DIC Asset to buy back up to 5% of shares

German commercial property investor DIC Asset said that it plans to buy back as much as 5% of its shares in a bid to support the net asset value per share of its stock. Frankfurt-based DIC said it might reacquire as many as 1.57 million shares on the stock exchange in a buyback that began Friday and will run to 10 February 2009.

DIC said the very negative performance of its share price as a result of market uncertainty had meant the value of its shares had moved sharply away from their intrinsic value. The company stressed that its fundamentals are instead sound while it has stable financing with long-term guarantees. ‘With our business model focused on the German commercial real estate market, we are active in a market which - compared with others internationally - remains the most robustly positioned,’ DIC said in a letter to shareholders.

The company noted that rentals on the German commercial real estate market are currently stable. DIC said it had let a total of 158,000 m² up to 30 September, and said it expected this positive trend to continue. ‘Our broadly diversified tenant structure in this context serves as the best possible basis for solid and sustainable cash flows which have always been a permanent feature of our business model.’

DIC forecasted rental income of around EUR 100 mln in the first three quarters of 2008, up 55% compared to the same period last year. And while DIC said it had not been immune from a sharp fall in property transactions, it said it had nonetheless managed to complete 12 sales to date, raising a total of EUR 55 mln in the process. DIC Asset said its share of these sales was EUR 28 mln, making for a profit of some EUR 5 mln up to the third quarter.