DO Deutsche Office : reports positive business development in Q1/2015

DO Deutsche Office AG reports positive business development in Q1/2015

- Increase in FFO by 18% to EUR 12.0 (Q1/ 2014: EUR 10.2) million.

- NAV per share increased for second quarter in a row to EUR 4.51, EPRA-NAV per share at EUR 4.79.

- Dynamic start into the year with good letting results in Q1/2015: letting performance equals c6% of total lettable area of the portfolio.

- Vacancy end of Q1/2015 at 17.1% compared to 20.0% in Q1/2014. Due to rental contracts to start in the course of Q2/2015, vacancy of c16% is expected by end of Q2/2015. Vacancy is expected to be further reduced to 14 - 13 % in the course of 2015.

- Debt reduction continues: Net-Loan-to-Value reduced to 52.7% as of March 31, 2015 and 50.6% post sale of Westend-Ensemble as of April 30, 2015 respectively.

- Financial result improved significantly: Decline by 24% year-over-year to EUR -8.1 million.

- 2015 guidance confirmed:

- Rental income of EUR 105-107 million

- FFO climbs to at least EUR 50 million

- Stable dividends with a pay-out-ratio of 50 - 60 % of FFO

Cologne May 13, 2015. DO Deutsche Office AG (Deutsche Office) is announcing the results for Q1/2015. Deutsche Office had a dynamic start into 2015. Based on rental income of EUR 26.2 (Q1/2014: EUR 24.8) million, the company generated net rental income of EUR 23.2 (Q1/2014: EUR 21.9) million in the first three months. Net-Loan-to-Value (LTV) fell once more and reached 52.7% (Dec 31,2014: 53.5%) as of March 31, 2015. Significantly improved financing conditions and reduced LTV resulted in an improvement of the financial result by 24% compared to Q1/2014 to EUR -8.1 (Q1/2014: EUR -10.6) million.

Net profit for the first three months was EUR 11.7 (Q1/2014: EUR 101.3) million. Q1/2014 includes non-recurring effects from the merger with Prime Office REIT-AG.

The EPRA earnings - which are adjusted for non-recurring effects - amounted to EUR 11.1 (Q1/2014: EUR 10.1) million during the first three months of 2015, up 10% year-over-year.

Despite of property sales and vacancy, Deutsche Office increased Funds From Operations (FFO) in Q1 2015 year-over-year by 18% to EUR 12.0 (Q1/2014: EUR 10.2) million.

Net Asset Value (NAV) increased to EUR 814.1 (December 31, 2014: EUR 803.0) million. NAV per share as of March 31, 2015 increased for the second consecutive quarter to EUR 4.51 (December 31, 2014: EUR 4.45). Thus EPRA NAV per-share increased to EUR 4.79 (December 31, 2014: EUR 4.74).

Despite traditionally weaker letting markets during Q1, Deutsche Office achieved good letting results. The company managed to lease c52,600 sqm, or c6% of the total lettable area of the portfolio. Letting volume thus increased approximately 14% year-over-year. New lease agreements in Q1/2015 accounted for c11,900 sqm. Lease agreements for a total of c40,700 sqm were extended.

The vacancy in the portfolio stood at 17.1% as of March 31, 2015, compared with 20.0% for the same period in the previous year. New lease agreements will further reduce the vacancy rate to approximately 16% by the middle of 2015. Vacancy is expected to be further reduced to 14 - 13 % in the course of 2015.

The Executive Board confirms the guidance for 2015. Based on the existing portfolio, Deutsche Office expects rental income from investment properties of EUR 105 - 107 million, an increase of the FFO to at least EUR 50 million and stable dividend based on a pay-out ratio of 50 - 60% of FFO.

As part of the publication of the results for Q1 2015, the Executive Board is inviting analysts, investors, and journalists to attend a telephone conference on 05/13/2015 at 2:00 pm (CET). The quarterly report as well as a webcast of the telephone conference will be available on our homepage at www.deutsche-office.de.

Overview of key indicators

(in million euros)	Q1/2015	Q1/2014*	Change in %
Rental revenues	26.2	24.8	5.6
Net financing expenses	-8.1	-10.6	-23.6
EPRA-earnings	11.1	10.1	9.9
Funds from Operations (FFO)	12.0	10.2	17.6
	31.03.2015	31.12.2014	Change in %
Investment Properties	1,784.7	1,780.7	0.2
Balance sheet total	1,946.2	1,951.3	-0.3
Equity	814.1	803.0	1.4
Equity ratio (in %)	41.8	41.2	1.5
Net-Loan-to-Value [LTV] (in %)	52.7	53.5	-1.5
Net Asset Value (NAV)	814.1	803.0	1.4
NAV per share (in EUR)	4.51	4.45	1.3
EPRA-NAV per share (in EUR)	4.79	4.74	1.1

* Due to the registration of the merger on January 21, 2014, Q1/2014 figures for the former Prime Office REIT-AG are only included in the figures for February and March. Extraordinary income and loss resulting from the merger are also included, limiting the value of comparability.

Contact for questions:

DO Deutsche Office AG
Richard Berg
Head of Investor Relations & Corporate Communications
Email [e-mail]
Phone +49 (0)221 - 888 29 160

About Deutsche Office

Deutsche Office is a leading, SDAX index listed office property company, focusing on German metropolitan regions and conurbations. As at 31 March 2015, its geographically diversified real estate portfolio currently contains 51 properties held as investment properties, with a total rental area of about 900,000 square metres and an attractive and broad tenant base. As at 31 March 2015, the properties had a market value of about EUR 1.8 billion. Deutsche Office's business model is based on the profit-oriented, active asset management of office properties in German metropolitan regions, underpinned by investment to increase and to maintain the value of the properties in the portfolio. The strategy includes the acquisition of properties with potential for appreciation as well as exploiting sales opportunities applied throughout the entire property cycle in order to capitalise the appreciation achieved and to invest in new properties.

Additional information on Deutsche Office is available online at:
deutsche-office.com

2015-05-13 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.

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