Earnings Release • Nov 17, 2017
Earnings Release
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14 November 2017 – After closing of markets Under embargo until 17:40 CET
Public limited liability company Public regulated real estate company under Belgian law Registered office: avenue Louise 331-333, 1050 Brussels Enterprise number: 0877.248.501 (RLE Brussels) (the "Company")
* Alternative Performance Measure (APM) in accordance with ESMA (European Securities and Market Authority) guidelines published on 5 October 2015. For many years, Aedifica has used Alternative Performance Measures according to the guidelines issued by the ESMA in its communication. Some of these APM are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of its results and performance. The APM used in this interim statement are identified with an asterisk (*). The performance measures which are defined by IFRS standards or by Law are not considered as APM, neither are those which are not based on the consolidated income statement or the balance sheet. The APM are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements, in Appendix 3 below.
Aedifica's investment strategy is mainly built on the strength of the demographic trend toward population ageing in Europe. This strategy has contributed to the market's confidence in Aedifica, as demonstrated by the increasing stock price, which rose from €76.37 (30 June 2017) to €79.82 (29 September 2017).
The quarter under review was marked by the announcement of two major co-operation agreements – one for the construction of seventeen rest homes in Germany and another for the construction of two senior housing sites in The Netherlands – representing an overall investment of approx. €240 million. Moreover, the Group carried out a series of new investments, exclusively in the senior housing segment, in Belgium (a rest home located in West Flanders) as well as in Germany (a rest home situated in the State of Saxony-Anhalt) and The Netherlands (care residences in the Provinces of Gelderland, Utrecht, South Holland and Limburg). A total of seven sites entered into the Group's portfolio. In addition, a new care residence (in the Province of Overijssel in The Netherlands) and a renovated assisted-living apartment building (in the Province of Limburg in Belgium) entered into use during this first quarter.
During the first quarter of 2017/2018, the fair value of marketable investment properties including assets classified as held for sale* increased by €57 million (i.e. +4 %), reaching €1,584 million by 30 September 2017 (€1,528 million at the beginning of the period).
After 30 September 2017, Aedifica announced yet another acquisition of a care residence in The Netherlands (in the Province of Utrecht).
The acquisitions carried out or announced by the Group since the €219 million capital increase of 28 March 2017 are listed in Appendix I; they surpass the €400 million mark.
In addition to its investment activities, Aedifica strives to maintain optimal management of its real estate portfolio. The Company's portfolio provides for excellent rental incomes (supported by the Company's occupancy rates: 98.6 % occupancy, excluding the furnished apartments, which stand at 73.9 % occupancy), which amount to €21.8 million (an increase of 26 %) for the quarter ended 30 September 2017 (€17.4 million one year earlier).
At the end of the first quarter, Aedifica is ahead of the quarterly budget (in terms of both rental income and EPRA Earnings*) as derived from the annual outlook for the 2017/2018 financial year presented in the 2016/2017 Annual Financial Report (section 11.2 of the Consolidated Board of Directors' Report).
Aedifica's consolidated debt-to-assets ratio amounts to 42.0 % as of 30 September 2017 (40.8 % as of 30 June 2017).
Before even considering new opportunities in Belgium, Germany and The Netherlands, the Company's future growth is ensured given its existing commitments to acquire, renovate, extend, and/or redevelop multiple sites. These projects fit perfectly with Aedifica's strategy which, in the senior housing segment, aims to improve existing sites and to develop new projects in partnership with tenants/operators. The pipeline as of 30 September 2017 for these types of projects represents a total committed budget of approx. €350 million, to be invested over a four-year period (see Appendix II). This strategy allows Aedifica to maintain a portfolio of high-quality buildings that generate attractive net yields.
Finally, note that new investment opportunities are currently under consideration. These potential investments are fully aligned with the Company's investment strategy, which is highly favoured by the market.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
On 8 September 2017, Aedifica announced the acquisition of a rest home in Belgium, pursuant to a previously established agreement (see half year financial report of 23 February 2016). The De Duinpieper rest home is located in the "Vuurtorenwijk" neighbourhood in Ostend (70,000 inhabitants, Province of West Flanders). The building, designed by famous Belgian architect Lucien Kroll, was built in 1989. The site will be renovated into a modern residential care facility intended for seniors requiring continuous care, and extension works will be carried out for the construction of a new wing. Upon completion of the works, anticipated for summer 2019, the rest home will be able to welcome 115 residents. The site will remain operational during the works. Aedifica SA and its subsidiary Aedifica Invest SA have acquired 100 % of the shares of Dujofin BVBA, owner of the plot of land and the building. The contractual value of the site amounts to approx. €10 million. Aedifica has budgeted approx. €2 million for renovation and extension works. Aedifica's total investment (including the works) will amount to approx. €12 million. The operation was financed using Aedifica's credit facilities. The care residence will be operated by Fipromat SPRL, an entity of the Dorian group, a private player in the Belgian senior care market. The lease established for this site is an irrevocable 27-year triple net long lease. The initial gross yield amounts to approx. 5.5 %.
