Earnings Release • Feb 13, 2015
Earnings Release
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NSI N.V.
| Results (x € 1,000) | 2014 | Per share (x €) | 2013 | Per share (x €) | ||||
|---|---|---|---|---|---|---|---|---|
| Gross rental income | 133,599 | 144,564 | ||||||
| Net rental income | 109,160 | 121,791 | ||||||
| Direct investment result | 48,451 | 0.34 | 46,272 | 0.61 | ||||
| Indirect investment result | - | 185,994 | - | 1.30 | - | 180,347 | - | 2.38 |
| Result after tax | - | 137,543 | - | 0.96 | - | 134,075 | - | 1.77 |
| Occupancy rate (in %) | 79.9 | 79.5 | ||||||
| Loan-to-value (in %) | 48.9 | 45.4 | ||||||
| Dividend | 0.25 | 0.28 |
"We have made an important step in our asset rotation strategy with the sale of our non-core portfolio. After having sold these nonperforming assets we can focus even more on those assets where we can achieve the best returns.
We have improved the quality level of our portfolio from an operational point of view. For example through the redevelopment of the retail center Zuiderterras. resulting in 3 new tenants, after which the shopping center is now fully let. Also the roll out of HNK progresses according to plan. In 2014 we opened 4 new HNK's. HNK now represents approximately 10% of the rental income of the Dutch office portfolio. The HNK concept convincingly demonstrates its strength with strong rental levels and a like-for-like growth of over 33%.
Although the letting market remains persistently challenging, it is good to see that NSI is capable of exploiting opportunities. Unfortunately this doesn't apply to real estate values, which are largely determined by market sentiment. The negative revaluations hurt, but fortunately, we have a solid financial position, as evidenced by the recently agreed refinancing.
In 2015 we will focus relentlessly on our letting and asset rotation activities, aimed at transforming our portfolio to a higher quality level."
| 2 nd half year |
1 st half year 2014 |
31-12-2014 | 31-12-2013 | |
|---|---|---|---|---|
| 2014 | ||||
| Results (x €1,000) | ||||
| Gross rental income | 66,596 | 67,003 | 133.599 | 144,564 |
| Net rental income | 54,306 | 54,854 | 109,160 | 121,791 |
| Direct investment result | 23,962 | 24,489 | 48,451 | 46,272 |
| Indirect investment result | - 92,507 |
- 93,487 |
- 185,994 |
- 180,347 |
| Result after tax | - 68,545 |
- 68,998 |
- 137,543 |
- 134,075 |
| Occupancy rate (in %) | 79.9 | 79.7 | 79.9 | 79.5 |
| Loan-to-value (debts to credit-institutions/real estate | 48.9 | 47.8 | 48.9 | 45.4 |
| investments in %) | ||||
| Issued share capital | ||||
| Ordinary shares with a nominal value of €0.46 | 143,201,841 | 143,201,841 | 143,201,841 | 143,201,841 |
| Average number of outstanding ordinary shares during period | 143,201,841 | 143,201,841 | 143,201,841 | 75,804,581 |
| under review | ||||
| Data per average outstanding ordinary share (x €1) | ||||
| Direct investment result | 0.17 | 0.17 | 0.34 | 0.61 |
| Indirect investment result | - 0.65 |
- 0.65 |
- 1.30 |
- 2.38 |
| Total investment result | - 0.48 |
- 0.48 |
- 0.96 |
- 1.77 |
| Data per average outstanding ordinary share (x €1) | ||||
| (Interim-) dividend | 0.12 | 0.13 | 0.25 | 0.28 |
| Net asset value | 4.41 | 5.02 | 4.41 | 5.59 |
| Net asset value according to EPRA | 4.69 | 5.31 | 4.69 | 5.85 |
In February 2014 NSI announced its redefined strategy. NSI's focus is on operational performance and transforming the current portfolio into a high quality core portfolio and a "value add" portfolio. The core portfolio will safeguard a solid cash flow (and dividend) that will enable the company to fund its investments in the "value add" portfolio. In combination with the stable performance of the core portfolio, unlocking the value potential in the value add portfolio will ultimately deliver the highest total returns. This also includes not wasting management time and capital on assets that are nog profitable. Key in this process will be transforming "value-add" properties into core properties by upgrading these properties and addressing customer needs and market trends.
In 2014, NSI has sold the entire non-core portfolio, involving 52,619 sqm of non-performing office space. These properties had an average vacancy of over 80%, a negative cash flow and lacked the perspective within the strategy of NSI to be redeveloped in a profitable way.
Furthermore, NSI sold properties of which the value under NSI's management was optimized, after these assets were fully let out.
| Action | Properties | sqm | Sqm leased | Financial |
|---|---|---|---|---|
| Occupancy % | ||||
| Sale of non-core: | ||||
| Offices | Uraniumweg 23, Amersfoort * | 6,658 | 0 | 0% |
| Hettenheuvelweg 12, Amsterdam * | 2,347 | 0 | 0% | |
| Hettenheuvelweg 14, Amsterdam * | 2,367 | 546 | 24% | |
| Paasheuvelweg 15, Amsterdam * | 1,929 | 851 | 53% | |
| Rivium Boulevard 82-100, Capelle a/d IJssel * | 1,875 | 285 | 34% | |
| Keulenstraat 6, Deventer * | 3,571 | 1,579 | 44% | |
| Snipperlingsdijk, Deventer * | 1,208 | 350 | 32% | |
| Hanzeweg 5, Gouda * | 5,855 | 0 | 0% | |
| Adelbert van Scharnlaan 170-180, Maastricht * | 3,937 | 956 | 31% | |
| Touwslagerstraat 17, Ridderkerk * | 1,711 | 0 | 0% | |
| Volmerlaan 7, Rijswijk * | 5,499 | 0 | 0% | |
| Van Houten Industriepark 23, Weesp * | 1,309 | 273 | 24% | |
| Zaagmolenlaan 12, Woerden * | 1,662 | 136 | 9% | |
| Engelandlaan 270-340, Zoetermeer * | 2,681 | 1,315 | 53% | |
| Kobaltweg, Utrecht | 10,009 | 737 | 12% | |
| Total offices | 52,619 |
| Action | Properties | sqm |
|---|---|---|
| Sale of non-core | ||
| Industrial | Tijnmuiden, Amsterdam | 1,883 |
| Beemsterweg, Almere | 10,926 | |
| Dukaat, Deurne | 2,722 | |
| Total Industrial | 15,531 | |
| Residential | Zevenkampsering, Rotterdam | 48 units |
| Total non-core | 68,150 | |
| Sale of value add: | ||
| Offices | Max Euwelaan, Rotterdam | 1,100 |
| Luchthavenweg, Eindhoven | 1,972 | |
| Bovendonk, Roosendaal* | 3,361 | |
| Villawal, Nieuwegein* | 5,783 | |
| Total Value add | 12,216 | |
| *) Transfer in 2015 |
NSI sold for €28.5 million of assets in 2014, of which €15.4 million of assets will be delivered in 2015. With the above mentioned transactions NSI has made a clear step in migrating to a higher quality in the portfolio. The sale of the non-core portfolio came with a book loss (€ 8.1 million), but has a positive effect on the direct result. The value-add properties were sold at book values.
