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DIC Asset AG: Letter to shareholders

DIC Asset AG / Miscellaneous

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* Group profit of EUR 25 million expected for financial year 2008 * Property valuation with reductions of approximately 8.5 percent * Improved cash flow through exploitation of current interest rate trends, with average interest costs reduced to approximately 5 percent * Financing contract signed for the Opera Offices project in Hamburg

Frankfurt, 24 February 2009

Dear Sir or Madam, 

In the extremely difficult economic environment, DIC Asset AG is holding its own thanks to its focused business model. The Management Board of DIC Asset AG has just concluded important financing agreements with partner banks, which, in the interests of our shareholders, underline the stability of our company. Even after the recent property valuations, with corresponding adjustments, DIC Asset's financing and asset structure remains stable. We should like to take this opportunity to keep you informed of the current results and strategic measures.
Based on the provisional figures for the 2008 annual financial statements, we are expecting a result of approximately EUR 25 million. This means that, thanks to a stable leasing business and successful sales during the fourth quarter, we fulfilled our expectations. On 10 March 2009, we will publish and explain in depth the results for the financial year 2008 along with further details.

For the annual revaluation of our property portfolio, which took place at the end of December 2008, market values fell by approximately 8.5 percent compared with 31.12.2007 on the basis of provisional results. Given the adverse environment, the valuations of DIC Asset AG's property portfolio therefore remain sustainable. We can also confirm that we are meeting the agreed parameters for those portfolios for which valuation-based financial covenants are agreed.

We were able to reduce the interest rate of the EUR 350 million financing of our Odin portfolio by 50 basis points by restructuring the interest hedging arrangements and, at the same time, were able to extend the fixed interest period to seven years. In this way, DIC Asset AG is reducing its annual interest payments from this portfolio by approximately EUR 1.6 million. DIC Asset AG acquired the Odin portfolio with 28 properties and over 260,000 sqm floor space in 2007. DIC Asset AG was supported by its long-standing financing partners Berlin Hyp/Landesbank Berlin and LBBW in implementing the restructuring of the interest hedging.
The average interest on all DIC Asset AG loans, which amount to around EUR 1.65 billion, is now approximately 5.0 percent (previously: 5.3 percent). We have therefore managed to exploit the current positive trends on the interest rate market and to secure this basis for the long term, with the attendant positive effects on current cash flow. We have also managed to extend the interest hedge on the financing of another portfolio acquired at the end of 2005 by a volume of approximately EUR 63 million, so that the interest rate on 91 percent of DIC Asset AG's lending portfolio is now hedged on a long-term basis. In addition, only a very small proportion (seven percent) of all our financing will need to be extended or repaid over the next three years, with only one percent falling due for extension or repayment in 2009.

At the same time, within the framework of one of our opportunistic co-investments, we signed a project financing contract with Hamburger Sparkasse which will cover our financing requirement of EUR 35 million for the Hamburg 'Opera Offices' project in the long term and on attractive terms. Opera Offices is a project with around 15,000 sqm commercial space in the centre of Hamburg opposite the Hamburg State Opera. DIC acquired the building from the city of Hamburg at the end of 2006. The redevelopment work and new construction should begin at the end of 2009.
These decisions show that it is possible, even in the current financing environment, to reach suitable agreements with partner banks of long standing provided the basic conditions are right.

Yours faithfully

Ulrich Höller Markus Koch Dr. Jürgen Schäfer

(Members of the Management Board of DIC Asset AG)
24.02.2009  Financial News transmitted by DGAP

Language:     English
Issuer:       DIC Asset AG
              Eschersheimer Landstr. 223
              60320 Frankfurt
Phone:        +49 69 9454858-0
Fax:          +49 69 9454858-99
ISIN:         DE0005098404
WKN:          509840
Indices:      S-DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Hannover, Stuttgart, München, Hamburg, Düsseldorf  
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