Summary of past 5 years

Transcription

1 jaarverslag 2005 ENG :40 Pagina 1 1 Summary of past 5 years Results (x EUR 1,000) Rental income 20,807 21,805 20,874 21,201 21,830 Profit 24,141 41,375 19,357 22,271 28,688 Direct result 20,212 19,648 19,485 19,989 20,182 Indirect result 3,929 21, ,282 8,506 Balance sheet (x EUR 1,000) Investments 2 301, , , , ,894 Shareholders equity 298, , , , ,824 Number of shares 5,331,947 5,331,947 5,331,947 5,331,947 5,331,947 Fair value investment portfolio 2 (x EUR 1,000) Retail 136, , , , ,050 Offices 164, , , , , , , , , ,894 Share data (x EUR 1) Direct result Indirect result Profit Gross dividend Net dividend Net asset value before profit distribution Direct result per share Profit per share Figures before 2004 are based on Belgian GAAP. As from 2004, consolidated figures are based on IFRS; figures up to 2004 have been recalculated by adding realised and not realised gains or losses to the profit. 2 Fair value has been computed after deduction of the transaction costs incurred at the sales process; transaction costs contain mainly registration taxes of 10%-12.5%. The independent appraiser has carried out the valuation in conformity with International Valuation Standards and European Valuation Standards. Profit and dividend per share Share Price/Net asset value (at December 31, before distribution of profit) 7 6 Dividend Profit Net asset value Share Price

2 jaarverslag 2005 ENG :40 Pagina 2 Consolidated annual report of the Board of Directors of the Management Company The board of Directors of Management Company s activities The Board met four times in Regular items on the agenda of these meetings were the company s results and asset performance, developments on the Belgian property markets, investments and disinvestments, financing and the dividend policy. The members of the Board were present at all meetings except Mr. G.C.J. Verweij who was excused on the meeting of August 3, During 2005, the Board of Directors discussed about the design and functioning of the internal risk control and monitoring system. No adaptations are needed. In November 2005 the Board of Directors decided to appoint an audit committee. Other committees are not deemed necessary due to the size of the Board. The audit committee consists of Mr. B. De Corte (chairman) and Mr. B. Graulich. Mr. R.L.M. de Ruijter stepped down as director and managing director of the Management Company. Mr. de Ruijter carried out this mandate at Comm. VA SCA since The Board of Directors decided to co-opt Mr. J. Buijs as director and to appoint Messrs. G.C.J. Verweij and B. Graulich respectively as Managing Director and Chairman of the Board of Directors. The General Meeting of Shareholders of the Management Company, to be held on May 12, 2006, will be invited to ratify the appointment of Mr. J. Buijs. Members of the Board of Directors do not derive any advantage in any other way from the activities of Comm. VA Wereldhave Belgium SCA or its affiliated companies. The Board of Director members do not hold any shares or option rights in Comm. VA SCA. No loans, advances or guarantees have been extended to the Board of Directors members by Comm.VA Wereldhave SCA. The Board of Directors of the Management Company is composed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director. In 2005 no business transactions took place between the members of the Board of Directors of the Management Company and the company.

3 jaarverslag 2005 ENG :40 Pagina 3 3 Management Organisation N.V. S.A. (Statutory Management Company) Represented by its Board of Directors G.C.J. Verweij Managing Director Chairman Wereldhave N.V. B. De Corte Director Independent Director B. Graulich Director Independent Director J. Buijs Director Director of Wereldhave Management Holding comprises an integrated organisation for the investment in and management of commercial property. has permanent access to reliable and up to date information on property markets, also in the international scope. This means that the company is in a position to react swiftly to changing circumstances. Structure has been a Real Estate Investment Fund (Sicafi) since January 15, The fund is governed by the Royal Decree of April 10, 1995 and is recognized as such by the Banking, Finance and Insurance Commission. The company has the fiscal status of a Real Estate Investment Fund and is, therefore, not subject to corporate tax, except on possible exceptional and favourable advantages and on rejected expenditures. Financial agenda April 12, 2006 Annual General Meeting of Shareholders April 21, 2006 Dividend payable May 9, 2006 Publication of first quarter results 2006 August 8, 2006 Publication of half-year results 2006 November 7, 2006 Publication of first 9 months results 2006 March 2007 Annual Report 2006 The company is managed by N.V. S.A. that acts as sole statutory Management Company. The Board of Directors is composed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director. The Board of Directors meets at least four times per year. At December 19, 2005 Mr. R.L.M. de Ruijter stepped down as director and managing director of the Management Company. Messrs. G.C.J. Verweij and B. Graulich are appointed respectively as Managing Director and Chairman of the Board of Directors. Mr. J. Buijs has been co-opted as director; this decision will be ratified by the General Meeting of Shareholders on May 12, shares are traded at the Euronext continuous stock exchange in Brussels and are included in the "Next Prime" segment of Euronext. Wereldhave N.V., The Hague, held 68.2% of the shares directly or indirectly at December 31, Fortis Bank N.V. acts as deposit bank and ING Financial Markets as liquidity provider. Information Information is available from : Tel: [email protected] Website:

4 jaarverslag 2005 ENG :40 Pagina 4 Strategy outline Mission and corporate aim s mission is to make available, when and where needed, the right type of commercial and residential property. offers an attractive yield combined with a low risk profile on its property portfolio. The right accommodation at the right time and on the right spot Strategy The end-user is 's foremost consideration when making decisions on property investment. The strategic policy is to apply portfolio renewal for the optimal satisfaction of tenants changing demands. has a preference for investing in modern, adaptable and identifiable buildings in readily accessible locations in knowledge based areas, where there is a liquid property market. considers that this policy will engender both a continuous increase in earnings per share and an attractive growth in net asset value. Portfolio renewal attempts to limit the risks of the cyclical property market. This is achieved both by geographical portfolio diversification between various Belgian locations and by investing in offices, shopping centres, industrial property and residential property. Diversification facilitates portfolio renewal. Diversification by geographical area and type of property Through its in-house management, can recognise changes in the preferences of tenants, property maintenance requirements and marketability at an early stage and adopt a pro-active stance. This enables to react swiftly to the latest developments. The experience acquired by the management team clearly stimulates the portfolio renewal. In-house real estate management attaches great importance to durable innovative measures which lower total costs and raise tenant flexibility, while simultaneously relieving the pressure on the environment. Waste products will increasingly be taxed, making demolition and renovation increasingly expensive. anticipates this problem by applying its own environmental and durability criteria to the choice of materials and to its buildings energy and water requirements. Innovation and responsible corporate citizenship

5 jaarverslag 2005 ENG :40 Pagina 5. 5 Report to the shareholders A total of 30 new leases and lease renewals were contracted in 2005 of which 22 were related to the three shopping centres. The average rent increase in the shopping centres amounts to 13%. The office market is still quite weak. A key concern for Wereldhave Belgium is improving its office portfolio occupancy rate in Vilvoorde and Berchem-Antwerp. Lettings and relettings At April 13, 2005, acquired 4 commercial units alongside the shopping centre in Nivelles for an amount of EUR 3.9 mln. The sectoral diversification of the portfolio seemed succesful: the reduced valuation of a number of office buildings was compensated by an increase in value of the shopping centres. As from 2004, has a stake in the stock exchange listed real estate certificate Kortrijk Ring Shopping Centre. In 2005 this stake has been revaluated till EUR 8.2 mln (2004: EUR 6.5 mln). Portfolio In 2005 the direct result increased from EUR 3.74 to EUR Over 2005 a gross dividend of EUR 3.75 per share will be proposed to the General Meeting of Shareholders. Our firm balance sheet equilibriums enable us to continue with this high pay-out level. The dividend is payable at Fortis Bank, ING Bank and KBC Bank against delivery of coupon 9. Dividend As from January 1, 2006, the Corporate Governance recommendations have been applied. A detailed description can be found on page 55. Corporate governance As from the annual accounts 2005, the Sicafi applies IFRS. The figures for 2004 have been adjusted accordingly. The non consolidated statutory annual accounts are established according to Belgian GAAP. The consolidation of the participation in the company J-II has been incorporated for 100%. Transition to IFRS Fair value remains the principle of valuation for investment properties. Under IFRS, revaluation is accounted for in the profit and loss account.

