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DIC Asset AG

Quarterly Report May 17, 2023

117_10-q_2023-05-17_6f019cd8-cf89-4481-b436-6fc9cde68041.pdf

Quarterly Report

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Dear Shareholders, Just a few weeks ago, we shared news of the most successful financial year in the Company's history with you at the General Shareholders' Meeting. We promised you that we would continue to work to achieve success for DIC Asset AG with "dynamic performance" and presented our strategy to you – and we are on track to do just that.

Letting performance was particularly positive once again in the first quarter, with a rise of 88% year-on-year driven by higher levels of re-letting. We are similarly encouraged by like-for-like rent growth of 7.8% on our real estate platform, which primarily benefited from the effects of lease renewals and indexations.

It was clear that the current macroeconomic uncertainty, with its blend of high inflation, sharply rising interest rates and a weak global economy, would also shape the start of the new year. In light of this, we had already mentioned in our outlook that we continue to anticipate very subdued transaction activity in the first half of the year in particular and only expect the markets to normalise during the second half of 2023.

The decline in funds from operations to EUR 12.9 million reflects this situation and is explained not only by the current high interest burden (primarily resulting from the VIB acquisition) but also by the quiet transaction market that had been expected in the first few months of the new year. That being said, business performed in line with our expectations in the first quarter of 2023.

We do not expect the market environment to improve dramatically in the current quarter. However, it is worth taking a closer look, as media reporting is heavily dominated by perspectives on the housing market, which is not relevant to us. One also has to differentiate between individual asset classes within the commercial real estate market. It is becoming increasingly clear that sustainability creates long-term value, and we are focusing on the right areas by concentrating on office and logistics properties as well as Green Buildings. By the end of March, these two asset classes already represented 78% of the market value in the proprietary portfolio. We managed to significantly exceed our target of increasing the proportion of Green Buildings to more than 20% at the start of the year, which will also have a positive effect on future interest payments for our ESG-linked promissory notes.

"Business performed in line with our expectations in the first quarter of 2023 – we expect the markets to normalise during the second half of 2023"

We are actively contributing to ESG issues in our industry, having recently received a substantially improved Sustainalytics rating to place us among the world's top 10 real estate companies.

Most importantly, however, commercial tenants are placing an ever-greater emphasis on ESG-readiness in their search for suitable properties and when renewing leases. After all, up-to-date, climate-friendly and efficient buildings and work environments are an increasingly important argument, particularly when it comes to recruiting and retaining staff.

We are keeping our finger on the pulse and becoming the partner of choice with the range of products and services we can offer our clients, including renovating portfolio properties such as the Global Tower in Frankfurt. More detailed information and insights into this exciting area can be found in our Sustainability Report, which will be published online on 23 May.

Dear shareholders, everything we do is geared towards the success of this Company. The focus for 2023 is on the financial profile and on continuous improvement. We are also continuing to work on steadily improving our financial profile. Our aim is to reduce our loan-to-value ratio (LTV) to less than 50% in the short term and improve the average maturity of our financial debt with repayments and refinancing.

We made some initial progress in this respect already during the quarter under review.

  • With the successful transfer of the first sales from the previous year, we have improved our LTV slightly by 50 basis points to 57.3% since the start of the year
  • After refinancing 45 commercial properties at VIB level in February, the average maturity of our debt rose to 3.8 years as of 31 March 2023. Existing loans totalling around EUR 245 million were paid off and replaced with a new syndicated loan with a volume of around EUR 505 million
  • Cash on hand has increased by around EUR 310 million since the start of the year, primarily as a result of financing activities

We will continue to use our "dynamic performance" to follow this path and do everything we can to ensure that DIC Asset AG creates secure and long-term value for all of its stakeholders even in a turbulent environment.

I would like to thank all of our shareholders for the trust you have placed in us in such challenging times and wish you all the best for the months ahead.

Focus on long-term continuous cash flows and values

  • Market environment remains challenging transaction markets down y-o-y in the first quarter of 2023
  • Market normalisation and achievement of DIC transaction targets expected in the second half of the year
  • Healthy letting markets with a high share of renewals since the beginning of the year
  • Like-for-like growth of 7.8% on the platform driven by indexations and higher level of lease renewals
  • Improving DIC's financial profile by reducing and refinancing outstanding debt
  • Average maturity of loans and borrowings improves to 3.8 years with higher cash balance as at 31 March 2023
  • Cash flow quality further enhanced: increasing share of income sources that can be predicted long term (rents, recurring fees)
  • DIC platform becomes increasingly independent of transactions
  • ESG stabilises asset values and becomes a yield driver as properties can be marketed long term
  • Clear focus on Green Buildings, Green Leases and Green Developments (at VIB) excellent ESG rating results

Platform with stronger balance sheet portfolio Assets under management total EUR 14.1 billion

Assets under management (AuM) on the DIC platform rose by 22% yearon-year to EUR 14.1 billion, in particular due to the acquisition of a majority stake in VIB Vermögen AG ("VIB") in the second quarter of 2022.

