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Wereldhave NV (0NMR)


Thursday 04 August, 2011

Wereldhave NV

Half Yearly Report

RNS Number : 7318L
Wereldhave NV
04 August 2011

Key items

·      Profit € 52.6 mln (2010: € 58.0 mln)

·      Direct result per share € 2.51 (-1.2%)

·      Net asset value per share € 70.47 (-6.2%)

·      Slightly improved occupancy rate portfolio

·      Valuation portfolio stable

·      Sale of non-core properties for € 65 mln



Compared to the previous year, the profit for the first half of 2011 decreased by € 5.4 mln to € 52.6 mln, of which € 0.4 mln was caused by a decrease of the direct result and € 5.0 mln by a lower indirect result. The profit amounts to € 2.26 per share (2010: € 2.58 per share).


Direct result

The direct result for the first six months of 2011 amounts to € 57.4 mln, a € 0.4 mln decrease compared to 2010. The slightly lower direct result can be attributed to higher interest charges, one-off general costs and negative exchange rate differences.


In spite of a lower average occupancy rate and lease renewals at more competitive conditions in the offices portfolio, the like-for-like rental growth of the entire portfolio remained 1.1% positive. In combination with the property acquisitions and sales,  rental income rose by € 4.2 mln. Rental income was depressed by the active sales programme of relatively high yielding, non-core properties.


The interest charges rose by € 5.7 mln, primarily caused by the larger size of the loan portfolio in connection with property acquisitions and by higher interest rates. The average nominal interest rate as per June 30, 2011, rose to 3.0% (June 30, 2010: 2.4%). The general costs increased by € 1.1 mln, primarily due to one-off charges in connection with adjustments to the management organisations in The Netherlands and Finland. Exchange rate differences had a negative effect on the direct result of € 0.9 mln, as the average exchange rates prevailing for the first half year of 2011 were lower than in 2010. The taxes on result decreased by € 1.7 mln.


The direct result for the first half year of 2011 amounts to € 2.51 per share, which represents a € 0.03 or 1.2% decrease compared to the previous year. This includes a dilution of € 0.02 caused by the increased number of shares in issue in connection with the optional dividend in respect of the year 2010.

The EPRA occupancy rate as at June 30, 2011 amounts to 90.2%, a 0.8% increase compared with March 31, 2011. The occupancy rate of the retail portfolio rose by 0.1% to 96% during the second quarter. The occupancy rate of the offices portfolio rose by 1.6%, particularly in the United Kingdom and in Belgium, but also in the portfolios in Spain and the United States. The occupancy rate of the portfolio category other decreased by 0.4%, mainly caused by the sale of the fully let logistic portfolio in The Netherlands. Broken down per sector, the EPRA occupancy rates as at June 30, 2011 (March 31, 2011) are: retail 96.0% (95.9%), offices 83.7% (82.1%) and other 94.4% (94.8%).


Indirect result

The indirect result for the first half year of 2011 totalled € -4.8 mln (2010: € 0.2 mln). The valuation was slightly positive in France, Belgium and Finland, remained stable in The Netherlands and the United Kingdom and decreased slightly in Spain and the United States. The total valuation result of the property portfolio amounted to € -5.9 mln,
or -0.2% of the portfolio.
The average cap rate for the valuation of the portfolio remained nearly stable at 6.4% during the first half year of 2011. The revaluation of financial instruments (interest derivatives) amounted to € -0.3 mln.


A surplus on disposals of € 2.6 mln (4% above the latest book value) was made with the sale of five smaller properties in the United Kingdom and six logistic properties in the Netherlands for a total consideration of € 64,9 mln.


Other movements had an impact of € -1.2 mln on the indirect result.



At June 30, 2011 shareholders' equity stood at € 1,642.3 mln (December 31, 2010:
€ 1,728.1 mln).
The net asset value per share including current profit as at June 30, 2011, amounts to € 70.47 (December 31, 2010: € 75.12). The decrease is caused by the dividend payment for the year 2010 and negative exchange rate differences of € 43.9 mln, primarily due to a nearly 8% lower exchange rate for the US-dollar as at June 30, 2011 compared to year-end 2010. As a result, the solvency ratio slightly decreased to 58% (December 31, 2010: 59%), the loan to value remained stable at 40%. In connection with the payment of an optional dividend in respect of the financial year 2010, the number of shares in issue rose by 231,083 shares to 21,679,608. The new shares are entitled to dividend in respect of the full financial year 2011.


Property portfolio

Wereldhave did not acquire any properties during the first half of 2011. In the United Kingdom, five smaller properties were sold and in the Netherlands a logistics portfolio of six properties was sold. As at June 30, 2011, the value of the investment portfolio amounted to € 2,730.3 mln and the value of the development portfolio stood at € 170.7 mln.


During the second quarter, Wereldhave has agreed a number of lettings, amongst which a lease for ca. 7,800 m² of an office building in Allen, near Dallas, United States. In the Belgian portfolio a 9-year fixed lease was signed for the entire 5.200 m² Orion office building in Brussels with a Belgian Government institution. Also in Belgium during the third quarter of 2011, an office building at the Regentlaan in Brussels will be sold. The transaction price is in line with the book value. 


In the United Kingdom Wereldhave has reached agreement for the acquisition of approximately 4,300 m2 of retail space in Poole for € 12.7 mln, located directly next to the Dolphin centre. This further strengthens Wereldhave's position in the city centre of Poole. Completion will take place in August 2011.


Development portfolio

In Belgium the expansion of the Nivelles shopping centre is proceeding according to plan. The centre will be opened in spring 2012. Meanwhile, 65% of the project has either been pre-let or agreement on leasing conditions has been reached.


In the United States, the construction of the San Antonio project is also proceeding according to plan. The first apartments, a hotel and a large part of the commercial facilities will be completed during the last quarter of 2011, the remainder of the first phase will be completed in the first quarter of 2012. The original investment volume of the first phase of USD 190 mln has increased by USD 47 mln ( 33 mln) to USD 237 mln. The increase is caused by a larger average floor space of the apartments and an improved design and finishing level. In addition, heads of agreement have been reached on the lease for a fixed 20-year period of the hotel, which will be operated under an international luxury brand. The hotel will also become more spacious and luxurious than previously planned.


The extra floor space to be added to phase 1 decreases the volume of phase 2. The investment volume of phase 2 has been adjusted downwards by USD 25 mln from USD 140 mln to USD 115 mln. In balance, the total investment volume of phase 1 and phase 2 will increase by USD 22 mln (+7%) to ca. USD 350 mln. The construction of phase 2 will be started upon the successful completion of phase 1. 



In view of the active sales programme, the increase in interest charges and higher general costs, Wereldhave forecasts, assuming stable exchange rates, a direct result per share for the full year of 2011 between € 4.85 and € 4.95, which enables Wereldhave to maintain dividend at the 2010 level. 

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The Hague, August 4, 2011

Board of Management Wereldhave N.V.



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