6 jaarverslag 2005 ENG :40 Pagina 6 Results Direct result The direct result consists of the net result, corrigated with the result on the portfolio. Over 2005, the direct result of Comm. VA SCA increased to EUR 20.2 mln (2004: EUR 20.0 mln). This increase is the result of higher net rental income (EUR 0.6 mln), lower costs for unoccupied buildings and a release of provisions (EUR 0.7 mln), higher taxes (EUR 0.1 mln) and a lower financial result (EUR 1.0 mln). The direct result per share amounts to EUR 3.79 (2004: EUR 3.74). Indirect result The indirect result consists of the revaluation and the result on the disposal of assets. The revaluation of the investment portfolio amounts to EUR 8.5 mln (2004: EUR 2.3 mln). This increase is due to the positive revaluation of the commercial centres. During the year under review, no capital gains were realised. Profit The profit consists of the direct and indirect result. The profit for 2005 rose from EUR 22.3 mln to EUR 28.7 mln. This is the result of a higher positive revaluation (EUR 6.2 mln), a higher operating result before result on the portfolio (EUR 1.3 mln) and higher taxes (EUR 0.1 mln). The financial result decreased (EUR 1.0 mln) due to the loss off an exceptional financial result in Equity and Debt Nivelles for an amount of EUR 3.9 mln, to investments in buildings of EUR 0.3 mln and to the positive revaluation of the portfolio of EUR 8.5 mln. To December 31, 2005 the debt ratio on the total of assets amounts to 0.8% (IFRS) and, according with the Royal Degree of April 10, 1995, applicable on the Sicafis, the debt ratio amounts to 5.8%. The second method of calculation of the debt ratio (5.8%), applied hitherto, is in accordance with Article 52 of the Royal Degree of April 10, 1995 and interpreted by the supervisory authorities. The disputed fiscal claim of EUR 50.9 mln is not taken into account in the calculation. For that matter, the total sum of the fiscal claim is guaranteed by Wereldhave NV, shareholder of Comm. VA SCA. Stock market development In 2005, shareholders achieved a total return (assuming reinvestment of the dividend) of 24.2%. This is 4.4% higher than the annual performance of the ING property index, composed of Belgium s largest listed property investment funds. The price/direct result ratio at the end of 2005 was Shareholders Of the 5,331,947 shares in circulation at December 31, 2004, 37.99% were held by Wereldhave N.V., 30.21% by N.V. Wereldhave International and 31.80% by the general public. Shareholders equity at the end of 2005 before distribution of profit amounted to EUR mln, i.e. 99.2% of the balance total (2004: EUR mln or 99.0%). At December 31, 2005 the fair value of the portfolio amounted to EUR mln, compared with EUR at December 31, The increase of EUR 12.7 mln net can be attributed to the purchase of 4 commercial units alongside the shopping centre in Contracted rent Rental Income vs. market rent Share price 2005 (as a%) (x EUR mln) 16,000 14,000 12,000 10,000 Rental Income Market Rent , , ,000 2, Retail Offices /05 02/05 03/05 04/05 05/05 06/05 07/05 08/05 09/05 10/05 11/05 12/05

7 jaarverslag 2005 ENG :40 Pagina 7 7 Important events occured after the financial year After the year end no important events occurred which influenced the development of the company or the annual accounts of December 31, those located at The Veldekens office park in Berchem- Antwerp are not or partly leased due to an oversupply in the peripheral area. The value of the investment properties portfolio amounts to EUR mln at December 31, Financial instruments The company does not make use of financial instruments. Research and development In view of the nature and specific activity of the company, no operations are connected to research and development. Development of the property portfolio The commercial centres, Belle-Ile in Liège, Les Bastions in Tournai and the commercial centre in Nivelles maintain their status as popular shopping destination in their respective district. The combination of the following facilities: accessibility, free parking, safety, branche mix and animation, makes these shopping centres especially attractive. In the short/long term this guarantees added value to this kind of properties. Substantial rent increases were agreed during recent lease renewals. Ultimo 2005, has a stake in the listed stock exchange real estate certificate Kortrijk Ring Shopping Centre of 15.8%. The fair value amounts to EUR 8.2 mln per December 31, 2005 (2004: EUR 6.5 mln). The average occupancy rate of the portfolio over 2005 amounted to 82.9% (2004: 79.0%). The vacancy concerns only the office portfolio. The office building located at 28 Medialaan in Vilvoorde and Property valuation at 01/01/05 Retail EUR 168,339,000 Offices EUR 138,855,000 EUR 307,194,000 Property valuation at 31/12/05 Retail EUR 180,050,000 Offices EUR 139,844,000 EUR 319,894,000 Insured value of property portfolio at 31/12/05 Retail EUR 136,125,000 Offices EUR 146,468,000 EUR 282,593,000 Prospective theoretical rent (on the basis of 100% occupancy) for 2006 Retail EUR 13,529,000 Offices EUR 13,454,000 EUR 26,983,000 Breakdown of portfolio by age (as a % of market value) Geographical breakdown (as a % of rental income) Brussels Flanders Wallonia % % 28% 0 < 5 years 5-10 years years

8 jaarverslag 2005 ENG :40 Pagina 8 The Belgian property market During the year under review almost 50% more office space was let than in Thanks to the expansion of the European Union the vacancy rate in the Brussels conurbation dropped slightly to 10.4%. No improvement was recorded in the Leopold district, where a relatively large amount of new buildings were completed in anticipation of this expansion. The European Union, however, has a preference for larger office buildings, for which no space is available in the Leopold district. As a result the EU is now moving to more peripheral office locations, resulting in increasing vacancies and falling rents (down 3% to EUR 285 per m 2 ) in the Leopold district. In the nearby Central district vacancies decreased but rents none-the-less fell by 10% to EUR 200 per m 2. Other districts also recorded this remarkable combination of lower vacancy rates and falling rents. In view of the expected completion of 500,000 m 2 of new office space in 2006 landlords have been prepared to make concessions on rents. Tenants are sensitive to the quality of locations and of individual buildings. Initial rental yields amount to 6% in the Central Business District (Leopold), to 6.5% in the outlying areas (Ring) and 6.7% on the periphery. The take up of office space in Antwerp probably totalled around 70,000 m 2 in 2005, which is considerably less than the average for the recent past. Major road works on the outer ring-road, which lasted till the end of the year, were a contributory depressing element. The supply of office space peaked at the end of 2004 and hardly declined since. In view of the lower office rent levels conversion to residential accommodation is a more remunerative option than in Brussels. Initial rental yields on office properties currently amount to circa 7%. The vacancy level for shops in the traditional main shopping streets is attributed to the success of shopping centres and retail parks. In the last few years there has been a definite upgrading of the retail trade on the outskirts of towns, which are no longer dominated by discount outlets. In the city centres there is strong demand for good quality shops in A-1 locations. Since the end of 2004 rents in shopping centres have been rising rapidly. In the best centres higher rents (EUR 1,600 per m 2 ) than in the main shopping streets (EUR 1,250 per m 2 ) are already being paid. Rents in retail parks amount to EUR 135 per m 2. Rental yields on top Belgian retail property are currently running at 5% in the main shopping streets and 6% to 7.5% in shopping centres. Yields are under downward pressure as a result of the low level of interest rates and investors demand for retail property. The weak demand for industrial property has affected rental levels, which in the case of semi-industrial buildings have scarcely risen in the last ten years. Letting periods are getting successively shorter. Initial rental yields have fallen from 10% to 7% over the last few years. purchased four adjacent shops as part of its plan to expand the Nivelles shopping centre. No other changes took place in the portfolio in The application for the building permit for the expansion of 8,000 m 2 will be submitted in the spring of In anticipation of the expansion, the shopping centre will be renovated. In Tournai plans have been prepared for the expansion of the shopping centre by 4,500 m 2. In view of this, on February 9, 2006 a plot of land was acquired to expand the parking facilities of the shopping centre.

9 jaarverslag 2005 ENG :40 Pagina 9 9 Prospects Profit Development In 2006, will mainly focus on seeking opportunities for extending its shopping centres, i.e. in Nivelles, and improving its offices portfolio occupancy rate. The positive development of rental levels in the shopping centres continues. However, the letting of office space in peripheral areas continues to be a challenge due to oversupply. s profit development will be mainly dependent on improving the occupancy rate of the office portfolio Statutory Management Company N.V. S.A. B. Graulich, chairman B. De Corte G.C.J. Verweij J. Buijs Vilvoorde, February 22, 2006

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11 jaarverslag 2005 ENG :40 Pagina Portfolio

12 jaarverslag 2005 ENG :40 Pagina 12 Breakdown by sector Breakdown by sector (as a % of market value) (as a % of rental income) Offices Retail Offices Retail 56% 44% 40% 60%

13 jaarverslag 2005 ENG :40 Pagina Portfolio summary on December 31, 2005 Location Diversifica- Rentable Parking Number Rental Average tion of the area spaces of income Occupaportfolio (in m 2 ) (number) tenants in 2005 tion 2005 (in %) (in EUR) (in %) Commercial Shopping Centre 4020 Liège 35 31,252 2, ,097, "Belle-Ile" Quai des Vennes 1 Shopping Centre 1400 Nivelles 11 19, ,569, Nivelles Chaussée de Mons 18 Shopping Centre 7500 Tournai 9 14,178 1, ,136, "Les Bastions" Bd. W. de Marvis 22 Shop 4000 Liège 1 3, , Rue de l Université 14 Rue Cathédrale 84/86 Offices Madou Centre 1000 Brussels 10 12, ,663, Bd. Bischoffsheim 302* Regent Brussel 2 3, , Bd. Régent 49* Orion Centre 1000 Brussels 4 5, ,143, Bd. Bischoffsheim 25* Jan Olieslagerslaan 1800 Vilvoorde 1 3, J. Olieslagerslaan 29* Business- & Mediapark 1800 Vilvoorde 3 5, , Medialaan 201* Business- & Mediapark 1800 Vilvoorde 2 3, , Medialaan 120* Business- & Mediapark 1800 Vilvoorde 6 12, Medialaan 246* De Veldekens 2600 Berchem 5 11, ,570, Roderveldlaan 368* De Veldekens 2600 Berchem 6 16, ,081, Roderveldlaan 1,119* De Veldekens 2600 Berchem 5 11, , Berchemstadion- 224* straat Total ,584 21,830, * Archives.

