VALUATION PROPERTY PORTFOLIO VASTNED RETAIL: - VALUE INCREASE OF 103 MILLION - NET RETURN 6.0%

Transcription

1 Press release nine months results 2007 VALUATION PROPERTY PORTFOLIO VASTNED RETAIL: - VALUE INCREASE OF 103 MILLION - NET RETURN 6.0% (in brackets: first nine months 2006) Direct investment result: 46.8 million ( 46.9 million); Indirect investment result: 94.9 million ( 73.7 million); Investment result: million ( million); Direct investment result per share: 2.78 ( 2.78); Indirect investment result per share: 5.64 ( 4.36); Investment result per share: 8.42 ( 7.14); Shareholders equity per share as at September 30, 2007: (December 31, 2006: 57.93); Anticipated direct investment result per share for 2007: 3.72 (2006: 3.70). VastNed Retail invests in high street shops, shopping centres and retail warehouses located in good and top locations in its core countries: the Netherlands, Spain, France and Belgium, as well as in the growth market Turkey. Invested capital amounted to 1,853.3 million as at September 30, 2007 (excluding the development pipeline and the acquisition in Lille, France). Investment result VastNed Retail shareholders In the first nine months of 2007, the investment result rose to EUR million (EUR million). Despite 3.3% positive like-for-like rent growth in the standing portfolio, the direct investment result remained virtually stable at EUR 46.8 million (EUR 46.9 million). This was mainly caused by a 0.7 million one-off gain recognised in the third quarter of 2006 arising from a positive outcome of arbitration proceedings in respect of the factory outlet in Messancy, and to increased interest charges due to the share buyback, and to the increased market interest rate. The indirect investment result rose to EUR 94.9 million positive (EUR 73.7 million positive) due to a sharp value increase of the property portfolio of EUR million.

2 Composition investment result first nine months 2007 Gross rental income In the first nine months of 2007, gross rental income increased to 89.0 million ( 82.9 million). This increase was mainly attributable to acquisitions, indexation of existing lease agreements and renegotiation of lease contracts. This increase was offset by one-off damages from the project developer of the factory outlet in Messancy of 1.0 million, which was credited to the lease incentives in Taking this into account, the likefor-like increase of the gross rental income compared to the same period last year thus came to 3.3%. Net service charge expenses The total of net service charge expenses rose to 2.7 million ( 2.2 million). Net service charge expenses are mainly a consequence of not being able to fully charge on the service charges to tenants. The increase is mainly connected to the planned redevelopments of a number of existing properties, which are kept vacant intentionally in anticipation of this work. Operating expenses Operating expenses as a percentage of gross rental income rose to 10.3% (9.3%). This rise was due one the one hand to allocations to the provision for doubtful debtors in respect of the factory outlet in Messancy, and on the other to ground rent for the property Getafe III, acquired in October Value movements investment properties The value movements of the investment properties in the first nine months of 2007 amounted to million ( 83.4 million). Net result on disposals of investment properties The net result on disposals of investment properties in the first nine months of 2007 amounted to 1.1 million ( 1.0 million). Expenditure Net financing costs Net financing costs increased to 21.1 million ( 16.7 million). This was largely due to the higher interest-bearing loan capital as a result of the acquisitions and the share buyback, and, to a lesser extent, to the increase of the average interest rate to 4.55% (4.31%). General expenses General expenses rose to 5.5 million ( 5.0 million) mainly as a result of increased personnel costs and consultancy costs arising from unrealised acquisitions. Income tax due on the reporting period Income tax on the reporting period amounted to 0.9 million ( 0.9 million). Movement deferred tax liabilities The positive value movements partly took place in Spain, which resulted in a movement in deferred tax liabilities of 5.6 million ( 9.4 million). Investment result attributable to minority interests The part of the investment result that is attributable to minority interests in the first nine months of 2007 amounted to 6.8 million ( 4.8 million). This increase was mainly caused by value increases in the Belgian property portfolio, in which VastNed holds a majority interest of 72.4%. 2