In 2014, NSI transformed two office buildings (into a school and a hotel) and the transformation of two office properties into (student) housing are currently being prepared. These transformations involved in total 22,705 sqm, representing approximately 4% of the Dutch office portfolio.
| Action | Properties | sqm |
|---|---|---|
| Transformations into: | ||
| Hotel | Delftlandlaan, Amsterdam | 7,500 |
| School | Arlandaweg, Amsterdam | 4,205 |
| (Student)housing | 2 assets in Amsterdam | 11,000 |
| Total | 22,705 |
The roll out of HNK to 20 properties by the year 2016 in the office Dutch office portfolio is progressing according to schedule. In 2014, four new HNK properties have been opened, bringing the HNK´s in operation to 7 as per year end 2014.
| Action | Properties | sqm | |
|---|---|---|---|
| Transformations into: | |||
| HNK – completed | Oude Middenweg, Den Haag | 15,000 | |
| Van Diemenstraat, Amsterdam | 10,000 | ||
| Zernikepark, Groningen | 3,500 | ||
| Boogschutterstraat, Apeldoorn | 14,000 | ||
| HNK – in progress | Bennekomseweg, Ede | 10,331 | |
| Europalaan, Den Bosch | 7,500 | ||
| Arthur van Schendelstraat, | 9,200 | ||
| Utrecht |
Also in the retail portfolio, NSI added value through redevelopment and active management. In 2014 NSI completed the redevelopment of the Zuiderterras, part of shopping center Zuidplein in Rotterdam. The redevelopment resulted in the arrival of 3 new tenants. In shopping center Zevenkamp in Rotterdam active management resulted amongst others, in the relocation of tenants to new locations to accommodate new tenants and to facilitate expansions of existing tenants. Both retail centers are now fully let.
In 2014 NSI has thoroughly reviewed its retail portfolio and assessed how the changing retail landscape should be anticipated. This analysis has resulted in the decision to fully focus on the ´daily shopping needs´ segment in which ´convenience´ for the consumer is crucial. In addition, NSI has worked on a strategy in which NSI can support its retailers online in their business.
Due to the above actions, the Dutch portfolio in 2014 progressed as follows towards the targets set for 2016
Following the strengthening of the balance sheet after the private placement in November 2013, NSI has further implemented its financing strategy in 2014. The main objectives were to achieve greater diversification of funding sources, to extend the average maturity of the loan portfolio and to reduce financing costs. Moreover NSI sought a simplification and standardization of the loan documentation and structure.
The agreed facility of €550 million (subject to documentation) gives substance to all above mentioned objectives.
Characteristics of the new facility are:
The modest economic growth of 2014 is expected to continue in 2015 with a forecasted growth rate of 1.5%. The consumer confidence is growing, and thanks to increased purchasing power and the recovery of the housing market, consumer spending is expected to increase after years of contraction. Also on the labour market a tipping point seems to be reached. The unemployment rate has reached its peak in 2014 and is expected to decline in 2015. (source: CPB)
Despite these positive economic indicators, the letting market will remain challenging due to a number of structural dynamics, among others the changing demand of customers. Success on the letting market is therefore primarily determined by the ability to respond to the changing demand rather then by the business cycle. NSI has in both its office and retail portfolio a clear proposition that is anticipating these changing requirements. In 2015 NSI will therefore continue to focus on the further execution of its customer-centered strategy.
In the office portfolio, NSI will remain focused on the rollout of HNK. In its objective to evolve to a higher quality in the portfolio, NSI will remain focused on selling non-strategic properties.
In the retail portfolio, NSI will increase its focus on 'convenience' in its local neighborhood shopping centers. This new focus will fully determine the execution of the asset rotation strategy in the retail portfolio.
The total investment result, consisting of the sum of the direct and indirect investment results amounted to - €137.5 million in 2014 (2013: - €134.1 million), which mainly results from a positive operational result and negative revaluations of properties and financial instruments.
NSI uses the direct investment result (rental income less operating costs, service costs not recharged, administrative costs and financing costs) as a measure for the performance of its core business and for determining its dividend.
The direct result improved by 4.7% to €48.5 million in 2014 (2013: €46.3 million), as a result of lower financing costs which offset lower rental income.
The gross rental income amounted to €133.6 million compared with €144.6 million in 2013, mainly as result of loss of rental income due to sales (€5.4 million) and lower reversionary rent levels. The gross rental income remained stable at €33.3 million in the 4th quarter of 2014.
The occupancy rate of the total portfolio increased to 79.9% compared with 31 December 2013 (79.5%), being a stable development compared with 30 September 2014 (79,8%).
Offices NL
| Leasing activities 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Leases started (sqm) | Vacated (sqm) | Expired (sqm) | Renewed (sqm) | Disposed (sqm) | Retention | Financial occupancy | Take-up/ | ||||
| rate | as per 31 December 2014 | supply ratio2 | |||||||||
| 19,913 | 59,554 | 112,383 | 53,277 | 61,010 | 47.4% | 71.5% | 13.3% |
The occupancy rate declined to 71.5% compared with year-end 2013 (72.1%). The decline compared with 30 September 2014 (72.2%) was due to a number of large contract expirations and a number of exceptionals:
In the 4th quarter, assets for a total of 50,268 sqmm2 have been classified as 'held for sale' as NSI reached agreement on the sale of these assets. The transactions will only be completed after balance sheet date. These assets are no longer included in the calculation of the occupancy rate. The majority of these assets concern the non-core assets, which had an average occupancy rate of 23%. The impact of the sale of the non-core portfolio on the occupancy rate as per 31 December 2014 is 2.0%. Furthermore, 1 asset has been classified as 'real estate under development' due to the transformation to HNK (Arthur van Schendelstraat in Utrecht), after the contract of Prorail expired on 31 December 2014. Therefore this asset is also not included in calculation of the occupancy rate during the redevelopment, with an effect of 1.7% on the occupancy rate.