14 jaarverslag 2005 ENG :40 Pagina 14 Offices buildings Description of the portfolio Investment portfolio Madou Centre, 1-8 Boulevard Bischoffsheim, 1000 Brussels Year of construction: Renovation: 2002 Location: along the inner ring road, in the Art-Loi quarter Rentable area: 12,364 m 2 offices and 302 m 2 archives Parking: 150 underground spaces Orion Centre, Boulevard Bischoffsheim, 1000 Brussels Year of construction: 1990 Location: along the inner ring road, in the Art-Loi quarter Rentable area: 5,205 m 2 offices, 25 m 2 archives and 4 apartments (500 m 2 ) Parking: 60 underground spaces plus 4 parking spaces alongside the apartments Office building, 58 Boulevard du Régent, 1000 Brussels Year of construction: Renovation: 1997 Location: along the inner ring road, in the Art-Loi quarter Rentable area: 3,246 m 2 offices and 49 m 2 archives Parking: 32 underground spaces

15 jaarverslag 2005 ENG :40 Pagina Office building, Jan Olieslagerslaan, 1800 Vilvoorde Year of construction: 1998 Location: in the Business Class office park, just near the station of Vilvoorde Rentable area: 3,012 m 2 offices and 29 m 2 archives Parking: 82 underground and above ground spaces Business- & Mediapark, Medialaan, 1800 Vilvoorde Year of construction: 1999 Location: in the immediate vicinity of the Brussels Ring Road (exit 6) and the airport Rentable area: Medialaan 30: 5,495 m 2 offices and 201 m 2 archives Medialaan 32: 3,932 m 2 offices and 120 m 2 archives Parking: 301 underground and above ground spaces Business- & Mediapark, 28 Medialaan, 1800 Vilvoorde Year of construction: 2002 Location: in the immediate vicinity of the Brussels Ring Road (exit 6) and the airport Rentable area: 12,743 m 2 offices and 246 m 2 archives Parking: 305 underground and above ground spaces

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17 jaarverslag 2005 ENG :40 Pagina De Veldekens I 1-2 Roderveldlaan, 2600 Berchem - Antwerpen Year of construction: 2001 Location: alongside the Antwerp ring road Rentable area: 11,976 m 2 offices and 368 m 2 archives Parking: 238 underground and above ground spaces De Veldekens II Roderveldlaan, 2600 Berchem - Antwerpen Year of construction: 1999 Location: alongside the Antwerp ring road Rentable area: 16,020 m 2 offices and 1,119 m 2 archives Parking: 316 underground and above ground spaces De Veldekens III Berchemstadionstraat, 2600 Berchem - Antwerpen Year of construction: 2002 Location: alongside the Antwerp ring road Rentable area: 11,192 m 2 offices and 224 m 2 archives Parking: 217 underground and above ground spaces

18 jaarverslag 2005 ENG :40 Pagina 18 Breakdown of portfolio by sector (as a % of rental income) 5.36% 3.44% 6.73% 16.64% 17.07% 0.73% 2.75% 5.08% 3.51% 6.70% 4.57% 6.52% 11.84% 2.95% 1.95% 2.16% 2.01% Government Catering Food Shoes/leatherwear Ladieswear Mens wear Childrens wear Mixed wear Gifts Interior decoration Leasure and miscellaneous Beauty & Bodycare Services Supermarkets Financials Multinationals IT sector Geographical breakdown (as a % of rental income) 36% 9% 11% 16% 16% Brussels Vilvoorde Berchem-Antwerpen Nivelles Tournai Liège 12%

19 jaarverslag 2005 ENG :40 Pagina Description of the portfolio Investment portfolio Shopping centres Belle-Ile Commercial Centre 1 Quai des Vennes, 4020 Liège Year of construction: 1994 Location: Belle Ile is located to the Southeast of Liège, by the Autoroute des Ardennes - E25 Rentable area: 31,252 m 2 rentable floor area The shopping centre houses 99 shops Parking: 2,200 spaces Shopping centre Nivelles, 18 Chaussée de Mons, 1400 Nivelles Year of construction: Renovation: 1995 Location: The Nivelles Shopping Centre is located on the outskirts of Nivelles, at the Nivelles-Sud exit of the E19 motorway between Brussels and Paris Rentable area: 19,501 m 2 rentable floor area (including 3,998 m 2 retail warehouses) The shopping centre houses 61 shops Parking: 802 spaces Les Bastions Shopping Centre, 22 Boulevard Walter de Marvis, 7500 Tournai Year of construction: Renovation: 1996 Location: The Les Bastions shopping centre is situated along the ring road around Tournai Rentable area: 14,178 m 2 rentable floor area (including 2,997 m 2 retail warehouses) The shopping centre houses 58 shops Parking: 1,260 spaces

20 jaarverslag 2005 ENG :40 Pagina 20 Real estate expert report Property portfolio analysis Resolutions of the real estate expert TROOSTWIJK-ROUX C.V.B.A., prepared on December 31, 2005, following the valuation of the property portfolio at December 31, 2005, as referred to in article 56, paragraph 1, of the Royal Decree of April 10, 1995 with respect to real estate investment funds. 44% of the property holding consists of offices and 56% consists of commercial properties. At December 31, 2005 the fair value of the portfolio of Wereldhave Belgium amounted to EUR 320,250,000 consisting of: Evaluation principles for the property portfolio The valuation has been carried out in conformity with IVS and EVS. Offices: EUR 140,150,000 Retail: EUR 180,100,000 Brussels, December 31, 2005 TROOSTWIJK - ROUX C.V.B.A. Investment Properties Investment properties are valued at fair value. Fair value is based on the market rent minus the operating costs. To determine the fair value, the net capitalisation factor and the net present value of the difference between market rent and contractual rent, of forecasted vacancy and of necessary future investments are determined for each object. This value is reduced by the standard transaction costs (registration tax 10% %, estate agent s fees 1.2% and solicitor's fees 0.2%, i.e. 11.4% % in total). Development portfolio The valuation of development portfolio is based on the cost price or the estimated lower fair value. The cost price includes the costs for contracted but not yet completed operations and capitalised interest. The value is based on an inspection carried out by one or more chartered surveyors, taking into account the location, construction type, zoning requirements and maintenance status at the time of assessment. The valuations are also based on data supplied by the client and/or third parties if necessary, which we assume to be correct.

21 jaarverslag 2005 ENG :40 Pagina Consolidated Annual Accounts 2005 Contents Consolidated balance sheet 22 Consolidated profit and loss account 23 Consolidated summary of movements in equity 24 Consolidated cash flow statement 25 Notes to the consolidated annual accounts 01. General information Fiscal status Accounting policies Transition to IFRS Direct and indirect result Segment information Investment properties Other tangible assets Trade receivables and other non current assets Current financial assets Current receivables Cash and cash equivalents Share capital Loans Provisions Group Insurance Other long term liabilities Other short term liabilities Securities Rental income Property charges General expenses Valuation differences Financial result Taxes on result Result per share Dividend Risks Internal risk control and monitoring system Claims Related Group companies Events occured afterthe financial year 47 Auditors report 48 Extract of the statutory annual report 50

22 jaarverslag 2005 ENG :40 Pagina 22 Consolidated balance sheet at December 31, 2005 (amounts x EUR 1,000) Assets Notes I Non-current assets C Investment properties 7 319, ,194 E Other tangible assets F Trade receivables and other non-current assets 9 4,627 4, , ,146 II Current assets B Current financial assets available for sale 10 8,197 6,535 D Trade receivables E Tax receivables and other current assets ,386 F Cash and cash equivalents 12 3,135 6,258 11,845 14,329 Total assets 336, ,475 Equity and liabilities Equity I Shareholder s equity A Capital , ,969 D Reserves Reserves available for distribution 5,627 5,627 E Result Retained result 72,662 70,149 Result of the financial year 28,688 22,271 G Change in fair value of financial assets and liabilities 1, , ,231 Liabilities I Non-current liabilities A Provisions 15/ E Other non-current liabilities II Current liabilities D Trade debts E Other F Accrued charges and deferred income 18 1,876 2,596 2,417 3,091 Total equity and liabilities 336, ,475

23 jaarverslag 2005 ENG :40 Pagina Consolidated profit and loss account (amounts x EUR 1.000) Notes I Rental Income 20 21,830 21,201 Net rental income 21,830 21,201 V VII Recovery income of charges and taxes payable by tenants on let properties (+) 1,870 2,012 Charges and taxes payable by tenants on let properties ( ) 2,223 2, Property result 21,477 20,401 IX Technical costs X Commercial costs XII Property management costs Property charges Property operating result 20,841 19,658 XIV General costs 22 Staff costs Other XV Other operating charges ,099 1,204 Operating result before result on the portfolio 19,742 18,454 XVII Gains or losses on disposals of other non financial assets 9 1 XVIII Revaluation of property investment 23 8,506 2,282 Operating result 28,257 20,737 XIX Financial income 770 1,674 XX Interest charges XXI Other financial charges Financial result ,543 Pre-tax result 28,827 22,280 XXIII Corporate taxes Taxes Net result 28,688 22,271 Net result shares of the Group 28,688 22,271 Result per share 26 5,38 4,18

24 jaarverslag 2005 ENG :40 Pagina 24 Consolidated summary of movements in equity (amounts x EUR 1,000) Notes Shareholders Total equity Share Reserves Retained Revaluation capital profit fair value of financial assets Balance to January 1, ,969 5,627 89, ,102 Differences 8 8 Profit of financial year 22,271 22,271 Distribution of dividend 2003 a 19,728 19,728 Balance to December 31, ,969 5,627 92, ,653 Adjustments IFRS b Balance to January 1, ,969 5,627 92, ,231 Revaluation financial assets available for sale 1,663 1,663 Profit financial year 28,688 28,688 Distribution of dividend 2004 c 19,728 19,728 Other Balance to December 31, ,969 5, ,350 1, ,824 Notes a Dividend paid 2003 EUR 3.70 (net EUR 3.145) per share 19,728 19,728 b Adjustments IFRS Revaluation financial assets available for sale 215 Other c Dividend paid 2004 EUR 3.70 (net EUR 3.145) per share 19,728 19,728

