DIRECT INVESTMENT RESULT VASTNED RETAIL RISES TO 3.85 PER SHARE

Transcription

1 Press release Annual figures 2007 DIRECT INVESTMENT RESULT VASTNED RETAIL RISES TO 3.85 PER SHARE (in brackets: annual figures 2006) Direct investment result: 64.4 million ( 62.5 million); Indirect investment result: million ( million); Investment result: million ( million); Direct investment result per share: 3.85 ( 3.70); Indirect investment result per share: ( 6.53); Investment result per share: ( 10.23); Equity per share as at December 31, 2007: (December 31, 2006: 57.93); For 2008, a direct investment result of approximately 4.00 is anticipated. VastNed Retail invests in high street shops, shopping centres and retail warehouses located in good and top locations in its core countries: the Netherlands, Spain, France and Belgium, as well as in the growth market Turkey. Invested capital as at December 31, 2007 amounted to 2,093.1 million (excluding the development pipeline not entered in the balance sheet). Investment result VastNed Retail shareholders In 2007, the investment result rose by 41.4% from million in 2006 to million. The 2007 investment result comprises a direct investment result of 64.4 million and an indirect investment result of million. Composition investment result 2007 financial year Gross rental income Gross rental income rose by 8.9% from million in 2006 to million in The composition of the increase is presented below. Composition of movements in gross rental income Like for * 1,000 Acquisitions Disposals 2006 like 2007 NL 44, (322) ,992 E 28,831 3, ,025 F 17,784 3,005 (5) 1,446 22,230 B 18, (1,447)* ,633 Tr P 1, ,073 T 110,729 7,815 (1,774) 3, ,577 * includes a one-off compensation relating to Messancy of 1.0 million recognised in 2006.

2 Net service charge expenses Net service charge expenses increased from 3.1 million in 2006 to 3.6 million in This relatively high amount was mainly attributable to the factory outlet in Messancy, where promotion, marketing and management costs, incurred to raise the number of visitors and sales, could not be fully charged on to the lessees. This item also increased compared to 2006 due to a lower occupancy rate of the properties Parque Vistahermosa in Alicante and Plaisir-Sablons in Plaisir. In the latter shopping centre, located near Paris, an increasing number of units is kept vacant on purpose in anticipation of the redevelopment of the centre. Operating expenses Operating expenses expressed as a percentage of gross rental income rose year-on-year by 0.5% to 10.0% (9.5%) or 12.0 million (2006: 10.5 million). This rise was mainly due to additional writedowns of doubtful debtors of the factory outlet in Messancy. Operating expenses also increased due to the acquisition of the expansion of the Getafe III shopping centre, for which ground rent is periodically payable. Value movements investment properties The value movements of the investment properties increased sharply in 2007 from million positive to million positive (this will be further explained elsewhere in this press release). Net result on disposals investment properties The net result on disposals of the investment properties amounted to 6.5 million negative ( 0.1 million positive). This item, in addition to on balance positive results on the disposal of a number of smaller properties in the Netherlands, France and Belgium, was mainly caused by a 5.4 million loss on the sale of the factory outlet in Messancy. As a result of this disposal, an improvement of 0.09 per share is anticipated as from the 2008 financial year. Furthermore, in early 2008 a final settlement was reached with the buyer of the larger part of the German property portfolio that was sold in 2004, in the dispute concerning an adjustment of the purchase price, which resulted in a deferred negative sales result of 2.5 million. Expenditure Net financing costs Net financing costs rose from 22.7 million in 2006 to 29.8 million in This rise was mainly due to additional interest-bearing loans for the net acquisitions realised in 2006 and 2007 and for the share buyback programme carried out in the third quarter of 2007, in which 500,000 own shares were acquired for 28.0 million. General expenses General expenses rose to 7.7 million (2006: 6.7 million). The rise was mainly due to increased external consultancy costs, being the costs of tax and legal advice in relation to acquisitions that were not completed, and due to additional consultancy costs related to the indicative offer from IEF Capital in the second half of 2007 and the subsequent offering process for VastNed Retail. Additionally, the rise was also due to increased costs related to VastNed Retail s office in Istanbul that was opened in the middle of Income tax due on the reporting period Income tax due on the reporting period in 2007 resulted in a 0.7 million income, as compared to a 0.9 million expense in This was due to a one-off tax income in France and Spain. 2

