Press release. Annual figures 2008

Transcription

1 Press release Annual figures 2008 VASTNED RETAIL: DIRECT INVESTMENT RESULT PER SHARE ( 3.85 BEFORE ONE-OFF COSTS); PROPERTY VALUE DECREASES RESULT IN NEGATIVE INDIRECT INVESTMENT RESULT OF 6.82 PER SHARE Reinier van Gerrevink, CEO VastNed Retail: The credit crisis has deteriorated in the final quarter of 2008 and has seeped through into the real economy. The Dutch and Belgian property portfolios continued to show positive revalutions up until the third quarter of 2008, but in the fourth quarter the value movements turned negative in these countries too, although to a limited extent. The value decreases were due to yield increases resulting from the deteriorating developments in the property investment and financing markets triggered by the credit crisis. For our total property portfolio, this yield increase averaged approx. 60 basis points; in Spain it was over 120 basis points, while in the Netherlands and Belgium it was between 0 and 10 basis points. In Spain rental income is under pressure due to lower sales in the shopping centres. Gross rental income as such has not yet declined, but there was a limited decrease after deduction of all related operating expenses. Due to positive letting results, the other core countries showed healthy rent growth, both top-line and bottom-line. Only a limited number of tenants departed, so that the average occupancy rate was 97.9%. Despite the difficult financing market we managed to sell almost 60 million in property, on average above book value. This confirms that in lesser economic times in particular there is great demand for investment in relatively stable retail property. The proceeds of the sales have largely been used for the one-off repayment of debts. In spite of these difficult market conditions we succeeded in maintaining the direct investment result per share before the costs of the offering process at 3.85 (2007: 3.85). (in brackets 2007 financial year) Direct investment result: 60.9 million ( 64.4 million); Indirect investment result: million negative ( million positive); Investment result: 51.1 million negative ( million positive); Direct investment result per share 3.85 (before costs offering process 3.71); Indirect investment result per share: 6.82 negative ( positive); Investment result per share: 3.11 negative ( positive); Shareholders equity per share as at December 31, 2008: (December 31, 2007: 69.42); Average occupancy rate in 2008: 97.9% (96.9%). VastNed Retail invests in individual retail properties, shopping centres and retail warehouses located in good and top locations in its core countries: the Netherlands, Spain, France and Belgium as well as the growth market Turkey. Invested capital was 2,014.8 million as at December 31, 2008.

2 Country Investment properties The developments in the area of occupancy rate, lease incentives, value movements and acquisitions and disposals in the property portfolio in the 2008 financial year were as follows: Occupancy rate The present vacancy is very limited and may be considered frictional. The occupancy rate was impacted favourably by the transfer to property under renovation of the units designated for leisure that are being converted into retail space in the property Parque Vistahermosa in Alicante and the cinema to be converted into retail space in the Montigalá shopping centre in Badalona for the duration of this redevelopment. The occupancy rate in Belgium improved considerably compared to 2007 due to the sale of the factory outlet in Messancy. A lease has been concluded on favourable terms for the property at Istiklal Caddesi 98 in Turkey. As a result, the average occupancy rate in Turkey improved in the course of The occupancy rate by country was as follows. Occupancy rate in % Year-end 2008 FY 2008 FY 2007 NL E F B Tr P T Lease incentives The lease incentives also remained limited in the 2008 financial year, decreasing to 1.2% (2.1%), mainly due to the sale of the factory outlet in Messancy, Belgium. IFRS rent-free / incentives in % Country FY 2008 FY 2007 NL (0.3) (0.4) E (2.2) (2.8) F (1.7) (1.0) B (1.0) (6.0) Tr - - P - - Total (1.2) (2.1) Value movements investment properties During the 2008 financial year, the value movements of the investment properties were million negative ( million positive). The net yield as at December 31, 2008 was 6.3% (year-end 2007: 5.7%). The net yield is calculated by dividing the theoretical net rental income as at December 31, 2008 by the value (costs paid by the purchaser) of the investment properties as at that date. The external appraisals of the Spanish and French property portolios resulted in value decreases due to the rise of the theoretical net yields by 120 and 130 basis points respectively in Country Value movements ( million) Q Q Q Q FY 2008 FY 2007 NL (28.4) (5.6) 85.9 E 3.2 (19.5) (33.1) (29.1) (78.5) 58.0 F 4.4 (12.3) (15.5) (23.1) (46.5) 42.4 B (7.3) Tr 1.5 (1.1) 0.2 (1.1) (0.5) (1.2) P 0.1 (0.1) 0.2 (2.1) (1.9) 1.4 T 34.3 (24.3) (41.5) (91.1) (122.6) 208.0