3 Investment properties The developments in terms of occupancy rate, rent levels, value movements and investments in the property portfolio in the first nine months of 2007 were as follows: Occupancy rate The occupancy rate remains good, and current vacancy is fractional. The occupancy rate as per September 30, 2007 improved to 97.1% compared to June 30, 2007 due to new leases. The 0.4% lower average occupancy rate compared to the same period last year was due to the acquisition of a number of partially vacant properties in France and Spain at the end of 2006, which meanwhile have been partly leased. The remaining part is expected to be leased out soon. The occupancy rates per county were: Country Occupancy rate in % September 30, 2007 First nine months 2007 First nine months 2006 NL E F B P TR Total Lease discounts, rent-free periods and lease incentives The lease discounts, rent-free periods and lease incentives (applying straightlining) in the first nine months of 2007 increased to 2.2% (1.4%). As stated above, this increase is connected to a one-off gain recognised in Country IFRS rent-free / incentives in % First nine months 2007 NL (0.4) (0.3) E (2.8) (2.0) F (1.3) (1.0) B (6.3) (3.3) P - - TR - - Total (2.2) (1.4) First nine months 2006 Value movements investment properties The value movements in the first nine months of 2007 amounted to million ( 83.4 million), lowering the net yield to 6.0% (year-end 2006: 6.2%). The net yield is calculated by dividing the theoretical net rental income as at September 30, 2007 by the value (costs borne by the buyer) of the investment properties at that date. Country Value movements (* 1 million) First nine months 2007 First nine months 2006 NL E F B P TR (0.7) - Total Acquisitions In the first nine months of 2007, acquisitions were made and commitments entered into totalling million. 3

4 Acquisitions * after balance sheet date ** pipeline Price (* 1 million) Progress has also been made on the expansion developments at the French shopping centres Plaisir-Sablons and Val Thoiry. They does not yet concern set pipeline, however, upon realisation the shopping centres will be expanded by 11,000 and 6,000 square metres respectively. Disposals In the first nine months of 2007 the following disposals were made: NIY in % City Address Netherlands Amsterdam Buikslotermeerplein Borculo Lichtenhorst Heerlen In de Cramer* Disposals Price City (* 1 Address million) Netherlands Leiden Korevaarstraat 2 e-f 0.5 Amersfoort Arnhemsestraat Dinteloord Raadhuisplein Heerlen Akkerstraat Rotterdam Groene Hilledijk 217/ 0.5 Meerdervoortstraat Schiedam Broersvest Schiedam Hoogstraat Vlaardingen Hoogstraat Zeist Scheeperslaan 1, 1a-c/ 1.0 Steijnlaan 24-24c Zierikzee Dam Zierikzee Verre Nieuwstraat Enschede Dotterbloemstraat Hendrik-Ido- Winkelcentrum 22.3 Ambacht Hoog Ambacht** Houten Achterom 1-5** 4.2 Spoorhaag ** Lelystad Wisselplein** 21.8 IJsselstein Utrechtsestraat 45* France Lille 56 high street shop and 100 apartements at various addresses* Lille (Seclin) Terres et Eaux * Turkey Istanbul Elysium Shops, Kazim Orbay Caddesi Total Belgium Antwerpen Breydelstraat Messancy Rue de l Institut Charleroi Rue de la Montagne Total 10.6 Solvency and financing with loan capital Shareholders equity per share expressed as a percentage of the investment properties amounted to 59.6% as at September 30, 2007 (September 30, 2006: 63.1%). The ratio between short-term loan capital and long-term loan capital amounted to 32/68 as per September 30, 2007 (September 30, 2006: 35/65%) Share buyback programme The share buyback programme was concluded on September 24, In the period between August 17, 2007 through September 21, 2007 a total of 500,000 shares were purchased, the maximum announced prior to the buyback programme. The shares were acquired in various transactions at an average price of The share buyback programme benefits the direct investment result per share. In order to use the financial space optimally, VastNed Retail will continue 4