Following the consolidation of VIB, own properties held in the Commercial Portfolio almost doubled year-on-year to EUR 4.1 billion. The value of the VIB portfolio as part of the Commercial Portfolio was around EUR 2.0 billion as at 31 March 2023. By the end of March 2023, 31 retail properties had been disposed (transferred) as part of the launch of the fund "VIB Retail Balance I" at VIB level and the "Kaufhof Chemnitz" property at DIC level. The properties were already reported under the balance sheet item "Non-current assets held for sale" as of 31 December 2022.

Assets under management in the Institutional Business totalled around EUR 10.0 billion (+6% year-on-year) as at 31 March 2023. In the first quarter of 2023, a major property management mandate was discontinued (annual fees of c. EUR 0.4 million). In addition, the acquisitions (31 properties of the VIB retail fund) were transferred to assets under management in the third-party business. Overall, third-party business assets under management declined slightly in the first three months of 2023.

No further transactions were notarised in the first quarter of 2023. We expect the transaction market to return to normal in the second half of 2023.

Assets under Management

in EUR billion

Portfolio by segment

31.03.2023 Commercial
Portfolio
Institutional
Business
Total
Number of properties 174 183 357
Market value in EUR million* 4,106.5 10,033.8 14,140.3
Rental space in sqm 1,879,700 2,843,600 4,723,300
31.03.2022 Commercial
Portfolio
Institutional
Business
Total
Number of properties 93 145 238
Market value in EUR million* 2,230.6 9,423.6 11,654.2

* Market value as at 31.12. of the previous year, later acquisition generally considered at cost

Strong contribution from indexations Like-for-like rental income up 7.8%

Like-for-like rental income for the entire portfolio under management was up 7.8%. Both the Commercial Portfolio (+4.7%) and the Institutional Business (+8.8%) saw rents increase based primarily on indexations and a higher level of lease renewals.

Letting performance in the first three months of 2023 was up 88% yearon-year to 123,400 sqm, with the higher proportion of logistics leases (e.g. 35,600 sqm to DACHSER Biebesheim) being a key factor. However, DIC was also successful in letting retail properties (e.g. signing a lease for 20,400 sqm at the former Kaufhof location in Leverkusen to Modehaus Aachener) and a hotel property in Hamburg managed for third parties (other commercial).

The previous year's figures do not yet include the letting performance relating to VIB. In the first quarter of 2023, VIB accounted for a total of 45,000 sqm (renewals only).

Letting performance expressed in annualised rent contracted to EUR 10.5 million (previous year: EUR 13.5 million), thereby EUR 3.0 million below the prior year mainly due to the large-volume lease with Deutsche Bank in the prior-year quarter. Of the rental income contracted in the first quarter of 2023, EUR 4.4 million relates to the Commercial Portfolio and EUR 6.1 million to the Institutional Business (previous year: EUR 0.6 million and EUR 12.9 million, respectively).

Lease expiry volume: Around 67% of the leases on the platform expire in 2027 or later whereas 3% of the total volume expire in 2023.

Lease expiry volume in % of annualised rental income Like-for-like rental income annualised, in EUR million � Institutional Business � Commercial Portfolio 422.2 +7.8 % +8.8 % + 4.7% 455.3 31.03.2022 31.03.2023 322.7 2026 9.9 % 66.8% 2025 2027 et seqq. 14.1 % 99.5 351.1 104.2 2024 6.6 % 2023 2.6 %

Commercial Portfolio: Focus: logistics and office assets

Strategic asset classes: Following the sales of 32 retail properties in the first quarter of 2023, office and logistics together now account for 78% of the market value in a dynamically growing portfolio (previous year: 72%).

Logistics properties are the largest asset class at 41% of market value. At EUR 77.3 million, they account for around 42% of annualised rents.

The office asset class follows in second place, representing a share of 37% of the portfolio's market value or 39% of rents.

The EPRA vacancy rate as at 31 March 2023 improved to 4.9% y-o-y, mainly due to the portfolio mix (31 March 2022: 7.0%).

At 5.1 years, WALT remains at a high level (31 March 2022: 5.8 years). The decline is largely due to disposals.

The gross rental yield of 4.8% in the Commercial Portfolio (excluding project developments and repositioning properties) was stable y-o-y.

Commercial Portfolio – Asset classes

Type of use No. of
properties
Market value EUR m % of total Rental income EUR m % of total EPRA
vacancy rate
WALT
Logistics 64 1,698.3 41 % 77.3 42 % 1.4 % 5.0
Office 59 1,516.3 37 % 71.9 39 % 8.7 % 5.5
Retail 12 309.8 8 % 15.3 8 % 3.0 % 4.8
Mixed-Use 16 314.9 8 % 17.3 10 % 8.0 % 4.2
Other 18 50.9 1 % 2.2 1 % 3.6 % 1.9
Project Developments 5 216.3 5 % n.a. n.a. n.a.
Balance Sheet Portfolio 174 4,106.5 100 % 184.0 100 % 4.9 % 5.1

* all figures without project developments and repositioning properties, except for number of properties and market value

Institutional Business: Raising funds for existing and new products

Assets under Management (AuM) in the third-party business for institutional investors as at 31 March 2023 rose to EUR 10.0 billion year-on-year.