On 28 July 2017, Aedifica acquired a rest home in Germany (as announced in the press release of 13 June 2017) with the fulfillment all outstanding conditions. The purchase price was paid and Aedifica SA/NV has acquired the property and full use of the building. The operation was financed using Aedifica's credit facilities. The Seniorenheim am Dom rest home benefits from an excellent location in the historic centre of Halberstadt (40,000 inhabitants, State of Saxony-Anhalt). The residential care facility is intended for seniors requiring continuous care (Pflegeheim). The rest home has approximatively one hundred rooms and includes several recreational rooms and physical therapy rooms. The building was constructed in 2008 and can welcome 126 residents. The contractual value amounts to approx. €9 million. The site is operated by an entity of the Deutsche Pflege und Wohnen group (Deutsche Pflege und Wohnstift GmbH). Since 2016, DPUW is controlled by the Belgian group Armonea. The lease established for the site is an irrevocable 25-year double net long lease. The initial gross yield amounts to approx. 7 %.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
On 17 August 2017, Aedifica announced the signing of a co-operation agreement with Specht Gruppe for the construction of seventeen rest homes in Germany. The rest homes (to be constructed) will be located in urban and rural areas in several states of northern Germany (Lower Saxony, North Rhine-Westphalia, Schleswig-Holstein, Mecklenburg-Vorpommern and Bremen). These residential care facilities will be designed for seniors requiring continuous care ("Pflegeheim") and will consist primarily of single rooms. In addition to the standard single rooms, larger rooms (suites) will be included to cater to the high-end market segment. The buildings will also house complementary services, such as day centres for seniors and, in some cases, childcare services or a pharmacy. One of the buildings will contain some apartments designed for independent living (with care services available on demand). Upon completion of all buildings, this portfolio will have a total capacity of approx. 1,500 units. The rest homes will generally be located on care campuses, which also contain buildings offering independent living apartments for seniors (with care services available on demand). With only one exception, these apartments will be constructed in separate buildings. Aedifica will acquire the plots of land through the takeover of companies owned by Specht Gruppe (in principle after receipt of the development permits) during the next few months and, as is currently expected, by the end of the second quarter of 2018 at the latest. After each takeover, construction of the new buildings will begin. Therefore, an agreement will be signed with Residenz Baugesellschaft, an entity of Specht Gruppe, which will carry out the construction of the new buildings for a fixed amount and which guarantees its timely completion. Assuming all development permits will be received, Aedifica's total investment will ultimately amount to approx. €200 million. The first buildings are expected to be completed in late 2018 or early 2019. The operation will be financed using Aedifica's credit facilities. All sites will be rented out to Residenz Management GmbH, an entity of Specht Gruppe, and will be operated by high quality operators. The sites will be rented out on the basis of irrevocable 30-year long leases and, in addition, will benefit from a triple net warranty of limited duration which will cover the buildings' maintenance. The initial yields amount to approx. 5.5 %.
On 11 September 2017, Aedifica announced an agreement for the acquisition of a senior housing site in Germany. Seniorenresidenz an den Kienfichten is located near the centre of Dessau-Rosslau (83,000 inhabitants, State of Saxony-Anhalt) within a large private park. The site comprises a villa which was completely renovated in 2009, and a new building that was completed at the beginning of the year. The site has a capacity of 88 units, including 62 units serving seniors requiring continuous care ("Pflegeheim", situated in the new building) and 26 units serving seniors opting to live independently with access to care services on demand ("betreutes Wohnen", situated in the villa). The agreement for the acquisition of this site by Aedifica SA/NV is subject to the usual outstanding conditions in Germany, which are mainly of administrative nature and which should be fulfilled during the fall of 2017. The purchase price will be paid and the property and full use of the building will automatically be acquired at that time. The contractual value amounts to approx. €6 million. The operation will be financed using Aedifica's credit facilities. The site is operated by Cosiq GmbH, a private German player on the senior care market. The lease established for the site is an irrevocable 25-year double net long lease. The initial gross yield amounts to approx. 7 %.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
On 10 July 2017, Aedifica announced the acquisition of a senior housing site to be constructed in The Netherlands. The future Huize De Compagnie care residence is located near the centre of Ede (114,000 inhabitants, Province of Gelderland) on the site of a former barracks which will be entirely redeveloped. A portion of this site will be renovated into a modern residential care facility for seniors requiring continuous care. The care residence is expected to be completed during the second half of 2018 and will be able to welcome 42 residents. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the buildings and the plot of land on which they are located. The contractual value amounts to approx. €2 million. The construction will be carried out by IDBB Vastgoed BV and delivered turnkey to Aedifica. Aedifica has budgeted approx. €6 million for renovation works. Aedifica's total investment (including the renovation) will amount to approx. €9 million. The operation will be financed using Aedifica's credit facilities. The care residence will be operated by an entity of the Compartijn group, a private Dutch player on the senior care market. Compartijn is a subsidiary of Incluzio BV, owned by the Facilicom Services Group. The lease established for this site is an irrevocable 20-year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
On 19 July 2017, Aedifica announced the signing of a co-operation agreement between Aedifica, Stichting Rendant and HEVO, for the construction of new buildings on two of Stichting Rendant's sites. These new buildings will replace the existing buildings which have become obsolete. The sites are located in the cities of Leeuwarden (96,000 inhabitants, Province of Friesland) and Heerenveen (50,000 inhabitants, Province of Friesland). Both sites comprise approx. 130 housing units oriented toward seniors opting to live independently, with the option to access care services on demand. Completion of the works is expected during the second half of 2019. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, will acquire the full property of both sites in principle in late 2017 or early 2018 (after receipt of the development permits). Subsequently, the existing buildings will be demolished and replaced by new constructions. The works will be carried out and delivered turnkey by HEVO BV. Aedifica's total investment will amount to approx. €40 million. The operation will be financed using Aedifica's credit facilities. The sites will be operated by Stichting Rendant, a not-for-profit organisation that is active in the Dutch senior care market. The leases that will be established for these sites are irrevocable 25-year triple net long leases. The initial yields amount to approx. 5.5 %.