5 to weigh various investment options, including share buybacks, on a permanent basis. The number of ordinary shares with dividend rights amounted to 16,362,097 as at September 30, Developments and outlook 2007 As stated before, the board of management expects a clear improvement of producer and consumer confidence in Europe. On the other hand, the short-term interest rate is expected to rise, while the longterm interest rate will remain more or less stable. This expected rise of the interest rate compared to June 30, 2007 in conjunction with lower net initial yields on investment properties results in lower spreads with a correspondingly lower contribution to the direct investment result per share from acquisitions. Taking all the above into account and based on the investment programme realised at present and barring unforeseen circumstances including global tensions and the associated unpredictable economic consequences, the board of management anticipates a direct investment result per share of 3.72 (2006: 3.70). Rotterdam, November 9, 2007 Further information: Reinier van Gerrevink or Arnaud du Pont, tel Today at a.m. CET a conference call will be held in which further comments will be made on the nine months figures This call can be followed by means of an audio webcast on Forward-looking statements This press release contains a number of forward looking statements. These statements are based on current expectations, estimates and prognoses of the board of management and on the information currently available to the company. The statements are subject to certain risks and uncertainties which are hard to evaluate, such as the general economic conditions, interest rates, exchange rates and amendments to statutory laws and regulations. The board of management of VastNed Retail cannot guarantee that its expectations will materialise. Furthermore, VastNed Retail does not accept any obligation to update the statements made in this press release. 5

6 KEY FIGURES September 30, December 31, September 30, Results (x 1,000) Gross rental income 88, ,729 82,866 Direct investment result 46,781 62,452 46,933 Indirect investment result 94, ,420 73,669 Investment result 141, , ,602 Balance sheet (x 1,000) Investment properties 1,853,267 1,730,705 1,571,012 Equity 1,104,937 1,048, ,451 Equity VastNed Retail shareholders 1,032, , ,943 Long-term liabilities 527, , ,779 Ratio equity/investment properties (in %) Occupany rate (in %) Financial occupancy rate Average number of ordinary shares in issue 16,822,630 16,892,880 16,898,507 Number of ordinary shares in issue (end of period) 16,362,097 16,876,183 16,876,183 Per share (x 1) Equity VastNed Retail shareholders at beginning of period (including final dividend) Final dividend previous financial year (2.60) (2.47) (2.47) Equity VastNed Retail shareholders at beginning of period (excluding final dividend) Direct investment result Indirect investment result Investment result Value movements financial derivatives directly recognised in equity Other movements 0.19 (0.01) (0.01) Interim dividend (1.12) (1.10) (1.10) Equity VastNed Retail shareholders at end of period (including final dividend) Share price (end of period) Premium/(Discount) (in %) (10.52)

7 CONSOLIDATED PROFIT AND LOSS ACCOUNT (x 1,000) Net income from investment properties Q3 Q Gross rental income 88,956 82,866 29,831 28,230 Net service charge expenses (2,689) (2,233) (1,025) (963) Operating expenses (9,188) (7,703) (3,073) (2,610) Net rental income 77,079 72,930 25,733 24,657 Value movements investment properties in operation 103,614 84,438 31,405 34,182 Value movements investment properties under renovation (185) (1,024) (48) (717) Total value movements investment properties 103,429 83,414 31,357 33,465 Net result on disposals of investment properties 1, Total net income from investment properties 181, ,340 57,953 58,161 Expenditure Financial income Financial expenses (22,001) (16,993) (7,809) (5,759) Value movements financial derivatives - (2) - (1) Net financing costs (21,068) (16,672) (7,479) (5,571) General expenses (5,548) (5,028) (1,733) (1,707) Total expenditure (26,616) (21,700) (9,212) (7,278) Investment result before taxes 154, ,640 48,741 50,883 Income tax expense (867) (882) (183) 1 Movement deferred tax liabilities (5,599) (9,384) (1,174) (6,384) (6,466) (10,266) (1,357) (6,383) Investment result after taxes 148, ,374 47,384 44,500 Investment result attributable to minority interests (6,806) (4,772) (2,256) (2,318) Investment result attributable to VastNed Retail shareholders 141, ,602 45,128 42,182 Per share (x 1) Investment result attributable to VastNed Retail shareholders Diluted investment result attributable to VastNed Retail shareholders