3 Movement deferred tax liabilities The allocation to deferred tax liabilities fell from 15.2 million in 2006 to 11.9 million in Despite higher unrealised value movements of the property portfolio in Spain compared to 2006, which resulted in a higher allocation to deferred tax liabilities than in 2006, the allocation decreased compared to 2006 due to a one-off additional allocation to deferred tax liabilities of 6.7 million recognised in This one-off allocation was due to higher tax rates in Spain, as a result of which for the calculation of deferred tax liabilities in Spain 2006 a higher effective tax rate (from 15% to 18%) had to be taken into account. This rate remained the same in Due to a tax loss in Turkey, a deferred tax asset of 0.2 was recognised. Due to locally applicable favourable tax regimes, value movements in the Netherlands, Belgium and France do not lead to movements in deferred tax liabilities. Investment result attributable to minority interests The investment result attributable to minority shareholders of 13.2 million (2006: 6.6 million) comprises a direct investment result attributable to minority interests of 3.7 million (2006: 4.4 million) and an indirect investment result attributable to minority interests of 9.5 million (2006: 2.2 million). The decrease of the direct investment result attributable to minority shareholders is mainly related to the lower direct investment result of Intervest Retail, in which VastNed Retail has a 72.4% stake (2006: 72.4%). This lower result of Intervest Retail is largely due to the deteriorated operating result of the factory outlet in Messancy. The rise of the indirect investment result attributable to minority shareholders was due to considerably higher positive value movements in the Belgian property portfolio held by Intervest Retail and of the shopping centre Het Rond in Houten, the Netherlands. Property portfolio The value of the property portfolio amounted to 2,093.1 million as per December 31, 2007 (December 31, 2006: 1,730.7 million). Occupancy rate The financial occupancy rate decreased marginally to 96.9% (2006: 97.4%), mainly due to the shopping centre Limoges-Corgnac, of which 75% was leased out at the time of acquisition (a number of units have been leased out since), the shopping centre Plaisir- Sablons near Paris that will be redeveloped and the retail and leisure park Parque Vistahermosa in Alicante. The occupancy rate broken down by country is presented below. Country Yearend 2007 Occupancy rate in % 2007 financial year 2006 financial year NL E F B Tr P T Rent-free periods, lease discounts and incentives The lease discounts, rent-free periods and lease incentives increased to 2.1% (1.6%) in the 2007 financial year. A breakdown by country is provided below. 3

4 Rent-free periods, lease discounts and incentives in % Country 2007 financial year 2006 financial year NL (0.4) (0.3) E (2.8) (2.2) F (1.0) (1.1) B (6.0) (4.0) Tr (0.2) - P - - T (2.1) (1.6) Leasing activity A significant number of lease transactions took place in What we refer to as leasing activity comprises new leases and lease renewals. The first category comprises lease of vacant office space to new lessees and the second category refers to the conclusion of new contracts and to rent adjustments with existing lessees. In concluding contracts, on average 15% higher gross rent was realised in VastNed Retail s core countries. An overview is given below. New leases Lease renewals Lease activty Country Mom vem ent gros Volume as a % of theoretical gross rent Momve ment gross rent Volume as a % of theoretical gross rent Volume as a % of theoretical gross rent s rent In % NL E F B T T: total of the core countries (NL, E, F, and B excluding Messancy) The leasing activity refers to lease contracts concluded in Increased rent levels will largely impact 2008 and will contribute to the direct investment result. New leases not only resulted in an increase of the rent level compared to the old level, but also in an increase compared to market rents as issued by appraisers (14%). Taking into account the lease discounts, rent-free periods and lease incentives provided, the total increase amounted to 9.5%. Value movements investment properties The value movements of the investment properties increased sharply in 2007 from million positive to million positive. These higher value movements were also caused by continued strong demand for retail investment property in 2007, whereby buyers are prepared to acquire property at initial yields that are significantly lower than the yields included in the external appraisals in early The lower initial yields are supported by realised and anticipated rent growth in relation to the continued strong demand for good retail locations, particularly among international retailers with ambitious expansion plans. The indexation rates of 4% and 5% respectively as apply in France and Spain as from 1 January will also reinforce this value growth. The value increase of the Belgian property portfolio was reduced by approximately 10 million due to further downward value adjustments of the factory outlet in Messancy during In France the value increase was curbed somewhat by acquisition costs of 8.8 million charged to this item in relation to the acquisition of the retail property portfolio in Lille. The acquisition costs charged totalled 14.0 million. Value movements (* 1 million) Country Financial year 2007 Financial year 2006 NL E F B Tr (1.2) - P Total Acquisitions and commitments In 2007, acquisitions were made and commitments were entered into for a total amount of million. The acquisitions are set out below. 4

