1st Quarter Results

RNS Number : 4580G

Wereldhave NV

12 May 2011

 



Results 1st quarter 2011

Key items

•           Profit € 27.6 mln (2010: € 12.6 mln)

•           Direct result per share € 1.27 (+5.8%)

•           Net asset value per share € 74.83 (-0.5%)

•           Valuation portfolio stable

•           Sale of non strategic properties for € 54.3 mln

•           Successful private placement of USD 300 mln

 Hans Pars, CEO Wereldhave N.V. comments:

"Mainly due to the property acquisitions made in 2010, the direct result per share rose by 5.8% during the first quarter. In 2011 we have not made any purchases to date. With the sale of a logistic portfolio of six properties in The Netherlands and three smaller properties in the United Kingdom for well over € 54 mln, our sales program is well on track.

The occupancy rate of our shopping centres, representing well over half of our total portfolio, remained stable, but the occupancy of the offices portfolio dropped, particularly in the United States. We notice that prospective tenants wish to use the current tenant markets and that they are taking their time to make a decision. Our highest priority is to improve the occupancy rate of our offices portfolio."

Profit  

The result for the first quarter of 2011 rose by € 15.0 mln to € 27.6 mln compared to 2010, the equivalent of € 1.21 per share (2010: € 12.6 mln or € 0.50 per share). The valuation result for the first quarter (including a revaluation of financial instruments of

€ -1.4 mln) amounted to € -2.0 mln (2010: € -12.0 mln). Exchange rate differences had a positive effect of € 2.7 mln on the result (2010: € -1.5 mln), primarily because the lower exchange rate for the US-dollar resulted in lower deferred taxes.

Direct result   

The direct result for the first quarter of 2011 amounts to € 29.0 mln, an increase of

€ 1.5 mln compared 2010. The higher direct result can be attributed to the acquisitions made in 2010 and the letting of an office building in Paris. These increases were partially absorbed by rising vacancy in the offices portfolio, renewals at lower rents and sales. In balance, net rental income rose by € 4.4 mln.

The increased size of the loan portfolio in connection with the property acquisitions led to an increase in interest charges of € 3.2 mln. The average nominal interest as at March 31, 2011 rose to 2.8% (March 31, 2010: 2.2%). General costs rose by € 0.6 mln, particularly due to the larger management organisations in connection with the expansion of the portfolios in The Netherlands and Belgium. Taxes on the direct result dropped by € 0.7 mln. The average exchange rates for the first quarter were slightly above the levels during the first quarter of 2010, causing a small positive effect on the direct result of € 0.2 mln.

The EPRA occupancy rate as at March 31, 2011 stood at 89.4%, a 2.1% drop compared to year-end 2010. The occupancy rate of the retail portfolio rose by 70 basis points to 95.9%, but the occupancy rate of the offices portfolio dropped by 4.9%, especially in the United States, but also in the relatively smaller portfolios in Spain and the United Kingdom. The occupancy rate of the category other assets dropped by 0.6%, mainly as a result of an expiring lease of a logistic building in the Netherlands. Broken down per sector, EPRA occupancy rates as at March 31, 2011 (year-end 2010) are: retail 95.9% (95.2%), offices 82.1% (87.0%) and other 94.8% (95.5%).

The direct result for the first quarter of 2011 amounts to € 1.27 per share, which represents an increase of € 0.07, or +5.8%, in spite of the increased number of shares in issue in connection with the optional dividend for the year 2009.

Indirect result

The indirect result for the first quarter of 2011 totaled € -1.4 mln (2010: € -14.9 mln). The valuation of the property portfolio did not change in all countries. The average cap rate for the valuation of the portfolio remained nearly stable at 6.4% during the first quarter of 2011. The revaluation of financial instruments (interest derivatives) amounted to

€ -1.4 mln (2010: € 1.2 mln).

A surplus on disposals of € 0.7 mln (2010: € -0.1 mln) was made with the sale of three smaller properties in the United Kingdom for a total consideration of € 15.1 mln.

