Regulated information embargo 03/11/2008, 17:45 Interim statement for the third quarter of 2008 of the board of directors covering the period 01.07.2008 to 30.09.2008 Positive results for Intervest Retail Antwerp, 3 November 2008 - Public property investment fund Intervest Retail 1 releases today its results for the third quarter of 2008. 1. Operating activities for the third quarter of 2008 Rental activity In 2008, the demand for commercial real estate on the rental and investment market remains still high. In spite of more difficult market circumstances in the retail trade, retailers are prepared to pay higher rents for good locations. New lease contracts and rental renewals in the commercial portfolio of Intervest Retail are still concluded at higher rents. The commercial real estate portfolio which is mainly let to national and international companies is to a certain degree sensitive to the conjuncture. On the short term however, no direct risks are recognized that can influence fundamentally the results of the financial year 2008. Furthermore, within the property investment fund there are on the level of debtors risks clear and effective internal control procedures to limit this risk. Evolution real estate portfolio REAL ESTATE PATRIMONY 30.09.2008 31.12.2007 Total lettable surface area (m²) 174.825 166.591 Occupancy rate 2 (%) 99,2 % 99,3 % Fair value of the portfolio ( 000) 334.770 312.938 - investment properties ( 000) 326.136 291.382 - development projects ( 000) 8.634 21.556 Debt ratio RD 21 June 2006 (max. 65%) (%) 39 % 43 % On 30 September 2008, the fair value of the portfolio, including the development projects, amounts to 335 million ( 313 million on 31 December 2007). This rise with 22 million is mainly due to the increase in value of the commercial real estate portfolio (by 14,5 million or 5 % compared to 31 December 2007), the capital gain resulting from the opening of the Julianus project in Tongeren (by 4,9 million) and investments in the existing portfolio. On 30 September 2008, the debt ratio of the property investment fund amounts to 39 % (43 % on 31 December 2007). The decrease of the debt ratio results mainly from the positive revaluation of the real estate portfolio during 2008. 1 Intervest Retail is a public property investment fund listed on NYSE Euronext Brussels. 2 The occupancy rate is calculated as the ratio of the actual rental income to the same rental income plus the estimated rental value of the vacant locations for rent. 1 / 6
Vilvorde For the commercial-residential project at the corner of the Leuvensestraat and the Jean-Baptiste Nowélei in Vilvorde, the opening on 24 September 2008 of a new store of the international fashion retailer H&M was particularly successful and the works for 11 luxury apartments on the floors are in progress. The sale on plan of the apartments evolves favourably. Currently 9 apartments are already sold. Olen At the beginning of August 2008 the manager of the wooncenter Van de Ven (sprl Het Genoegen) has been declared bankrupt. In spite of uncertain market circumstances there is a reasonable interest from retailers for this new project. The start of the project will largely depend on the evolution of the prelettings in this project which are currently ongoing. 2. 2.1. Financial results Third quarter of 2008 3 RESULTS ( 000) 01.07-30.09 2008 01.07-30.09 2007 Net rental income 4.955 4.104 Property management costs and income -5-7 Property result 4.950 4.097 Property charges -580-1.106 General costs and other operating cost and income -209-197 Operating result before result on portfolio 4.161 2.796 Result on portfolio 3.373 5.621 Operating result 7.534 8.417 Financial result -1.574-1.147 Net profit 5.960 7.270 Operating distributable result 2.643 1.683 Result on portfolio 3.373 5.621 Revaluation of financial instruments (IAS 39) and other non-distributable elements -56-34 During the third quarter of 2008 the net rental income of Intervest Retail amounts to 4,9 million ( 4,1 million). This increase with 0,8 million results for 0,3 million from the new commercial centre Julianus in Tongeren which opened successfully on 13 March 2008, for 0,3 million from rental income of the warehouses portfolio let to Decor Heytens, acquired end 2007, and for 0,2 million from higher rental income from the existing portfolio and from indexations. During the third quarter of 2008 the property charges decrease with 0,5 million to 0,6 million ( 1,1 million), mainly due to the fact that marketing and service charges for Factory Shopping Messancy are no longer incurred because of the sale of this centre at the end of 2007. With the decrease of the property charges and the increase of rental income, the operating result before the result on portfolio increases in the third quarter of 2008 with 1,4 million to 4,2 million ( 2,8 million). 