3 Acquisitions and pipeline properties taken into operation Properties in pipeline In 2008 a total of five properties were acquired for 9.0 million, of which Rue du Bois d Orly 23 in Augny was acquired in the fourth quarter. This peripheral retail property is leased for approx. 160,000 per year, which equates to a net initial yield of 6.9%. Three pipeline properties were taken into operation. They were Retail Park Roermond, the extension of shopping centre Het Rond in Houten and the city centre shopping centre Julianus in Tongres. Acquisitions City Address Price ( 1 million) Netherlands Tilburg Westermarkt 16, Westermarkt Amersfoort Utrechtsestraat13 / Hellestraat France Augny Rue du Bois d Orly Belgium Mechelen Bruul Total 9.0 Disposals In 2008, property investments totalling 57.9 million were disposed of. This concerned disposals in the Netherlands, France and Belgium. Disposals in the 2008 financial year were as follows: City Address Disposals Netherlands Amsterdam Osdorpplein and Leiden Haarlemmerstraat Price (* 1 million) Leidschendam Berkenhove 9, Eglantier 9 and Rozemarijnhof 7 Weigelia City centre Various locations in 36.6 portfolio the Netherlands Rijswijk Herenstraat Veenendaal Schoolstraat France Lille Avenue Foch 16 (car park) Rue du Gal de Wett (apartment) 0.1 Belgium Mechelen IJzerenleen Total 57.9 Leasing activity The leasing activity in the 2008 financial year comprised new leases and lease renewals. The first category concerns leasing vacated space to new lessees and the second concluding new contracts or lease renewals with existing lessees. Despite anxiety in the retail sector, tenants of retail space in good locations continued to be prepared to pay higher rents. The main reason is that a shop s location is one of the key success factors for a retailer. New leases in VastNed Retail s core countries the Netherlands, Spain, France and Belgium were concluded at on average a 14.7% higher gross rent compared to the former rent level.

4 The figures are as follows: Cou ntry Movement gross rent % New leases Volume as a % of theoretical gross rent Movement gross rent % Lease renewals Volume as a % of theoretical gross rent Leasing activity Volume as a % of theoretical gross rent NL E F B T Investment result VastNed Retail shareholders In the 2008 financial year, the investment result fell to 51.1 million negative ( million positive) and comprised a direct investment result of 60.9 million ( 64.4 million) and an indirect investment result of million negative ( million positive). Adjusted for the one-off costs of the offering process and additonal interest expenses due to the share buyback programme implemented in the third quarter of 2007, the direct investment result remained stable compared to The positive effect of the sale of the factory outlet in Belgium and the like-for-like rent growth of the property portfolio were set off by the one-off tax gain recognised in 2007 and the increased average interest in The negative indirect investment result is a reflection of the current circumstances in the property investment and financing market. Composition investment result 2008 financial year Gross rental income Gross rental income rose during the 2008 financial year to million ( million). This increase was due to net investments (including completed pipeline projects) made in 2007 and 2008 and rent increases due to indexations of existing leases, new leases concluded and renegotiation of existing leases. Long lease The long lease for land in 2008 was virtually the same as in 2007, and was mainly attributable to the Getafe III shopping centre in Spain. Net service charge expenses Due to the sale of the factory outlet centre in Messancy, finalised at the end of January 2008, the total of net service charge expenses fell from 3.6 million to 2.1 million. Operating expenses Operating expenses as a percentage of gross rental income remained stable at 9.5% (9.5%), and came to 12.5 million ( 11.5 million). The decrease of operating expenses due to the sale of the factory outlet in Messancy was largely set off by higher expenses resulting from bad debts in the Spanish property portfolio. Value movements investment properties During the 2008 financial year, the value movements of the investment properties were million negative ( million positive). As stated above, this was mainly attributable to negative revaluations of the investment properties in Spain and France. The value movements of the investment properties also include write-downs totalling 6.4 million on the properties in pipeline as at December 31, The pipeline projects Retail Park Roermond, the extention of the Het Rond shopping centre in Houten and shopping centre Julianus in Tongres, all completed in 2008, contributed a total of 7.1 positive to the value movement of the investment properties at the time of completion.