On 24 August 2017, Aedifica announced the acquisition of a care residence in The Netherlands. The Huize Hoog Kerckebosch care residence is located in a green, residential area near the centre of Zeist (63,000 inhabitants, Province of Utrecht), approx. 10 km from the city of Utrecht. It is a modern residential care facility serving seniors requiring continuous care in the middle to high-end market segment. The site is able to welcome 32 residents in an exceptional environment. It was completed in early July 2017 and is operational since the month of August. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the site. The contractual value amounts to approx. €8 million. The operation was financed using Aedifica's credit facilities. The care residence is
operated by an entity of the Compartijn group. The lease established for the site is an irrevocable 20 year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
On 12 September 2017, Aedifica announced the acquisition of a care residence in The Netherlands. The Martha Flora Den Haag care residence is located in a green, residential area of The Hague (526,000 inhabitants, Province of South Holland), within walking distance of two parks and the North Sea. In 2013, the building (which dates from the first half of the 20th century) was entirely redeveloped into a modern residential care facility intended for seniors requiring continuous care. The care residence has a capacity of 28 residents. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the site. The contractual value amounts to approx. €8.5 million. The operation was financed using Aedifica's credit facilities. The care residence is operated by the Martha Flora group. The lease established for the site is an irrevocable 25-year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
On 12 September 2017, Aedifica announced the acquisition of a care residence to be constructed in The Netherlands. The Huize Ter Beegden care residence is located near Roermond (Beegden, in the municipality of Maasgouw, 24,000 inhabitants, Province of Limburg) on the site of a former farmhouse which will be entirely redeveloped into a modern residential care facility intended for seniors requiring continuous care. The care residence is expected to be completed during the second half of 2018 and will have a capacity of 19 residents. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the buildings and the plot of land on which they are located. The contractual value amounts to approx. €0.5 million. The construction will be carried out by IDBB Vastgoed BV and delivered turnkey to Aedifica. Aedifica has budgeted approx. €4 million for construction works. Aedifica's total investment (including the works) will amount to approx. €5 million. The operation will be financed using Aedifica's credit facilities. The care residence is operated by an entity of the Compartijn group. The lease established for the site is an irrevocable 20-year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
On 26 September 2017, Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the Martha Flora Rotterdam site pursuant to a previously established agreement (see press release of 2 June 2016). The contractual value amounts to approx. €2 million. A new care residence with a capacity of 19 units will be constructed on this site (which already generates a limited rental income). The construction will be carried out by HD Projectrealisatie and delivered turnkey to Aedifica. Aedifica's total investment (including the works) will amount to approx. €8 million. The care residence will be operated by the Martha Flora group. The lease established for the site is an irrevocable 20-year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
On 8 November 2017, Aedifica announced the acquisition of a care residence to be constructed in The Netherlands. The Martha Flora Bosch en Duin site is located in Bosch en Duin, a green, residential area in the municipality of Zeist (63,000 inhabitants, Province of Utrecht), approx. 10 km from the city of Utrecht. On the site, a modern residential care facility intended for seniors requiring continuous care will be constructed. The care residence is expected to be completed during the third quarter of 2018 and will have a capacity of 27 residents. Aedifica Nederland BV, a 100 % subsidiary of Aedifica SA/NV, acquired the full property of the plot of land. The contractual value amounts to approx. €2 million. The construction will be carried out by GREEN Real Estate, in co-operation with Bogor Projectontwikkeling, and delivered turnkey to Aedifica. Aedifica has budgeted approx. €5 million for construction works. Aedifica's total investment (including the works) will amount to approx. €7 million. The operation will be financed using Aedifica's credit facilities. The care residence will be operated by the Martha Flora group. The lease established for the site is an irrevocable 25-year triple net long lease. The initial gross yield amounts to approx. 6.5 %.
On 18 August 2017, phase II of the works at the Villa Temporis senior housing site in Hasselt (Province of Limburg, Belgium) was completed, in particular the renovation of the assisted-living apartment building (invested amount of approx. €2 million). The site is operated by an entity of the Vulpia group.
The new construction of the Molenenk care residence in Deventer (Province of Overijssel, The Netherlands) was completed on 21 August 2017 (invested amount of approx. €11 million). The site is operated by an entity of the Domus Magnus group. The building was developed by Panta Rhei HealthCare BV.
The residual apartments of the apartment building located at avenue de Broqueville 8 in Brussels (presented in the segment "apartment buildings") were sold in two transactions (one apartment sold on 19 September 2017 and five apartments sold on 25 October 2017) for a total amount of approx. €1.3 million.
The assisted-living apartments to be sold (located at the Residentie Poortvelden site in Aarschot) amount to approx. €4 million and represent all assets classified as held for sale as of 30 September 2017.