8 DIRECT EN INDIRECT INVESTMENT RESULT (x 1,000) Direct investment result Q3 Q Gross rental income 88,956 82,866 29,831 28,230 Net service charge expenses (2,689) (2,233) (1,025) (963) Operating expenses (9,188) (7,703) (3,073) (2,610) Net rental income 77,079 72,930 25,733 24,657 Financial income Financial expenses (22,001) (16,993) (7,809) (5,759) Net financing costs (21,068) (16,670) (7,479) (5,570) General expenses (5,548) (5,028) (1,733) (1,707) Direct investment result before taxes 50,463 51,232 16,521 17,380 Income tax expense (867) (882) (183) 1 Direct investment result after taxes 49,596 50,350 16,338 17,381 Direct investment result attributable to minority interests (2,815) (3,417) (905) (1,290) Direct investment result attributable to VastNed Retail shareholders 46,781 46,933 15,433 16,091 Indirect investment result Value movements investment properties in operation 103,429 83,414 31,357 33,465 Net result on disposals of investment properties 1, Value movements financial derivatives - (2) - (1) Indirect investment result before taxes 104,516 84,408 32,220 33,503 Movement deferred tax liabilities (5,599) (9,384) (1,174) (6,384) Indirect investment result after taxes 98,917 75,024 31,046 27,119 Indirect investment result attributable to minority interests (3,991) (1,355) (1,351) (1,028) Indirect investment result attributable to VastNed Retail shareholders 94,926 73,669 29,695 26,091 Investment result attributable to VastNed Retail shareholders 141, ,602 45,128 42,182 Per share (x 1) Direct investment result attributable to VastNed Retail shareholders Indirect investment result attributable to VastNed Retail shareholders

9 CONSOLIDATED BALANCE SHEET (x 1.000) September 30, December 31, September 30, Assets Investment properties in operation 1,822,276 1,706,337 1,552,640 Investment properties under renovation 3,054 3,054 3,054 Other assets in respect of lease incentives 2,550 3,260 3,318 1,827,880 1,712,651 1,559,012 Investment properties in pipeline 25,387 18,054 12,000 Total investment properties 1,853,267 1,730,705 1,571,012 Tangible fixed assets 1,337 1,119 1,095 Financial derivatives 10,852 4,597 1,254 Deferred tax assets Total fixed assets 1,865,666 1,736,421 1,573,361 Debtors and other receivables 14,547 22,230 19,406 Income tax Cash and cash equivalents 5,856 7,007 6,010 Total current assets 20,576 29,912 26,048 Total assets 1,886,242 1,766,333 1,599,409 Equity and liabilities Capital paid-up and called 84,381 84,516 84,960 Share premium reserve 405, , ,262 Hedging reserve in respect of financial derivatives 7,741 3, Reserve exchange rate fluctuations Other reserves 393, , ,500 Investment result attributable to VastNed Retail shareholders 141, , ,602 Equity VastNed Retail shareholders 1,032, , ,943 Equity minority interests 72,722 70,368 68,508 Total equity 1,104,937 1,048, ,451 Deferred tax liabilities 50,792 43,076 36,295 Provisions in respect of employee benefits 1,893 1,575 1,366 Long-term interest-bearing loans 462, , ,643 Long-term tax liabilities 3,539 3,684 6,395 Guarantee deposits and other long-term liabilities 8,903 10,278 10,080 Total long-term liabilities 527, , ,779 Payable to banks 181, , ,621 Redemption long-term liabilities 26,819 25,374 53,388 Financial derivatives Income tax 5,384 4,544 5,744 Other liabilities and accruals 39,882 75,431 39,115 Total short-term liabilities 253, , ,179 Total equity and liabilities 1,886,242 1,766,333 1,599,409