5 Net result on disposals investment properties In the 2008 financial year a 0.9 million positive sales result was realised on the disposals ( 6.5 million negative). Expenditure Net financing costs Net financing costs rose to 39.3 million ( 29.8 million). This was largely attributable to the increased average interest-bearing loan capital of million ( million) due to acquisitions made in 2007 and 2008 and to the share buyback programme effected in Additionally, interest expenses rose as a result of the increased market rent. This increase of the market rent was partly caused by increased margins at the lending banks. The average interest rate for the total interest-bearing loan capital came to 4.80% (4.64%). General expenses General expenses increased to 10.2 million ( 7.7 million), which was attributable almost fully to one-off costs totalling 2.4 million associated with the offering process on the VastNed Retail shares in the spring of Increased consultancy costs relating inter alia to the Lille portfolio acquired in 2007 were set off by a fall in general expenses due to taking the Spanish property portfolio into the company s own management. Income tax payable on the reporting period Income tax payable on the reporting period increased to 1.7 million ( 0.7 million income). In 2007, one-off tax gains were recognised in Spain and France totalling 1.6 million. The increase was attributable further to higher income tax of 0.4 million in the French property portfolio. This was caused by the decision to defer incorporating the Lille portfolio, acquired at the end of 2007, into the tax-exempt SIIC regime to As a result of this decision, a lower exit tax is expected to be payable, which will amply set off the additional tax expense referred to above. The payable exit tax has been accounted for in the balance sheet as a liability. Deferred tax assets and liabilities The value decrease of the property portfolio in Spain, which is held by a company that is effectively subject to income tax, was mainly responsible for the positive movement of deferred tax liabilities of 12.3 million ( 11.9 million negative). Investment result attributable to minority interests The part of the investment result attributable to minority interests was 7.2 million in the 2008 financial year ( 13.2 million). This increase was mainly due to the lower indirect investment result of Intervest Retail, in which VastNed Retail has a 72.4% interest. Solvency and financing with loan capital Solvency Shareholders equity including minority interests and deferred tax liabilities expressed as a percentage of total equity was 55.5% on December 31, 2008 (December 31, 2007: 59.1%). This is in compliance with the solvency covenants of the loan agreements. The ratio short-term loan capital / long-term loan capital as per December 31, 2008 amounted to 27/73 (December 31, 2007: 34/66). The average duration of the

6 long-term loans as at December 31, 2008 was 4.4 years (5.5 years) and the fixed-interest period was 5.0 years (5.6 years) so that the risk of interest rate increases is limited. Number of ordinary shares The total number of ordinary shares with dividend rights was 16,417,526 at the end of the reporting period (December 31, 2007: 16,362,097). Dividend In accordance with VastNed Retail s dividend policy, it will be proposed to the general meeting of shareholders on April 7, 2009 to declare a final dividend of 2.68 per ordinary share, being the 2008 direct investment result per share of 3.85 before the costs of the offering process less the interim dividend of 1.17 per share. Taking into account the fiscal distribution obligation and the share price at that time, it will be possible to receive the final dividend either fully in cash or 0.85 in cash and a percentage of VastNed Retail shares, charged to the share premium reserve, approaching a value of 1.83 per share. The final dividend will be made payable on May 4, Developments and outlook direct investment result 2009 In the present economic climate, VastNed Retail will focus predominantly on safeguarding net rental income by means of an active letting policy, by closely monitoring tenants payment behaviour and where possible by assessing sales figures. In view of the significant fall in consumer confidence and the decrease of retail sales of the past few months we have lowered our expectations for rental growth. The impact of these developments on rental levels is strongly dependent on the location and the sector in which the retailer operates. In spite of the difficulty to provide an accurate forecast in the present turbulence and uncertain times, the board of management is optimistic, based on the good spread of the property portfolio in terms of locations and tenants, that VastNed Retail may weather the present economic storm. Taking into account that approximately one third of the loan portfolio has a floating interest rate, we expect that VastNed Retail may benefit from decreased market interest rates. This effect is mitigated by the increased margins charged by the lending banks. Taking into account the turbulent economic climate and the expectation that the financing markets will continue to be tight and interest rates volatile, the board of management does not make any statements about the expected 2009 direct investment result per share. Rotterdam, March 2, 2009 Further information: Reinier van Gerrevink or Arnaud du Pont, tel Today at 11 am an analysts meeting will be held in which further comments will be made on the 2008 annual figures. This meeting can be followed by means of an audio webcast on