As of 30 September 2017, the following development projects are in progress:
In terms of financing, the following transactions took place since the beginning of the 2017/2018 financial year:
14 November 2017 – After closing of markets Under embargo until 17:40 CET
Taking into account the abovementioned financing arrangements, the timetable showing the maturity of Aedifica's current credit facilities is as follows (in € million):
| Weighted Average Maturity (years) | 4.6 | 4.3 |
|---|---|---|
| Total | 910 | 656 |
| - > 2024/2025 : |
134 | 110 |
| - 2023/2024 |
156 | 106 |
| - 2022/2023 : |
160 | 62 |
| - 2021/2022 : |
167 | 105 |
| - 2020/2021 : |
90 | 90 |
| - 2019/2020 : |
80 | 80 |
| - 2018/2019 : |
118 | 98 |
| - 2017/2018 : |
5 | 5 |
| Lines | Utilisation |
Establishment of these credit facilities demonstrates once again the strong and durable relationship Aedifica maintains with its banks.
On 7 September 2017, Aedifica received a 3 rd consecutive "EPRA Gold Award" for its Annual Financial Report (financial year 2015/2016), keeping the Company at the top of the 104 real estate companies assessed by EPRA, the European association of listed real estate companies.
Stefaan Gielens, Aedifica's CEO, is one of the ten nominees to become "Trends Manager of the Year 2017" ("Trends Manager van het Jaar 2017"). The nomination is an acknowledgement of Aedifica's international growth over the past year and its long-term strategy as a pure play healthcare real estate investor. Since 1985, the "Trends Manager of the Year" is chosen annually by the readers of Trends magazine, viewers of Kanaal Z and a panel of professionals. The winner will be announced on 9 January 2018.
The consolidated turnover (consolidated rental income) for the first quarter of the current financial year amounts to €21.8 million, i.e. +26 % compared to the same period of the previous financial year. This is above the quarterly budget as derived from the annual outlook for the 2017/2018 financial year presented in the 2016/2017 Annual Financial Report, owing to the timing of the acquisitions as compared to what was budgeted, but also due to the good performance registered on a like-for-like basis*.
The consolidated rental income by segment is presented in the following table:
| Consolidated rental income (x €1,000) |
30 September 2017 | 30 September 2016 | Var. (%) on a like-for-like basis* |
Var. (%) |
|---|---|---|---|---|
| Senior housing | 18,177 | 13,579 | +1.3% | +33.9% |
| Apartment buildings | 2,485 | 2,746 | +1.4% | -9.5% |
| Hotels and other | 1,235 | 1,075 | -0.7% | +14.9% |
| Inter-segment | -49 | -49 | ||
| Total | 21,848 | 17,351 | +1.2% | +25.9% |
The evolution of rental income in the senior housing segment (+33.9 % as compared to the same period of the previous financial year overall or +1.3 % on a like-for-like basis*) demonstrates the relevance of Aedifica's investment strategy in this segment which generates 83 % of the Company's turnover.
Rental income of apartment buildings has decreased due to the disposal of a building (Tervueren 13 in June 2017) and the transfer (on 1 July 2017) of the Ring building to the "hotels and others" segment. On a like-for-like basis*, rental income of the apartment buildings has increased and is slightly above budget.
The rental incomes of the hotels and other building types are analysed as follows:
1 See press release of 5 September 2017.
At the end of the first quarter of the current financial year, Aedifica increased its portfolio of marketable investment properties including assets classified as held for sale* by €57 million, from a fair value of €1,528 million to €1,584 million (€1,600 million for the investment properties including assets classified as held for sale*). This 4 % growth comes mainly from net acquisitions (see sections 2.1, 2.2 and 2.3 above), completion of development projects (see section 2.4 above) and changes in the fair value of marketable investment properties recognised in income (+ €2.1 million, or +0.1 % over the first quarter). The fair value of marketable investment properties, as assessed by independent experts, is broken down as follows:
As of 30 September 2017, Aedifica has 200 marketable investment properties including assets classified as held for sale*, with a total surface area of approx. 822,000 m2 , consisting mainly of:
The breakdown by sector is as follows (in terms of fair value):
The geographical breakdown is as follows (in terms of fair value):
The occupancy rate2 of the total unfurnished portion of the portfolio (representing 95 % of the fair value of marketable investment properties including assets classified as held for sale*) amounts to 98.6 % as of 30 September 2017. This is comparable to the record level reached at the end of the previous financial year (30 June 2017: 98.7 %).
2 The occupancy rate is calculated as follows:
- For the total portfolio (excluding the furnished apartments): (contractual rents + guaranteed income) / (contractual rents + estimated rental value (ERV) on vacant areas of the property portfolio). We note that this occupancy rate includes the investment properties for which units are in renovation and hence temporarily not rentable.
- For the furnished apartments: % rented days during the financial year. This occupancy rate can thus not be compared to the one calculated on the rest of the portfolio, as the methodology is specific to this segment.
The occupancy rate of the furnished portion of the portfolio (representing only 5 % of the fair value of marketable investment properties) reached 73.9 % for the first quarter of the current financial year. This is an increase compared to the total occupancy rate of the 2016/2017 financial year (73.5 %) and the occupancy rate realised during the first quarter of the previous financial year (69.4 %).
The overall occupancy rate3 of the total portfolio reached 99 % as of 30 September 2017.
The weighted average lease term for all buildings in the Company's portfolio is 20 years; this is unchanged as compared to 30 June 2017. This impressive aggregate performance is explained by the large proportion of long-term contracts (such as long leases) in the Company's portfolio.
