Interim / Quarterly Report • Nov 30, 2012
Interim / Quarterly Report
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| REAL ESTATE PORTFOLIO |
30.09.12 | 31.03.12 |
|---|---|---|
| Total lettable retail area in m² | 516,543 | 428,548 |
| Occupancy rate in % | 98.02 % | 98.19 % |
| Fair value of the real estate portfolio in EUR (incl. assets held for sale) | 652,428,000 | 550,631,000 |
| Debt ratio (R.D. of 7 December 2010 (max 65 %)) in % | 54.37 % | 51.08 % |
| RESULTS | 30.09.12 | 30.09.11 |
| Net rental income | 19,705,000 | 17,598,000 |
| Property result | 19,467,000 | 17,436,000 |
| Property charges | - 1,224,000 | - 1,024,000 |
| General costs and other operating costs and income | - 1,080,000 | - 1,184,000 |
| Operating result before result on the portfolio | 17,165,000 | 15,228,000 |
| Result on the portfolio | 2,897,000 | 3,036,000 |
| Operating result | 20,062,000 | 18,263,000 |
| Financial result | - 6,833,000 | - 6,479,000 |
| Taxes | - 342,000 | - 78,000 |
| Net profit/loss | 12,886,000 | 11,707,000 |
| Net current profit/loss (excl. result on the portfolio) | 9,989,000 | 8,671,000 |
| Net current profit/loss (excl. result on the portfolio) (Group) | 9,835,000 | 8,671,000 |
| DATA PER SHARE – SHARE GROUP |
30.09.12 | 31.03.12 |
| Number of shares | 5,813,122 | 5,437,074 |
| Net asset value per share (fair value) | 43.10 | 44.39 |
| Net asset value per share (fair value) excl. dividend | 41.65 | 41.59 |
| Net asset value per share (fair value) excl. dividend excl. IAS 39 | 47.27 | 46.40 |
| Net asset value per share (investment value) | 45.78 | 46.99 |
| Net asset value per share (investment value) excl. dividend | 44.33 | 44.19 |
| Net asset value per share (investment value) excl. dividend excl. IAS 39 | 49.95 | 49.01 |
2012-2013 half-yearly financial results I Retail Estates I 3
| MANA GEMENT REPORT . . |
4 |
|---|---|
| 0. Introduction | 6 |
| 1. Report on activities for the first half of the 2012-2013 financial year, closed on 30 September 2012 . . |
7 |
| 2. Amendments to articles of association of Retail Estates NV | 10 |
| 3. Analysis of the results . | 11 |
| 4. Prospects | 12 |
| 5. Changes to the composition of the board of directors | 13 |
| 6. Future-oriented statements | 13 |
| Financial Repor t |
14 |
| 1. Condensed consolidated income statement | 16 |
| 2. Condensed consolidated balance sheet | 18 |
| 3. Condensed statement of changes in shareholders' equity 4. Condensed consolidated cashflow statement |
20 24 |
| 5. Notes on the condensed consolidated interim figures | 26 |
| 6. Report on the limited review of the consolidated interim figures for the six-month ending on 30 September 2012 | 35 |
| Sh ar e Per form ance Repor t |
36 |
| 1. Stock market performance | 38 |
| 2. Dividend and yield | 39 |
| 3. Shareholders' calendar | 39 |
| REAL ESTATE REPORT |
|
| 40 | |
| 1. Real estate expert's report 2. Note |
42 44 |
| 3. Sectoral spread | 44 |
| 4. Breakdown by type of building | 45 |
| GENE RAL INF ORMATI ON |
46 |
| Lexicon | 48 |
| Information sheet | 51 |
by means of acquisitions, investments in project development and investments in the optimisation of the real estate portfolio
2012-2013 half-yearly financial results I Retail Estates I 5
Retail Estates NV is one of Belgium's largest real estate companies, specialising in retail premises on suburban sites. Its property portfolio consists of 506 retail premises in Belgium and the Grand Duchy of Luxembourg, representing a total lettable surface area of 516,543 m² and an investment value of EUR 652.10 million (including a participating interest of 84.18 % in Distri-Land Immobilière NV property certificates).
Retail Estates NV manages its property portfolio itself and has a proven track record in real estate development for its own account.
Retail Estates NV is a listed company (Euronext Brussels), with a market capitalisation of approximately EUR 293 million on 30 September 2012.
Although management endeavours to limit the risk factors to a minimum, careful account still has to be taken of a certain number of risks. For an overview of these risks, reference is made to pages 4 to 7 of the annual report 2011-2012.