7 Future looking statements This press release contains a number of forward-looking statements. These statements are based on current expectations, estimates and prognoses of the board of management and on the information currently available to the company. The statements are subject to certain risks and uncertainties which are hard to evaluate, such as the general economic conditions, interest rates and amendments to statutory laws and regulations. The board of management of VastNed Retail cannot guarantee that its expectations will materialise. Furthermore, VastNed Retail does not accept any obligation to update the statements made in this press release.

8 KEY FIGURES December 31, December 31, Results (x 1,000) Gross rental income 132, ,577 Direct investment result 60,888 64,367 Indirect investment result (111,942) 180,173 Investment result (51,054) 244,540 Balance sheet (x 1,000) Investment properties 2,014,789 2,093,101 Equity 1,094,400 1,214,942 Equity VastNed Retail shareholders 998,170 1,135,829 Long-term liabilities 690, ,616 Solvency based on banks' definition (in %) Ratio equity / investment properties (in %) Occupancy rate (in %) Financial occupancy rate Average number of ordinary shares in issue 16,399,050 16,706,552 Number of ordinary shares in issue (at year-end) 16,417,526 16,362,097 Per share (x 1) Equity VastNed Retail shareholders at beginning of year (including final dividend) Final dividend previous financial year (2.73) (2.60) Equity VastNed Retail shareholders at beginning of year (excluding final dividend) Direct investment result per share (before costs offering process) Costs of offering process (0.14) - Indirect investment result (6.82) Investment result (3.11) Value movements financial derivatives taken directly to equity (1.61) 0.32 Translation differences net investments - - Other movements Interim dividend (1.17) (1.12) Equity VastNed Retail shareholders at year-end (including final dividend) Share price (year-end) Premium / (Discount) (in %) (40.79) (5.36)

9 CONSOLIDATED PROFIT AND LOSS ACCOUNT (x 1,000) Net income from investment properties Q4 Q Gross rental income 132, ,577 33,511 31,621 Ground rent (557) (538) (140) (135) Net service charge expenses (2,099) (3,640) (593) (951) Operating expenses (12,495) (11,478) (3,373) (2,693) Net rental income 116, ,921 29,405 27,842 Value movements investment properties in operation (126,680) 208,456 (84,519) 104,842 Value movements investment properties under renovation 3,313 (502) (169) (317) Value movements investment properties in pipeline (6,409) - Total value movements investment properties (122,640) 207,954 (91,097) 104,525 Net result on disposals investment properties 946 (6,455) (226) (7,542) Total net income from investment properties (4,838) 306,420 (61,918) 124,825 Expenditure Financial income 2,185 1, Financial expenses (41,024) (30,948) (10,461) (8,947) Value movements financial derivatives (461) - (451) - Net financing costs (39,300) (29,766) (10,490) (8,698) General expenses (10,228) (7,740) (1,951) (2,192) Total expenditure (49,528) (37,506) (12,441) (10,890) Investment result before taxes (54,366) 268,914 (74,359) 113,935 Income tax payable on the reporting period (1,742) 703 (189) 1,570 Deferred tax assets and liabilities 12,289 (11,850) 4,997 (6,251) 10,547 (11,147) 4,808 (4,681) Investment result after taxes (43,819) 257,767 (69,551) 109,254 Investment result attributable to minority interests (7,235) (13,227) 2,203 (6,421) Investment result attributable to VastNed Retail shareholders (51,054) 244,540 (67,348) 102,833 Per share (x 1) Investment result attributable to VastNed Retail shareholders (3.11) (4.10) 6.22 Diluted investment result attributable to VastNed Retail shareholders (3.11) (4.10) 6.22