3 Rate calculated according to the EPRA methodology.
The table below presents the portfolio's gross yield by segment, compared to the fair value of the marketable investment properties, increased (for furnished apartments) by the goodwill and the carrying amount of the furniture.
In general, the gross yield amounts to 5.7 %.
| 30 September 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (x €1,000) | Senior housing |
Apartment buildings |
Hotels and other |
Marketable investment properties incl. assets classified as held for sale* |
Development projects |
Investment properties incl. assets classified as held for sale* |
||
| Fair value | 1,300,558 | 203,365 | 80,386 | 1,584,309 | 16,055 | 1,600,364 | ||
| Annual contractual rents | 74,862 | 10,034 | ° | 5,185 | 90,081 | - | - | |
| Gross yield (%) °° | 5.8% | 4.9% | 6.5% | 5.7% | - | - |
| 30 June 2017 | |||||||
|---|---|---|---|---|---|---|---|
| (x €1,000) | Senior housing |
Apartment buildings |
Hotels and other |
Marketable investment properties incl. assets classified as held for sale* |
Development projects |
Investment properties incl. assets classified as held for sale* |
|
| Fair value | 1,244,461 | 215,205 | 68,009 | 1,527,675 | 17,174 | 1,544,849 | |
| Annual contractual rents | 71,372 | 10,702 | ° 4,451 |
86,525 | - | - | |
| Gross yield (%) °° | 5.7% | 4.9% | 6.5% | 5.7% | - | - |
| 30 September 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (x €1,000) | Senior housing |
Apartment buildings |
Hotels and other |
Marketable investment properties incl. assets classified as held for sale* |
Development projects |
Investment properties incl. assets classified as held for sale* |
||
| Fair value | 1,108,660 | 219,428 | 68,554 | 1,396,642 | 19,183 | 1,415,825 | ||
| Annual contractual rents | 63,902 | 10,907 | ° | 4,491 | 79,300 | - | - | |
| Gross yield (%) ** | 5.8% | 4.9% | 6.6% | 5.7% | - | - |
° The amounts related to the furnished apartments correspond to the annualised rental income excl. VAT.
°° Based on the fair value (re-assessed every 3 months, increased with the goodwill and the furniture for the furnished apartments). In the senior housing segment, the gross yield and the net yield are generally equal ("triple net" contracts), with the operating charges, the maintenance costs and the rents on empty spaces related to the operations generally being, in Belgium and in The Netherlands, supported by the operator (the same applies for hotel lease contracts). In Germany, the net yield is generally lower than the gross yield, with certain charges remaining at the responsibility of the owner, such as the repair and maintenance of the roof, structure and facades of the building ("double net" contacts).
The table below presents the evolution of the net asset value per share.
Excluding the non-monetary impact (that is to say, non-cash) of the changes in fair value of hedging instruments4 , the net asset value per share based on the fair value of investment properties is €52.04 as of 30 September 2017 (30 June 2017: €51.30 per share).
| Net asset value per share (in €) | 30 September 2017 | 30 June 2017 |
|---|---|---|
| Net asset value excl. changes in fair value of hedging instruments* | 52.04 | 51.30 |
| Effect of the changes in fair value of hedging instruments | -1.91 | -1.89 |
| Net asset value | 50.13 | 49.40 |
| Number of share outstanding (excl. treasury shares) | 17,975,820 | 17,975,820 |
The Board of Directors continues to pay close attention to the shifting economic and financial context and the associated effects on the Group's activities.
In the current economic climate, Aedifica's key strengths include the following:
4 The effect of the changes in fair value of hedging instruments of -€1.91 per share as of 30 June 2017 is the impact in equity of the fair value of hedging instruments, which is negative for €34 million, mainly booked in the liabilities on the balance sheet.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
The dividend expectations for the current financial year, as published in the 2016/2017 Annual Financial Report, remain unchanged at €2.50 gross per share, this represents an increase of 11 % compared to the dividend distributed for the 2016/2017 financial year.
According to the "Weekly table value", published on 10 November 2017 by Bank Degroof Petercam, Aedifica is currently the 3 rd Belgian REIT in terms of market capitalisation.
The Board of Directors considers that the key risk factors summarised in pages 2 to 11 of the 2016/2017 Annual Financial Report remain relevant for the remaining months of the 2017/2018 financial year.
On 28 September 2017, Aedifica's Board of Directors announced that two new members will strengthen the Company's Management Committee in order to support Aedifica's international growth: Mr. Charles-Antoine van Aelst, as Chief Investment Officer (CIO), and Mr. Sven Bogaerts, as Chief Mergers & Acquisitions (CM&AO).
As from 1 October 2017, Aedifica's Management Committee consists of six members:
| Name | Function |
|---|---|
| Stefaan Gielens | Chief Executive Officer (CEO) and executive director |
| Jean Kotarakos | Chief Financial Officer (CFO) and executive director |
| Laurence Gacoin | Chief Operating Officer (COO) |
| Sarah Everaert | Chief Legal Officer (CLO) / Secretary-General |
| Charles-Antoine van Aelst | Chief Investment Officer (CIO) |
| Sven Bogaerts | Chief M&A Officer (CM&AO) |
The Annual General Meeting of 27 October 2017 renewed, with immediate effect and for a period of 3 years (until the end of the Annual General Meeting of 2020) the office of Ms. Adeline Simont, acting as non-executive Director, and Mr. Eric Hohl, acting as non-executive Director.