25 jaarverslag 2005 ENG :40 Pagina Consolidated cash flow statement (amounts x EUR 1,000) Cash flow from operating activities Profit 28,250 21,910 Add: revaluation property 8,506 2,282 Movements in receivables 1,607 1,837 Movements in current liabilities 20,697 26,891 Net cash flow from operating activities 27,596 27,336 Cash flow from investment activities Investments 4, Net cash flow from investment activities 4, Cash flow from financing activities Dividend received Net cash flow from financing activities Net cash flow 3,123 5,982 Cash and bank balances At January 1 6,258 12,240 Decrease cash and bank balances 3,123 5,982 Situation at December 31 3,135 6,258

26 jaarverslag 2005 ENG :40 Pagina 26 Notes to the consolidated annual accounts 1. General Information Comm. VA SCA (the company) has the status of a Real Estate Investment Fund with fixed capital (sicafi). The company invests in offices, shopping centres, industrial property and residential property. Comm. VA has a preference for investing in modern, adaptable and identifiable buildings in readily accessible locations in knowledge based areas, where there is a liquid property market. The company is managed by the sole statutory Management Company, represented by the Board of Directors. The Board of Directors is composed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director. On December 19, 2005, Mr. R.L.M. de Ruijter stepped down as director and managing director. The Board of Directors decided to co-opt Mr. J. Buijs as director and to appoint Mr. G.C.J. Verweij as Managing Director. The company quotes at the Euronext continuous stock exchange in Brussels and is included in the "Next Prime" segment of Euronext. Fortis Bank N.V. acts as deposit bank and ING Financial Markets as liquidity provider. The consolidated figures were approved of by the Board of Directors of the Management Company on February 22, The General Meeting of Shareholders will be held on April 12, 2006 at the registered offices of the company. 2. Fiscal status The company has the fiscal status of a Real Estate Investment Fund and is, therefore, not subject to corporate tax, except on possible exceptional and favourable advantages and on rejected expenditures. 3. Accounting policies 3.1. Basis of preparation The Group's functional currency is the euro and all transactions are presented in euro. The financial statements of Comm. Va SCA have been presented in euros, rounded to the nearest thousand. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). Comm. VA SCA did not make use of any early application of any standards. The consolidated financial statements and the company financial statements have been prepared on the historical cost basis, unless specified otherwise. Costs and loans issued and loans received are taken into account on amortised cost basis. Comm. VA SCA has adopted IFRS rules as approved by the EU Commission and has implemented IFRS 1 as from the year 2005 with a transition date of January 1, Before 2005, the accounts were based on Belgian GAAP. Comparative 2004 figures included in the 2005 accounts have been restated in accordance with relevant IFRS requirements. The accounting policies below have been applied to the years presented. The standards adopted by Comm. VA Wereldhave SCA as from January 1, 2004 require retrospective application. The company has elected to make use of the exemptions available under IFRS 1 and to: Not apply IFRS 3 for the years before 2004; IAS 19: per January 1, 2004, the company has included all cumulative and actuarial profit and loss for employee benefits; The accounts have been prepared before distribution of profit Consolidation Subsidiaries are those entities, including special purpose entities, controlled by the company. Control exists when the company has the power, directly or indirectly, to govern the financial and operating policies of an entity. The financial statements of subsidiaries are included in the consolidated financial statements. Intra-group balances and unrealized gains and losses are eliminated. In case of control of less than 100%, subsidiaries are consolidated on a 100% basis. In these cases a minority share is shown in the balance sheet under equity as well as in the profit and loss account as a separate item. The purchase method is used to account for the acquisition of subsidiaries. The acquisition is measured at the fair value of the assets and liabilities at the date of acquisition. Re-measurement at subsequent balance sheet dates is based on fair value. As soon as control ceases to exist, subsidiaries are deconsolidated.

27 jaarverslag 2005 ENG :40 Pagina Investment property Investment properties are those properties which are held to earn rental income or for capital appreciation or for both. On acquisition, investment properties are recognised at cost. Investment properties are stated at fair value at the balance sheet date. Fair value is based on market value, being the estimated amount for which a property could be exchanged on the date of valuation in an arm s length transaction. Fair value is based on the capitalisation of market rents less operating costs. The net capitalisation factor and the present value of the differences between market rent and contracted rent, of vacancies and of maintenance expenditure to be taken into account are calculated for each property individually. Transfer tax is deducted. After acquisition subsequent expenditure is added to the asset s carrying amount when it is probable that future economic benefits will flow to the entity. All other expenditure, such as repairs and maintenance, are charged to the income statement during the financial period in which they are incurred. The part property in own use is not significant and therefore not classified separately as property in own use. The portfolio is valued quarterly at fair value by an independent external valuer in conformity with Internation Valuation Standards and European Valuation Standards. Valuation differences are recognised in the income statement Other tangible assets Property and equipment are stated at cost less depreciation. Depreciation is charged to the income statement on a straightline basis over the estimated useful lives of the assets: Property: 33 years Office furniture: 10 years Equipment: 3 years Cars (exl. residual value): 4 years Gains and losses on disposal are recognised in the income statement Development projects Property that is being constructed or developed for future use as investment property is classified as a development project. Development projects are valued at cost or at estimated fair value if lower. Cost includes the (estimated) works performed, the costs of staff directly related to technical supervision and project management on the basis of time spent, and capitalised interest costs on the basis of amounts spent and money market rates up to the date of completion. An impairment loss is recognised for the amount by which the asset s carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement. Development projects are transferred to investment properties on the date of technical completion Trade receivables Trade receivables are recognised initially at fair value, less transaction costs and subsequently on amortised cost basis less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the group company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset s carrying amount and the estimated future cash flows. The provision is recognised in the income statement Financial assets Financial assets, classified under non-current assets, will include items due after more than twelve months. Financial assets are recognised at cost or at cost after transaction costs and subsequently valued in conformity with IAS 39. Loans Loans issued and other receivables are taken into account, initially at fair value less transaction costs and subsequently on amortised cost basis. Capitalised rent free periods and other leasing expenses The expenses are initially recognised at cost and are amortised over the term of the lease. Financial assets available for sale Financial assets available for sale are initially recognised at cost and subsequently valued at fair value. Valuation results are directly taken to equity. Negative permanent valuation results are incorporated in the profit and loss account.

28 jaarverslag 2005 ENG :40 Pagina Cash and cash equivalents Cash and cash equivalents comprise cash balances and cash deposits and are valued in conformity with IAS 39. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value Share capital Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares are shown as a deduction from the proceeds Provisions In conformity with IAS 37, a provision is recognised in the balance sheet when a legal obligation would exist, as a result of a past event and when it is probable that an outflow of economic benefits will be required to settle the obligation Interest bearing debt On acquisition, loans are initially recognised at cost, less transactions costs. Any difference between cost and redemption value is recognised in the income statement over the period of the interest bearing liabilities on the basis of the effective interest per loan. The short term portion of loans outstanding to be repaid within twelve months is shown under current liabilities Employee benefit plans Defined benefit plans The net receivable or liability in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned for their service in the current and prior periods. That benefit is discounted to determine its present value and the fair value of any plan assets is deducted. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability. In markets where there is no deep market in such bonds, the market yields (at the balance sheet date) on government bonds are used. Actuarial gains and losses arising from adjustments and changes in actuarial assumptions are recognised in income over the average remaining service period of employees, if and so far as the balance of these gains and losses exceeds 10% of the higher of the actuarial obligations or the value of assets Trade and other payables Trade and other payables are taken into account, initially at cost less transaction costs. Any difference between cost and redemption value is recognised in the income statement over the period of the issued amount. The short term portion of loans outstanding to be repaid within twelve months is shown under current liabilities Leases A. If a group company is the lessee, operating and financial leases could occur: 1. Operating lease: Leases in which substantially all risks and rewards of ownership are retained by another party, the lessor, are classified as operating leases. Payments, including prepayments, made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. 2. Finance lease: Leases of assets where the group company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding obligations, net of finance charges, are included in long term liabilities. The interest element of the finance cost is charged to the income statement over the lease period. The investment properties acquired under finance leases are carried at their fair value. B. If a group company is the lessor, operating and financial leases could occur: 1. Operating lease: Properties leased out under operating leases are included in investment property in the balance sheet. 2. Finance lease: When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. When the present value of operational leases of a property equals its value, the property is reclassified to receivables financial leasing.

29 jaarverslag 2005 ENG :40 Pagina Revenue Rental income Rental income from investment property leased out under operating lease is recognised in the income statement on a straightline basis over the term of the lease. Lease incentives having the nature of rent free periods are recognised as an integral part of the rental income. The incentives are amortised over the term of the lease, limited to the first break of the lease. Amortizations are charged to rental income. Rental income does not include amounts charged to tenants in respect of common costs. Rental income is shown on an accrual basis Expenses Charges and taxes payable by tenants on let properties (+/-) These are shown on a gross basis when the property owner acts as a principal. In the presentation on a gross basis costs and charges are shown separately. Costs and charges are shown on an accrual basis. Property expenses The amount consists of operating cost for the account of the owner attributable to the accounting period, such as: technical costs charges and taxes of vacant properties insurance premiums property management commercial costs Commercial costs include the depreciation of expenditure in connection with a letting. The expenditure is depreciated over the term of the lease Interest Interest comprises interest attributable to the accounting period on loans, other debts, accounts receivable and cash and bank balances. Due to the amortised cost valuation of loans, interest will include interest addition to loans on the basis of effective interest rate per loan Corporate tax Income tax on profit and loss for a year comprises current tax. Current income tax is the expected tax payable or receivable on the taxable income or loss for the period using tax rates prevailing at the balance sheet date and any adjustment to taxation in respect of previous years Direct and indirect result Comm. VA SCA presents results as direct and indirect results, enabling a better understanding of results. The direct result consists of rental income, general costs, other gains and losses and financial income and expense. The indirect result consists of the valuation results, results on disposals and other results not taken into account for the direct result. This presentation is not obligatory under IFRS Segment reporting Segment reporting presents results, assets and liabilities primarily per region and secondarily per sector. Sectors reported are determined in accordance with the type of investment property, namely offices and shops. Segment results and assets include items directly attributable to these segments. Unallocated items comprise mainly financing and other unattributable items such as overheads. Investment property depreciation charges are not recognised since investment properties are valued at fair value (see above under Investment properties). The fair value calculation takes into account technical and economical obsoles-cence. General costs The amount comprises general costs attributable to the accounting period. Direct staff costs relating to property management are included in property expenses. Direct staff costs relating to supervising and monitoring development projects are capitalised on the basis of time spent.