10 DIRECT AND INDIRECT INVESTMENT RESULT (x 1,000) Direct investment result Q4 Q Gross rental income 132, ,577 33,511 31,621 Ground rent (557) (538) (140) (135) Net service charge expenses (2,099) (3,640) (593) (951) Operating expenses (12,495) (11,478) (3,373) (2,693) Net rental income 116, ,921 29,405 27,842 Financial income 2,185 1, Financial expenses (41,024) (30,948) (10,461) (8,947) Net financing costs (38,839) (29,766) (10,039) (8,698) General expenses (10,228) * (7,740) (1,951) (2,192) Direct investment result before taxes 67,789 67,415 17,415 16,952 Income tax payable on the reporting period (1,742) 703 (189) 1,570 Direct investment result after taxes 66,047 68,118 17,226 18,522 Direct investment result attributable to minority interests (5,159) (3,751) (1,530) (936) Direct investment result attributable to VastNed Retail shareholders 60,888 64,367 15,696 17,586 Indirect investment result Value movements investment properties in operation (126,680) 208,456 (84,519) 104,842 Value movements investment properties under renovation 3,313 (502) (169) (317) Value movements investment properties in pipeline (6,409) - Total value movements investment properties (122,640) 207,954 (91,097) 104,525 Net result on disposals investment properties 946 (6,455) (226) (7,542) Value movements financial derivatives (461) - (451) - Indirect investment result before taxes (122,155) 201,499 (91,774) 96,983 Deferred tax assets and liabilities 12,289 (11,850) 4,997 (6,251) Indirect investment result after taxes (109,866) 189,649 (86,777) 90,732 Indirect investment result attributable to minority interests (2,076) (9,476) 3,733 (5,485) Indirect investment result attributable to VastNed Retail shareholders (111,942) 180,173 (83,044) 85,247 Investment result attributable to VastNed Retail shareholders (51,054) 244,540 (67,348) 102,833 Per share (x 1) Direct investment result attributable to VastNed Retail shareholders Indirect investment result attributable to VastNed Retail shareholders (6.82) (5.05) 5.15 Investment result attributable to VastNed Retail shareholders (3.11) (4.10) 6.22 * including 2,382 costs of offering process

11 CONSOLIDATED BALANCE SHEET (x 1,000) December 31, December 31, Assets Investment properties in operation 1,965,256 2,062,078 Investment properties under renovation 26,043 3,054 Other assets in respect of lease incentives 1,976 2,395 1,993,275 2,067,527 Investment properties in pipeline 21,514 25,574 Total investment properties 2,014,789 2,093,101 Tangible fixed assets 1,075 1,387 Financial derivatives - 11,591 Deferred tax liabilities 1,218 2,422 Total fixed assets 2,017,082 2,108,501 Debtors and other receivables 21,181 29,429 Income tax 2, Cash and cash equivalents 3,089 13,748 Total currents assets 26,474 43,322 Total assets 2,043,556 2,151,823 Equity and liabilities Capital paid-up and called 82,088 84,381 Share premium reserve 407, ,181 Hedging reserve in respect of financial derivatives (17,864) 8,471 Reserve for translation differences Other reserves 577, ,190 Investment result attributable to VastNed Retail shareholders (51,054) 244,540 Equity VastNed Retail shareholders 998,170 1,135,829 Equity minority interests 96,230 79,113 Total equity 1,094,400 1,214,942 Deferred tax liabilities 40,460 57,669 Provisions in respect of employee benefits 1,236 1,915 Long-term interest-bearing loans 610, ,092 Financial derivatives 20, Long-term tax liabilities 8,435 9,690 Guarantee deposits and other long-term liabilities 9,265 9,948 Total long-term liabilities 690, ,616 Payable to banks 183, ,635 Redemption long-term liabilities 36,283 71,735 Income tax 4,343 9,656 Other liabilities and accruals 34,601 46,239 Total short-term liabilities 258, ,265 Total equity and liabilities 2,043,556 2,151,823