Rental income during the first half of the financial year amounted to EUR 19.88 million, 12.30 % up on the figure for the comparable half of the 2011-2012 financial year (EUR 17.70 million). This increase is almost entirely attributable to the growth in the real estate portfolio and the positive indexation of the rents.
The occupancy rate1 on 30 September 2012 remained at a high 98.02 %, compared with 98.18 % on 31 March 2012.
The fair value of the real estate portfolio amounts to EUR 636.96 million. The rental yield on this portfolio established by the real estate experts is 6.91 % based on the actual rent.
The stability of the value of suburban retail properties is explained mainly by continuing interest on the part of wealthy private individuals in this type of investment. Retail Estates NV noticed this when carrying out its annual ongoing divestment programme.
Retail Estates NV also holds a significant stake of 84.18 % in the real estate certificates issued by Immobilière Distri-Land NV The fair value of this property portfolio as at 30 September 2012 is EUR 17.71 million and is equal to the value on 31 March 2012. Retail Estates' share in the total fair value of the real estate plots of the real estate certificates amounts to EUR 13.77 million.
As at 30 September 2012 the real estate portfolio consisted of 506 premises with a lettable surface area of 516,543 m².
1 The occupancy rate is calculated as the surface area actually let out in proportion to the lettable area, expressed in m2.
Along the Bredabaan road in Merksem, an existing store with warehouse was converted into 2 retail properties which are let to Fun and X2 O respectively. The site was extended with a large car park which is located on a neighbouring plot that was purchased for this purpose. The new property now represents a rental income of EUR 0.52 million and a fair value of EUR 7.95 million.
Along the Sint-Pieterskaai in Bruges, an existing store was converted to be integrated with the adjacent retail park V-Mart. The new property consists of 3 retail premises of which two are let. The renovated premises represent a rental income of EUR 0.21 million and a fair value of EUR 3.24 million.
In a retail park along the Boulevard de Froidmont, an existing retail property which is let to Aldi was expanded to 1,464 m² lettable surface area upon the request of the tenant.
On 1 September 2012, the leasing contract with Aldi for a new building started for a term of 18 years. Previously, an outdated store was demolished and adjacent plots of building land were purchased. This new store represents a fair value of EUR 1.61 million and a rent collection of EUR 0.11 million (excluding VAT).
On 28 September 2012, an underlying villa in Barchon was purchased for EUR 0.42 million. This purchase is part of a development to expand the existing retail park in Barchon and improve the access situation.
On 26 April 2012, the exclusive control was acquired of Infradis Real Estate NV through the acquisition of all shares of this company. IT is owner of a store property in Namen, which has been let since August to New Vanden Borre, and a complex in Zaventem, which consists of 2 retail premises let to Ixina and Carpetright, and 6 SME units, mainly let to Carpetright and a logistics company of the
2 The purchase and sale values of the investments and disposals are in line with the investment values as appraised by the real estate experts.
Colruyt group. The entire property represents a rental income of EUR 0.77 million and a fair value of EUR 10.93 million as at 30 September 2012.
On 1 May 2012, the release of the retail park V-Mart took place. This new retail park consists of 10 retail premises with a total lettable area of 11.592 m² and a net rental income of EUR 0.73 million. This property represents a fair value of EUR 10.73 million. All retail premises are let to affiliate companies including Hubo, Lidl, Maxizoo, Pronti and others. The buildings were constructed on a terrain belonging to a third party.
On 1 July 2012, the release of 27 retail premises located in the retail park T-Forum in Tongeren took place. They represent a total lettable area of 31,039 m² and a rent collection of EUR 2.36 million. This shopping complex represents a fair value of EUR 38.52 million. 2 properties are not yet released.
Over the past six months, 10 retail premises and 1 SME property were sold to private investors for a net rental income of EUR 8.86 million.
The retail premises sold, are situated in Molenbeek (4 properties, 3,249 m²), Grivegnée (1 property, 395 m²), Maldegem (1 property, 1,000 m²), Aubange (3 properties, 1,198 m²), Bruges (1 SME property, 1,675 m²) and Korbeek-lo (1 property, 1,300 m²). The fair value of these premises as at the time of sale amounted to EUR 8.61 million.