Since the beginning of the year, acquired properties from the previous year with a volume of EUR 348 million were transferred. This contrasts with a disposal of EUR 518 million from the discontinuation of a property management mandate.

DIC currently manages 32 vehicles (17 pool funds totalling EUR 6.3 billion, eight club deals totalling EUR 1.8 billion and seven separate accounts totalling EUR 1.9 billion) for a total of 169 institutional investors.

Around 59% of equity comes from investors who have invested in more than one DIC investment product.

At present, around EUR 250 million in committed equity is still available for further acquisitions or forward deals that have already been notarised.

Fundraising for the shares that have not yet been placed is currently continuing – with the aim of placing all of the shares with institutional investors in the next months. As at 31 March 2023, these shares are shown as "non-current assets held for sale" in the consolidated balance sheet.

DIC is also in discussions and explores the market for other investment products it plans to launch in the course of the year.

Asset classes, Institutional Business

Based on: AuM in EUR billion as at 31.03.2023

P&L – Commercial Portfolio segment: Strong rental growth after VIB integration

Commercial Portfolio

Comparability with the prior-year quarter is only possible to a limited extent, as VIB was not yet included in the first quarter of 2022.

Net rental income more than doubled to EUR 44.0 million (previous year: EUR 21.1 million), driven mainly by the VIB consolidation and like-for-like growth of gross rents (+4.7%).

The segment's operating expenses of EUR 5.7 million are at a normalised level incl. VIB (previous year: EUR 7.9 million). The prior-year quarter included transaction costs of EUR 4.9 million for the VIB acquisition.

At EUR -26.0 million, the net interest result was significantly lower than the previous year's result of EUR -7.7 million. This is mainly due to the interest expense of the VIB bridge financing, the inclusion of VIB in the figures for the first quarter of 2023, and one-off effects from the recent refinancing of VIB. VIB was not included in the consolidated financial statements until the second quarter of 2022.

The other adjustments mainly relate to the one-off interest expense mentioned above.

The segment's FFO contribution after deducting non-controlling interests was up slightly on the previous year at EUR 12.9 million (previous year: EUR 12.3 million).

The segment's FFO II contribution that includes the value added by disposals was at EUR 20.4 million (previous year: EUR 12.3 million).

Segment reporting

in EUR million Q1 2023 Q1 2022
Commercial
Portfolio
Institutional
Business
Total Commercial
Portfolio
Institutional
Business
Total
Gross rental income (GRI) 50.4 50.4 25.0 25.0
Net rental income (NRI) 44.0 44.0 21.1 21.1
Profits on property disposals 8.2 8.2 0.0 0.0
Real estate management fees 10.5 10.5 25.4 25.4
Share of the profit or loss
of associates
0.2 0.7 0.9 1.3 3.2 4.5
Depreciation and amortisation – 17.2 – 1.2 – 18.4 – 8.6 – 2.1 – 10.7
Net other income 0.0 0.0 0.0 0.2 0.2
Net interest result – 26.0 0.0 – 26.0 – 7.7 – 1.3 – 9.0
Operational expenditure (OPEX) – 5.7 – 11.0 – 16.7 – 7.9 – 12.8 – 20.7
- of which admin costs – 1.9 – 3.7 – 5.6 – 6.0 – 4.6 – 10.6
- of which personnel costs – 3.8 – 7.3 – 11.1 – 1.9 – 8.2 – 10.1
Other adjustments 6.5 0.2 6.7 5.2 5.2
Funds from Operations (FFO) 19.0 0.4 19.4 12.3 14.4 26.7
Funds from Operations (excluding
non-controlling interest)
12.9 0.0 12.9 12.3 14.4 26.7
Funds from Operations II (FFO II) 27.2 0.4 27.6 12.3 14.4 26.7
Funds from Operations II
(excluding non-controlling inter
est, including profit on disposals)
20.4 0.0 20.4 12.3 14.4 26.7

P&L – Institutional Business Segment: Increase of recurring management fees

Institutional Business

Real estate management fees from asset management, property management and development fees rose year-on-year to EUR 10.5 million (previous year: EUR 8.6 million). In the prior-year period, additional transaction and performance fees of EUR 16.8 million were received. Overall, real estate management fees amounted to EUR 10.5 million compared with EUR 25.4 million in Q1 22.

At EUR 0.7 million, the share of the profit or loss of associates is down y-o-y due to the lower transaction business (previous year: EUR 3.2 million).

Despite the y-o-y increase in assets under management, operating expenses at EUR 11.0 million are down around 14% on the previous year, also reflecting the decline in the transaction business.

Lower transaction-related real estate management fees result in a significantly lower contribution to earnings in the reporting period compared with the previous year, despite the improved cost ratios.

The segment's FFO contribution excluding non-controlling interest is EUR 0.0 million (previous year: EUR 14.4 million).

