Results 2010 Wereldhave N.V.
· Profit € 95.1 mln (2009: € -102.3 mln)
· Direct result € 115.9 mln (+4%)
· Direct result per share € 5.10 (+3.5%)
· Net asset value per share € 75.12 (+2%)
· Optional dividend € 4.70 (2009: € 4.65)
· Solvency 60%
· Issue USD 300 mln private placement
The profit for 2010 amounted to € 95.1 mln, or € 4.15 per share (2009: € -102.3 mln or € -5.07 per share). The improved result is primarily caused by improved valuation results. The revaluation totalled € - 15.1 mln, mainly caused by acquisition costs that were deducted for the valuation (2009: € - 245.8 mln). Exchange rate differences had a negative effect on profit of € 2.6 mln (2009: + € 6.0 mln).
The direct result over 2010 amounted to € 115.9 mln, which was € 4.8 mln higher than the figure for 2009. Due to the purchases and the letting of two offices in Washington DC and Paris, net rental income rose by € 17.0 mln. As these acquisitions were financed with debt, interest charges rose by € 8.6 mln. The average interest rate as per December 31, 2010 remained stable at 2.6%.
General costs rose by € 2.2 mln, about half of which due to one-off expenses in relation to changes in the organisation. Taxes on result increased by € 1.1 mln, because a one-off tax benefit of € 1.6 mln in 2009. Exchange rate differences ultimately had a positive effect on the direct result of € 1.9 mln.
The average occupancy rate for 2010 amounts to 90.3% (2009: 90.8%). As at December 31, 2010, EPRA occupancy stood at 91.4%. In accordance with the EPRA best practices, as from today, Wereldhave will report the occupancy rate at balance sheet date. EPRA occupancy levels per sector over 2010 were 95.2% for retail, 87.0% for offices and 95.5% for other properties.
The indirect result for 2010 totalled € - 20.8 mln (2009: € - 213.4 mln). Primarily due to the acquisition costs in the Netherlands and the UK of € 18.7 mln that were immediately deducted from the valuation, there was a negative property revaluation of € 15.1 mln as at 31 December 2010. The average yield on the portfolio applied in the valuation increased by circa 20 basis points in 2010, bringing the weighted cap rate on the portfolio to approximately 6.5% (2009: 6.7%). The revaluation on financial instruments amounted to € 1.0 mln (2009: € -1.2 mln).
With property disposals to the amount of € 45 mln, a surplus on property disposals of € 2.5 mln was achieved in 2010 (2009: € 0.8 mln).
As at year-end 2010 equity, including minority interests and before appropriation of the proposed dividend, amounted to € 1,728.1 mln. This represents a 60% solvency (2009: 70%). The total number of ordinary shares in issue at year-end 2010 amounted to 21,448,525. The net asset value per share before profit appropriation as at December 31, 2010 was € 75.12 (2009: € 73.77).
During the last quarter of 2010, Wereldhave issued a convertible bond of € 230 mln with a maturity of 5 years (2010-2015) at a coupon of 2.875%. The conversion price is € 81.10, well above the net asset value. The conversion price will not be adjusted for dividends, unless and to the extent that the annual dividend payment exceeds € 4.75 per share (as from 2011 raised by € 0.05 per annum). No bonds had been converted into Wereldhave shares as at 31 December 2010.
In February 2011, Wereldhave reached agreement for the issue of 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 euro, will be made available as from the end of march 2011 in tranches of 5, 7 and 10 years.
In The Netherlands, Wereldhave purchased five shopping centres in 2010 for a total of € 265 mln. At the end of 2010, the Dolphin shopping centre in Poole, United Kingdom, was added for € 100 mln. As a result of these acquisitions, the interest in shopping centres increased to 52% of the entire portfolio.
During 2010, Wereldhave sold smaller and logistic properties in the United Kingdom and The Netherlands. Ten properties and a plot of land were sold for a total consideration of
€ 45 mln. Wereldhave now does no longer have any logistic properties in the UK.
The investment portfolio underwent a negative revaluation of 0.5%, primarily caused by transaction costs that were deducted for the valuation. At year-end 2010, the value of the development portfolio amounted to € 134.5 mln; the value of the investment portfolio stood at € 2,860.1 mln.
In 2010 Wereldhave invested a total amount of € 60.6 mln in development projects.
As at December 31, 2010, in Belgium Wereldhave acquired five development projects from ING Real Estate Development. The initial investment was € 19.6 mln, but the acquisition offers perspective to a growth of the retail portfolio with € 150 mln. The Belgian development portfolio contains the extensions of shopping centres in Nivelles, Tornai and Waterloo and the redevelopment of a shopping centre in Genk. In June 2010, Wereldhave started construction of the expansion of Shopping Centre Nivelles with 12,000 m² and parking facilities. Completion is scheduled for 2012. The other projects are still in the planning and licensing stages.