On 4 July 2012, the control of Databuild Investments NV was acquired through the acquisition of a participation of 62.5 % of the shares, whereby a part (308 shares) of these shares was purchased and a part (317 shares) was acquired via contributions in kind. This contribution was part of the authorised capital whereby a capital increase was performed for the amount of EUR 10.01 million (EUR 4.69 million share capital and EUR 5.32 million share premiums). In this respect, 208,607 new shares were issued at an issue price of EUR 48.These new shares are participating in the profit of the fiscal year starting on 1 April 2012. The 37.5 % of shares which were not acquired, are owned by third parties who are active in project development of suburban retail stores.
This company owns 32 retail premises, of which 22 are concentrated in retail parks in the towns of Lommel (5 retail premises), Gembloux (10 retail premises) and Châtelet (7 retail premises). The remaining 10 premises are located in Soignies (2 retail premises), Anderlues (2 retail premises), Bouillon (2 retail premises), Fleurus (1 retail property), Thuin (1 retail property) and Libramont (2 retail premises). The retail premises represent a rental income of EUR 3.27 million and a fair value of EUR 49.60 million.
On 27 July 2012, the board of directors carried out a capital increase of EUR 8.04 million as part of authorised capital (EUR 3.77 million capital and EUR 4.27 million by means of a contribution in kind in the context of an optional stock dividend). 68.27 % of shareholders chose to subscribe to new shares, which means that 167,441 new shares were issued which are participating in the profit of the fiscal year starting on 1 April 2012. The new shares were issued at an issue price of EUR 48.
On 9 August 2012, the merger proposal was submitted for the merger by absorption of Belgian Wood Center NV and Champion Invest NV. This merger took place on 30 November 2012 without the issuing of new shares. The merger of these subsidiaries simplifies the administration and reduces the taxable income of the subsidiaries of Retail Estates NV.
Further to the aforementioned capital increases of 4 July and 27 July 2012, the articles of association of Retail Estates NV were modified on each occasion, however, these modifications only concerned the amount of the share capital and the number of shares.
On 3 September 2012, the new articles of association of Retail Estates NV were approved whereby several of the articles still need to be modified in accordance with the R.D. of 7 December 2010 and the interpretive announcement of the FSMA with regard to granting proxies for acts of disposal on real estate.
Interim results as at 30 September 2012: net current result of the Group up by 13.42 % - fair value of the real estate portfolio up by 18.51 %.
For the six months to 30 September 2012, the net current result (i.e. profit before the results on the portfolio) amounted to EUR 9.84 million, an increase of 13.42 % compared to the same period in the previous year.
Net rental income rose from EUR 17.60 million to EUR 19.71 million. This is mainly due to the acquisition of 85 additional properties in the current financial year and the contribution of retail properties purchased during the previous financial year and which are contributing 100 % for the first time this financial year. Compared with 30 September 2011, the real estate portfolio grew by EUR 110.46 million. With respect to 31 March 2012, the portfolio grew by EUR 99.48 million.
After deduction of property charges, this gives a property result of EUR 19.47 million compared to EUR 17.43 million last year.
Property charges amount to EUR - 1.22 million compared to EUR - 1.02 million the year before. The increase is thus in line with the increase in rental income. After deduction of general costs, the investment company posted an operating result before result on the portfolio of EUR 17.17 million. The operating margin is 87.11 %.
Net earnings from disposals of investment properties amount to EUR 0.24 million out of total sales of EUR 8.91 million. Variations in the fair value of investment properties amount to EUR 2.65 million, representing the net surplus of various positive and negative variations.
The financial result is EUR - 6.83 million, a rise in costs of EUR 0.35 million compared with the same period last year. Retail Estates NV finances its real estate portfolio with long-term bank debts at fixed interest rates. The average interest rate as at 30 September 2012 was 4.65 %.
The net result (share Group) for the first half of the year is EUR 12.73 million, consisting of the net current result of EUR 9.84 million and the result on the portfolio of EUR 2.90 million. Per share this represents a net current result available for distribution of EUR 1.75 for the first half of the year.
The fair value of the property portfolio, including assets held for sale, amounted to EUR 652.43 million as at 30 September 2012, compared to EUR 550.63 million on 31 March 2012.
The net asset value (fair value) per share amounted to EUR 41.65 (excluding 50 % of the expected dividend) as at 30 September 2012. As of 31 March 2012 this was EUR 41.59 (excl. dividend).
The debt ratio amounted to 54.37 % as at 30 September 2012 compared to 51.08 % as at 31 March 2012.