5 Acquisitions City Address Price (* 1 million) Netherlands Amsterdam Buikslotermeerplein Borculo Lichtenhorst 7,9 4.3 IJsselstein Utrechtsestraat Heerlen In de Cramer France Lille 56 inner city shops / apartments Seclin Terres et Eaux 3.4 (Lille) Toulon Les 4 Chemins 5.9 Augny Rue du Bois d Orly 2.3 Belgium various Heytens portfolio 21.3 Turkey Istanbul Elysium Shops 9.8 Kazim Orbay Caddesi 3 Istanbul Istiklal Caddesi Istanbul Istiklal Caddesi Total In 2007, the following commitments were entered into: - In Houten, the Netherlands, two office properties were acquired for 4.2 million in total with the intention to redevelop them into shops in due time. - A turnkey agreement was concluded with Fortis Vastgoedontwikkeling concerning the acquisition of a city centre development in the Wisselplein in Lelystad and the district shopping centre Hoogambacht in Hendrik-Ido-Ambacht, both in the Netherlands. Investments are expected to amount to approximately 21.8 million and 22.3 million respectively. Delivery will take place in VastNed Retail has concluded a combined sales and construction contract for the development of a peripheral retail property in Thoiry, France. The investment is estimated to total approximately 6.7 million. Delivery is scheduled to take place in Disposals A limited number of smaller individual properties in the Netherlands and Belgium were sold in Additionally, the factory outlet in Messancy was sold in December This transaction was finalised in February Disposals City Address Price (x 1 million) Netherlands Leiden Korevaarstraat 2e-f 0.5 Amersfoort Arnhemsestraat Dinteloord Raadhuisplein Heerlen Akerstraat Rotterdam Groene Hilledijk 217 / 0.5 Meerdervoortstraat Schiedam Broervest Schiedam Hoogstraat Vlaardingen Hoogstraat Zeist Scheeperslaan 1 and 1a-c / Steijnlaan a Zierikzee Dam Zierikzee Verre Nieuwstraat Enschede Dotterbloemstraat Amsterdam Ceintuurbaan France Vichy Rue de George Clemenceau 12 (hotel) 0.3 Belgium Antwerpen Breydelstraat Messancy Rue de l Institut Charleroi Rue de la Montagne Messancy Route d Arlon Total 21.1 The result on disposals, including deferred purchase costs from the previous financial year, was 6.5 million negative, largely due to the disposal of Messancy. Solvency and financing with loan capital Equity expressed as a percentage of the investment properties amounted to 58.1% as per December 31, 2007 (December 31, 2006: 60.6%). The ratio short-term loan capital / long-term loan capital as per December 31, 2007 amounted to 34/66 (December 31, 2006: 33/67). The average interest rate on the total interest-bearing loan capital rose from 4.31% to 4.64%, mainly due to the 5