30 jaarverslag 2005 ENG :40 Pagina Transition to IFRS Comm.VA Wereldhave SCA financial statements for the year ended December 31, 2005 are the first Comm.VA Wereldhave SCA annual financial statements complying with IFRS. The IFRS adoption date is January 1, Wereldhave has adjusted its opening balance sheet at January 1, 2004 to an IFRS opening balance sheet per that date. The following IFRS standards, including amendments up to December 31, 2005, are applied by Comm.VA Wereldhave SCA as from January 1, 2004 and are the most relevant to the Comm.VA Wereldhave SCA operations and financial reporting: IAS 1 Presentation of financial statements IAS 7 Cash flow statements IAS 8 Accounting policies, changes in accounting estimates and errors IAS 10 Events after the balance sheet date IAS 12 Income taxes IAS 14 Segment reporting IAS 16 Property and equipment IAS 17 Leases IAS 18 Revenue IAS 19 Employee benefits IAS 21 The effects of changes in foreign exchange rates IAS 23 Borrowing costs IAS 24 Related party disclosures IAS 27 Consolidated and separate financial statements IAS 32 Financial instruments: disclosure and presentation IAS 33 Earnings per share IAS 36 Impairment of assets IAS 37 Provisions, contingent liabilities and contingent assets IAS 39 Financial instruments: recognition and measurement IAS 40 Investment property and IFRS 1 First-time adoption of international financial statements IFRS 3 Business combinations IFRS 5 Assets held for sale Expenditure relating to leases: IAS 17 requires straight-lining of expenditure relating to the letting of space over the term of the lease; Employee benefits: IAS 19 requires the recognition of the net asset or liability resulting from defined benefit pension plans; Consolidation: IAS 27 requires consolidation of controlled subsidiaries on a 100% basis, showing a minority interest in equity and the income statement; Valuation of loans: IAS 39 requires valuation of loans at amortised cost. A summary of amendments to the equity from Belgian GAAP to IFRS as well as the amended balance sheets at January 1, 2004 and December 31, 2004 and the amended income statement 2004 are shown hereafter. The adoption of these standards has not resulted in substantial changes in accounting policies. Amendments in accounting policies applied up to and including the financial year 2004 have been included as per January 1, 2004 in respect of: Tax liabilities: IAS 12 require tax assets and liabilities and movements in tax liabilities to be shown at nominal value; in conformity with IAS 12 and IAS 37, the disputed tax claim which was taken into account as receivable and debt in accordance with the advise of the Commission for Accounting Principles, does not have to be taken into account anymore (detail p. 47);

31 jaarverslag 2005 ENG :40 Pagina Recapitulation of IFRS adjustments in equity (amounts x EUR 1,000) January 1, 2004 December 31, 2004 Total equity according to Belgian GAAP 300, ,511 Revaluation of financial assets and liabilities 215 Liabilities relating to defined benefit pension plans 22 Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and other leasing expenses Reclassification long leasehold rights agreement C&A 27 Profit adjustment 2003 (dividend) 19,728 Profit adjustment 2004 (dividend) 19,728 Total equity according to IFRS 320, ,231

32 jaarverslag 2005 ENG :40 Pagina IFRS adjustments on the consolidated balance sheet as at January 1, 2004 (amounts x EUR 1.000) Assets Notes Belgian GAAP IFRS IFRS adjustments I Non-current assets C Investment properties a 301,893 1, ,584 E Other tangible assets F Trade receivables and other non current assets b 5,141 5, ,070 6, ,902 II Current assets Receivables > 1 year c 7,773 7,773 D Trade receivables E Other receivables d 50,969 50, F Cash and cash equivalents 12,297 12,297 Other current assets e ,325 58,711 13,614 Total assets 374,395 51, ,516 Equity and liabilities Equity I Shareholder s equity A Capital 224, ,969 D Reserves Reserves available for distribution 5,627 5,627 E Result Retained profit f 70, ,021 Result for the financial year f 19,485 19, ,771 19, ,102 Liabilities I Non-current debts E Other non-current debts II Current debts D Trade debts g E Taxes g 50,939 50,938 1 E Salaries and social security F Other debts g 19,939 19, F Accrued charges and deferred income 1,804 1,804 73,479 71,210 2,269 Total equity and liabilities 374,395 51, ,516 Number of ordinary shares in issue 5,331,947 5,331,947 5,331,947 Net asset value per ordinary share (x EUR 1) * * Including profit financial year.

33 jaarverslag 2005 ENG :40 Pagina Notes to the IFRS adjustments on the consolidated balance sheet to January 1, 2004 a Investment properties Reclassification long leasehold rights agreement C&A 2,632 Reversal of commitments for works not yet carried out 544 Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and other leasing expenses 397 1,691 b c d Trade receivables and other non-current assets Reclassification long term receivables 5,141 5,141 Receivables > 1 year Reclassification long leasehold rights agreement C&A 2,632 Reclassification long term receivables 5,141 7,773 Other receivables Claim on Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of the disputed claim (cfr. page 47) 50,938 Reclassification other current assets ,440 e Other current assets Reclassification other current assets f Equity Rental costs are recognised in the reserve unavailable for distribution 397 Reclassification result of the financial year 243 Dividend payable is added to the retained profit. Presentation of the balance sheet is done before appropriation of profit 19,485 19,331 g Short term liabilities Reversal of commitments for works not yet carried out 544 Debt on Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of the disputed claim (cfr. page 47) 50,938 Reversal provision dividend payable 19,728 71,210

34 jaarverslag 2005 ENG :40 Pagina IFRS adjustments on the consolidated balance sheet as at December 31, 2004 (amounts x EUR 1,000) Assets Note Belgian GAAP IFRS IFRS adjustments I Non current assets C Investment properties a 305,320 1, ,194 E Other tangible assets F Trade receivables and other non-current assets b 6,320 1,481 4, , ,146 II Current assets Receivables > 1 year c 7,444 7,444 B Financial current assets available for sale d 6,535 6,535 D Trade debts E Tax receivables and other current assets e 51,276 49,890 1,386 F Cash and cash equivalents 6,258 6,258 Other current assets f 1,048 1,048 66,176 51,847 14,329 Total assets 377,929 51, ,475 Equity and liabilities Equity I Shareholder s equity A Capital 224, ,969 D Reserves Reserves available for distribution 5,627 5,627 E Result Retained profit g 72,915 2,766 70,149 Result financial year h 22,271 22,271 G Change in fair value of financial assets and liabilities i ,511 19, ,231 Liabilities I Non-current debts A Provisions j E Other non-current liabilities II Current debt D Trade debts k E Taxes l 50,949 50,949 E Salaries and social security m E Other n 19,918 19, F Accrued charges and deferred income 2,596 2,596 74,286 71,174 3,091 Total equity and liabilities 377,929 51, ,475 Number of ordinary shares in issue 5,331,947 5,331,947 5,331,947 Net asset value per ordinary share (x EUR 1) * * Including profit financial year.

35 jaarverslag 2005 ENG :40 Pagina Notes to the IFRS adjustments on the consolidated balance sheet as at December 31, 2004 a Investment properties Reversal of commitments for works not yet carried out 530 Reclassification long leasehold rights agreement C&A 2,632 Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and other leasing expenses 228 1,874 b Trade receivables and other non-current assets Reclassification stake real estate certificate Kortrijk Ring Shopping Centre 6,320 Long term receivables are classified as financial non-current assets (previously as current assets) 4,839 1,481 c Receivables > 1 year Long term receivables are classified as financial non-current assets (previously as current assets) 4,839 Reclassification long leasehold rights agreement C&A 2,605 7,444 d Financial assets available for sale Reclassification stake real estate certificate Kortrijk Ring Shopping Centre 6,320 Revaluation stake real estate certificate Kortrijk Ring Shopping Centre 215 6,535 e Tax receivables and other current assets Claim on the Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of the disputed claim (cfr. page 47) 50,938 Reclassification deferred charges and accrued income 1,048 49,890 f Other current assets Reclassification deferred charges and accrued income 1,048 1,048 g Retained result Reclassification result of the financial year 2,543 Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and other leasing expenses 228 Pension costs 22 Reclassification amortisation of capital long leasehold rights C&A 27 2,766

36 jaarverslag 2005 ENG :40 Pagina 36 h Result of the financial year Reclassification result of the financial year 2,543 Reversal provision dividend payable 19,728 22,171 i Revaluation of financial assets and liabilities Revaluation stake real estate certificates Kortrijk Ring Shopping Centre j Provisions Reclassification defined benefit obligations k Trade debts Reclassification defined benefit obligations 21 Reversal of commitments for works not yet carried out l Taxes Debt on Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of the disputed claim. 50,938 Reclassification liability (cfr. page 47) 11 50,949 m Remuneration and social security Reclassification liability n Other Reclassification liability 11 Reclassification liability 71 Liability group insurance 22 Reversal provision dividend payable 19,728 19,624