The retention rate was negatively affected by a number of large contract expired at 31 December 2014, including the Central Government Real Estate agency ("Rijksgebouwendienst", 5,000 sqm), ROC Amsterdam (5,000 sqm) and Prorail (9,000 sqm).
NSI signed 24,000 sqm of new leases (take-up) in the Dutch office portfolio in 2014. NSI continues to consistently perform better than the market average in terms of take-up. NSI realized a take-up of 2.4% of the total market take up, while the NSI portfolio represents 1.2% of the total market. The take-up/supply ratio of NSI was 13.3%, compared with 12.5% in the total office market.
The effective rent level of new leases in the office portfolio, taking incentives into account, amounted to €128 per sqm in 2014. This is significantly above the 2013 level (€106 per sqm), partly as a result of the growing share of HNK lettings. The effective rent level for the overall Dutch office portfolio amounted to €134 per sqm as per 31 December 2014 (31 December 2013: €144 per sqm) due to the expiration of a number of large long term leases. The average lease duration of the portfolio was 3.8 years as per 31 December 2014.
The roll-out of the HNK concept is progressing according to plan, with 7 HNK's in operation at year-end 2014. Furthermore, the transformations of the HNK's in Ede (ca. 10,000 sqm), Den Bosch (ca. 7,500 sqm) and Utrecht (9,000 sqm) have commenced. Given the success of HNK Utrecht, NSI decided to open a second HNK in Utrecht. The property at the Arthur van Schendelstraat, which became available as per 31 December 2014 after Prorail vacated the property, is a perfect HNK location and located nearby Utrecht Central Station. The first lease agreement for 1,100 sqm has already been signed for this property.
HNK continues to perform strongly. 44% of the new letting transactions in the office portfolio relate to HNK. HNK realized a take-up/supply ratio of 26%, which is twice as the market average. The effective rent level of new leases of €188 per sqm is significantly higher than in the traditional office portfolio. Also the significant higher conversion rate from interest to transaction emphasizes the strength of the proposition.
The average occupancy rate in HNK was 56.6% The gross rental income from HNK amounted to €5.4 million, representing 9.9% of the gross rental income of the Dutch office portfolio in 2014.
HNK realized a like-for-like growth of 33.7%in 2014, and grew 13.6% organically in the 4th quarter versus the 3rd quarter on 2014.
NSI invested €5.1 million in HNK in 2014, bringing the total cumulative investments in the HNK roll-out to €11.7 million, out of the total 3-years investment plan of €31.0 million.
| Leasing activities 2014 | |||||
|---|---|---|---|---|---|
| Leases started (sqm) | Vacated (sqm) | Expired (sqm) | Renewed (sqm) | Retention rate | Financial occupancy |
| as per 31 December 2014 | |||||
| 16,155 | 15,597 | 63,279 | 47,715 | 75% | 88.4% |
The occupancy rate of the retail portfolio improved from 87.8% per 31 December 2013 to 88.4% (30 September 2014: 88.8%). The most important driver of the improvement was the completion of the redevelopment of the Zuiderterras, after which NSI was able to accommodate 3 new tenants, including crowd puller Primark.
he effective rent level of new leases amounted to €169 per sqm in 2014 The effective rent level for the overall Dutch retail portfolio amounted to €182 per sqm at year-end 2014. The average lease duration of the portfolio increased to 4.5 years (31 December 2013: 4.0 years).
The occupancy rate of the Belgian portfolio increased to 86.0% (31 December 2013: 85.0%, 30 September 2014: 84.8%) as a result of an increase in the office portfolio to 82.7% (31 December 2013: 81.5%). The industrial portfolio at the end of December 2014 remained stable at 91.2% (31 December 2013: 91.3%), despite the sale of a fully let semi-industrial property at the beginning of 2014.
The leasing activity was primarily focused on the renewal of existing lease agreements in 2014. In total, agreements representing 20% of the annual rental income were extended, while 2% worth of new lease agreements were signed. The main contract extensions are with Hewlett-Packard Belgium in the office segment portfolio and with Nike Europe and CEVA Logistics Belgium in the logistics portfolio. Furthermore, the agreements with Sofidel Benelux in Duffel was long term extended. Sofidel will fully integrate its production site with the warehouse of Intervest Offices & Warehouses.
In 2014 and early 2015, Intervest Warehouses and Offices made further progress in delivering on its strategic objective to grow the share of its logistics portfolio to 60%. Following the acquisitions, for in total €61.9 million, of the logistic site in Opglabbeek (77,000 sqm) by the end of 2014 and the site in Luik (52.000 m2) in February 2015, the logistics portfolio represents now 48%.
| 2014 | 2013 |
|---|---|
| 93,333 | 103,208 |
| 72,053 | 81,578 |
| 40,266 | 40,219 |
| 37,067 | 39,304 |
Gross rental income by segment in the Netherlands, Belgium and Switzerland
| x € 1,000 | 2013 | Purchases | Disposals | Organic Growth | 2014 |
|---|---|---|---|---|---|
| The Netherlands | |||||
| Offices | 57,915 | - | -892 | -981 | 54,659 |
| Retail | 32,181 | - | -1,855 | -3,554 | 26,772 |
| Large scale retail | 6,591 | - | -1,225 | 5,366 | |
| Industrial | 6,212 | - | -660 | -518 | 6,416 |
| Residential | 309 | - | -189 | - | 120 |
| Total | 103,208 | - | -3,596 | -6,279 | 93,333 |
| Switzerland | |||||
| Offices | 318 | - | -318 | - | - |
| Retail | 819 | - | -819 | - | - |
| Total | 1,137 | - | -1,137 | - | - |
| Belgium | |||||
| Offices | 24,807 | - | - | -67 | 24,740 |
| Industrial | 15,412 | 67 | -714 | 761 | 15,526 |
| Total | 40,219 | 67 | -714 | 693 | 40,266 |
| Total NSI | 144,564 | 67 | -5,447 | -5,585 | 133,599 |
The lower rental income in 2014 compared with 2013 is for 50% caused by the sale of properties. In 2013, 5 office properties, 5 retail centres and 2 industrial properties were sold in the Dutch portfolio. In Belgium an industrial property and a plot of land were sold. Furthermore, the last remaining Swiss assets, an office property and a retail centre, were sold.