6 increase of the short-term interest rate in At year-end 2007, two-thirds of the loan portfolio had a fixed interest rate with a duration of 5.6 years. Dividend In accordance with VastNed Retail s dividend policy, it will be proposed to the annual general meeting of shareholders to be held on April 8, 2008 to declare a final dividend of 2.73 per ordinary share, being the direct investment result 2007 per share of 3.85 less the interim dividend of 1.12 per share. Taking into account the previously mentioned fiscal distribution obligation and the then share price, the final dividend can be paid out either fully in cash, or 1.35 in cash and a percentage of VastNed Retail shares yet to be determined, charged to the share premium reserve, approaching a value of 1.38 per share. The final dividend will be made payable on May 2, The board of management will consider a share buyback of the same order of magnitude of the number of shares to be issued as stock dividend in order to mitigate the dilutive effect on the direct investment result per share. Offering process As stated in various press releases, a number of selected parties are investigating the possibility of making an offer for VastNed Retail or parts of the company. In the press release of February 8, 2008, it was stated that indicative offers have been received from various parties, and that these parties need more time to make definitive offers. The board of management expects to be able to make further announcements in the middle of March Developments and outlook 2008 The economies of the countries in which VastNed Retail operates developed positively in Employment and retail sales developed relatively healthily, certainly against the background of the developments in the United States. Rising inflation appears to reflect a too rapidly developing economy rather than being a sign of an approaching recession. Most economic institutions are convinced that economic growth in the countries in which VastNed Retail operates will largely remain stable. Given the rising inflation, the long-term interest rate, after a limited decrease in early 2007, is expected to return to the level of the second half of The investment properties in the pipeline in Roermond and Tongeren will come into operation in March 2008 and in August 2008 the expansion of shopping centre Het Rond in Houten will be completed, all at attractive initial yields. Based on the foregoing, the board of management is confident about the direct investment result in Despite the one-off tax assets recognised in 2007, resulting in a positive effect on the direct investment result of approximately 0.10 per share, based on the developments described above and due to the sale of the factory outlet in Messancy, which has a positive effect of approximately 0.09 per share, the board of management anticipates a direct investment result of about 4.00 per share. This is excluding one-off consultancy costs related to the ongoing offering process. Rotterdam, February 22, 2008 Further information: Reinier van Gerrevink or Arnaud du Pont, tel

7 Today at 11 a.m. CET an analysts meeting will be held in which further comments will be made on the 2007 annual figures. This meeting can be followed by means of an audio webcast on Forward looking statements This press release contains a number of forward looking statements. These statements are based on current expectations, estimates and prognoses of the board of management and on the information currently available to the company. The statements are subject to certain risks and uncertainties which are hard to evaluate, such as the general economic conditions, interest rates and amendments to statutory laws and regulations. The board of management of VastNed Retail cannot guarantee that its expectations will materialise. Furthermore, VastNed Retail does not accept any obligation to update the statements made in this press release. 7

8 KEY FIGURES December 31, December 31, Results (x 1,000.-) Gross rental income 120, ,729 Direct investment result 64,367 62,452 Indirect investment result 180, ,420 Investment result 244, ,872 Balance sheet (x 1,000.-) Investment properties 2,093,101 1,730,705 Equity 1,214,942 1,048,081 Equity VastNed Retail shareholders 1,135, ,713 Long-term liabilities 617, ,988 Ratio equity/investment properties (in %) Occupancy rate (in %) Financial occupancy rate Average number of ordinary shares in issue 16,706,552 16,892,880 Number of ordinary shares in issue (end of period) 16,362,097 16,876,183 Per share ( x 1) Equity VastNed Retail shareholders at beginning of period (including final dividend) Final dividend previous financial year (2.60) (2.47) Equity VastNed Retail shareholders at beginning of period (excluding final dividend) Direct investment result Indirect investment result Investment result Value movements financial derivatives taken directly into equity Other movements 0.25 (0.01) Interim dividend (1.12) (1.10) Equity VastNed Retail shareholders at end of period (including final dividend) Share price (end of period) Premium (in %) (5.36) 32.92