The macro-economic uncertainties do not enable predictions to be made as to the evolution of the fair value of property or the negative variations in the fair value of financial hedging instruments. The evolution of the net asset value of the share, which is sensitive to such variations and uncertainties, is therefore uncertain. To date, the reduced consumer confidence and the lower retail turnover of some retail firms have not resulted in an increase of unoccupied premises or collection issues at Retail Estates. This is probably the result of the discount character of the peripheral retail formulas.
At the end of last financial year (2011-2012), a net current result was projected on the assumption of a stable result. Based on the results of the first half of the year, this objective is maintained. The expected dividend3 (EUR 2.90 gross per share) is confirmed. This represents a 3.57 % increase in the dividend compared with 2011-2012. These expectations were filled in the hypothesis of stable consumer spending and provided a limited but positive evolution of rents.
3 Pursuant to article 7 of the R.D. of 7 December 2010, the dividend is determined based on the statutory (unconsolidated) financial statements of Retail Estates NV.
Following the end of his mandate as managing director of Belfius Insurance, Mr. Guido Roelandt resigned effectively on 1 September 2012 as director of Retail Estates. His vacancy will be filled by co-optation.
This half-yearly report contains a number of future-oriented statements. Such statements are subject to risks and uncertainties which mean that the actual results can differ significantly from those expected on the basis of such future-oriented statements in this interim statement. Significant factors that can influence such results include changes in the economic situation and commercial and environmental factors.
2012-2013 half-yearly financial results I Retail Estates I 15
| 1.A. Condensed consolidated income statement (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| Rental income | 19,882 | 17,704 |
| Rental related expenses | - 177 | - 106 |
| NET RENTAL INCOME | 19,705 | 17,598 |
| Recovery of property expenses | ||
| Recovery of charges and taxes normally payable by tenants on let properties |
1,675 | 1,379 |
| Charges and taxes normally payable by tenants on let properties | - 1,893 | -1,510 |
| Other rental related income and expenses | - 20 | - 31 |
| PROPERTY RESULT | 19,467 | 17,436 |
| Technical costs | - 526 | - 516 |
| Commercial costs Charges and taxes on unlet properties |
- 53 - 79 |
- 25 - 22 |
| Property management costs | - 564 | - 457 |
| Other property charges | - 2 | - 4 |
| PROPERTY CHARGES | - 1,224 | - 1,024 |
| OPERATING PROPERTY RESULT | 18,244 | 16,412 |
| Operating corporate costs | - 1,080 | - 1,184 |
| Other current operating income and expenses | ||
| OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO | 17,165 | 15,228 |
| Result on disposals of investment properties | 243 | 92 |
| Result on sales of other non-financial assets | ||
| Changes in fair value of investment properties | 2,654 | 2,944 |
| OPERATING RESULT | 20,062 | 18,264 |
| Financial income | 625 | 401 |
| Interest charges | - 7,397 | - 6,840 |
| Other financial charges | - 61 | - 40 |
| FINANCIAL RESULT | - 6,833 | - 6,479 |
| 1.A. Condensed consolidated income statement (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| RESULT BEFORE TAXES | 13,228 | 11,785 |
| Taxes | - 342 | - 78 |
| NET RESULT | 12,886 | 11,707 |
| Attributable to: Equity holders of the Group |
12,732 | 11,707 |
| Minority interests | 154 | |
| Note: | ||
| Net current result (share Group) | 9,835 | 8,671 |
| Result on portfolio | 2,897 | 3,036 |
| RESULT PER SHARE |
30.09.12 | 30.09.11 |
|---|---|---|
| Number of ordinary shares in circulation | 5,813,122 | 5,395,408 |
| Weighted average number of shares | 5,621,550 | 5,240,232 |
| Net current result per ordinary share (in €) | 2.26 | 2.23 |
| Diluted net current result per share (in €) | 2.26 | 2.23 |
| Profit available for distribution per share (in €)4 | 1.72 | 1.66 |
| Net current result per share (share Group) (in €)5 | 1.75 | 1.65 |
| 1.B. STATE MENT OF OTHER COMPREHENSI VE INC OME - (in 000 €) |
30.09.12 | 30.09.11 |
|---|---|---|
| * Net profit | 12,886 | 11,707 |
| * Other components of other comprehensive income | ||
| Impact on fair value of estimated transaction rights and | ||
| costs resulting from the hypothetical disposal of investment | - 1,386 | - 398 |