Equity/debt    

At March 31, 2011 shareholders' equity, before deduction of the proposed dividend, stood at € 1,723.8 mln. The solvency ratio (equity/equity + interest bearing debt) amounts to 60% (2010: 64%), the loan to value amount to 39%. Wereldhave ranks amongst the best capitalised European property companies. In connection with the payment of an optional dividend in respect of the financial year 2010, as at May 10, 2011 231,083 new shares were issued, bringing the number of shares in issue from 21,679,608 as at May 10, 2011. The new shares are entitled to dividend in respect of the full financial year 2011.

Exchange rate differences had a negative effect of € 32.8 mln on shareholders' equity, largely caused by a nearly 6% lower exchange rate for the US-dollar at March 31, 2011, compared to year-end 2010. The net asset value as at March 31, 2011, before deduction of dividend, amounts to € 74.83 (December 31, 2010: € 75.12).

In March 2011, Wereldhave has issued a USD 300 mln private placement (senior unsecured notes), at an average initial interest rate of 3.5%. The loan, of which half will be swapped to Euros, was made in tranches of 5, 7 and 10 years.  With this private placement, Wereldhave has improved the spread of financing sources, raised the average maturity of the loan portfolio and increased it's financial firepower for acquisitions. Also in March 2011, Wereldhave repaid the € 200 mln convertible bond 2006-2011 in full. No bonds opted for conversion.

Property portfolio      

Wereldhave did not acquire any properties during the first quarter of 2011. In the United Kingdom, three smaller properties were sold for € 15.1 mln, which is € 0.7 mln above book-value. As at March 31, 2011, the value of the development portfolio amounted to

€ 151.1 mln; the value of the investment portfolio stood at € 2,797.9 mln.

On April 29, 2011, Wereldhave sold a logistic portfolio of six properties in the Netherlands for € 39.2 mln, slightly below book-value.

Development portfolio           

In Belgium the expansion of the Nivelles shopping centre is proceeding according to plan. The completion of 12,000 m² of retail space with covered parking facilities is scheduled for the beginning of 2012. Leasing activity has started, with three leases for a total of 2,500 m² already signed. There is a lively interest from retail chains that wish to be present in the centre. The other projects in Belgium are still in their planning- and consent phases.

In the United States, marketing activities of the first phase of the San Antonio project has started. The first apartments, the hotel and a large part of the commercial space will be completed as from the last quarter of 2011.

In Finland the project management for the refurbishment and expansion of the Itäkeskus shopping centre began its tasks. The construction of the first phase is scheduled to start during the second half of the year.

Prospects       

During the first quarter of 2011 the occupancy rate of the offices portfolio has dropped further, especially in the United States, where a relatively large portion of the leases expired in 2010. Although interest from prospective tenants seems to increase since late 2010, this has not yet shown in a higher occupancy rate. Prospective tenants take their time to reach a decision and lettings generally are at lower rental levels than the old leases.

Wereldhave does not yet forecast the result for the year 2011. The result largely depends on the development of the occupancy rate of the offices portfolio, the pace of purchases and sales and changes in interest charges and movements in exchange rates.

The results will be explained during a conference call, to be held today at

14.00 h CET. The conference call can be followed by audiocast on www.wereldhave.com. Questions can be put by e-mail via this webcast.

The Hague, May 12, 2011

Board of Management Wereldhave N.V.

Click on, or paste the following link into your web browser, to view the associated PDF document.

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For further information:

Wereldhave N.V.

Richard W. Beentjes

Tel.       + 31 70 346 93 25

Wereldhave. Value for tomorrow.

www.wereldhave.com

Information for analysts:

Wereldhave N.V.

Charles F. Bloema / Jaap-Jan Fit

Tel.       + 31 70 346 93 25

Profile 

Wereldhave, established in 1930, is a property investment company with an internationally diversified portfolio of approximately € 3 billion. Wereldhave's activities are currently spread over four property sectors and across six European countries - the Netherlands, Belgium, Finland, France, Spain and the United Kingdom - and three regions in the United States. It creates value by actively managing shopping centres, through sound timing in the purchase and sale of offices and residential property, and by developing it's own property at cost.

Real estate is a local business. Local expertise is decisive for the success of a property investment company. With its local personnel, Wereldhave maintains direct contact with its tenants. This enables Wereldhave to stay on top of the issues concerning its tenants and up-to-date on market developments. Knowledge of rapidly-changing user requirements is also deployed in the development of projects for Wereldhave's own portfolio.

 

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