37 jaarverslag 2005 ENG :40 Pagina IFRS adjustments to the profit and loss account for 2004 (amounts x EUR 1,000) Note Profit 2004 Profit 2004 IFRS IFRS Belgian GAAP Adjustments I Rental income 21,201 21, Net rental income a 21,201 21, V Recovery income of charges and taxes payable by tenants on let properties (+) 2,012 2,012 VII Charges and taxes payable by tenants on let properties ( ) 2,812 2,812 Property result 20,401 20, IX Technical costs X Commercial costs XII Property management costs Property operating result 19,658 19, XIV General costs Staff costs Other XV Other operational costs XVII Gains or losses on disposals of other non financial assets 1 1 XVIII Revaluation of property investment b 2,282 2,282 Operating result 20,737 18,428 2,309 XIX Financial income 1,674 1,674 XX Interest charges XXI Other financial charges Pre-tax result 22,280 19,971 2,309 XXIII Corporate taxes 9 9 Net income 22,271 19,962 2,309 Shares ranking for dividend 5,331,947 5,331,947 Profit per share, ranking for dividend Notes to the IFRS adjustments to the profit and loss account for 2004 a b Rental income Reclassification long leasehold rights agreement C&A Revaluation of property investment Revaluation investment properties 2,282 2,282

38 jaarverslag 2005 ENG :40 Pagina Direct and indirect result (amounts x EUR 1,000) 2005 Direct result Indirect result Rental income 21,830 21,830 Property charges General costs 1,099 1,099 Operating result before result on the portfolio 19,742 19,742 Revaluation of property investment positive 11,165 11,165 negative 2,659 2,659 8,506 8,506 Gains or losses on disposals of other non financial assets 9 9 Net operating profit 28,257 19,751 8,506 Financial result Pre-tax result 28,827 20,321 8,506 Tax on result Profit 28,688 20,182 8,506 Profit per share 5,38 3,79 1, Direct result Indirect result Rental income 21,201 21,201 Property charges 1,543 1,543 General costs 1,204 1,204 Operating result before result on the portfolio 18,454 18,454 Revaluation of property investment positive 12,654 12,654 negative 10,372 10,372 2,282 2,282 Gains or losses on disposals of other non financial assets 1 1 Net operating profit 20,737 18,455 2,282 Financial result 1,543 1,543 Pre-tax result 22,280 19,998 2,282 Tax on result 9 9 Profit 22,271 19,989 2,282 Profit per share

39 jaarverslag 2005 ENG :40 Pagina Segment information (amounts x EUR 1,000) Primary segmentation (geographical) The segmentation of rental income and investments are segmented to the following regions: 2005 Flanders Brussels Wallonia Total Net rental income 4,425 4,363 13,042 21,830 Property investments 88,314 51, , ,894 Revaluations ,576 8, Flanders Brussels Wallonia Total Net rental income 4,385 4,433 12,383 21,201 Property investments 88,092 50, , ,194 Revaluations 8,644 1,254 12,180 2,282 Secondary segmentation (per sector) The segmentation of rental income and investments are segmented to the following sectors: 2005 Offices Retail Total Net rental income 8,788 13,042 21,830 Property investments 139, , ,894 Revaluations 930 7,576 8, Offices Retail Total Net rental income 8,819 12,382 21,201 Property investments 138, , ,194 Revaluations 9,898 12,180 2,282

40 jaarverslag 2005 ENG :40 Pagina Investment properties (amounts x EUR 1,000) Balance at January 1 307, ,584 Purchases/investments 4, Rent incentives Revaluations 8,506 2,282 Balance at December , ,194 Investment properties valued at EUR 61.3 mln have been charged by way of mortgage. The properties in the investment property portfolio were valued by CVBA Troostwijk-Roux at December 31, Value investment properties according to the external valuation reports 320,250 Book value of rent free periods and other leasing expenses 356 Balance sheet valuation 319, Other tangible assets (amounts x EUR 1,000) Office equipment Cars Total Balance at January 1, Purchases Depreciation Balance at December 31, Balance at January 1, Disposals Depreciation Balance at December 31, /12/ /12/2004 Total costs of acquisition Total depreciation Net book value

41 jaarverslag 2005 ENG :40 Pagina Trade receivables and other non current assets (x EUR 1,000) 31/12/ /12/2004 Loans 4,281 4,531 Capitalised rent investments 2 Prepaid costs 17 Capitalised brokeragefees Capitalised rent free periods Total 4,627 4, Current financial assets (x EUR 1,000) 31/12/ /12/2004 Current financial assets available for sale 8,197 6,535 Total 8,197 6,535 An interest of 15.8% (17,865 Real Estate Certificates) is being maintained in the shopping centre at Kortrijk - Kuurne. Fair value is established taking into account the average quotation during the last fortnight of December. 11. Current receivables (x EUR 1,000) 31/12/ /12/2004 Trade receivables (tenants) Tax receivables and other current assets 442 1,386 Total 513 1,536 The property tax to be recovered due to vacancy amounts to EUR 442 on December 31, 2005 (2004: EUR 233). 12. Cash and cash equivalents (x EUR 1,000) 31/12/ /12/2004 Bank 3,135 1,958 Deposits 4,300 Total 3,135 6,258

42 jaarverslag 2005 ENG :40 Pagina Share capital (x EUR 1,000) Issued capital Amounts Number of shares At January 1, ,969 5,331,947 At December 31, ,969 5,331,947 At December 31, ,969 5,331,947 Bearer shares and registered shares Registered 3,636,214 Bearer 1,695,733 Total 5,331,947 The Statutory Management Company is entitled to increase the authorised capital in one or more issues by a maximum amount of EUR 200,000,000. This authorisation has been approved on April 13, 2005, is valid for three years and is renewable. 14. Loans At December 31, 2005 the company does not make use of external financing besides the short term liabilities. 15. Provisions At December 31, 2005 the company did not build up any provisions. 16. Group insurance (x EUR 1,000) Net liability at January Movements in liabilities 12 Net liability at December Other long term liabilities (x EUR 1,000) 31/12/ /12/2004 Guarantee tenants Total Other short term liabilities (x EUR 1,000) 31/12/ /12/2004 Trade debts Other Other short term liabilities 1,876 2,596 Total 2,417 3,091

43 jaarverslag 2005 ENG :40 Pagina Securities Debt guaranteed by securities on company assets for an amount of EUR 50.9 mln (2004: EUR 50.9 mln). These securities are the subject of a legal mortgage with reference to the disputed tax claim. With reference to the above, a guarantee was submitted by Wereldhave NV. 20. Rental income (x EUR 1,000) Office and trade properties are subject to (trade)lettings with various expiry dates. Rents are adjusted yearly by the index of health. The leases define the rent, the rights and obligations of the lessor and the lessee,notice and renewal options and the common charges. Recovery income of charges and taxes are not included in the rental income. Rent loss as a result of vacancy, expressed as a percentage of theoretical rent amounted to 17.1% (2004: 18%) The future aggregate contractual rent from leases as to December 31, 2005 is shown in the following table Year 1 20,740 17,782 Year 2 year 5 61,813 39,049 > 5 year 12,107 9,509 Total 94,660 66, Property charges (x EUR 1,000) Technical costs Commercial costs Other operational costs Total General expenses (x EUR 1,000) Salaries Social security Pension and insurance costs Audit fees Advisory fees 3 88 Other general expenses Subtotal 1,105 1,106 Allocated to real estate costs Total Pension costs Pension costs comprise premiums relating to the employee pension plan.

44 jaarverslag 2005 ENG :40 Pagina 44 Employees During 2005 an average of 7 people (2004:7) were employed by the Sicafi. Management Company The remuneration of the Management Company is decided upon by the General Meeting of Shareholders and is fixed on EUR 55,000. The Board of Directors of the Management Company members do not hold any shares or options in Comm. VA SCA. No loans, advances or guarantees have been extended to the Board of Directors members. 23. Revaluation gains - losses, net (x EUR 1,000) Valuation investment properties Gains 11,165 12,654 Losses 2,659 10,372 8,506 2, Financial result (x EUR 1,000) Financial income: Dividend certificate Kortrijk Ring Shopping Centre Interest received Moratory interest 866 Interest costs Other , Taxes on results (x EUR 1,000) Taxes are calculated on possible exceptional and favourable advantages and on rejected expenditures. Deferred taxes are not recognised as there are no differences between the accounting and the fiscal result Corporate taxes Result per share The result per share is calculated on the basis of the total profit after tax and the average number of outstanding shares during the year (2005: EUR 5.38; 2004: EUR 4.18). No financial instruments convertible into shares have been distributed. 27. Dividend The Board of Directors of the Management Company proposes a gross dividend per share of EUR 3.75 (2004: EUR 3.19), totalling to EUR 20.0 mln (2004: EUR 19.7 mln).