The organic (like-for-like) rental development of the retail portfolio was for approx. 70% impacted by the redevelopments in two assets; shopping centres Zuidplein and 't Loon. In Zuidplein, the impact of the strategic early termination of the contract with MediaMarkt Saturn (1January), to be able to facilitate Primark (1 November). The impact of this strategic decision was approx. -€1,0 million. The impact of shopping centre 't Loon in the organic growth was approx. -€1.5 million. The negative organic growth in the large scale retail is mainly caused by a (previously disclosed) rent reduction with a home furniture store. On a like-for-like growth in the office portfolio, growth was -1.7%. The rental development in the 4th quarter was stable versus the 3rd quarter.
Gross rental income by segment in the Netherlands and Belgium:
| x €1,000 | Q3 2014 | Purchases | Disposals | Organic Growth | Q4 2014 |
|---|---|---|---|---|---|
| The Netherlands | |||||
| Offices | 13,545 | - | - | -7 | 13,538 |
| Retail | 6,637 | - | - | -60 | 6,578 |
| Large scale retail | 1,370 | - | - | -73 | 1,297 |
| Industrial | 1,681 | - | 32 | -32 | 1,681 |
| Residential | - | - | - | - | - |
| Total | 23,233 | - | 32 | -171 | 23,095 |
| Belgium | |||||
| Offices | 6,241 | - | - | -35 | 6,206 |
| Industrial | 3,833 | 67 | - | 88 | 3,989 |
| Total | 10,074 | 67 | - | 53 | 10,194 |
| Total NSI | 33,307 | 67 | 32 | -117 | 33,289 |
Service costs not recharged to tenants increased in 2014 to €5.8 million (2013: €4.7 million), but remained stable in the 2nd half compared with the 1st half (€2.9 million). The increase is caused by start up costs of new HNK properties and fragmented vacancy in multi-tenant properties.
The operating costs amounted to €18.6 million in 2014 (2013: €18.1 million) and showed a slight increase in the 2nd half of 2014 (€9.4 million) due to higher maintenance costs and increased letting costs. The letting costs reflect the intensified efforts required to acquire new tenants, but also the trend of smaller contracts and shorter durations resulting in more contract handling.
Financing costs significantly decreased to €42.4 million in 2014 compared with €58.0 in 2013, due to a lower debt position following the equity placement in November 2013 and the improved financing terms related to this.
The indirect investment result for 2014 amounted to €186.0 million negative (2013: -€180.3 million). The indirect investment result consists of both realized revaluations (sales results on investments sold) and unrealized revaluations. These unrealized revaluations concern primarily the changes in the market value of the property portfolio (-€183.1million). The indirect investment result amounted to -€92.5 million in the 2nd half of 2014 (1st half 2014: -€93.5 million, mainly as result of revaluations in the property portfolio (-€93.1 million).
The realised revaluations include the result on sales (-€1.4 million) of transactions completed in 2014, being 3 office properties, 3 industrial assets and 48 residential units in the Netherlands and the sale of a semi-industrial asset in Belgium.
The effect of the value of the derivatives on the indirect investment result amounted to - € 2.6 million in 2014 as result of the low Euribor-rates, compared with a positive effect of €26.2 million in 2013.
NSI utilizes interest-rate hedging instruments exclusively to limit operational interest rate risks. There is no 'over-hedging situation' and NSI is not exposed to margin calls. The value of the financial derivatives automatically reverts to zero at the end of the duration of these instruments.
Values in the Dutch portfolio remained under pressure, resulting in revaluations of - €177.9 million in 2014 (€90.5 million in the 2nd half of 2014), of which -€122.5 million was related to the Dutch office portfolio (-€63.0 million in the 2nd half of 2014), -€41.6 million to the retail portfolio (-€19.2 million in the 2nd half of 2014) and €13.6 million to the large scale retail portfolio (-€7.5 million in the 2nd half of 2014. The value of the Dutch industrial portfolio remained stable.
A change in market yields caused the largest impact on revaluations in both the office and the retail portfolio. Furthermore, there were some exceptional situations in the 2nd half of the year. NSI reached agreement about the sale of a portfolio of noncore assets. As the sale was not yet completed as per 31 December 2014, the book loss (€8.1 million) on this sale is included in the revaluations. Corrected for this exceptional item, the negative revaluation was lower in 2nd half of the year compared with the 1st half year of 2014.
Shoppingcenter 't Loon had a large impact (€12.7 million) in the retail portfolio. The reconstruction and redevelopment will be completed on 5 March 2015 when the completely renewed C&A store will be officially opened. In the large scale retail environments, the revaluations were mainly caused by the continued challenging market conditions. This resulted in pressure on market rents and specifically by a rent reduction provided to a home furniture store.
In the Belgian portfolio, a negative revaluation in the office portfolio (€7.0 million) was partially offset by a positive revaluation in the industrial portfolio (€1.8 million), resulting in a total revaluation of - €5.2 million.
| FY 2014 | HY1 2014 | HY1 2014 | FY 2013 | HY2 2013 | HY1 2013 | 2012 | 2011* | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Offices | - | 122,519 | - | 63,010 | - | 59,510 | - | 131,658 | - | 68,951 | - | 62,707 | - | 102,090 | - | 31,400 |
| Retail | - | 41,604 | - | 19,232 | - | 22,371 | - | 38,812 | - | 25,395 | - | 13,417 | - | 11,304 | - | 72 |
| Large scale retail | - | 13,645 | - | 7,486 | - | 6,159 | - | 11,284 | - | 7,689 | - | 3,595 | - | 5,120 | - | 550 |
| Industrial | - | 109 | - | 758 | 650 | - | 11,024 | - | 7,178 | - | 3,845 | - | 6,094 | - | 1,351 | |
| Residential | - | - | - | 575 | - | 490 | - | 85 | - | 155 | 135 | |||||
| Total | - | 177,876 | - | 90,487 | - | 87,390 | - | 193,352 | - | 109,703 | - | 83,649 | - | 124,763 | - | 33,238 |
*) In accordance with IFRS the figures prior to the merger with VNOI (first three quarters of 2011) have not been amended and represent only NSI. As of the fourth quarter of 2011 all results of NSI and VNOI are fully consolidated.
