DIC Asset AG has today presented its interim report for the first half of the 2012 financial year. Gross rental income posted a marked increase of 11%, to 62.5 million.
The vacancy rate has fallen further to only 12.0%, reflecting successful rental activities. The operating profit (FFO) increased by 6%, to 21.3 million. All in all, DIC Asset AG generated consolidated profit of 5.1 million (H1 2011: 6.2 million), which is down on the previous year largely owing to expenditure targeting future projects. The trends of the first quarter were thus confirmed overall.
Details of the half-year report
Although sentiment improved initially, the first half of 2012 was once again defined by uncertainty stemming from the European sovereign debt crisis. In this market environment, DIC Asset achieved gross rental income of 62.5 million (H1 2011: 56.5 million). The 11% increase was driven by portfolio growth as well as by constant and strong letting performance. Net rental income in the first six months amounted to 56.1 million and was therefore 7% higher year-on-year (H1 2011: 52.2 million).
Fees from real estate management were unchanged at 2.3 million. Higher asset and property management revenues from the 'DIC Office Balance I' special investment fund therefore made up for the loss of fees after the sale of properties held in the Co-Investment segment and joint venture portfolios from the previous year that were fully taken over. Total revenues also increased to 78.2 million (H1 2011: 76.0 million), primarily reflecting higher rental income.
DIC Asset AG increased its letting volume by 16% over the previous quarter to 60,000 m² (Q1 2012: 52,000 m²). Total letting volume in the first half year amounted to around 112,000 m² (H1 2011: 138,000 m²). This equates to annualised rental income of 11.7 million and is therefore just short of last year's figure (H1 2011: 12.4 million). The like-for-like increase in rental income was 0.1%, as in the first half of the previous year. Overall, the vacancy rate was lowered significantly to 12.0% (H1 2011: 13.8%, Q1 2012: 12.3%). Letting volume to date this year reduced the potential volume of contracts set to expire in 2012 by more than half, from 9.9 to 4.3% of annual rental income. Lease expiries in 2013 have already fallen from 9.6 to 7.4%.
The acquisition volume to date in 2012 amounts to 86 million. This includes the purchase of an office property at the main station in Frankfurt/Main (17 million) for the asset portfolio (Commercial Portfolio), a new office building in Eschborn for the 'DIC Office Balance I' special investment fund (44 million), as well as two properties in Mannheim and Dresden (25 million) for the 'DIC HighStreet Balance' retail property fund that is being developed and marketed. The disposal volume to date for 2012 stands at 12.4 million. This comprises primarily four properties, each of which are significantly lower than the average property size of around 12 million, which has further optimised the portfolio structure.
Net financing expenses increased in the first half year reflecting portfolio expansion with an interest result of -28.6 million (H1 2011: -26.1 million). This was attributable in particular to higher financing volumes as a result of the acquisitions and expenses incurred for servicing the bond issue. Interest income rose from 3.6 million to 4.9 million, whilst interest expense increased from -29.7 million to -33.5 million.
The average maturity of the financial debt of 1.52 billion (December 31, 2011: 1.52 billion, June 30, 2011: 1.43 billion) was three years as at June 30, 2012. In the first half of 2012, 11 loans with an aggregate volume of around 500 million were arranged with around a dozen banks, with the loans covering the entire managed real estate portfolio. The average rate of interest on financial debt was 4.20% as at June 30 2012 therefore 15 basis points lower than at year-end 2011 (Q4 2011: 4.35%).
Personnel expenses increased to 5.8 million (H1 2011: 4.9 million) due to the e