9 CONSOLIDATED PROFIT AND LOSS ACCOUNT (x 1,000.-) Net income from investment properties Q4 Q Gross rental income 120, ,729 31,621 27,863 Net service charge expenses (3,640) (3,095) (951) (862) Operating expenses (12,016) (10,462) (2,828) (2,759) Net rental income 104,921 97,172 27,842 24,242 Value movements investment properties in operation 208, , ,842 44,483 Value movements investment properties in pipeline (502) (1,223) (687) (199) Total value movements investment properties 207, , ,155 44,284 Net result on disposals of investment properties (6,455) 73 (7,542) (923) Total net income from investment properties 306, , ,455 67,603 Expenditure Financial income 1, Financial expenses (30,948) (23,110) (8,947) (6,117) Value movements financial derivatives - (2) - - Net financing costs (29,766) (22,744) (8,698) (6,072) General expenses (7,740) (6,684) (2,192) (1,656) Total expenditure (37,506) (29,428) (10,890) (7,728) Investment result before taxes 268, , ,565 59,875 Current income tax expenses 703 (872) 1, Movement deferred tax liabilities (11,850) (15,150) (6,251) (5,766) (11,147) (16,022) (4,681) (5,756) Investment result after taxes 257, , ,884 54,119 Investment result attributable to minority interests (13,227) (6,621) (6,421) (1,849) Investment result attributable to VastNed Retail shareholders 244, , ,463 52,270 Per share (x 1) Investment result per share attributable to VastNed Retail shareholders Diluted investment result per share attributable to VastNed Retail shareholders

10 DIRECT AND INDIRECT INVESTMENT RESULT (x 1,000.-) Direct investment result Q4 Q Gross rental income 120, ,729 31,621 27,863 Net service charge expenses 3,640-3, Operating expenses 12,016-10,462-2,828-2,759- Net rental income 104,921 97,172 27,842 24,242 Financial income 1, Financial expenses 30,948-23,110-8,947-6,117- Net financing costs 29,766-22,742-8,698-6,072- General expenses 7,740-6,684-2,192-1,656- Direct investment result before taxes 67,415 67,746 16,952 16,514 Current income tax expenses , Direct investment result after taxes 68,118 66,874 18,522 16,524 Direct investment result attributable to minority interests 3,751-4, ,005- Direct investment result attributable to VastNed Retail shareholders 64,367 62,452 17,586 15,519 Indirect investment result Value movements investment properties 207, , ,525 44,284 Net result on disposals of investment properties 6, , Value movements financial derivatives Indirect investment result before taxes 201, ,769 96,983 43,361 Movement deferred tax liabilities 11,850-15,150-6,251-5,766- Indirect investment result after taxes 189, ,619 90,732 37,595 Indirect investment result attributable to minority interests 9,476-2,199-5, Indirect investment result attributable to VastNed Retail shareholders 180, ,420 85,247 36,751 Investment result attributable to VastNed Retail shareholders 244, , ,833 52,270 Per share (x 1) Direct investment result attributable to VastNed Retail shareholders Indirect investment result attributable to VastNed Retail shareholders

11 CONSOLIDATED BALANCE SHEET (x 1,000.-) December 31, December 31, Assets Investment properties in operation 2,062,078 1,706,337 investment properties under renovation 3,054 3,054 Other assets in respect of lease incentives 2,395 3,260 2,067,527 1,712,651 Investment properties in the pipeline 25,574 18,054 Total investment properties 2,093,101 1,730,705 Tangible fixed assets 1,387 1,119 Financial derivatives 11,591 4,597 Deferred tax liabilities 2,422 - Total fixed assets 2,108,501 1,736,421 Debtors and other receivables 29,429 22,230 Income tax Cash and cash equivalents 13,748 7,007 Total current assets 43,322 29,912 Total assets 2,151,823 1,766,333 Liabilities Capital paid-up and called 84,381 84,516 Share premium reserve 405, ,706 Hedge reserve with respect to financial derivatives 8,471 3,119 Other reserves 66 - Investment result attributable 393, ,500 to VastNed Retail shareholders 244, ,872 Equity VastNed Retail shareholders 1,135, ,713 Equity minority interests 79,113 70,368 Total equity 1,214,942 1,048,081 Deferred tax liabilities 57,669 43,076 Provisions in respect of personnel benefits 1,915 1,575 Long-term interest bearing loans 538, ,375 Long-term tax liabilities 9,690 3,684 Guarantee deposits and other long-term liabilities 9,948 10,278 Total long-term liabilities 617, ,988 Payable to banks 191, ,821 Redemption long-term liabilities 71,735 25,374 Financial derivatives Income tax 9,656 4,544 Other debts, accruals and deferred income 46,239 75,431 Total short-term liabilities 319, ,264 Total liabilities 2,151,823 1,766,333