.
| FY 2014 | HY2 2014 | HY1 2014 | 2013 | 2012 | Q4 2011 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Offices | - | 6,971 | - | 4,845 | - | 2,126 | - | 19,308 | - | 21,899 | 2,555 | |
| Retail | 1,773 | 2,218 | - | 445 | 20,513 | 7,946 | - | 6,126 | ||||
| Total | - | 5,198 | - | 2,627 | - | 2,572 | 1,205 | - | 13,953 | - | 3,571 |
The EPRA net initial yield (NI yield) is calculated as annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable operating and service costs, divided by the market value of the property, increased with (estimated) purchasers' costs.
The EPRA Topped-up NI yield is calculated as an adjustment to the EPRA NI yield in respect of the expiration of rent free periods (or other unexpired lease incentives).
| EPRA GIY | EPRA NIY | EPRA | EPRA GIY | EPRA NIY | EPRA | |
|---|---|---|---|---|---|---|
| topped up NIY | topped up NIY | |||||
| 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | |
| Offices | 8.4% | 6.3% | 6.5% | 8.1% | 6.4% | 6.6% |
| Retail | 7.0% | 6.0% | 6.1% | 6.7% | 5.6% | 5.6% |
| Large scale retail | 7.8% | 6.0% | 6.0% | 7.9% | 6.9% | 6.9% |
| Industrial | 8.8% | 7.5% | 7.5% | 9.2% | 8.1% | 8.1% |
| Residential | - | - | - | - | 5.5% | 5.5% |
| Total Netherlands | 7.9% | 6.2% | 6.4% | 7.7% | 6.3% | 6.4% |
| Total Belgium | 6.9% | 6.3% | 6.9% | 6.9% | 6.3% | 6.7% |
| Total | 7.6% | 6.3% | 6.6% | 7.5% | 6.3% | 6.5% |
In 2014 NSI received a Gold Medal and the award for Most Improved Annual Report for its annual report 2013. The Gold Medal is being awarded to companies for their exceptional compliance with the Best Practice Recommendations (BPR) of EPRA in order to improve transparency and consistency in financial reporting.
The value of the real estate investments amounted to €1,668.2 million on 31 December 2014 (2013 €1,808.8 million). This is the result of the balance of disposals, revaluations, acquisitions and investments.
The LtV (loan-to-value) was 48.9% on 31 December 2014 (31 December 2013 45.4%) mainly as result of negative revaluations. NSI is committed to maintain the LtV level below 50%.
Debts to credit institutions amounted to €815.5 million as per 31 December 2014 (31 December 2013: €821.9 million). The funding available to the company under the committed credit facilities as at 31 December 2014 amounted to €201.0 million (31 December 2013: €150.8 million).
The average remaining maturity of the loans amounted to 2.0 years at 31 December 2014 (31 December 2013: 2.2 years), but will be significantly extended to 4.0 years by the new facility, subject to documentation, as announced today.
In April 2014, Intervest Offices & Warehouses successfully placed 2 bonds for a total amount of €60 million, with maturities of respectively 5 years (€25 million, interest rate 3.430%) and 7 years (€35 million, interest rate 4.057%), expiring respectively on 1 April 2019 and 1 April 2021. The proceeds have been used to repay temporary committed bank facilities. These bonds will replace the current outstanding bond of 75 million with a coupon of 5.1%, which will be repaid on 29 June 2015. Until then, the financing costs will be temporarily higher.
Furthermore, the refinancing of € 59 million that would expire in 2016 has been completed, with the term of the loans being extended to 2018, 2019 and 2020.
The fixed-interest part of the interest bearing debt, including interest rate swaps, increased from 82.4% at year-end 2013 to 89.7% as at 31 December 2014, mainly as result of the earlier mentioned pre-funding through the Belgian bond issue.
The average costs of debt (including margins) decreased from 4.8% as at year-end 2013 to 4.6% as per 31 December 2014. The average cost of debt is based on the current interest margins by quarter end, which does not reflect the average interest margin for the period.
The interest coverage ratio amounted to 2.6 as per 31 December 2014.
NSI's equity decreased to €788.3 million (31 December 2013: €932.9 million), predominantly as the result of the loss of €137.5 million, the cash dividend payments (€31.5 million) and the increase in the minority interest (€24.4 million).
Intervest Warehouses & Offices issued new shares for an amount of €26 million on 22 December 2014, in relation to the acquisition of the logistical site in Opglabbeek.
The net asset value, including the market value of the derivatives, decreased to €4.41 per share on 31 December 2014 (31 December 2013: €5.59, 30 June 2014: €5.02). If the value of the derivatives are excluded (the net asset value according to EPRA), the net asset value amounts to €4.69 per share (31 December 2013: €5.85, 30 June 2014: €5.31).
In line with the applicable dividend policy (pay-out of the direct result of at least 75% of the direct result), NSI proposes a final dividend of €0.12 per share in cash. This totals the 2014 dividend to €0.25 per share of which €0.13 has already been distributed as interim dividend.
The value of the real estate portfolio decreased by €140.6 million to €1,668.2 million in 2014 (year-end 2013: €1,808.8). This decrease is the result of revaluations of (- €183.1 million), disposals of (€16.2 million), investments (€25.7 million) and acquisitions (€33.0 million).
| Sold in 2nd half year 2014 | Sold in 1st half year 2014 | Sold in 2014, transfer in 2015 |
|---|---|---|
| (held for sale) | ||
| Office Kobaltweg Utrecht | Office Max Euwelaan Rotterdam | Portfolio non-core assets (table pag. 4) |
| Office Luchthavenweg Eindhoven | 48 residential units Rotterdam | Office Bovendonk Roosendaal |
| Industrial property Dukaat Deurne | Industrial property Tijnmuiden | Office Villawal Nieuwegein |
| Industrial property Beemsterweg | Amsterdam | |
| Almere |
In Belgium, a logistical site of 77,000 sqm in Opglabbeek (€33.1 million) has been acquired in 2014. Furthermore, Intervest Offices & Warehouses announced the acquisition of a logistical site (52,000 sqm) in Luik on 5 February 2015. When including these acquisitions, the logistical portfolio accounts now for 48% of the portfolio of Intervest Offices & Warehouses, progressing towards the strategic target of 50%.