| properties | ||
| Changes in the actual part of the fair value of authorised | ||
| hedging instruments qualifying for hedge accounting as | - 6,457 | -12,611 |
| defined by IFRS | ||
| COMPREHENSIVE INCOME OF THE FIRST HALF YEAR | 5,043 | - 1,302 |
4 Based on the number of ordinary shares in circulation.
5 Based on the weighted average number of shares.
| ASSETS (in 000 €) | 30.09.12 | 31.03.12 |
|---|---|---|
| Non-current assets | 637,346 | 537,938 |
| Intangible assets | 69 | 82 |
| Investment properties 6 | 636,955 | 537,472 |
| Other tangible assets | 301 | 363 |
| Financial assets | ||
| Trade receivables and non-current assets | 21 | 21 |
| Current assets | 20,485 | 17,006 |
| Non-current assets or groups of assets held for sale | 15,473 | 13,159 |
| Trade receivables | 1,313 | 495 |
| Tax receivables and other current assets | 1,413 | 1,216 |
| Cash and cash equivalents | 1,151 | 1,450 |
| Deferred charges and accrued income | 1,135 | 686 |
| TOTAL ASSETS | 657,831 | 554,944 |
| SHAREHOLDERS' EQUITY AND LIABILITIES (in 000 €) | 30.09.12 | 31.03.12 |
|---|---|---|
| SHAREHOLDERS' EQUITY | 261,848 | 241,336 |
| Shareholders' equity attributable to shareholders of the parent company |
250,570 | 241,336 |
| Capital | 129,449 | 121,174 |
| Share premium | 52,857 | 43,268 |
| Reserves | 55,532 | 49,533 |
| Net result for the financial year | 12,732 | 27,360 |
| Minority interests | 11,278 | |
| Liabilities | 395,983 | 313,608 |
| Non-current liabilities | 327,525 | 285,561 |
| Provisions | 128 | |
| Non-current financial debts | 292,033 | 257,423 |
| Credit institutions | 292,033 | 257,423 |
| Financial leasing | ||
| Other non-current liabilities | 35,364 | 28,139 |
6 Including development projects (IAS 40).
| CAPITAL AND RESERVES AND LIABILITIES (in 000 €) | 30.09.12 | 31.03.12 |
|---|---|---|
| Current liabilities | 68,458 | 28,047 |
| Current financial debts | 40,419 | 16,215 |
| Credit institutions | 40,419 | 16,215 |
| Financial leasing | ||
| Trade debts and other current debts | 24,993 | 9,687 |
| Other current liabilities | 105 | 164 |
| Accrued charges and deferred income | 2,941 | 1,981 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 657,831 | 554,944 |
| DEBT RATI O |
30.09.12 | 31.03.12 |
|---|---|---|
| Debt ratio 7 | 54.37 % | 51.08 % |
| NET ASSET VALUE PER SHARE (in €) | 30.09.12 | 31.03.12 | |||||
|---|---|---|---|---|---|---|---|
| Net asset value per share (fair value)8 | 43.10 | 44.39 | |||||
| Net asset value per share (investment value)9 | 45.78 46.99 |
||||||
| Net asset value per share (fair value)8 excl. dividend |
41.65 | 41.59 | |||||
| Net asset value per share (investment value)9 excl. dividend |
44.33 | 44.19 | |||||
| Net asset value per share (fair value)8 excl. dividend excl. IAS 39 |
47.27 | 46.40 | |||||
| Net asset value per share (investment value)9 excl. dividend excl. IAS 39 |
49.95 | 49.01 |
7 The debt ratio is calculated as follows: obligations (excluding provisions, accrued charges and deferred income, financial instruments and deferred taxes), divided by the total assets (excluding financial instruments).
8 The net assets per share (fair value) is calculated as follows: shareholders' equity (attributable to shareholders of the parent company) divided by the number of shares.
9 The net asset per share (investment value) is calculated as follows: shareholders' equity (attributable to shareholders of the parent company) (excluding the impact on the fair value of estimated transaction rights and costs resulting from the hypothetical disposal of property investments) divided by the number of shares.