45 jaarverslag 2005 ENG :40 Pagina Risks The control measures taken for each type of risk are described below Business risks These comprise the risks that Comm. VA Wereldhave SCA considers that it incurs as part of its ordinary business operations, viz.: Developments in the rental market These cover risks such as loss of rental income owing to vacancy, lettability and market changes in rent. The developments in the rental market are closely followed by the management. Developments in the value of property Decreases in the value of property have a negative impact on Comm. VA SCA s capital position. The fair value of the portfolio is calculated at the end of every quarter by an external independent real estate expert. Valuation of properties and financial instruments To determine the value of properties, estimates of items such as market rents and yields are used. The valuation of financial instruments is determined with market based reference values. The risks exists that these estimates and reference values are not correct. The valuation of the portfolio is established by an external independent real estate expert and is binding for the company. Market based reference values of financial instruments are obtained from well established financial institutions. These values are assessed with an internal calculation model. Technical condition of the buildings This covers risks such as the whole or partial loss of buildings, the risk of hidden shortcomings and the risk of soil pollution. Comm. VA SCA s property is covered in accordance with the Belgian regulations. The insurance companies have excluded terrorism from the risks covered. Whenever any property is purchased, a thorough structural analysis is made of the building or of the construction plans. Comm. VA SCA s entire portfolio has been inspected in accordance with the legal regulations. At the end of tenancy agreements with tenants conducting any activities that are potentially harmful to the environment, a soil survey is conducted. Any costs caused by soil pollution are recovered from the tenant if at all possible. Acquisitions of new property are preceded by thorough investigations. In case of soil and/or ground water pollution, this is tested in accordance with the applicable regulations. Technological developments Technological developments may cause property to become obsolete before its time, which will have a negative effect on the lettability and the value of the property. The management of Comm. VA SCA sticks closely to technological developments and reports to the Board of Directors of the Management Company. Changes in laws or regulations Comm. VA SCA has appointed a compliance officer, who is charged with supervision on compliance with regulations. Information to third parties As a listed company, Comm. VA SCA is obliged to meet legal obligations and standards relating to the timing and contents of disclosure of information to third parties. The risk exists that the disclosure is non compliant to these obligations and standards. The internal administrative organisation and internal control, as well as the financial system and its planning, have specifically been developed to comply with all legal and regulatory requirements regarding the timing and contents of the financial and non financial information. Tenant-related performance risk This risk primarily consists of the risk of rents not being paid and the possibilities for recovering damages to leased property at the end of the lease. Prospective tenants are examined for their creditworthiness and reliability. Comm. VA Wereldhave Belgium SCA standard tenancy agreements stipulate payments guarantees. Comm. VA SCA has a strict collection policy. Supplier-related performance risk Whenever activities are outsourced, fulfilment of the agreements by the counter-party constitutes a risk. The risk is of particular importance with major contracts such as turnkey projects etc. Contracts are granted based on model agreements that are regularly updated. The agreements include extensive warranty and completion clauses. Comm. VA SCA tries to build solid relationships with its suppliers, thus reducing the risk of unsatisfactory completion.

46 jaarverslag 2005 ENG :40 Pagina 46 Financial risks These are the risks that Comm. VA SCA incurs because it is subject to economic risks. The following risks are distinguished: Interest rate developments Changes in interest rates may affect the results, the yields and the value of the property. The interest rate policy is determined by the Board of Directors of the Management company. The policy is determined using parameters established by the Board of Directors. Per balance date, Comm. VA SCA does not apply external financing. Inflation Rising inflation will have a positive effect on the value of property, since that value is based in part on the volume of rental income (related to the index of health). Low inflation and deflation have a negative impact on the value of property. The rate inflation is one of the parameters established by the Board of Directors and used in determining its policy. Information about the actual inflation figures is included in the monthly management reports. Operational risks These risks stem from the fact that a business is a collaborative venture between people, in which human fability and vulnerability cannot be excluded form the processes. People The risks attached to people can be broken down into: Continuity The risk of employees leaving the company. Conduct These risks chiefly concern errors, fraud, embezzlement, etc. Comm. VA SCA has designed and implemented its own specific accounting organisation with internal controls built in. The various business processes have been described and approved by the Board of Directors. The business processes are detailed in job descriptions for each position. The accounting system and its related internal controls are based on the greatest possible separation of jobs, and include an automated information system whose access is based on the job descriptions referred to above. The risk of fraud and embezzlement is limited by the consistent use of internal and external powers of authorisation and a strict separation of investment and management positions and accounting and payment positions. The Board of Directors external power of authorisation is unlimited and independent. Other holders of powers of authorisation are only jointly authorised and within certain limits. Internally, a principle of two signatures and four eyes applies in all instances. Invoices are only made payable if the invoice in question has been approved in accordance with the relevant authorisation schedule. All payments must be signed by two authorised officers. Information system The risk consists of the information system not being sufficiently available and reliable Comm. VA SCA has an integrated information systems department, developed by Wereldhave N.V. Back-ups are made of the data files on a daily basis. The back-up files are stored every week in an external safe. An agreement has been concluded with IBM for back-up systems. Strategic risks These are the risks attached to a company s strategic choices, such as mergers, alliances etc. Comm. VA SCA distinguishes the following strategic risks: Risk of retention of statute SICAFI Comm. VA SCA has the status of a Real Estate Investment Fund with fixed capital under legislation of the Royal Decree of April 10, One of the implications of that status is that no corporate tax need be paid if certain conditions are met. However, failure to meet all statutory requirements may result in the tax status being revoked. Retention of the tax status is a matter of continual attention of the Board of Directors. 29. Internal risk control and monitoring system The Board of Directors is responsible for the design, implementation and functioning of the internal risk control and monitoring system of the sicafi related activities. These systems aim to detect, with reasonable certainty and in time, significant risks in order to control them in the best possible way. They give a clearer understanding into how far strategic, operational and financial objectives are reached and in the reliability of the financial reporting. They support the respect of relevant legislation and regulation. The board of Directors is well aware of the fact that not a single system for risk control can totally exclude a minor risk of not obtaining the companies objectives nor prevent that substantial mistakes, losses, fraud or disrespect of any law or regulation may occur.

47 jaarverslag 2005 ENG :40 Pagina The main elements of the internal risk management and monitoring system of Comm. VA are: The integrated AO/IC systems, containing procedures on details relating to the business processes, administration, audits, internal management reports and documentation; A full integrated central information system. During the most recent reporting year, this system once again functioned in line with purpose. The internal management reports, aimed at the immediate detection of any developments in the value of investments and in the results per share. mln, on (as the administration maintains) the hidden distribution of dividends to the shareholders of NV MLO on December 15. The notice of assessment relating to the above was sent on July 28, As the Manager contests the principle of hidden distribution of dividends, and has always observed all judicial consequences of the various transactions, he is of the opinion that this direct tax assessment is not justified. These assessments represent a legal mortgage inscription for an amount of EUR 50.9 mln. With reference to the above, a guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of the disputed fiscal claim. Complaints procedure Complaints about the financial reporting, internal risk management, control systems and the audit must be submitted to the secretary of the company, who will then inform the Board of Directors of the Management Company of the complaints. The secretary is responsible for ensuring complaints are registered. He will notify the complainant that his complaint has been received and give him an indication of when a decision in respect of the claim is expected to be taken. The Board of Directors of the Management Company will notify its decision to the complainant within 12 weeks after receiving the complaint. Investor relations For all Comm. VA stock related questions, visit our website: Claims 31. Related Group companies The remuneration of the Management Company is decided upon by the General Meeting of Shareholders and is fixed on EUR 55,000. Besides the decreed dividends and above mentioned remuneration to the Management Company, there have been no transactions with Group companies in Important events occured after the financial year After the end of the financial year, no important events occurred which influenced the development of the company or the annual accounts of December 31, On 23/12/96 nv (former MLO nv) received a registered supplementary assessment in the amount of EUR 35.9 mln for the 1994 tax year. This assessment relates to a notification of reorganization dated 18/11/1996, whereby the administration maintains that, in this case, the succession of a number of actions should be considered as a hidden distribution of dividends to the shareholders of MLO NV. The Management is of the opinion that the imposed supplementary assessment is by no means justified, as neither the company nor its shareholders were in any way involved in the transactions to witch the administration refers, and the company has always accepted all judicial consequences of the various legal transactions, and that any hidden distribution of dividends as described in the notification of reorganization was out of the question. On the basis of the above and advice obtained from an external fiscal advisor, the Manager is convinced that the company has strong arguments to contest the supplementary assessment successfully. For the 1993 tax year the tax administration has imposed a direct advance income tax assessment in the amount of EUR 15.07

48 jaarverslag 2005 ENG :40 Pagina 48 Free translation of the auditor s report to the general shareholders meeting on the consolidated financial statements as of and for the year ended 31 December 2005 of Comm. VA SCA 2005 and of its results of operations and cash flows for the year then ended, in accordance with IFRS as adopted by the EU and with the legal and regulatory requirements applicable to quoted companies in Belgium. In accordance with legal and regulatory requirements, we are pleased to report to you on the performance of the audit mandate which you have entrusted to us. We have audited the consolidated financial statements set forth on pages 1 to 9 and 22 to 47, which have been prepared in accordance with IFRS as adopted by the EU. These financial statements comprise the consolidated balance sheet of Comm. VA SCA and its subsidiaries as of December 31, 2005 and the related consolidated statements of income, cash flows and changes in shareholders equity for the year December 31, 2005 then ended. We have also examined the management report on the consolidated financial statements. It is the responsibility of the company's Board of Directors to prepare the consolidated financial statements and to determine what information is to be included in their management report on the consolidated financial statements. Our responsibility is to examine those documents in accordance with Belgian generally accepted auditing standards, as issued by the "Institut des Reviseurs d'entreprises/instituut der Bedrijfsrevisoren". Qualified audit opinion on the consolidated financial statements Other certification We supplement our report with the following certification which does not modify our audit opinion on the consolidated financial statements: The management report on the consolidated financial statements deals with the information required by the law and is consistent with the consolidated financial statements. However, we are not in a position to express an opinion on the description of the principal risks and uncertainties facing the Group, its state of affairs, its forecast development or the significant influence of certain events on its future development. Nevertheless, we can confirm that the information provided is not patently in contradiction with the information we have acquired in our role as statutory auditors. March 15, 2006 The statutory auditor PricewaterhouseCoopers Reviseurs d Entreprises / Bedrijfsrevisoren Represented by Luc Discry Certified Revisor The aforementioned standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. In accordance with those standards, we considered the group s administrative and accounting organisation, as well as its internal control procedures. We have obtained all explanations and information required for our audit. We examined, on a test basis, evidence supporting the amounts in the consolidated financial statements. We assessed the accounting principles used, the basis of consolidation and significant estimates made by the enterprise, as well as the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion the consolidated financial statements set forth on pages 1 to 9 and 22 to 47 give a true and fair view of the net worth and financial position of the Group as of December 31,