Furthermore, a semi-industrial asset was sold (Riyadstraat, Meer) in the Belgian portfolio.
The annualized rental income of the properties sold in 2015 amount to €2.2 million.
The most important investments included the roll out of HNK (€5.1 million), the redevelopment of Zuiderterras in Rotterdam (€3.8 million) and the reconstruction of shopping centre 't Loon (€6,0 million).
| in % | # assets | x € 1.000 | |
|---|---|---|---|
| Sector spread | |||
| Offices | 54 | 164 | 896,201 |
| Retail | 26 | 42 | 431,075 |
| Industrial | 20 | 43 | 340,300 |
| Total real estate investments | 100 | 249 | 1,668,176 |
| Geographical spread | |||
| The Nederland's | 63 | 211 | 1.056.30 |
| Belgium | 37 | 38 | 611,446 |
| Total real estate investments | 100 | 249 | 1,668,176 |
As at 31 December 2014, the portfolio consisted of 249commercial properties, spread across:
The occupancy rate of the entire portfolio as at 31 December 2014 rose to 79.9% (31 December 2013: 79.5%, 30 September 2014: 79.8%)). Occupancy levels as at 31 December 2014 per sector were: 75.0% in offices, 87.2% in industrial premises and 88.4% in retail and 84.5% in large-scale retail. Occupancy levels per country were: 77.1% in the Netherlands and 86.0% in Belgium.
The occupancy rate in the total office portfolio remained stable at 75.0%. The occupancy rate in the Belgian office portfolio improved from 81.5% (31 December 2013) to 82.7%. The occupancy rate of the Dutch office portfolio (71.5%) declined (31 December 2013: 72.1%, 30 September 72.2%), amongst other due to a number of large contract expiration at year end 2014.
The occupancy rate improved in the retail portfolio from 87.8% per 31 December 2014 to 88.4% (30 September 2014: 88.8%), amongst other due to the completion of the redevelopment of Zuiderterras. The occupancy rate was stable at 84.5% in the large scale retail portfolio (31 December 2013: 84.7%).
The occupancy rate in the total logistics portfolio decreased from 88.0% as at 31 December 2013 to 87.2% as per 31 December 2014 (30 September 2014: 88.4%). The occupancy rate of the Belgian portfolio remained stable at 91.2% (31 December 2013: 91.3%) despite the sale of a fully let industrial property in the 1st quarter of 2014.
| Netherlands | Belgium | Total | |
|---|---|---|---|
| Offices | 76,712 | 32,957 | 109,669 |
| Retail | 32,140 | 32,140 | |
| Large scale retail | 6,703 | 6,703 | |
| Industrial | 7,764 | 21,155 | 28,919 |
| Total | 123,319 | 54,112 | 177,431 |
The annualized contractual rental income from the real estate portfolio as at 31 December 2014 amounted to € 140.1 million (31 December 2013: € 145.0 million, 30 June 2014: € 143.2 million).
| 2014 | 2013 | |
|---|---|---|
| Results (x €1,000) | ||
| Gross rental income | 133,599 | 144,564 |
| Net rental income | 109,160 | 121,791 |
| Direct investment result | 48,451 | 46,272 |
| Indirect investment result | - 185,994 |
- 180,345 |
| Result after tax | - 137,543 |
- 134,075 |
| Occupancy rate (in %) | 79,9 | 79,5 |
| Balance sheet data (x €1,000) | ||
| Real estate investments | 1,668,176 | 1,808,768 |
| Shareholders' equity | 788,302 | 932,915 |
| Shareholders' equity attributable to NSI | 632,112 | 801,159 |
| shareholders | ||
| Net debts to credit institutions (excluding other | ||
| investments) | 815,483 | 821,854 |
| Loan-to-value (debts to credit institutions/ real | ||
| estate investments in %) | 48.9 | 45.4 |
| Issued share capital (in shares) | ||
| Ordinary shares with a nominal value of €0,46 | ||
| during period under review | 143,201,841 | 143,201,841 |
| Average number of outstanding ordinary shares | ||
| during period under review | 143,201,841 | 75,804,581 |
| Data per average outstanding ordinary share (x | ||
| €1) | ||
| Direct investment result Indirect investment result |
0.34 - 1.30 |
0.61 - 2.38 |
| Total investment result | - 0.96 |
- 1.77 |
| Data per share (x €1) | ||
| (Interim-) dividend | 0.25 | 0.28 |
| Net asset value | 4.41 | 5.59 |
| Net asset value according to EPRA | 4.69 | 5.85 |
| Average stock-exchange turnover | ||
| (shares per day, without double counting) | 177,660 | 199,858 |
| High price | 5.04 | 7.00 |
| Low price | 3.57 | 4.51 |
| Closing price | 3.68 | 4.60 |
| 2014 | 2013 | 2 | nd halfyear 2014 | 2 | nd halfyear 2013 | |||
|---|---|---|---|---|---|---|---|---|
| Gross rental income | 133,599 | 144,564 | 66,596 | 70,952 | ||||
| Service costs nog recharged to tenants | - | 5,828 | - | 4,723 | - | 2,902 | - | 2,359 |
| Operating costs | - | 18,611 | - | 18,050 | - | 9,388 | - | 9,268 |
| Net rental income | 109,160 | 121,791 | 54,306 | 59,325 | ||||
| Financing income | 176 | 477 | 53 | 321 | ||||
| Financing costs | - | 42,391 | - | 58,042 | - | 21,063 | - | 29,702 |
| Administrative costs | - | 7,711 | - | 6,458 | - | 3,934 | - | 3,371 |
| Direct investment result before tax | 59,234 | 57,768 | 29,362 | 26,573 | ||||
| Corporate income tax | - | 111 | - | 121 | - | 44 | - | 55 |
| Direct investment result after tax | 59,123 | 57,647 | 29,318 | 26,518 | ||||
| Direct investment result attritutable to non | ||||||||
| controlling interest | - | 10,672 | - | 11,375 | - | 5,356 | - | 5,717 |
| Direct investment result | 48,451 | 46,272 | 23,962 | 20,801 | ||||