| TABLE OF CHANGES TO SHAREHOLDERS' EQUIT Y (in 000 €) |
Capital ordinary shares |
Share premium |
|---|---|---|
| Balance according to IFRS on 31 March 2011 | 112,989 | 33,418 |
| - Net appropriation of profits 2010-2011 | ||
| - Transfer of portfolio result to reserves | ||
| - Transfer of net current result to reserves | ||
| - Dividend for financial year 2010-2011 | ||
| - Capital increase through contribution in kind | 7,509 | 8,788 |
| - Minority interests | ||
| - Costs of capital increase | -205 | |
| - Global result 30/09/2011 | ||
| Balance according to IFRS on 30 September 2011 | 120,293 | 42,206 |
| Balance according to IFRS on 31 March 2012 | 121,174 | 43,268 |
| - Net appropriation of profits 2011-2012 | ||
| - Transfer of result from the portfolio to reserves | ||
| - Transfer of net current result to reserves | ||
| - Dividend for financial year 2011-2012 | ||
| - Capital increase through contribution in kind | 8,461 | 9,589 |
| - Costs of capital increase | - 186 | |
| - Minority interests – Acquisition Databuild Investments NV | ||
| - Other | ||
| - Global result 30/09/2012 | ||
| Balance according to IFRS on 30 September 2012 | 129,449 | 52,857 |
| 229,608 |
|---|
| 0 |
| 0 |
| 0 |
| - 13,453 16,297 |
| 0 |
| - 205 |
| - 1,302 |
| 230,945 |
| 241,336 |
| 0 |
| 0 |
| 0 |
| - 15,107 |
| 18,050 |
| - 186 |
| 11,208 |
| 1,504 |
| 5,043 |
| 261,848 |
| *Detail of the reserves (in 000 €) |
Legal reserves | Reserve for the positive / negative balance of changes in fair value of real estate properties |
|
|---|---|---|---|
| Balance according to IFRS on 31 March 2011 | 334 | 63,874 | |
| - Net appropriation of profits 2010-2011 | |||
| - Transfer of portfolio result to reserves | 10,395 | ||
| - Transfer of net current result to reserves | |||
| - Reclassification between reserves | - 1,536 | ||
| - Capital increase through contribution in kind | |||
| - Minority interests | |||
| - Costs of capital increase | |||
| - Other | |||
| - Global result 31/03/2011 | |||
| Balance according to IFRS on 30 September 2011 | 334 | 72,733 | |
| Bilan selon IFRS au 31 mars 2012 | 369 | 71,052 | |
| - Net appropriation of profits 2011-2012 | |||
| - Transfer of result from the portfolio to reserves | 9,396 | ||
| - Transfer of net current result to reserves | |||
| - Reclassification between reserves | 25 | - 5,398 | |
| - Capital increase through contribution in kind | |||
| - Minority interests | 84 | ||
| - Costs of capital increase | |||
| - Other | 1,67910 | ||
| - Global result 30/09/2012 | |||
| Balance according to IFRS on 30 September 2012 | 394 | 76,813 |
10 Decrease in valuation of non-non-built ground in Westende, processed through equity last year. This decrease is processed in the first semester through a variable price adjustment in the contract.
| Available reserves |
Impact on fair value of estimated transaction duties and costs resulting from the hypothetical disposal of investment properties |
Reserve for the balance of changes in fair value of authorised hedging instruments qualifying for hedge accounting as defined by IFRS |
Results carried forward from previous financial years |
TOTAL |
|---|---|---|---|---|
| 2,497 | - 12,449 | - 9,096 | 11,349 | 56,509 |
| 10,395 | ||||
| 2,844 | 2,844 | |||
| 1,536 | 0 | |||
| 1 | ||||
| - 398 | - 12,611 | - 13,009 | ||
| 4,033 | - 12,847 | - 21,707 | 14,193 | 56,739 |
| 4,033 | - 14,145 | - 26,187 | 14,412 | 49,534 0 |
| 9,396 | ||||
| 2,857 | 2,857 | |||
| 5,398 | 175 | - 200 | 0 | |
| 0 | ||||
| 84 | ||||
| 0 | ||||
| - 175 | 1,504 | |||
| -1,386 | - 6,457 | - 7,843 | ||
| 9,431 | -15,531 | - 32,644 | 17,069 | 55,532 |
| (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT THE BEGINN ING OF THE FINANCIAL YEAR |
1,450 | 1,150 |
| 1. Cash-flow from operating activities | 6,765 | 6,610 |
| Net result for the six-month period: | 12,886 | 11,706 |
| Operating result | 20,062 | 18,264 |
| Interest paid | - 7,210 | - 6,907 |
| Interest received | 3 | 3 |
| Dividends received | ||
| Corporation tax paid | - 695 | - 108 |
| Accrued interest | ||
| Others | 726 | 454 |
| Non-cash elements to be added to/deducted from result | - 2,859 | - 2,985 |
| * Depreciation and write-downs | ||
| – Depreciation / write-downs (or write-back) on intangible and tangible assets (+/-) |
90 | 81 |
| – Depreciation / write-downs (or write-back) on trade receivables |
83 | - 30 |
| * Other non-cash elements | ||
| – Changes in fair value of property investments | - 2,654 | - 2,944 |
| – Profit on sale of property investments | - 243 | - 92 |
| Change in working capital requirements | - 3,261 | - 2,111 |
| * Movements of assets: | ||
| – Trade receivables and other receivables | - 842 | - 2,788 |
