DIC Asset AG: Excellent 2021 financial year – focus in 2022 to remain clearly on further growth
DGAP-News: DIC Asset AG / Key word(s): Annual Results
DIC Asset AG: Excellent 2021 financial year – focus in 2022 to remain clearly on further growth
Frankfurt am Main, 9 February 2022. DIC Asset AG (“DIC”), ISIN: DE000A1X3XX4, one of Germany’s leading listed property companies, published its consolidated financial statements for 2021 today. The company once again achieved or exceeded its annual targets, thereby showing how much potential the commercial real estate market has to offer if you know the business as well as DIC does, and pursue it as dynamically.
The company achieved decisive growth in all of its key figures, achieved FFO in the triple-digit millions for the first time, and swiftly expanded its share of logistics assets so that it already accounts for c. 8% of all assets under management now.
Most notably, the company has grown with a clear and consistent focus on sustainability, and it will employ this strength and competence to meet the market requirements in regard to the ESG criteria as one of the industry’s pioneering players in the ongoing year, too. At issue in this context are not only properties as such but “green” financing topics as well.
Sonja Wärntges, CEO of DIC Asset AG, commented: “We take pride in our achievements in the past year. But what has always defined DIC Asset AG is its clear-cut strategic vision of the future. We prosper whenever we manage to address market needs and the challenges of our time in constructive and creative ways. Accordingly, the ESG requirements represent a factor that we will structure in the best interest of our stakeholders. We will keep growing very dynamically this year as well. 2022 will be another year of building significant wealth for all of our stakeholders, and of success.”
At the upcoming annual general meeting, the company will therefore propose to its shareholders to raise the dividend to EUR 0.75 per share based on its success in 2021. Like the previous year, this implies a high pay-out ratio of 57%. Shareholders will have the choice of a cash or a scrip dividend again, as they did in prior years. The dividend yield relative to the share price at year-end 2021 therefore approximates 4.9%.
Key indicators and results of the 2021 financial year
The company’s assets under management increased by around 20% to EUR 11.5 billion. At EUR 107.2 million, the funds from operations (FFO) crossed into the triple-digit range for the first time, and topped the prior-year result by a substantial 11% (2020: EUR 96.5 million). The growth was fuelled, aside from the significant 11% increase in net rental income, by a 27% increase in real estate management fees. The item does not include profits from disposals. FFO II, the same item with profits from disposals added, equalled EUR 131.0 million (2020: EUR 128.5 million). The adjusted profit for the period (adjusted to reflect the one-off effect caused by refinancing a major share of the Commercial Portfolio) totalled EUR 69.9 million and was slightly below the prior-year result (previous year: EUR 73.1 million). The one-off effect concerns essentially prepayment penalties triggered by premature refinancing arrangements, and amounted to EUR 11.5 million after taxes.
Quickly, creatively and reliably: letting performance improved again
The property management team once again achieved an impressive letting performance as it signed lease agreements for 309,100 sqm (plus 15%) with an annualised rental income of EUR 33.0 million (2020: EUR 33.2 million). The strategic expansion in the logistics sector is clearly reflected in the letting activities, with several large-scale leases signed for a combined floor area of 152,500 sqm. But now as then, office lettings continue to make up the largest share of the letting performance with 55 % or EUR 18.0 million in annualised rent income.
Transaction activity again on very high level as a result of fast trading
For the third consecutive year, the transaction volume remained close to the mark of EUR 2 billion. Adding up to c. EUR 1.9 billion by the end of 2021, the total transaction volume achieved the target corridor of EUR 1.5 to 2.2 billion quoted at the start of the year. Overall, 17 assets in a total volume of c. EUR 1.6 billion were acquired during the financial year, thereof 7 properties worth c. EUR 242 million on behalf of the Commercial Portfolio. Ten properties in a volume of c. EUR 1,317 million were purchased on behalf of institutional investors. Seven properties in a total volume of c. EUR 345 million were sold: three of these, involving assets held in the Commercial Portfolio and adding up to c. EUR 28 million, were sold for the purposes of portfolio optimisation and realisation of income, while another four properties in a combined volume of c. EUR 317 million were sold in conjunction with the company’s active management mandates.