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The Annual General Meeting approved, with immediate effect and for a period of 3 years (until the end of the Annual General Meeting of 2020) the election of two new Directors: Ms. Marleen Willekens, as non-executive independent Director and Mr. Luc Plasman, as non-executive independent Director. Aedifica's Board of Directors welcomes these appointments.
The Board of Directors wants to express again its warmest thanks to Ms. Sophie Maes, its outgoing Director, for her commitment and her contribution to Aedifica's success.
Since 27 October 2017, Ms. Marleen Willekens is Chairman of the Audit Committee, while Ms. Elisabeth May-Roberti chairs the Nomination and Remuneration Committee. Mr. Plasman joined the Investment Committee and the Nomination and Remuneration Committee.
Since 27 October 2017, the committees are hence composed as follows:
14 November 2017 – After closing of markets Under embargo until 17:40 CET
The Annual General Meeting of 27 October 2017 approved, with immediate effect and for a period of 3 years (until the end of the Annual General Meeting of 2020) the renewal of the office of Ernst & Young Réviseurs d'Entreprises SC s.f.d. SCRL, represented by Mr. Joeri Klaykens, acting as the Company's statutory auditor.
| Financial calendar | |
|---|---|
| Half year results 31.12.2017 | 21/02/2018 |
| Interim statement 31.03.2018 | 16/05/2018 |
| Annual press release 30.06.2018 | 5/09/2018 |
| 2017/2018 Annual Financial Report | September 2018 |
| Annual general meeting 2018 | 26/10/2018 |
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The English version of this press release constitutes a free translation of the French language text and is made for information purposes only. In case of inconsistency with the French version or inaccuracy of the English translation, the French text shall prevail.
5 These dates are subject to change.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
Aedifica is a Regulated Real Estate Company under Belgian law specialised in healthcare real estate, particularly in senior housing. Aedifica has developed a portfolio worth more than €1.6 billion in Belgium, Germany and in The Netherlands.
Aedifica has been quoted on the Euronext Brussels (continuous market) since 2006 and is identified by the following ticker symbols: AED; AED:BB (Bloomberg); AOO.BR (Reuters).
The Company's market capitalisation was €1.5 billion as of 31 October 2017.
Aedifica is included in the EPRA indices.
This document contains forward-looking information that involves risks and uncertainties, including statements about Aedifica's plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Aedifica. Should one or more of these risks, uncertainties or contingencies materialise, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, Aedifica does not assume any responsibility for the accuracy of these forward-looking statements.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
| (in € million) | Marketable investment properties |
Development projects |
Total | ||
|---|---|---|---|---|---|
| carried out | subject to outstanding conditions |
||||
| Martha Flora Hilversum | The Netherlands | 2 | - | 6 | 8 |
| Villa Walgaerde1 | The Netherlands | 4 | - | - | 4 |
| La Ferme Blanche1 | Belgium | 6 | - | - | 6 |
| Het Gouden Hart | The Netherlands | 7 | - | - | 7 |
| Huize Dennehof | The Netherlands | 1 | - | - | 1 |
| Prinsenhof1 | Belgium | 4 | - | - | 4 |
| Op Haanven1 | Belgium | 2 | - | - | 2 |
| LTS | The Netherlands | 2 | - | 10 | 12 |
| Het Gouden Hart van Leersum | The Netherlands | 2 | - | 4 | 6 |
| Residentie Blaret | Belgium | 21 | - | - | 21 |
| Oeverlanden | The Netherlands | 12 | - | - | 12 |
| Seniorenresidenz Laurentiusplatz | Germany | 5 | - | 3 | 8 |
| Seniorenheim am Dom | Germany | 9 | - | - | 9 |
| Huize De Compagnie | The Netherlands | 2 | - | 6 | 9 |
| Rendant (portfolio) | The Netherlands | - | - | 40 | 40 |
| Specht Gruppe (portfolio) | Germany | - | - | 200 | 200 |
| Huize Hoog Kerckebosch | The Netherlands | 8 | - | - | 8 |
| Villa Temporis (phase II)1 | Belgium | 2 | - | - | 2 |
| Molenenk1 | The Netherlands | 11 | - | - | 11 |
| De Duinpieper1 | Belgium | 10 | - | 2 | 12 |
| Seniorenresidenz an den Kienfichten | Germany | - | 6 | - | 6 |
| Martha Flora Den Haag | The Netherlands | 9 | - | - | 9 |
| Huize Ter Beegden | The Netherlands | 0 | - | 4 | 5 |
| Martha Flora Rotterdam1 | The Netherlands | 2 | - | 6 | 8 |
| Martha Flora Bosch en Duin | The Netherlands | 2 | - | 5 | 7 |
| Total as of 14 November 2017 | 125 | 6 | 287 | 418 |
1 Realisations of previously concluded agreements.
6 The figures in this table are rounded amounts. Subsequently, the sum of certain figures might not correspond to the stated total.
