DIC Asset: Property acquisitions of €78 million to boost FFO growth (DE)

DIC Asset AG has now acquired three fully-let commercial properties with an investment volume of some €78 million in Duisburg, Karlsruhe and Leipzig. The acquisition is the result of two exclusive transaction implementations with international investors.


Marktforum in Duisburg.

As previously announced, DIC Asset AG is consequently expanding its portfolio with three attractive, modern properties, which are let to well-known, highly creditworthy companies. As a result, some of the funds raised by the capital increase and the corporate bond have been invested following this further step on the course for growth.

In the first transaction, DIC Asset acquired the retail property 'Marktforum' in Duisburg's district Rheinhausen for around €16 million; the asset contains rental space of some 10,000 m². EDEKA as the general tenant with a term of 12 years comes along with further renowned tenants like dm, Deichmann and Takko.

The purchase was effected at an attractive initial rental yield to the purchase price of around 8% and is expected to be reflected in the income statement in the fourth quarter of 2011 with the transfer of ownership.

The FFO contribution in 2012 will amount to more than €0.7 million. The company, together with a regional financial institution who helped finance the deal, was able to exploit the currently very favorable financing window and secure a long-term interest rate of less than 4% on a loan-to-value (LtV) of around 65%.

The second transaction involves two core office properties offering rental space of 40,000 m² for some €62 million in Karlsruhe and Leipzig. With an average term of around eight years the properties are let on a long-term basis to several major international insurance and service companies which have a high degree of creditworthiness.

The two office properties were acquired for additional growth of the first real estate special fund 'DIC Office Balance I', in which DIC Asset AG holds a 20% stake. The planned distribution yield from the two properties is in the target range of the special fund of around 6%.

In accordance with the German Investment Act, borrowing for the two special fund properties amounts to less than 50% of the purchase price and was provided by a German Landesbank.

The transactions were brokered by Jones Lang LaSalle (Duisburg property), WhiteWater (Karlsruhe property) and BNP Paribas Real Estate (Leipzig property).

Ulrich Höller, CEO of DIC Asset AG: "With the two core properties in Karlsruhe and Leipzig, DIC Asset AG is continuing the strategic expansion of its fund business.

"The Marktforum in Duisburg with its long-term tenancy agreements and a diverse user structure plus the highly attractive rental yield is a good addition to our portfolio".

Source: Thomas Pfaff Kommunikation

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