| Revaluation of real estate investments | - | 183,075 | - | 192,314 | - | 93,114 | - | 112,318 |
| Elimination of rental incentives | 54 | 1,049 | - | 527 | 186 | |||
| Revaluation of other investments | - | - | 3,536 | - | - | - | 3,536 | |
| Net result on sales of real estate investments | - | 1,358 | - | 3,649 | - | 674 | - | 2,836 |
| Movements in market value of financial derivatives | 2,488 | 25,705 | - | 1,371 | 8,116 | |||
| Exchange-rate differences | 72 | 287 | 41 | - | 214 | |||
| Allocated management costs | - | 2,261 | - | 2,546 | - | 1,131 | - | 1,273 |
| Indirect investment result before tax | - | 189,164 | - | 175,578 | - | 94,034 | - | 111,875 |
| Corporate income tax | 22 | 95 | 22 | 93 | ||||
| Indirect investment result after tax | - | 189,186 | - | 175,483 | - | 94,056 | - | 111,626 |
| Indirect investment result attributable to non | ||||||||
| controlling interest | - | 3,192 | - | 4,864 | - | 1,549 | - | 93 |
| Indirect investment result | - | 185,994 | - | 180,347 | - | 92,507 | - | 111,626 |
| Total investment result | - | 137,543 | - | 134,075 | - | 68,545 | - | 90,825 |
| Data per average outstanding share (x €1) | ||||||||
| Direct investment result | 0.34 | 0.61 | 0.61 | 0.24 | ||||
| Indirect investment result | - | 1.30 | - | 2.38 | - | 0.65 | - | 1.38 |
| Total investment result | - | 0.96 | - | 1.77 | - | 0.48 | - | 1.14 |
| 2014 | 2013 | ||||
|---|---|---|---|---|---|
| Gross rental income | 133,599 | 144,564 | |||
| Service costs recharged to tenants | 21,104 | 22,016 | |||
| Service costs | - 26,932 |
- 26,739 |
|||
| Service costs not recharged to tenants | - 5,828 |
- | 4,723 | ||
| Operating costs | - 18,611 |
- | 18,050 | ||
| Net rental income | 109,160 | 121,791 | |||
| Revaluation of investments | - 183,129 |
- | 194,801 | ||
| Proceeds sales | 14,876 | 120,035 | |||
| Book value sales | - 16,234 |
- 123,684 |
|||
| Net result on sales of investments | - 1,358 |
- | 3,649 | ||
| Total net proceeds from investments | - 75,327 |
- | 76,659 | ||
| Administrative costs | - 9,972 |
- | 9,004 | ||
| Financing income | 244 | 264 | |||
| Financing costs | - 42,387 |
- 58,116 |
|||
| Movements in market value of financial derivatives | - 2,488 |
25,705 | |||
| Net financing result | - 44,631 |
- | 32,147 | ||
| Result before tax | - 129,930 |
- | 117,810 | ||
| Corporate income tax | - 133 |
- | 26 | ||
| Result after tax | 130,063 | - | 117,836 | ||
| Exchange-rate differences on foreign participations | - | - | 1 | ||
| Total non-realised result | - | - | 1 | ||
| - 130,063 |
- | 117,837 | |||
| Total realised and non-realised result | |||||
| Result after tax attributable to: | |||||
| NSI shareholders | - 137,543 |
- | 134,075 | ||
| Non-controlling interest | 7,480 | 16,239 | |||
| Result after tax | - 130,063 |
- | 117,836 | ||
| Total realised and non-realised result attributable | |||||
| to: | |||||
| NSI shareholders | - 137,543 |
- | 134,076 | ||
| Non-controlling interest | 7,480 | 16,239 | |||
| Total comprehensive income | - 130,063 |
- | 117,837 | ||
| Data per average outstanding share (x €1) |
Before proposed profit appropriation 2014 (x €1,000)
| 31-12-2014 | 31-12-2013 | |
|---|---|---|
| Assets | ||
| Real estate investments | 1,645,271 | 1,808,768 |
| Intangible assets | 8,449 | 8,481 |
| Tangible assets | 1,952 | 2,865 |
| Financial derivatives | - | 234 |
| Total fixed assets | 1,655,672 | 1,820,348 |
| Assets held for sale | 22,905 | - |
| Debtors and other accounts receivable | 11,374 | 14,291 |
| Cash | 10,235 | 13,204 |
| Total current assets | 44,514 | 27,495 |
| Total assets | 1,700,186 | 1,847,843 |
| Shareholders' equity | ||
| Issued share capital | 65,872 | 65,872 |
| Share premium reserve | 923,435 | 923,435 |
| Other reserves | - 219,652 |
- 54,073 |
| Retained earnings | - 137,543 |
- 134,075 |
| Total shareholders' equity attributable to | ||
| shareholders | 632,112 | 801,159 |
| Non controlling interest | 156,190 | 131,756 |
| Total shareholders' equity | 788,302 | 932,915 |
| Liabilities | ||
| Interest-bearing loans | 492,046 | 707,300 |
| Financial derivatives | 38,406 | 36,857 |
| Total long-term liabilities | 530,452 | 744,157 |
| Redemption requirement long-term liabilities | 300,826 | 106,579 |
| Financial derivatives | 1,536 | 517 |
| Debts to credit institutions | 32,846 | 21,179 |
| Other accounts payable and deferred income | 46,224 | 42,496 |
| Total current liabilities | 381,432 | 170,771 |
| Total liabilities | 911,884 | 914,928 |
| Total shareholders' equity and liabilities | 1,700,186 | 1,847,843 |
| 2014 | 2013 | |||
|---|---|---|---|---|
| Result after tax | - | 130,063 | - | 117,836 |
| Adjusted for: | ||||
| Revaluation of real estate investments | 183,075 | 192,314 | ||
| Net result on sales of investments | 1,358 | 3,649 | ||
| Book profit on divestment tangible fixed assets | - 18 |
- | 24 | |
| Net financing expenses | 44,631 | 32,147 | ||
| Corporate income tax | - 133 |
- | 26 | |
| Depreciation | 408 | 725 | ||
| Cash flow from operating activities | 229,321 | 228,785 | ||
| Movements in debtors and other accounts receivable | 2,903 | 5,850 | ||
| Movements in other liabilities, accrued expenses and | 1,109 | 359 | ||
| deferred income | ||||
| Financing income | 244 | 264 | ||
| Financing expenses | - | 39,773 | - | 59,603 |