Segment reporting

in EUR million Q1 2023
Q1 2022
Commercial
Portfolio
Institutional
Business
Total Commercial
Portfolio
Institutional
Business
Total
Gross rental income (GRI) 50.4 50.4 25.0 25.0
Net rental income (NRI) 44.0 44.0 21.1 21.1
Profits on property disposals 8.2 8.2 0.0 0.0
Real estate management fees 10.5 10.5 25.4 25.4
Share of the profit or loss
of associates
0.2 0.7 0.9 1.3 3.2 4.5
Depreciation and amortisation – 17.2 – 1.2 – 18.4 – 8.6 – 2.1 – 10.7
Net other income 0.0 0.0 0.0 0.2 0.2
Net interest result – 26.0 0.0 – 26.0 – 7.7 – 1.3 – 9.0
Operational expenditure (OPEX) – 5.7 – 11.0 – 16.7 – 7.9 – 12.8 – 20.7
- of which admin costs – 1.9 – 3.7 – 5.6 – 6.0 – 4.6 – 10.6
- of which personnel costs – 3.8 – 7.3 – 11.1 – 1.9 – 8.2 – 10.1
Other adjustments 6.5 0.2 6.7 5.2 5.2
Funds from Operations (FFO) 19.0 0.4 19.4 12.3 14.4 26.7
Funds from Operations (excluding
non-controlling interest)
12.9 0.0 12.9 12.3 14.4 26.7
Funds from Operations II (FFO II) 27.2 0.4 27.6 12.3 14.4 26.7
Funds from Operations II
(excluding non-controlling inter
est, including profit on disposals)
20.4 0.0 20.4 12.3 14.4 26.7

Balance sheet: Characterised by high liquidity

  • Total assets have increased by EUR 147.6 million to EUR 5,327.9 million since the beginning of the year, mainly as a result of signing a new syndicated loan for the majority of the logistics portfolio for around EUR 505 million and the concurrent repayment of EUR 245 million in previous financing in February 2023 at the level of the subsidiary VIB. DIC held an interest of 68.75% in VIB as at 31 March 2023.
  • Non-current assets at EUR 4,250.6 million at the end of the first quarter of 2023 were at the level of the year-end 2022 (EUR 4,247.6 million).
  • The increase in current assets of EUR 144.6 million is mainly attributable to the increase in cash and cash equivalents at the level of subsidiary VIB, which is due to the refinancing arrangement for the majority of the logistics portfolio, and the disposal of the properties previously shown under non-current assets held for sale into the fund "VIB Retail Balance I".
  • Equity at EUR 1,666.7 million is EUR 2.6 million higher than at year-end 2022. In addition to the effect of the slightly positive profit for the period in the first quarter of 2023, this is due to an increase in other comprehensive income and an offsetting effect in non-controlling interests. The dividend for the previous year approved at the end of March was not paid out until the second quarter of 2023. At 31.3%, the equity ratio as at 31 March 2023 was slightly below the December 2022 figure of 32.1% as a result of the increase in total equity and liabilities.
  • Liabilities rise by EUR 144.9 million to EUR 3,661.1 million compared to the end of 2022. The increase in loans and borrowings is primarily attributable to the financing activities of VIB.

Balance sheet overview

in EUR million 31.03.2023 31.12.2022
Total assets 5,327.9 5,180.3
Total non-current assets 4,250.6 4,247.6
- thereof goodwill 190.2 190.2
Total current assets 1,077.3 932.7
Equity 1,666.7 1,664.1
Total non-current financial liabilities 2,573.2 2,697.6
Total current financial liabilities 684.5 402.2
Other liabilities 403.4 416.4
Total liabilities 3,661.1 3,516.2 
Balance sheet equity ratio 31.3 % 32.1 %

Financial profile: Continuous optimisation

Loan-to-value (LTV)*/Adjusted LTV**

31.12.2022 31.03.2023

* The ratio of total financial debt, corporate bonds and liabilities to related parties minus cash in banks on the one hand and the fair value of investment property, equity investments and receivables from related parties and intangible assets, e.g. goodwill on the other hand, adjusted for Warehousing.

** Incl. full value of Institutional Business

Maturities of loans and borrowings

* Nominal values as of 31 March 2023

Ø interest rate:

in %, based on total interest bearing liabilities at end of period

31.12.2022 31.03.2023

  • Refinancing of 45 properties at the level of VIB (repayment of financing with a volume of around EUR 245 million and conclusion of a syndicated loan for around EUR 505 million).
  • Higher level of cash on hand of EUR 498.0 million as at 31 March 2023 (31 December 2022: EUR 188.4 million)
  • • Average maturity of loans and borrowings (incl. VIB bridge) increases to 3.8 years (31 December 2022: 3.5 years). Excl. the bridge it was at 4.3 years at the end of March 2023
  • • Average interest rate (incl. floating rate VIB bridge) increases to 2.8% and 2.6% without bridge (31 December 2022: 2.4% and 1.9%)
  • • Maturities in 2023 and 2024: Review of refinancing options and focus on debt reduction by using sales proceeds
  • • LTV down slightly since the start of the year (-50 basis points), in particular due to the sale of "Kaufhof Chemnitz" in the first quarter of 2023
  • • Covenants as at 31 March 2023 with sufficient headroom:
  • ° Bond LTV 54.8% (covenant level 60.0%)
  • ° Secured LTV 25.3% (covenant level 45.0%)
  • ° ICR 3.2x (Covenant Level 1,8x)