Commercial Portfolio: high degree of stability and appreciation
The main portfolio metrics of the proprietary portfolio continued to improve. The gross rental income increased by 8% to EUR 108.4 million (previous year: EUR 100.7 million) as a result of warehousing activities, acquisitions and highly successful lettings. The annualised rent income increased by 3.5% like-for-like as of the balance sheet date. The net rental income increased by 11% to EUR 91.2 million, which is not least due to the fact that pandemic-related allowances for rent receivables were EUR 2.9 million lower than they had been the year before (previous year: EUR 82.2 million). The EPRA vacancy rate declined slightly year on year, from 5.4% down to 5.3%. As a result, the third-party appraisal of the properties in the Commercial Portfolio returned a valuation effect equal to around 4.0% or EUR 85.7 million by year-end.
Brisk growth trajectory in the Institutional Business continues
The business for institutional clients has continued to pursue its consistent growth trajectory. Assets under management grew by 22% to EUR 9.3 billion (2020: EUR 7.6 million). As a result, real estate management fees increased by a substantial 27% to EUR 101.2 million (previous year: EUR 79.7 million). The share of the profit or loss of associates through co-investments in the Institutional Business vehicles equalled EUR 4.9 million (2019: EUR 11.4 million).
Financial and capital structure keeps getting “greener”
During the past financial year, DIC expanded its funding spectrum by issuing its first ESG-linked promissory note over a total amount of EUR 280 million throughout the year, followed by its first “green bond” over an amount of EUR 400 million. Toward the end of the year, the company completed the premature refinancing of loans in a volume of c. EUR 550 million for the Commercial Portfolio with a seven-year maturity. The company managed to lower the average level of interest rates across all financial liabilities to 1.8% as of 31 December 2021. Year on year, the average remaining term to maturity for all financial liabilities increased by 0.8 years to 4.4 years as of the end of December 2021.
The net asset value (NAV) continued to go up, this time rising by 7% to EUR 1,509.8 million (previous year: EUR 1,409.9 million). The net asset value adjusted to include the value of the Institutional Business (Adjusted NAV) equalled EUR 2,046.5 million by the end of 2021 or EUR 25.00 per share (31 December 2020: EUR 22.04). The increase was mainly driven by the successful growth of the integrated real estate platform, the warehousing activities, and the strategic expansion of the logistics asset class.
Forecast for 2022 – growth in all business areas
DIC plans to pursue further growth in both business segments during the 2022 financial year. Specifically, DIC is planning acquisitions in a volume of EUR 1.4 to 1.9 billion, of which EUR 200 to 300 million are earmarked for the Commercial Portfolio, and EUR 1.2 to 1.6 billion for the Institutional Business. On the dispositions side, it is planned to transact sales in a volume of EUR 300 to 500 million, including assets worth c. EUR 100 million from the Commercial Portfolio and assets worth c. EUR 200 to 400 million from the Institutional Business portfolio. The gross rental income is expected to reach EUR 106 to 109 million by year-end, while the real estate management fees in the Institutional Business are likely to reach between EUR 105 and 115 million. The company expects the funds from operations (FFO) to increase to somewhere between EUR 115 and 119 million. In the medium term, DIC is planning to expand its assets under management to approximately EUR 15 billion.
The full-length 2021 Annual Report of DIC Asset AG was published on 9 February 2022 and is available on the company’s homepage under the link below: https://www.dic-asset.de/en/ir/publications/
About DIC Asset AG:
DIC Asset AG is Germany’s leading listed specialist for commercial real estate with more than 20 years of experience on the real estate market and access to a broad-based network of investors. Our business is based on a regional and inter-regional real estate platform with eight offices on the ground in all major German markets. We manage 237 assets with a combined market value of c. EUR 11.5 billion on site, always close to our properties and their occupiers.
The Commercial Portfolio segment represents the proprietary real estate portfolio of DIC Asset AG. Here, we generate steady cash flows from stable rent revenues on long-term leases while also optimising the value of our portfolio assets through active management, and realising gains from sales.
In the Institutional Business segment, we earn recurrent fees from real estate services we provide to national and international institutional investors by structuring and managing investment vehicles that return attractive dividend yields.
DIC Asset AG has been SDAX-listed since June 2006.
IR/PR Contact DIC Asset AG:
DIC Asset AG at a Glance
*All per-share figures adjusted in accordance with IFRS. (Total no. of shares in 2021: 81,504k; 2020: 79,421k)
*** Commercial Portfolio, not including assets to be repositioned
**** incl. full value of Institutional Business
 Not included in the forecast is inorganic growth, e. g. via the acquisition or takeover of companies.
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