| – Tax receivables and other current assets | - 198 | 509 |
| – Deferred charges and accrued income | - 440 | - 825 |
| * Movements of liabilities: | ||
| – Trade debts and other currents debts | - 2,684 | 597 |
| – Other current liabilities | - 59 | -18 |
| – Accrued charges and deferred income | 960 | 413 |
| (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| 2. Cash-flow from investment activities | - 44,901 | - 8,482 |
| Purchase of Intangible assets | - 7 | - 26 |
| Acquisition of investment properties | - 28,371 | - 11,769 |
| Disposal of investment properties and assets held for sale | 9,178 | 5,114 |
| Acquisition of shares in real estate companies | - 25,693 | - 1,697 |
| Disposal of shares in real estate companies | ||
| Acquisition of other tangible assets | - 9 | - 103 |
| Income from trade receivables and other non-current assets | ||
| Disposal of non-current financial assets | ||
| 3. Cash-flow from financing activities | 37,837 | 1,676 |
| * Change in financial liabilities and financial debts | ||
| – Increase in financial debts | 47,933 | 36,502 |
| – Decrease in financial debts | - 3,229 | - 21,168 |
| * Change in other liabilities | ||
| – Increase (+) / Decrease (-) in other liabilities | 235 | |
| – Increase minority interests | 154 | |
| Dividends | ||
| – Dividend for the previous year (-) | - 7,070 | - 13,453 |
| * Costs of capital increase | - 186 | - 205 |
| CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD |
1,151 | 954 |
Rounding up or down to the nearest thousand can lead to rounding-off differences between the balance sheet and income statement and the attached details.
The interim financial report for the first six-month period ending on 30 September 2012 has been prepared using accounting standards consistent with International Financial Reporting Standards as implemented by the Belgian R.D. of 7 December 2010 on the accounting, annual accounts and consolidated annual accounts of public real estate investment companies, and amending the R.D. of 10 April 1995 on real estate investment companies, and in accordance with IAS 34 "Interim Financial Reporting".
In determining the fair value of investment properties in accordance with IAS 40 "Property Investment", an estimated amount of transfer taxes and costs is deducted by the independent property expert. The impact on the fair value of investment properties of these estimated transfer taxes and costs on the hypothetical disposal of investment properties is recorded directly in the shareholders' equity under the heading "lmpact on fair value of estimated transfer taxes and costs in the event of the hypothetical disposal of investment properties" expressly provided for in the above R.D.. In the first six-month periods ending on 30 September 2012 and 30 September 2011, amounts of, EUR - 1.39 and EUR – 0.40 million, respectively, were directly recorded in the shareholders' equity under this account.
In these condensed interim financial statements the same accounting principles and calculation methods are applied as in the consolidated financial statements for the year ending on 31 March 2012.
The company transactions of the past six months have not been treated as a business combination as defined under IFRS 3. The company considers that IFRS 3 is not applicable, given the nature and size of the company over which control has been acquired. These are companies owning a small number of premises, and which are not intended to be kept on as independent businesses.
In accordance with article 13§2 of the R.D. of 14 November 2007, Jan De Nys, managing director, declares that, to his knowledge,
year, and the main transactions between related parties and their possible impact on the condensed interim financial statements if these transactions are of significant importance and were not concluded under normal market conditions.
IFRS 8 defines an operating segment as follows: an operating segment is a component of the company: (IFRS 8.2):
Given that suburban retail properties account for 94 % of the Retail Estates portfolio, a breakdown of activities by operating segment is not relevant. The board of directors does not use any other segment in its decision-making process.
In accordance with the modified IAS 40 standard, project developments are included under investment properties. On purchase they are valued at purchase cost, including incidental expenses and nondeductible VAT.
After initial recognition, projects are valued at fair value once contractors have been found, the necessary licences are acquired, and the properties are let. This fair value valuation is based on the valuation by the real estate expert, after deduction of work still to be done.