DIC Asset AG 12 Quarterly Statement Q1 2023

Guidance confirmed Financial year 2023

Guidance
Gross rental income EUR 185–195 million
Real estate management fees EUR 70–80 million
FFO I (after minority interests,
before tax)
EUR 90–97 million
Acquisitions Commercial Portfolio:
No acquisitions
Institutional Business:
EUR 300–800 million
Sales Commercial Portfolio:
EUR 300–500 million
Institutional Business:
EUR 100–200 million

Key figures

Key financial figures in EUR million Q1 2023 Q1 2022 Δ
Gross rental income 50.4 25.0 25.4
Net rental income 44.0 21.1 22.9
Real estate management fees 10.5 25.4 14.9
Proceeds from sales of property 356.4 2.8 353.6
Profits on property disposals 8.2 0.0 8.2
Share of the profit or loss of
associates
0.9 4.5 3.6
Funds from Operations excluding
non-controlling interest (FFO)
12.9 26.7 13.8
Funds from Operations II
(excluding non-controlling inter
est, including profit on disposals)
20.4 26.7 6.3
EBITDA 47.0 30.5 16.5
EBIT 28.6 19.7 8.9
Profit for the period 2.2 9.5 7.3
Cash flow from operating activ
ities
6.1 39.0 32.9

Key financial figures per share in EUR*

FFO per share (excluding
non-controlling interest)
0.16 0.33 0.17
FFO II per share (excluding
non-controlling interest)
0.25 0.33 0.08
Earnings per share (excluding
non-controlling interest)
0.00 0.11 0.11

* All per share figures adjusted in accordance with IFRS (number of shares Q1 2023: 83,152,366; Q1 2022: 81,861,163)

Balance sheet figures in EUR million 31.03.2023 31.12.2022
Investment property 3,673.3 3,673.3
Non-current assets held for sale (IFRS 5) 296.1 540.8
Equity 1,666.7 1,664.1
Financial liabilities (incl. IFRS 5) 3,296.5 3,138.4
Total assets 5,327.9 5,180.3
Loan-to-Value ratio (LTV)** 57.3 % 57.8 %
Adjusted LTV / ** 54.1 % 54.7 %
NAV per share (in EUR)* 18.48 18.29
Adjusted NAV per share (in EUR) / *** 22.03 21.84
Key operating figures 31.03.2023 31.12.2022
Number of properties 357 360
Assets under Management in EUR billion 14.1 14.7
Rental space in sqm 4,723,300 4,794,600
Letting result in sqm 123,400 374,900
Key operating figures (Commercial Portfolio)*** 31.03.2023 31.12.2022
Annualised rental income in EUR million 184.0 203.8
EPRA vacancy rate in % 4.9 4.3
WALT in years 5.1 5.5
Avg. rent per sqm in EUR 8.41 8.26
Gross rental yield in % 4.8 4.8

* All per share figures adjusted in accordance with IFRS (number of shares 31.03.2023: 83,152,366; 31.12.2022: 83,152,366)

** Adjusted for warehousing

*** Calculated for the Commercial Portfolio only, without repositioning and warehousing

**** Incl. full value of Institutional Business

Consolidated income

statement in EUR thousand Q1 2023 Q1 2022
for the period from 1 January to 31 March 2023 Gross rental income 50,443 25,009
Ground rents – 49 – 140
Service charge income on principal basis 9,474 5,142
Service charge expenses on principal basis – 11,302 – 5,954
Other property-related expenses – 4,553 – 2,951
Net rental income 44,013 21,106
Administrative expenses – 5,640 – 10,587
Personnel expenses – 11,043 – 10,128
Depreciation and amortisation – 18,343 – 10,748
Real estate management fees 10,452 25,377
Other operating income 621 278
Other operating expenses – 584 – 62
Net other income 37 216
Net proceeds from disposal of investment property 356,355 2,842
Carrying amount of investment property disposed – 348,170 – 2,839
Profit on disposal of investment property 8,185 3
Net operating profit before financing activities 27,661 15,239
Share of the profit of associates 946 4,487
Interest income 2,292 3,769
Interest expense – 28,273 – 12,737
Profit / loss before tax 2,626 10,758
Current Income tax expense – 1,991 – 1,882
Deferred tax expense 1,605 586
Profit for the period 2,240 9,462
Attributable to equity holders of the parent 96 9,391
Attributable to non-controlling interest 2,144 71
Basic (=diluted) earnings per share (EUR) * 0.00 0.11