12 CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY (x 1,000) Equity as at January 1 1,214,942 1,048,081 Value movements financial derivatives (27,173) 5,395 Direct investment result 66,047 68,118 Indirect investment result (109,866) 189,649 Investment result (43,819) 257,767 Share buyback - (30,653) Capital payments to subsidiaries 14,573-14,573 (30,653) Final dividend previous financial year in cash (41,073) (42,297) Interim dividend in cash (19,209) (18,885) Dividend paid to minority interests (3,853) (4,525) Costs of stock dividend (14) (7) Dividend payment in cash (64,149) (65,714) Translation differences net investments Other movements 16 - Equity as at December 31 1,094,400 1,214,942 Value movements financial derivatives taken directly to equity (27,173) 5,395 Translation differences net investments Investment result (43,819) 257,767 Total result (70,982) 263,228 Attributable to: VastNed Retail shareholders (77,379) 249,958 Minority interests 6,397 13,270 (70,982) 263,228

13 CONSOLIDATED CASH FLOW STATEMENT (x 1,000) Cash flow from operating activities Investment result (43,819) 257,767 Adjustments for: Value movements investment properties 122,640 (207,954) Net result on disposals investment properties (946) 6,455 Net financing costs 39,300 29,766 Income tax (10,547) 11,147 Cash flow from operating activities before changes in working capital and provisions 106,628 97,181 Movement current assets 2,256 5,373 Movement short-term liabilities (2,964) 2,005 Movement provisions (679) , ,899 Interest paid (on balance) (40,817) (30,133) Income tax paid (2,998) (1,057) Cash flow from operating activities 61,426 73,709 Cash flow from investment activities Acquisition of investment properties and capital expenditure (107,411) (200,041) Disposal of investment properties 63,389 6,684 Capital payments to subsidiaries 14,573 - Cash flow from property (29,449) (193,357) Movement tangible fixed assets 312 (268) Cash flow from investment activities (29,137) (193,625) Cash flow from financing activities Share buyback - (30,653) Dividend paid (64,163) (65,732) Interest-bearing loans drawn down 100, ,987 Interest-bearing loans redeemed (78,785) (70,945) Cash flow from financing activities (42,948) 126,657 Movement in cash and cash equivalents (10,659) 6,741 Cash and cash equivalents as at January 1 13,748 7,007 Cash and cash equivalents at year-end 3,089 13,748

14 SEGMENT INFORMATION (x 1,000) Operating costs including ground rent and net Investment properties Gross rental income service charge expenses Net rental income December 31, Netherlands 751, ,309 50,463 45,992 6,428 5,644 44,035 40,348 Spain 499, ,309 33,490 33,025 4,478 3,427 29,012 29,598 France 427, ,848 25,914 22,230 2,328 2,249 23,586 19,981 Belgium 301, ,945 20,042 17,633 1,690 4,155 18,352 13,478 Turkey 20,236 20, Portugal 13,481 15,418 1,104 1, ,055 1,029 Total 2,014,789 2,093, , ,577 15,151 15, , ,921 Value movements Net result on disposals Movement in deferred investment properties investment properties taxes Total Netherlands (5,631) 85, (4,844) 86,243 Spain (78,465) 58, ,375 (12,413) (66,090) 45,597 France (46,525) 42, (596) (46,520) 42,011 Belgium 10,434 21, (4,569) ,691 16,948 Turkey (516) (1,198) - - (420) 214 (936) (984) Portugal (1,937) 1, (171) (1,706) 1,179 Germany (2,461) - 1,116 - (1,345) (122,640) 207, (6,455) 12,289 (11,850) (109,405) 189,649 of which attributable to third parties (2,132) (10,738) (71) 1, (2,203) (9,476) (124,772) 197, (5,193) 12,289 (11,850) (111,608) 180,173 This interim report has been prepared in accordance with IAS 34 'Interim financial reporting' For the principles of consolidation, the valuation of assets and liabilities and the determination of the result, reference is made to the 2007 annual accounts. The essential judgments used by the board of management in the application of the principles for financial reporting of VastNed Retail N.V. and the main sources of estimates used in the preparation of this press release are identical to the essential judgments and main estimates in the 2007 annual accounts. The actual results may deviate from these estimates. The figures for 2008 have not been audited.