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| Project or renovation (in millions €) |
Estimated inv. |
Inv. as of 30/09/2017 |
Futur inv. |
Date of completion |
Comments | |
|---|---|---|---|---|---|---|
| I. In progress | ||||||
| Genderstate/Petruspark/ | Eindhoven (NL)/ | 2 | 1 | 1 | 2017/2018 | Renovation |
| Parc Imstenrade | Heerlen (NL) | |||||
| Résidence Les Cheveux d'Argent |
Spa (BE) | 3 | 0 | 3 | 2017/2018 | Extension of a rest home |
| Résidence l'Air du Temps | Chênée (BE) | 7 | 4 | 3 | 2017/2018 | Extension and renovation of a rest home |
| Het Gouden Hart van Leersum1 | Leersum (NL) | 4 | 0 | 3 | 2017/2018 | Construction of a care residence |
| Huize Lieve Moenssens | Dilsen-Stokkem (BE) |
4 | 0 | 4 | 2017/2018 | Extension and renovation of a rest home |
| Martha Flora Hilversum1 | Hilversum (NL) | 7 | 3 | 4 | 2017/2018 | Construction of a care residence |
| Bonn | Bonn (DE) | 1 | 0 | 1 | 2017/2018 | Renovation of a rest home |
| Frohnau | Berlin (DE) | 1 | 0 | 1 | 2017/2018 | Renovation of a rest home |
| Heydeveld | Opwijk (BE) | 4 | 1 | 3 | 2018/2019 | Extension of a rest home |
| Vinkenbosch II | Hasselt (BE) | 2 | 0 | 2 | 2018/2019 | Renovation of a rest home |
| Seniorenresidenz Laurentiusplatz |
Wuppertal-Elberfeld (DE) |
3 | 0 | 3 | 2018/2019 | Renovation of a rest home |
| LTS Winschoten1 | Winschoten (NL) | 11 | 2 | 9 | 2018/2019 | Construction of a care residence |
| De Stichel | Vilvoorde (BE) | 4 | 0 | 3 | 2018/2019 | Extension of a rest home |
| Plantijn II | Kapellen (BE) | 4 | 0 | 4 | 2018/2019 | Extension and renovation of a rest home |
| Résidence Aux Deux Parcs | Jette (BE) | 2 | 0 | 2 | 2018/2019 | Extension of a rest home |
| Huize Ter Beegden1 | Beegden (NL) | 4 | 0 | 4 | 2018/2019 | Construction of a care residence |
| Huize De Compagnie1 | Ede (NL) | 7 | 1 | 5 | 2018/2019 | Construction of a care residence |
| 't Hoge III | Kortrijk (BE) | 2 | 0 | 2 | 2018/2019 | Extension of a rest home |
| Martha Flora Rotterdam1 | Rotterdam (NL) | 6 | 1 | 6 | 2019/2020 | Construction of a care residence |
| Plantijn III | Kapellen (BE) | 1 | 0 | 1 | 2019/2020 | Extension and renovation of a rest home |
| Residenz Zehlendorf | Berlin (DE) | 5 | 0 | 5 | 2019/2020 | Renovation of a rest home |
| De Duinpieper | Oostende (BE) | 2 | 0 | 2 | 2020/2021 | Extension and renovation of a rest home |
| II. Subject to outstanding conditions | ||||||
| - | - | - | - | - | - | - |
| III. Land reserves | ||||||
| Plot of land Bois de la Pierre | Wavre (BE) | 2 | 2 | 0 | - | Land reserve |
| Platanes | Brussels (BE) | 0 | 0 | 0 | - | Land reserve |
| IV. Acquisitions subject to outstanding conditions | ||||||
| An den Kienfichten | Dessau-Rosslau (DE) |
7 | 0 | 7 | 2017/2018 | Acquisition of a rest home |
| Mechelen | Mechelen (BE) | 15 | 0 | 15 | 2019/2020 | Acquisition of a new rest home |
| Rendant (portfolio) | Leeuwarden (NL)/ Heerenveen (NL) |
40 | 0 | 40 | 2019/2020 | Construction of two senior housing sites |
| Specht Gruppe (portfolio) | Germany | 200 | 0 | 200 | 2019/2020 | Construction of seventeen rest homes |
| TOTAL | 350 | 17 | 333 | |||
| Changes in fair value | - | -2 | - | |||
| Roundings | - | 1 | - | |||
| On balance sheet | 16 |
1 Although still under construction, these sites already generate limited rental incomes, in particular for the plots of land that have already been acquired. Their values are therefore no longer mentioned in the table above. This explains why the estimated investment values differ from those mentioned earlier, in particular in section 2.3.
Of these projects, 99 % are pre-let. It is expected that the total investment budget as of 30 September 2017 (€350 million) will be paid in cash.
14 November 2017 – After closing of markets Under embargo until 17:40 CET
For many years, Aedifica has used Alternative Performance Measures in accordance with ESMA (European Securities and Market Authority) guidelines published on 5 October 2015 in its financial communication. Some of these APM are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of its results and performance. The APM used in this interim statement are identified with an asterisk (*). The performance measures which are defined by IFRS standards or by Law are not considered as APM, neither are those which are not based on the consolidated income statement or the balance sheet. In this appendix, the APM are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements.