3 Between brackets comparable figures of the third quarter 2007 (01.07.2007 30.09.2007). 2 / 6
For the third quarter of 2008, the result on portfolio of the investment property fund amounts to 3,4 million ( 5,6 million) as a result of the increases in value of the commercial real estate portfolio. The financial result amounts to - 1,6 million (- 1,1 million) due to the increase of the interest charges as a result of investments in the commercial centre Julianus and the acquisition of the Heytens portfolio end 2007. Currently, 64 % of the credit facilities portfolio consists of loans with a fixed interest rate or fixed through interest rate swaps and 70 % of the credit withdrawals are long term financings, with an average duration of 2,9 years. Furthermore, on 30 September 2008, the property investment fund still disposes of 8 million of non-withdrawn credit facilities at financial institutions for the financing of future investments. For the third quarter of 2008, the average interest rate of the property investment fund amounts to 5,0 % (2007: 4,7 %). In October 2008 Intervest Retail has concluded an interest rate swap at a rate of 4,105 % (3M-euribor - excl. margin) with a duration of 5 years for a credit of 20 million in replacement of the existing credit with a fixed interest rate that expires mid December 2008. For the renewal of this credit facility negotiations with the financial institutions are almost in a final phase. During the third quarter of 2008, the net profit of the property investment fund Intervest Retail amounts to 6,0 million ( 7,3 million) and can be divided in: the operating distributable result of 2,6 million compared to 1,7 million during the same period of prior year. This increase of 57 % results from the opening of the commercial centre Julianus in Tongeren, the acquisition of the Heytens portfolio and the sale of the badly performing outlet center Factory Shopping Messancy. the result on portfolio of 3,4 million compared with 5,6 million during the same period of prior year. the revaluation of the financial instruments according to IAS 39 and other non-distribuable elements of - 0,1 million. 2.2. Cumulative figures for the first nine months of 2008 RESULTS ( 000) 30.09.2008 30.09.2007 Operating distributable result 8.013 5.609 Result on portfolio 19.444 15.886 Revaluation of financial instruments (IAS 39) and other non-distributable elements 42-86 Net profit 27.499 21.409 RESULT PER SHARE ( ) Number of shares entitled to dividend 5.078.525 5.078.525 Net profit ( ) 5,41 4,22 Gross dividend for the first nine months ( ) 1,58 1,10 Net dividend for the first nine months ( ) 1,34 0,94 The operating distributable profit of Intervest Retail increases during the first nine months of 2008 to 8,0 million ( 5,6 million). This increase leads to distributable earnings per share of 1,58 for the first nine months of 2008 compared to 1,10 for the same period of prior year, which corresponds to the earlier formulated expectations for the financial year 2008. 3 / 6
DATA PER SHARE ( ) 30.09.2008 30.09.2007 Number of shares 5.078.525 5.078.525 Net asset value per share (fair value) ( ) 40,93 36,51 Net asset value per share (investment value) ( ) 42,58 37,90 Share price on closing date ( ) 30,54 30,60 Discount to net asset value (fair value) (%) - 25 % - 16 % On 30 September 2008 the net asset value (fair value) of the share amounts to 40,93. Given that the share price of Intervest Retail on 30 September 2008 is 30,54, the share is quoted on 30 September 2008 with a discount of 25 % compared to the net asset value (fair value). 