49 jaarverslag 2005 ENG :41 Pagina 49 49

50 jaarverslag 2005 ENG :41 Pagina 50 Extract of the statutory annual report Balance sheet after profit distribution (amounts x EUR 1,000) Assets Fixed assets 324, ,815 III Tangible fixed assets 317, ,433 A Land and buildings 317, ,320 C Furniture and vehicles IV Financial fixed assets 6,382 6,382 Current assets 61,742 66,125 V Amounts receivable after more than one year 6,033 7,444 B Other amounts receivable 6,033 7,444 VII Amounts receivable within one year 52,453 51,426 A Trade receivables B Other receivables 52,382 51,276 VIII Deposits 4,300 B Other deposits 4,300 IX Cash and bank balances 3,090 1,907 X Deferred charges and accrued income 166 1,048 Total assets 385, ,940

51 jaarverslag 2005 ENG :41 Pagina Liabilities Capital and reserves 312, ,522 I Capital 224, ,969 A Issued capital 224, ,969 III Revaluation reserve 5,614 5,614 IV Reserves 39,499 30,865 A Legal reserve B Reserves not available for distribution 39,486 30,852 V Retained profit 42,249 42,074 Debts 73,549 74,418 VIII Amounts payable after more than one year D Other debts IX Amounts payable within one year 71,470 71,690 A Amounts payable after more than one year but payable within the year C Trade debts Suppliers E Taxes, salaries and social security 51,113 51,020 1 Taxes 51,042 50,949 2 Salaries and social security F Other debts 20,210 19,918 X Accrued charges and deferred income 1,876 2,596 Total liabilities 385, ,940

52 jaarverslag 2005 ENG :41 Pagina 52 A. Operating results (amounts x EUR 1,000) I Operating income 23,673 23,187 A Turnover 23,671 23,185 D Other operating income 2 2 II Operating costs 3,949 4,760 A Services and other goods 1,406 2,159 B Salaries, social security costs and pensions C Depreciations D Depreciations on trade receivables 128 F Other operating costs 1,908 2,038 III Operating profit 19,724 18,427 IV Financial income 770 1,674 A Interest from financial fixed assets B Interest from current assets 330 1,312 C Other financial income 2 1 V Financial costs VI Taxes VII Operating profit 20,161 19,961 B. Portfolio results (amounts x EUR 1,000) IX Fluctuations in the market value of portfolio components in proportion to the book value on the previous balance sheet 8,634 2,510 A Property assets 1 Real estate and real rights on buildings Gains 11,232 13,070 Losses 2,598 10,560 X Profit on portfolio 8,634 2,510

53 jaarverslag 2005 ENG :41 Pagina C. Extraordinary results (amounts x EUR 1,000) XI Extraordinary income 9 1 E Other extraordinary income 9 1 XIII Extraordinary profit 9 1 D. Results for appropriation (amounts x EUR 1,000) XIV Profit of financial year 28,804 22,472 V Appropriation of the changes in market value of the portfolio components A Transfer to reserves not available for distribution 8,634 2,510 XVI Profit to be appropriated 20,170 19,962 Appropriation account (amounts x EUR 1,000) A Profit to be appropriated 62,244 61,802 1 Profit for the year available for appropriation 20,170 19,962 2 Retained profit 42,074 41,840 D Result to be retained 42,249 42,074 1 Profit to be retained 42,249 42,074 F Distribution of profit 19,995 19,728 1 Dividend 19,995 19,728 The statutory annual report, the notes, the report of the Management Company and the auditors report can be obtained, free of charge, at the company s Head Office. These documents are also available on our website: With regard to these documents, the auditor delivered a qualified audit opinion on the financial statements. The statutory annual report, the notes and the auditors report will, according to the legal regulations, be deposited at the National Bank of Belgium.

54 jaarverslag 2005 ENG :41 Pagina 54 Other information 1. Identification of Comm.VA SCA, Real Estate Investment Fund (Sicafi) according to Belgian Law, registered at Medialaan 30 box Vilvoorde is a limited share partnership according to Belgian Law, which has made a public appeal to the savings domain. was established under the name of Rank City Wall by deed executed by Pierre Spaey, notary in Sint-Jans-Molenbeek on August 8, 1972, subsequently published in the Appendices to the Belgian Bulletin of Acts, Orders and Decrees on August 18, under reference number The articles of association have been changed several times, the last time on May 8, 2002 by deed executed by Denis Deckers, notary in Brussels. was established for an indefinite period. The articles of association of the Property Investment Fund and the Management Company can be viewed at the Registry of the Commercial Court in Brussels, or at the company s Head Office. The annual accounts are deposited at the National Bank of Belgium, and are deposited for inspection at the Registry of the Commercial Court in Brussels. The annual reports and accounts of are sent each year to the registered shareholders and, by request, to other interested parties. Decrees with respect to the appointment and/or dismissal of members of the board of the Business Manager, N.V. S.A. are published in the Appendices to the Belgian Bulletin of Acts, Orders and Decrees. Financial reports relating to are published in the financial press. Other documents available to the general public are open for inspection at the registered offices of. Type of Shares The company has bearer shares and registered shares Repurchase of shares The Real Estate Investment Fund is entitled to buy back its shares if this action is necessary to protect the company from serious and imminent disadvantage. This authorisation has been renewed on April 9, 2005 and is valid for three years. Preferential rights in the event of capital increase In the event of an increase in capital the new shares, which are subscribed to in cash, are preferentially offered to shareholders, in relation to the capital share represented by their shareholding on the day of issue. Management The Real Estate Investment Fund is managed by one or more Management Companies. N.V. S.A. is appointed as the sole Statutory Management Company. General Meeting of Shareholders The annual General Meeting is held on the second Wednesday of April at am. Financial year The financial year is equal to the calendar year. 2. Main Statutory dispositions Objective The main objective of is the collective investment of publicly attracted capital in the property category, as referred to in article 7, 5 of the Act of July 20, 2004 on certain forms of collective management of investment portfolios. Nominal Capital The authorised capital amounts to EUR 224,968,918 represented by 5,331,947 fully paid up shares, without mention of nominal value. Authorised Capital The Statutory Management Company is entitled to increase the authorised capital in one or more issues by a maximum amount of EUR 200,000,000. This authorisation has been renewed on April 9, 2005 and is valid for three years.

55 jaarverslag 2005 ENG :41 Pagina Corporate Governance Comm. VA attaches great importance to achieving a balance between the interests of the providers of risk-bearing capital and those of other stakeholders in the company. Matters such as transparancy, the adequate provision of forward-looking information and business ethics form a part of this philosophy. The recommendations of the Code Lippens were implemented per January 1, The overview below considers the areas where the company has strayed from the Commission's Commission s recommendations.. The Annual Meeting of Shareholders will be asked to grant its approval to the implementation of the recommendations. A detailed analysis in respect of each recommendation and best practice provision of the Corporate Governance Chapter can be found on our website. The Board met four times in The members of the Board were present at all meetings except Mr. G.C.J. Verweij who was excused on the meeting of August 3, In November 2005 the Board of Directors decided to appoint an audit committee. The audit committee consists of Mr. B. De Corte (chairman) and Mr. B. Graulich. The first meeting was held on February 15, The manager's Board of Directors comprises four members, half of whom are independent Directors within the meaning of the Belgian Corporate Governance Code. Consequently, the number of independent directors is not consistent with the recommendations in the Belgian Corporate Governance Code. The Board of Directors is anxious to have a limited number of Board members so as to guarantee the effectiveness of the deliberations and decision-making process. The limited number of Board members and of the audit committee is in keeping with the company's administrative simplicity, thereby helping to maintain the company's low cost structure. The Board of Directors has decided against setting up an Appointments Committee or a Remuneration Committee, thus Comm. VA SCA is departing from the relevant recommendations in the Belgian Corporate Governance Code. The Board regards these tasks as those of the entire Board of Directors. As the limited number of Board members allows for an effective debate on these issues, the Board sees no need to create separate committees. The remuneration of the Management Company is decided upon by the General Meeting of Shareholders and is fixed on EUR 55,000.

56 jaarverslag 2005 ENG :41 Pagina 56 Board of Directors of the Management Company G.C.J. Verweij Employed by Wereldhave since 1977 (m, 60) Manager Building Staff Department since 1981 Managing Director since Director Wereldhave Management Holding B.V. from 1982 December 20, 2005 Director Wereldhave N.V. from 1988 (chairman from March 1994) J. Buijs Employed by Wereldhave since 2000 (m, 40) Head of Building Staff Department since June 1, 2000 Co-opted director since Director Wereldhave Management Holding B.V. since January 1, 2005 December 20, 2005, replacing Mr. R.L.M. de Ruijter B. Graulich Independent Director (m, 40) Director since 2001 and Board positions: Chairman of the Board of Directors Partner/Director of Bencis B.V. since December 20, 2005 Omega Pharma, Sun Beverages Company a.o.. B. De Corte Independent Director (m, 61) Director since 1998 General Board Mr. P. Rasschaert Employed by since April 1, 2005 (m, 46)