Aedifica uses the following performance measures to determine the value of its investment properties; however, these measures are not defined under IFRS. They represent investment properties clustered in different ways to provide the reader with the most relevant information. The definition of these concepts as applied to the Aedifica financial statements may differ from those used in the financial statements of other companies. They are calculated as follows:
| (x €1,000) | 30/09/2017 | 30/06/2017 |
|---|---|---|
| Marketable investment properties | 1,579,869 | 1,523,235 |
| + Development projects | 16,055 | 17,174 |
| Investment properties | 1,595,924 | 1,540,409 |
| + Assets classified as held for sale | 4,440 | 4,440 |
| Investment properties including assets classified as held for sale*, or real estate | 1,600,364 | 1,544,849 |
| portfolio* | ||
| - Development projects | -16,055 | -17,174 |
| Marketable investment properties including assets classified as held for sale* | 1,584,309 | 1,527,675 |
Aedifica uses the net rental income on a like-for-like basis* to reflect the performance of the investment properties excluding the effect of scope changes; however, this performance measure is not defined under IFRS. It represents rental income excluding the effect of scope changes. The definition of this concept as applied to the Aedifica financial statements may differ from that used in the financial statements of other companies. It is calculated as follows:
| (x €1,000) | 30/09/2017 | 30/09/2016 |
|---|---|---|
| Rental income | 21,848 | 17,351 |
| - Scope changes | -5,684 | -1,374 |
| = Rental income on a like-for-like basis* | 16,164 | 15,977 |
Aedifica uses equity excl. changes in fair value of hedging instruments* to reflect equity before non-cash effects of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line "equity attributable to owners of the parent" without cumulated noncash effects of the revaluation of hedging instruments. The definition of this concept as applied to the Aedifica financial statements may differ from that used in the financial statements of other companies. It is calculated as follows:
| (x €1,000) | 30/09/2017 | 30/06/2017 |
|---|---|---|
| Equity attributable to owners of the parent | 901,209 | 888,039 |
| - Effect of the distribution of the dividend 2016/2017 | 0 | 0 |
| - Effect of the changes in fair value of hedging instruments | 34,295 | 34,055 |
| Equity excl. changes in fair value of hedging instruments* | 935,504 | 922,094 |
Aedifica uses net asset value per share excl. changes in fair value of hedging instruments* to reflect equity per share before the non-cash effect of the revaluation of hedging instruments; however, this performance measure is not defined under IFRS. It represents the line "equity attributable to owners of the parent" without cumulated non-cash effects of the revaluation of hedging instruments, divided by the number of shares outstanding (after deduction of treasury shares) at the closing date. The definition of this concept as applied to the Aedifica financial statements may differ from that used in the financial statements of other companies. It is calculated by dividing equity excl. changes in fair value of hedging instruments* by the number of shares outstanding (after deduction of treasury shares).
Aedifica supports reporting standardisation, which has been designed to improve the quality and comparability of information. The Company supplies its investors with most of the information recommended by EPRA. The following indicators are considered as APM:
Aedifica uses EPRA NAV* to comply with the EPRA's recommendations; however, this performance measure is not defined under IFRS. It represents the line "equity attributable to owners of the parent" after corrections recommended by the EPRA. It is calculated as follows:
| EPRA Net Asset Value* (NAV) | 30 September 2017 | 30 June 2017 | |
|---|---|---|---|
| x €1,000 | |||
| NAV per the financial statements (owners of the parent) | 901,209 | 888,039 | |
| NAV per the financial statements (in €/share) (owners of the parent) | 50.13 | 49.40 | |
| Effect of exercise of options, convertibles and other equity interests (diluted basis) |
0 | 0 | |
| Diluted NAV, after the exercise of options, convertibles and other equity interests |
901,209 | 888,039 | |
| Include: | |||
| (i.a) Revaluation of investment properties (if IAS 40 cost option is used) | 0 | 0 | |
| (i.b) Revaluation of investment properties under construction (IPUC) (if IAS 40 cost option is used) |
0 | 0 | |
| (i.c) Revaluation of other non-current investments | 0 | 0 | |
| (ii) Revaluation of tenant leases held as finance leases | 0 | 0 | |
| (iii) Revaluation of trading properties | 0 | 0 | |
| Exclude: | |||
| (iv) Fair value of financial instruments | 34,295 | 34,055 | |
| (v.a) Deferred tax | 3,109 | 3,098 | |
| (v.b) Goodwill as a result of deferred tax | 0 | 0 | |
| Include/exclude: | |||
| Adjustments (i) to (v) in respect of joint venture interests | 0 | 0 | |
| EPRA NAV* (owners of the parent) | 938,613 | 925,192 | |
| Number of shares (Denominator IAS 33) | 17,975,820 | 17,975,820 | |
| EPRA NAV* (in €/share) (owners of the parent) | 52.22 | 51.47 |
14 November 2017 – After closing of markets Under embargo until 17:40 CET
Aedifica uses EPRA NNNAV* to comply with the EPRA's recommendations; however, this performance measure is not defined under IFRS. It represents the line "equity attributable to owners of the parent" after corrections recommended by the EPRA. It is calculated as follows:
| EPRA Triple Net Asset Value* (NNNAV) | 30 September 2017 | 30 June 2017 |
|---|---|---|
| x €1,000 | ||
| EPRA NAV* (owners of the parent) | 938,613 | 925,192 |
| Include: | ||
| (i) Fair value of financial instruments | -34,295 | -34,055 |
| (ii) Fair value of debt | -8,523 | -8,523 |
| (iii) Deferred tax | -3,109 | -3,098 |
| EPRA NNNAV* (owners of the parent) | 892,686 | 879,516 |
| Number of shares (Denominator IAS 33) | 17,975,820 | 17,975,820 |
| EPRA NNNAV* (in €/share) (owners of the parent) | 49.66 | 48.93 |
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