3. Forecast As already mentioned in the half-yearly financial report of the property investment fund, Intervest Retail expects, on the basis of its financial results on 30 September 2008, that in spite of difficult market circumstances in the retail sector and the financial sector, the earnings per share will increase significantly compared to the dividend of 2007 which amounted to 1,47. Intervest Retail expects to propose its shareholders for the financial year 2008 a gross dividend per share between 2,05 and 2,10. This higher dividend results from the sale of the outlet center Factory Shopping Messancy, the acquisition of the Heytens portfolio end 2007, the opening of the commercial center Julianus in Tongeren and a thorough rental grow in the existing portfolio. On the basis of the share price on 30 September 2008 ( 30,54), this represents a gross dividend yield between 6,7 % and 6,9 %. On the short term, the efforts of the property investment fund will be concentrated on the optimisation of the rental income of the existing portfolio and the realisation of ongoing projects. On the long term, it is also the aim to let the portfolio grow depending on the investment opportunities which occur on the investment market. Note to the editors: for more information, please contact: INTERVEST RETAIL SA, Jean-Paul Sols - CEO or Inge Tas - CFO, tel. 32 3 287.67.87, www.intervestretail.be 4 / 6
- annexes Consolidated income statement (9 months) ( 000) 30.09.2008 30.09.2007 Rental income 14.955 13.108 Rental related expenses 83-557 NET RENTAL INCOME 15.038 12.551 Property management costs and charges -7-59 PROPERTY RESULT 15.031 12.492 Technical costs -419-233 Commercial costs -66-46 Charges and taxes on unlet properties -193-1.763 Property management costs -969-892 Other property charges -3-1 Property charges -1.650-2.935 OPERATING PROPERTY RESULT 13.381 9.557 General costs -921-749 Other operating income and expenses 52 39 OPERATING RESULT BEFORE RESULT ON PORTFOLIO 12.512 8.847 Result on disposals of investment properties 87 408 Changes in the fair value of investment properties and development projects 19.357 15.478 OPERATING RESULT 31.956 24.733 Financial income 71 58 Interest charges -4.445-3.372 Other financial charges -22-10 Revaluation financial instruments - IAS 39-10 0 Financial result -4.406-3.324 RESULT BEFORE TAXES 27.550 21.409 Taxes -51 0 NET PROFIT 27.499 21.409 Attributable to: Equity holders of the parent 27.499 21.409 Minority interests 0 0 Note: Operating distributable profit 8.013 5.609 Result on portfolio 19.444 15.886 Revaluation financial instruments - IAS 39 and other non-distributable elements 42-86 5 / 6
Consolidated balance sheet ASSETS ( 000) 30.09.2008 31.12.2007 Non-current assets 335.180 313.413 Intangible fixed assets 16 18 Investment properties 326.136 291.382 Development projects 8.634 21.556 Other tangible fixed assets 258 379 Financial fixed assets 118 60 Trade receivables and other non-current assets 18 18 Current assets 8.156 18.563 Assets held for sale 751 12.133 Trade receivables 1.061 675 Tax receivables and other current assets 5.059 4.085 Cash and cash equivalents 911 1.486 Deferred charges and accrued income 374 184 TOTAL ASSETS 343.336 331.976 SHAREHOLDERS EQUITY AND LIABILITIES ( 000) 30.09.2008 31.12.2007 Shareholders equity 207.854 187.762 Shareholders equity attributable to the shareholders of the parent company 207.851 187.759 Share capital 97.213 97.213 Share premium 4.183 4.183 Reserves 105.835 85.421 Result 8.881 8.281 Impact on the fair value of estimated transaction rights and costs resulting from the hypothetical disposal of investment properties -8.369-7.399 Changes in the fair value of financial assets and liabilities 108 60 Minority interests 3 3 Liabilities 135.482 114.214 Non-current liabilities 88.931 67.178 Provisions 215 195 Non-current financial debts 88.651 66.608 Credit institutions 88.643 66.587 Financial lease 8 21 Other non-current liabilities 65 69 Deferred taxes - liabilities 0 306 Current liabilities 46.551 77.036 Current financial debts 37.575 62.754 Credit institutions 37.574 62.749 Financial lease 1 5 Trade debts and other current debts 3.971 10.625 Other current liabilities 3.358 2.341 Accrued charges and deferred income 1.647 1.316 TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 343.336 331.976 6 / 6