End of Corporate News
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Language: English
Company: DIC Asset AG
Eschersheimer Landstr. 223
60320 Frankfurt
Germany
Phone: +49 69 9454858-0
Fax: +49 69 9454858-99
E-mail: info(at)dic-asset.de
Internet: www.dic-asset.de
ISIN: DE0005098404
WKN: 509840
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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152999 17.01.2012
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Datum: 17.01.2012 - 08:01 Uhr
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