| Tax paid | 465 | 1,522 | ||
| Cash flow from operations | 64,206 | 59,341 | ||
| Purchases of real estate and investments in existing | ||||
| properties | - | 58,717 | - | 18,221 |
| Proceeds of sales of real estate investments | 14,876 | 120,035 | ||
| Investments in tangible fixed assets | - | 185 | - | 662 |
| Divestments of tangible fixed assets | 774 | 70 | ||
| Investments in intangible fixed assets | - | 33 | - | 66 |
| Cash flow from investment activities | - | 43,285 | 101,156 | |
| Dividend paid | - | 38,415 | - | 27,882 |
| Costs related to optional dividend | - | - | 8 | |
| Share issue | 23,865 | 294,341 | ||
| Issue costs | - | - | 5,487 | |
| Unwinding derivatives | - | - | 17,122 | |
| Drawdown of loans | 115,397 | 31,653 | ||
| Redemption of loans | - | 136,404 | - | 364,554 |
| Cash flow from financing activities | - | 35,557 | - | 89,059 |
| Netto kasstroom | - | 14,636 | 71,438 | |
| Exchange-rate differences | - | - | 301 | |
| Cash and debts to credit institutions as of 1 January | - | 7,975 | - | 79,112 |
| Cash and debts to credit institutions as of 31 | ||||
| December | - | 22,611 | - | 7,975 |
The development of the item shareholders' equity 2014 was as follows:
| issued share capital |
share premium reserve |
other reserves | retained earnings |
total share holders' equity attributable to shareholders |
non controlling interest |
total share holders'- equity |
||||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of 1 January 2014 | 65,872 | 923,435 | - 54,073 |
- | 134,075 | 801,159 | 131,756 | 932,915 | ||
| Result 2014 | - | - | - | 137,543 | - | 137,543 | 7,480 | - | 130,063 | |
| Total realised and non-realised results | ||||||||||
| 2014 | - | - | - | - | 137,543 | - | 137,543 | 7,480 | - | 130,063 |
| Distributed final dividend 2013 in cash |
- | - | - 12,888 |
- | - | 12,888 | - 6,911 |
- | 19,799 | |
| Profit appropriation 2013 | - | - | 134,075 | - | 134,075 | - | - | - | ||
| Distributed interim-dividend 2014 in | ||||||||||
| cash | - | - | - 18,616 |
- | - | 18,616 | - | 18,616 | ||
| Share issue | - | - | - | - | - | 23,865 | 23,865 | |||
| Total contributions by and to | ||||||||||
| shareholders | - | - | - 165,579 |
- | 134,075 | - | 31,504 | 16,954 | - | 14,550 |
| Balance as of 31 December 2014 | 65,872 | 923,435 | - 219,652 |
- | 137,543 | 632,112 | 156,190 | 788,302 |
The development of the item shareholders' equity per over 2013 was as follows:
| issued share capital |
share premium reserve |
other reserves | retained earnings |
total share holders' equity attributable to shareholders |
non controlling interest |
total share holders'- equity |
|
|---|---|---|---|---|---|---|---|
| Balance as of 1 January 2013 | 31,372 | 657,912 | 80,683 | - 103,117 |
666,850 | 122,938 | 789,788 |
| Result 2013 | - | - | - | - 134,075 |
- 134,075 |
16,239 | - 117,836 |
| Exchange-rate differences on foreign | |||||||
| participations | - | - | - 1 |
- | - 1 |
- | - 1 |
| Total realised and non-realised results | |||||||
| - | - | - 1 |
- 134,075 |
- 134,076 |
16,239 | - 117,837 |
|
| Distributed final dividend 2012 in cash |
- | - | - 7,502 |
- | - 7,502 |
- 7,421 |
- 14,923 |
| Costs related to optional dividend | - | - | - 8 |
- | - 8 |
- | - 8 |
| Profit appropriation 2012 | - | - | - 103,117 |
103,117 | - | - | - |
| Distributed interim-dividend 2013 in | - | - | - 12,959 |
- | - 12,959 |
- | - 12,959 |
| cash | |||||||
| Issue of shares | 34,500 | 265,523 | - 11,169 |
- | 288,854 | - | 288,854 |
| Total contributions by and to | |||||||
| shareholders | 34,500 | 265,523 | - 134,755 |
103,117 | 268,385 | - 7,421 |
260,964 |
| Balance as of 31 December 2013 | 65,872 | 923,435 | - 54,073 |
- 134,075 |
801,159 | 131,756 | 932,915 |
| Date | |
|---|---|
| Publication annual report 2013 & convocation AGM | Mid March 2015 |
| AGM | 30 April 2015 |
| Publication trading update first quarter 2015 | 8 May 2015 |
| Publication first half year results 2015 | 31 July 2015 |
| Publication trading update third quarter 2015 | 30 October 2015 |
| Dividend distribution 2015 | Date |
|---|---|
| Setting of final dividend for 2014 | 30 April 2015 |
| Listing ex-dividend | 6 May 2015 |
| Payment of final dividend for 2014 | 12 May 2015 |
The figures in this press release have not been audited.
NSI will host a conference call and audiocast at 10.00 a.m. CET for analysts.
The dial in number for the conference call (participation code: 53740461# )is: Netherlands: +31 (0) 20 717 68 68 United Kingdom +44 (0)20 30 43 24 42 United States +1 914 885 07 80 Israel (toll free) - 1 809 214 432
__________________________________________________________________________
To subscribe for the audiocast, please use the following link: http://player.companywebcast.com/nsi/20150213_1/en/player
NSI creates - with and for its customers - inspiring environments to meet, work and do business. NSI realises this by investing in offices and retail in attractive, high-quality locations in the Netherlands and Belgium. NSI is a publicly listed real estate company, and manages invested assets of around €1.7 billion.
End press release
For more information: NSI N.V. – Eva Lindner T +31(020) 763 0300 E [email protected] / I www.nsi.nl/
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