10 CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY (x 1,000) Equity as per January 1 1,048, ,818 Value movements financial derivatives 4,695 1,997 Direct investment result 49,596 50,350 Indirect investment result 98,917 75,024 Investment result 148, ,374 Share buyback (30,653) (7,395) Acquisition and disposal of shares in subsidiaries (30,653) (7,294) Final dividend payment previous financial year in cash (42,297) (36,019) Interim dividend in cash (18,885) (18,593) Dividend paid to minority interests (4,525) (4,808) Costs of stock dividend (7) (24) Dividend payment in cash (65,714) (59,444) Translation differences net investments 15 - Equity as per September 30 1,104, ,451 Value movements financial derivatives directly recognised in equity 4,695 1,997 Translation differences net investments 15 - Investment result 148, ,374 Total result 153, ,371 Attributable to: VastNed Retail shareholders 146, ,495 Minority interests 6,879 4, , ,371

11 CONSOLIDATED CASH FLOW STATEMENT (x 1,000) Cash flow from operating activities Investment result 148, ,374 Adjustment for: Value movements investment properties (103,429) (83,414) Net result on disposals investment properties (1,087) (996) Net financing costs 21,068 16,672 Income tax 6,466 10,266 Cash flow from operating activities before changes in working capital and provisions 71,531 67,902 Movement current assets 8,861 3,579 Movement short-term liabilities (267) 6,352 Movement provisions 318 (128) 80,443 77,705 Interest paid (on balance) (20,211) (14,511) Income tax paid 120 (619) Cash flow from operating activities 60,352 62,575 Cash flow from investment activities Acquisitions of investment properties and investments in existing properties (66,071) (21,166) Disposals of investment properties 10,516 22,951 Cash flow investment properties (55,555) 1,785 Movement tangible fixed assets (218) 57 Cash flow from investment activities (55,773) 1,842 Cash flow from financing activities Share buybacks (30,653) (7,395) Dividend paid (65,339) (58,902) Interest-bearing debts drawn down 117,641 12,793 Interest-bearing debts redeemed (27,379) (19,333) Cash flow from investment activities (5,730) (72,837) Movement in cash and cash equivalents (1,151) (8,420) Cash and cash equivalents as at January 1 7,007 14,430 Cash and cash equivalents as at September 30 5,856 6,010

12 SEGMENTED INFORMATION (x 1,000) Operating expenses including net service Investment properties Gross rental income charge expenses Net rental income September 30, Netherlands 673, ,550 34,316 33,409 4,310 4,370 30,006 29,039 Spain 538, ,104 24,587 21,193 2,497 2,034 22,090 19,159 France 351, ,036 15,727 13,390 1,745 1,142 13,982 12,248 Belgium 266, ,647 13,064 14,091 3,177 2,349 9,887 11,742 Portugal 14,480 13, Turkey 8, ,853,267 1,571,012 88,956 82,866 11,877 9,936 77,079 72,930 Value movements Net result on disposals Movement deferred investment properties investment properties tax liabilities Total Netherlands 39,664 30, ,944 30,631 Spain 22,248 34, (5,558) (9,113) 16,690 25,548 France 31,021 15,988 - (5) ,021 15,983 Belgium 10, ,605 1,294 Portugal 412 1, (41) (271) 371 1,570 Turkey (714) (714) - 103,429 83,414 1, (5,599) (9,384) 98,917 75,026 Of which attributable to third parties (3,768) (1,207) (223) (148) - - (3,991) (1,355) 99,661 82, (5,599) (9,384) 94,926 73,671 This interim report has been prepared in accordance with IAS 34 'Interim financial reporting'. For the principles for consolidation, the valuation of assets and liabilities and the determination of the result, reference is made to the Annual Report The essential assessments in the application of the accounting principles for the financial reporting of VastNed Retail N.V. and the most significant sources for estimates used by the board of management in the preparation of this interim report are the same as the essential assessments and significant estimates in the 2006 Annual Accounts. The actual results may deviate from these estimates. The first nine months' figures have not been audited.