* calculated with the new average number of shares in accordance with IFRS

Consolidated statement of comprehensive income

for the period from 1 January to 31 March 2023

in EUR thousand Q1 2023 Q1 2022
Profit / loss for the period 2,240 9,462
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Fair value measurement of hedging instruments
Cash flow hedges 33 2,323
Items that shall not be reclassified subsequently to profit or loss
Gain / losses on financial instruments classified as measured
at fair value through other comprehensive income
10,569 – 4,731
Other comprehensive income* 10,602 – 2,408
Comprehensive income 12,842 7,054
Attributable to equity holders of the parent 10,698 6,983
Attributable to non-controlling interest 2,144 71

* after tax

Consolidated statement of cash flow

for the period from 1 January to 31 March 2023

in EUR thousand Q1 2023 Q1 2022
OPERATING ACTIVITIES
Net operating profit before interest and taxes paid 21,622 15,512
Realised gains / losses on disposals of investment property – 8,185 – 3
Depreciation and amortisation 18,343 10,748
Changes in receivables, payables and provisions – 4,709 18,748
Other non-cash transactions – 1,569 57
Cash generated from operations 25,502 45,064
Interest paid – 16,533 – 5,644
Interest received 189 0
Income taxes received / paid – 3,038 – 407
Cash flows from operating activities 6,120 39,013
INVESTING ACTIVITIES
Proceeds from disposal of investment property 356,355 2,842
Acquisition of investment property 0 – 7,711
Capital expenditure on investment properties – 15,697 – 7,661
Acquisition of other investments – 188,620 – 480,424
Disposal of other investments 0 81,549
Acquisition of office furniture and equipment, software – 38 – 268
Cash flows from investing activities 152,000 – 411,673
FINANCING ACTIVITIES
Repayment of minority interest – 10,200 0
Proceeds from other non-current borrowings 525,948 285,000
Repayment of borrowings – 363,612 – 1,511
Lease payments – 690 – 705
Payment of transaction costs 0 – 4,688
Cash flows from financing activities 151,446 278,096
Net increase in cash and cash equivalents 309,566 – 94,564
Cash and cash equivalents as at 1 January 188,404 546,911
Cash and cash equivalents as at 31 March 497,970 452,347

Consolidated balance sheet

Assets

in EUR thousand 31.03.2023 31.12.2022
Goodwill 190,243 190,243
Investment property 3,673,349 3,673,250
Property, plant and equipment 19,906 20,644
Investments in associates 82,210 81,642
Loans to related parties 108,622 106,872
Other investments 115,015 102,549
Intangible assets 38,021 39,781
Deferred tax assets 23,237 32,562
Total non-current assets 4,250,603 4,247,543
Receivables from sale of investment property 3,777 100
Trade receivables 53,354 28,831
Receivables from related parties 16,693 16,210
Income tax receivable 38,033 39,151
Derivatives 0 13,510
Other receivables 153,225 87,037
Other current assets 18,116 18,701
Cash and cash equivalents 497,970 188,404
781,168 391,944
Non-current assets held for sale 296,089 540,783
Total current assets 1,077,257 932,727
Total assets 5,327,860 5,180,270

Equity and liabilities

in EUR thousand 31.03.2023 31.12.2022
EQUITY
Issued capital 83,152 83,152
Share premium 912,716 912,716
Hedging reserve – 757 – 790
Reserve for financial instruments classified as at fair value
through other comprehensive income
4,283 – 6,286
Actuarial gains / losses pensions 740 740
Retained earnings 114,104 114,008
Total shareholders' equity 1,114,238 1,103,540
Non-controlling interest 552,507 560,561
Total equity 1,666,745 1,664,101
Liabilities
Corporate bonds 393,253 392,790
Non-current interest-bearing loans and borrowings 2,179,924 2,304,803
Deferred tax liabilities 231,455 242,368
Pension provisions 3,192 3,192
Other non-current liabilities 548 1,033
Total non-current liabilities 2,808,372 2,944,186
Corporate bonds 149,608 149,409
Current interest-bearing loans and borrowings 534,915 252,759
Trade payables 6,594 4,870
Liabilities to related parties 19,421 19,160
Income taxes payable 32,522 33,538
Other liabilities 70,899 73,571
813,959 533,307
Liabilities related to non-current assets held for sale 38,784 38,676
Total current liabilities 852,743 571,983
Total liabilities 3,661,115 3,516,169
Total equity and liabilities 5,327,860 5,180,270

Consolidated statement of changes in equity

for the period from 1 January to 31 March 2023

in EUR thousand Issued capital Share premium Hedging
reserve
Reserve for
financial
instruments
classified as at
fair value
through other
comprehensive
income
Actuarial
gains / losses pen
sions
Retained
earnings
Total
shareholders'
equity
Non-controlling
interest
Total
Balance at December 31, 2022 83,152 912,716 – 790 – 6,286 740 114,008 1,103,540 560,561 1,664,101
Profit / loss for the period 96 96 2,144 2,240
Other comprehensive income*
Items that may be reclassified subsequently to profit or loss
Gains / losses from cash flow hedges 33 33 33
Items that shall not be reclassified subsequently to profit or loss
Gains / losses on financial instruments classified as measured
at fair value through other comprehensive income
10,569 10,569 10,569
Actuarial gains / losses pensions 0 0 0
Comprehensive income 0 0 33 10,569 0 96 10,698 2,144 12,842
Change of non-controlling interest – 10,198 – 10,198
Balance at March 31, 2023 83,152 912,716 – 757 4,283 740 114,104 1,114,238 552,507 1,666,745

* Net of deferred taxes

This table will be continued on the next page.