In France, on December 1, 2010, Wereldhave purchased an office development of 17,670 m2 in Joinville-le-Pont, in the East of Paris. The project will be delivered turn-key and Wereldhave will take the letting risk. The investment volume amounts to approx. € 67 mln. Construction start is scheduled for the third quarter of 2011 with completion in the second quarter of 2013.
During the year plans were made to revitalise the shopping centre Itäkeskus in Finland. The plans aim to strengthen the market position of the centre, by a refreshment and refurbishment of the existing retail space and adding new retail space to the centre and optimising the tenant mix. The plans will be executed in the period 2011-2013. The costs for the revitalisation will range between € 25 - € 30 mln.
In Spain, a plan was completed for the redevelopment of the retail and leisure centre Planetocio. After the closing down of the former ice rink, the focus of the centre will be on a mix of active and passive leisure. Execution of the plams will start in the first half of 2011 and will be completed in 2012.
In the United Kingdom, Wereldhave will start construction for the redevelopment a mixed retail and office property in Richmond-upon-Thames. The retail element of the property has been pre-let on a long term lease to Whole Foods from the USA.
The two offices of the first phase of the Eilan project in San Antonio were completed during the third quarter of 2010. A first lease has been signed. Construction on the remainder of the first phase is proceeding according to plan. Completion is scheduled as from the final quarter of 2011.
An optional dividend of € 4.70 will be proposed to the General Meeting of Shareholders for 2010, of which € 3.10 in cash in order to comply with the fiscal distribution obligation, after deducting withholding tax, and € 1.60 in cash or in shares, at the option of the shareholder. The latter distribution will be charged to the reinvestment reserve and therefore no dividend tax will be due.
The dividend is payable from 13 May 2011. Shareholders can communicate their choice between cash and shares from April 26, 2011 until May 9, 2011, 17.00 hr CET. With a dividend of € 4.70, the payout ratio amounts to 92.2%. If a shareholder does not communicate his choice, the dividend will be paid in shares. The optional dividend component in shares (as a percentage) will be set by dividing the optional dividend in cash by the average of share prices at closure of trading of the period May 2 up to May 9, 2011. A 5% margin will be applied for rounding off logically in favour of a shares choice. The maximum number of ordinary shares to be issued is this percentage, multiplied by the number of shares in issue. The exact number of shares issued will be communicated by press release on May 10, 2011, before trading hours. The newly issued ordinary shares bear equal rights as those already in issue and are entitled to dividend as from the financial year 2011 and further.
General Meeting of Shareholders
The General Meeting of Shareholders will be held on April 18, 2011 in the Steigenberger Kurhaus Hotel, Gevers Deynootplein 30, Scheveningen at 11.00 h CET. For this meeting vote- and meeting rights will be granted to those shareholders who are registered as such on March 21, 2011 after trading hours (record date) in a (partial) register. The convocation and the agenda for the meeting will be available as from March 7, 2011 on the Company's websitewww.wereldhave.com.
Mr J. Krant will retire by rotation on April 18th, 2011. He is not available for re-election. Mr J.A.P. van Oosten will succeed him as Chairman of the Supervisory Board. The vacancy in the board will be filled with the nomination of Mr H.J. van Everdingen as member of the Supervisory board.
In 2011 Wereldhave will continue to restructure and expand the portfolio. Especially in the United Kingdom, France and Spain, Wereldhave seeks to expand it's portfolio to a minimum size of € 400 mln. In addition, Wereldhave will continue the sale of logistic property and of property with a value below € 20 mln.
In 2011 Wereldhave will work to realise at rental- and value growth of it's shopping centres. For the offices portfolio, attention will be focused on occupancy. In view of the economic climate, the conditions on most office markets will be challenging and there will be fierce competition with pressure on rents.
2011 will be an important year for the Eilan project in San Antonio, Texas, as completion of the remainder of the first phase is scheduled as from the last quarter of the year. Given the quality and location of the project, Wereldhave is confident in a successful letting of the project. In Belgium the extension of the Nivelles shopping centre is nearing completion, to open doors early in 2012.
Wereldhave is well positioned for these tasks with its sound balance sheet, it's good quality portfolio and management organisations that were fully fitted to their core tasks. 2011 promises to be another active year.
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.
Click on, or paste the following link into your web browser, to view the associated PDF document.
The Hague, March 3, 2011
Board of Management Wereldhave N.V.