DGAP-News: DO Deutsche Office AG with good letting

DGAP-News: DO Deutsche Office AG / Key word(s): Half Year Results DO Deutsche Office AG with good letting performance in H1/2014 and further improved financing structure and -costs in Q2/2014 (news with additional features) 05.08.2014 / 07:50 --------------------------------------------------------------------- DO Deutsche Office AG with good letting performance in H1/2014 and further improved financing structure and -costs in Q2/2014 - Successful letting of about 86,500 sqm (or approx. 9.1 % of the portfolio's total rentable space) in H1/2014. Vacancy at 19.4 %. - Further improved financing structure: average interest rate declines by another 20 basis points to 3.5 %. Loan-to-Value improves significantly to 55 % compared to Q4/2013. - Rental income of EUR 51.7 million. Funds from Operations (FFO) are in line with the expectations and amount to EUR 21.1 million or EUR 0.13 per share. - H1/2014 dominated by merger-related one-off effects and transaction costs: EPRA earnings reach EUR 20.6 million in H1/2014 after EUR 10.1 million in Q1/2014. - Net Asset Value (NAV) increases to EUR 784.3 million compared to year-end 2013 or EUR 4.35 per share as of 30 June 2014. EPRA NAV of EUR 4.61 per share in Q2/2014. Cologne, 05 August 2014. DO Deutsche Office AG ("Deutsche Office", formerly Prime Office AG), a leading office property company focussing on German metropolitan regions, presents its results for the first half of financial year 2014 (H1/2014). By changing its company name in mid-2014, Deutsche Office performed the last step of a merger of Prime Office REIT-AG and OCM German Real Estate Holding AG and completed the integration. Deutsche Office showed a good letting performance in H1/2014: its letting volume amounted to c86,500 sqm, i. e. approx. 9.1 % of Deutsche Office's portfolio's total rentable space. The vacancy rate amounted to 19.4 % on 30 June 2014. As of 30 June 2014, Deutsche Office's portfolio generated an annual net rent of EUR 111 million, which corresponds to a gross yield of about 6.0 % and an EPRA net yield of 5.2 %. H1/2014 was characterized by special and one-off effects in connection with the merger which was completed in Q1/2014: transaction costs (reported in other operating expenses) and particularly the real estate transfer tax payable in connection with the merger as well as advisory costs detracted about EUR 24.1 million from net income over the first six months of the year. Conversely, the initial consolidation of Prime Office REIT-AG into the Group at the end of January 2014 generated other merger-related operating income of about EUR 115.4 million. These special and one-off effects to some degree distort year-on-year comparisons which are therefore provided on a pro forma basis. With a rental income of EUR 51.7 (pro forma H1/2013: EUR 70.0) million, Deutsche Office generated EUR 45.1 (pro forma H1/2013: 62.8) million in net rental income during the first half of 2014. Net income in the first half of 2014 amounted to EUR 97.9 million (pro forma H1/2013: EUR -52.3 million). Adjusted by the special and one-off effects in H1/2014, Deutsche Office generated earnings before taxes of EUR 7.8 million. The EPRA earnings in the reporting period amounted to EUR 20.6 (pro forma H1/2013:23.3) million after EUR 10.1 million in Q1/2014. As expected, Funds from Operations (FFO) amounted to EUR 21.1 (pro forma H1/2013: 25.5) million. Due to property sales and vacancies in the portfolio, the FFO were down compared to the pro forma figure in the same period last year. Deutsche Office has an attractive financing structure, which could be further improved during the second quarter of 2014: with a Loan-to-Value of 55 % and an average maturity of bank loans of 4.8 years, the average interest rate could be reduced by another 20 basis points to 3.5 %, i. e. significantly below the originally planned 4 %. Based on the expected rental income from investment properties of EUR 109 to 111 million in financial year 2014, the executive board of Deutsche Office confirms its FFO guidance of EUR 44 to 46 million. Deutsche Office continues to plan to pay out between 40 and 45 percent of FFO for fiscal year 2014. The half-year report is available online on Deutsche Office's new corporate website: http://deutsche-office.de. Contacts Deutsche Office Richard Berg Head of Investor Relations & Corporate Communications Email rberg@deutsche-office.de Telephone +49 (0)221 - 888 29 160 About Deutsche Office Deutsche Office is a leading office property company focussing on German metropolitan regions. On 30 June 2014, its geographically diversified real estate portfolio contained 54 investment properties with a total rentable space of about 940,000 square metres and an attractive and broad tenant base. As at 30 June 2014, the properties had a total market value of about EUR 1.9 billion. Deutsche Office's business model is based on the return-oriented management of assets and particularly of office properties in German metropolitan regions. This strategy is complemented by selective acquisition of properties with potential for appreciation and value-enhancing investments in existing properties. Potential sales opportunities are capitalized over the entire real estate cycle in order to achieve attractive sales proceeds. Additional information on the company is available on Deutsche Office's website: http://deutsche-office.de +++++ Additional features: Document: http://n.equitystory.com/c/fncls.ssp?u=FPEYRCXPVV Document title: Press Release --------------------------------------------------------------------- 05.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: DO Deutsche Office AG Maarweg 165 50825 Köln Germany Phone: +49 (0)221 88829 100 Fax: +49 (0)221 88829 299 E-mail: info@deutsche-office.de Internet: www.deutsche-office.de ISIN: DE000PRME020 WKN: PRME02 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 280725 05.08.2014