Consolidated statement of changes in equity

for the period from 1 January to 31 December 2022

in EUR thousand Issued capital Share premium Hedging
reserve
Reserve for
financial
instruments
classified as at
fair value
through other
comprehensive
income
Actuarial
gains / losses pen
sions
Retained
earnings
Total
shareholders'
equity
Non-controlling
interest
Total
Balance at December 31, 2021 81,861 896,290 – 2,445 8,851 0 144,380 1,128,937 5,032 1,133,969
Profit / loss for the period
Other comprehensive income*
Items that may be reclassified subsequently to profit or loss
9,391 9,391 71 9,462
Gains / losses from cash flow hedges 2,323 2,323 2,323
Items that shall not be reclassified subsequently to profit or loss
Gains / losses on financial instruments classified as measured
at fair value through other comprehensive income
– 4,731 – 4,731 – 4,731
Actuarial gains / losses pensions
Comprehensive income 0 0 2,323 – 4,731 0 9,391 6,983 71 7,054
Change of non-controlling interest – 42 – 42
Balance at March 31, 2022 81,861 896,290 – 122 4,120 0 153,771 1,135,920 5,061 1,140,981
Profit / loss for the period
Other comprehensive income*
Items that may be reclassified subsequently to profit or loss
21,633 21,633 11,763 33,396
Gains / losses from cash flow hedges – 668 – 668 – 668
Items that shall not be reclassified subsequently to profit or loss
Gains / losses on financial instruments classified as measured
at fair value through other comprehensive income
– 10,406 – 10,406 – 10,406
Actuarial gains / losses pensions 740 740 740
Comprehensive income – 668 – 10,406 740 21,633 11,299 11,763 23,062
Changes in the basis of consolidation
Dividend distribution for 2021
Issuance of shares through capital increase in kind
Transaction costs of equity transactions
Change of non-controlling interest
1,291 16,628
– 202
– 61,396 – 61,396
17,919
– 202
566,195
– 22,458
566,195
– 61,396
17,919
– 202
– 22,458
Balance at March 31, 2022 83,152 912,716 – 790 – 6,286 740 114,008 1,103,540 560,561 1,664,101

Segment reporting

for the period from 1 January to 31 March 2023

in EUR million Q1 2023 Q1 2022
Commercial
Portfolio
Institutional
Business
Total Commercial
Portfolio
Institutional
Business
Total
Key earnings figures
Gross rental income (GRI) 50.4 50.4 25.0 25.0
Net rental income (NRI) 44.0 44.0 21.1 21.1
Profits on property disposals 8.2 8.2 0.0 0.0
Real estate management fees 10.5 10.5 25.4 25.4
Share of the profit or loss of associates 0.2 0.7 0.9 1.3 3.2 4.5
Depreciation and amortisation – 17.2 – 1.2 – 18.4 – 8.6 – 2.1 – 10.7
Net other income 0.0 0.0 0.2 0.2
Net interest result – 26.0 0.0 – 26.0 – 7.7 – 1.3 – 9.0
Operational expenditure (OPEX) – 5.7 – 11.0 – 16.7 – 7.9 – 12.8 – 20.7
of which admin costs – 1.9 – 3.7 – 5.6 – 6.0 – 4.6 – 10.6
of which personnel costs – 3.8 – 7.3 – 11.1 – 1.9 – 8.2 – 10.1
Other adjustments 6.5 0.2 6.7 5.2 0.0 5.2
Funds from Operations (FFO) 19.0 0.4 19.4 12.3 14.4 26.7
Funds from Operations (excluding non-controlling interest) 12.9 0.0 12.9 12.3 14.4 26.7
Funds from Operations II (FFO II) 27.2 0.4 27.6 12.3 14.4 26.7
Funds from Operations II
(excluding non-controlling interest, including profit on disposals)
20.4 0.0 20.4 12.3 14.4 26.7
EBITDA 46.7 0.3 47.0 14.8 15.7 30.5
EBIT 29.5 – 0.9 28.6 6.1 13.6 19.7
Segment assets
Number of properties 174 183 357 93 145 238
Assets under Management (AuM) 4,106.5 10,033.8 14,140.3 2,230.6 9,423.6 11,654.2
Rental space in sqm 1,879,700 2,843,600 4,723,300 827,500 2,381,200 3,208,700