12 CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY (x 1,000.-) Equity as per January 1 1,048, ,818 Value movements financial derivatives 5,395 4,558 Direct investment result 68,118 66,874 Indirect investment result 189, ,619 Investment result 257, ,493 Share buyback (30,653) (7,395) Acquisition and disposal of shares in subsidiaries (30,653) (7,294) Final dividend previous financial year in cash (42,297) (36,019) Interim dividend in cash (18,885) (18,593) Dividend paid to minority interests (4,525) (4,858) Costs stock dividend (7) (24) Dividend paid (65,714) (59,494) Currency translation differences net investments 66 - Equity as per December 31 1,214,942 1,048,081 Value movements financial derivatives taken directly into equity 5,395 4,558 Currency translation differences net investments 66 - Investment result 257, ,493 Total result 263, ,051 Attributable to: VastNed Retail shareholders 249, ,265 Minority interests 13,270 6, , ,051

13 CONSOLIDATED CASH FLOW STATEMENT (x 1,000.-) Cash flow from operating activities Investment result 257, ,493 Adjustments for: Value movements investment properties (207,954) (127,699) Net result on disposals investment properties 6,455 (73) Net financing costs 29,766 22,744 Income tax 11,147 16,022 Cash flow from operating activities before changes in working capital and provisions 97,181 90,487 Movement current assets 5,373 (3,670) Movement short-term liabilities 2,005 6,368 Movement in provisions ,899 93,266 Interest paid (on balance) (30,133) (20,917) Income tax paid (1,057) (4,548) Cash flow from operating activities 73,709 67,801 Cash flow from investment activities Acquisition of investment properties and investments in existing properties (200,041) (95,784) Disposal investment properties 6,684 23,601 Cash flow on property (193,357) (72,183) Movement tangible fixed assets (268) 33 Cash flow from investment activities (193,625) (72,150) Cash flow from financing activities Share buyback (30,653) (7,395) Dividend paid (65,732) (59,491) Interest bearing loans drawn down 293, ,171 Interest bearing loans redeemed (70,945) (48,359) Cash flow from financing activities 126,657 (3,074) Movement in cash and balances 6,741 (7,423) Payable to cash and bank as at January 1 7,007 14,430 Payable to cash and bank at end of period 13,748 7,007

14 SEGMENTED INFORMATION (x 1,000.-) Operating expenses including net service Investment properties Gross rental income charge expenses Net rental income 39, Netherlands 728, ,818 45,992 44,669 5,644 5,953 40,348 38,716 Spain 574, ,878 33,025 28,831 3,427 2,766 29,598 26,065 France 470, ,576 22,230 17,784 2,249 1,632 19,981 16,152 Belgium 283, ,365 17,633 18,405 4,155 3,163 13,478 15,242 Portugal 20, Turkey 15,418 14,068 1,073 1, , ,093,101 1,730, , ,729 15,656 13, ,921 97,172 Net result on disposals of Value movements Movement deferred investment properties investment properties tax liabilities Total Netherlands ,906 40, ,243 40,639 Spain ,010 46,556 12,413-14,833-45,597 31,723 France ,369 35, ,011 35,167 Belgium 4, ,517 3, ,948 4,112 Turkey - - 1, Portugal - - 1,350 2, ,179 1,908 Germany 2, ,116-1, , , ,698 11,850-15, , ,621 Of which attributable to third parties 1, ,738-2, ,476-2,199-5, , ,647 11,850-15, , ,422 This interim report has been drawn up in accordance with IAS 34 'Interim Financial Reporting'. For the principles for consolidation, the valuation of assets and liabilities and the determination of the result, reference is made to the Annual Report The essential judgments used by the board of management in the application of the principles for financial reporting of VastNed Offices/Industrial N.V. and the main sources of estimates used in the preparation of this press release are identical to the essential judgments and main estimates in the 2006 Annual Accounts. Actual results may deviate from these estimates. The 2007 figures have not been audited by the external auditor.