Transactions in 2023 Loan to value (LTV)

in EUR million
(number of properties)
Notarisations
2023 YTD
thereof: Notarisations
2023 YTD with Transfer
until 31.03.2023
Prior-year Notarisations
with Transfer
until 31.03.2023
Acquisitions
Commercial Portfolio 0 (0) 0 (0) 0 (0)
Institutional Business 0 (0) 0 (0) 348 (31)
Total 0 (0) 0 (0) 348 (31)
Sales
Commercial Portfolio 0 (0) 0 (0) 359 (32)
Institutional Business 0 (0) 0 (0) 0 (0)
Total 0 (0) 0 (0) 359 (32)
in EUR thousand 31.03.2023 31.12.2022
Asset values
Carrying amount of Properties 3,673,349 3,673,250
Carrying amount of properties under IFRS 5** 87,495 435,750
Fair value adjustment 345,657 342,901
Fair value of investment properties, total 4,106,501 4,451,901
Fair value of investments (indirect property)* 317,007 205,337
Goodwill 190,243 190,243
Service agreements 48,967 52,175
Carrying amount of loans / receivables due to
related parties
125,315 123,082
Fair value of assets (value) 4,788,033 5,022,738
Less goodwill
Less service agreements
– 190,243
– 48,967
– 190,243
– 52,175
Add fair value of Institutional Business 522,276 522,276
Adjusted fair value of assets (value) 5,071,099 5,302,596
Liabilities
Non-current interest-bearing loans and borrowings** 2,106,860 2,236,839
Current interest-bearing loans and borrowings 534,915 252,759
Liabilities related to non-current assets held for sale
(IFRS 5)**
38,784 38,676
Related party liabilities 19,421 19,160
Corporate Bonds 542,861 542,199
Less cash and cash equivalents – 497,970 – 188,404
Net liabilities (loan) 2,744,871 2,901,229
LTV** 57.3 % 57.8 %
Adjusted LTV** 54.1 % 54.7 %

* includes shares in associated companies and other investments

EPRA key figures

EPRA financial figures in EUR million 31.03.2023 31.12.2022 Δ
EPRA Net Reinstatement Value (EPRA-NRV) 1,671.6 1,669.5 0 %
EPRA Net Disposal Value (EPRA-NDV) 1,258.0 1,254.2 0 %
EPRA Net Tangible Assets (EPRA-NTA) 1,213.6 1,196.6 1 %
EPRA net initial yield (in %)** 3.9 3.9 0 %
EPRA "topped up" net initial yield (in %)** 3.9 4.0 3 %
EPRA vacancy rate (in %)*** 4.9 4.3 14 %
EPRA-LTV (%) 60.9 60.5 1 %
Q1 2023 Q1 2022 Δ
EPRA earnings 20.2 25.3 20 %
EPRA cost ratio incl. direct vacancy costs (in %)** 19.5 21.9 11 %
EPRA cost ratio incl. direct vacancy costs (in %)** 16.8 19.5 14 %
EPRA financial figures per Share in EUR* Q1 2023 Q1 2022 Δ
EPRA earnings per share 0.24 0.31 23 %
31.03.2023 31.12.2022
NAV per share 18.48 18.29 1 %
Adjusted NAV per share**** 22.03 21.84 1 %

* all per share figueres adjusted accordance with IFRSs (number of shares Q1 2023: 83,152,366; Q1 2022: 81,861,163)

** Calculated for the Commercial Portfolio only

*** Calculated for the Commercial Portfolio only, without warehousing, project developments and repositioning

**** incl. Full value of Institutional Business

Investor Relations Contact

Peer Schlinkmann Head of Investor Relations & Corporate Communications

Tel. (069) 94 54 858-1492 Fax (069) 94 54 858-9399 [email protected]

Maximilian Breuer, CFA Senior Investor Relations Manager

Tel. (069) 94 54 858-1465 Fax (069) 94 54 858-9399 [email protected]

Disclaimer

This quarterly statement contains forward-looking statements including associated risks and uncertainties. These statements are based on the Management Board's current experience, assumptions and forecasts and the information currently available to it. The forward-looking statements are not to be interpreted as guarantees of the future developments and results mentioned therein. The actual business performance and results of DIC Asset AG and of the Group are dependent on a multitude of factors that contain various risks and uncertainties. In the future, these might deviate significantly from the underlying assumptions made in this quarterly statement. Said risks and uncertainties are discussed in detail in the risk report as part of financial reporting. This quarterly statement does not constitute an offer to sell or an invitation to make an offer to buy shares of DIC Asset AG. DIC Asset AG is under no obligation to adjust or update the forward-looking statements contained in this quarterly statement.

For computational reasons, rounding differences from the exact mathematical values calculated (in EUR thousand, %, etc.) may occur in tables and cross-references.

Financial calendar

2023
23.05. 2022 Sustainability Report
08.06. EPRA Corporate Access Summer 2023
03.08. H1 2023 Report
12.09. SRC Forum Financials + RE 2023
September Berenberg GS CC 2023
September Baader Investment Conference 2023
08.11. Q3 2023 Statement
November Deutsches Eigenkapitalforum 2023

Legal

DIC Asset AG Neue Mainzer Straße 20 · MainTor 60311 Frankfurt am Main Tel. (069) 94 54 858-0 · Fax (069) 94 54 858-9399 [email protected] · www.dic-asset.de

This quarterly report is also available in German (binding version).

For more information:

https://www.dic-asset.de/en/ir/

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