The framework agreement concluded on 29 May 2012 for the acquisition of NV Databuild Investments provides that Retail Estates NV shall acquire, at the latest effective on 1 July 2016, all the shares of this company which it does not yet own based on the same valuation formula which was chosen on 4 July 2012 to acquire control. This concerns 375 shares of NV Databuild Investments with a value of EUR 11.28 million on 30 September 2012.
Article 54 of the new R.D. of 7 December 2010 on closed-end real estate investment funds (the so-called SICAFI/BEVAK) requires publicly traded real estate investment companies to establish a financial plan with an implementation schedule when its consolidated debt ratio exceeds 50% of consolidated assets. The financial plan describes the measures to be taken to prevent the consolidated debt ratio from exceeding 65% of consolidated assets.
A separate report on the financial plan is prepared by the auditor, confirming that the latter has verified the method of drawing up the plan, particularly as regards the economic bases, and that the figures contained in this plan concur with the accounts of the public real estate investment company.
The general guidelines of the financial plan are included in the annual and half-yearly financial reports. The annual and half-yearly financial reports will describe and justify how the financial plan has been implemented during the period under review and how the public real estate investment company will implement the plan in the future.
Since 2008-2009,the debt ratio of Retail Estates NV has risen above 50%. In the aforementioned year, the debt ratio was 56%, subsequently remaining stable at around 53%. Throughout its history, the Retail Estates' debt ratio has never exceeded 65%.
The board of directors considers a debt ratio of + 55 % ideal for the shareholders of the real estate investment fund (bevak) in terms of the return and the current earnings per share. The impact of every investment on the debt ratio is reviewed and if necessary the investment is not carried out if it has a negative influence on the debt ratio. Based on the current debt ratio of 54.37 %, Retail Estates NV has an investment potential of EUR 199.75 million without exceeding as such a debt ratio of 65 %, and an investment potential of EUR 92.55 million without exceeding a debt ratio of 60 %.
Every quarter, the board of directors is presented with a prognosis of how the debt ratio will evolve during the following quarter. The board also discusses any deviations which may have occurred between the estimated and actual debt ratio during the previous quarter.
The projection of the debt ratio as at 31 December 2012 takes into account the following assumptions:
• disposals in the third quarter 2012 - 2013
Investments amounting to EUR 1.74 million are planned.
• results of the third quarter 2012 - 2013
The results of the third quarter as indicated in the budget for 2012 - 2013, approved by the board of directors.
• planned investments in the third quarter 2012 - 2013
Investments amounting to EUR 2.5 million are planned for the third quarter of the fiscal year 2012 - 2013.
Considering the aforementioned assumptions, the debt ratio as at 31 December 2012 will amount to 53,63 %.
A projection is also made of the debt ratio as at 31 March 2013 (end of the fiscal year). This projection takes into account the following assumptions:
• disposals in the second semester 2012 - 2013 No sales are planned in the fourth quarter. The total of sales in the second semester will remain the same as in the third quarter (EUR 1.74 million).
• results of the second semester 2012 - 2013 The results of the second semester as indicated in the budget for 2012 - 2013, approved by the board of directors.
• planned investments in the second semester 2012 - 2013 Investments amounting to EUR 1.3 million are planned for the fourth quarter of the fiscal year 2012 - 2013. The total investment amounts to EUR 3.8 million for the second semester of the fiscal year.
Considering the additional planned investments and the earnings expectations for the full year, the debt ratio at 31 March 2012 would amount to 52.92 %.
The valuation of the real estate portfolio also has an impact on the debt ratio. Considering the current capital basis, the maximum debt ratio of 65 % would be exceeded in the event of a reduction in the fair value of real estate investments of EUR 107.55 million. This reduction in value could be the result of an increase in the yield (if the rental values remain unchanged, the yield would have to increase by 1.42 % in order to exceed the debt ratio) or a reduction in rents (if the yields remain unchanged, the rents would have to drop by EUR 7.53 million). Historically, the fair value of the real estate portfolio has always risen or was at least stable since the real estate investment fund (bevak) was set up. There are
currently no indications in the market to assume an increase in the yield. There is no significant rate of unoccupied premises in the suburban retail market segment and consequently no pressure on rental prices.
In the event that substantial value reductions occur that cause the debt ratio to exceed 65 %, Retail Estates NV can sell a number of its properties. Retail Estates NV has a solid track record with regard to selling properties at their estimated investment value. In the 2009-2010 fiscal year, 27 properties were sold with a net selling price of EUR 47.37 million; in the 2010-2011 fiscal year, 13 properties were sold with a net selling value of EUR 8.64 million. At 31 March 2012, 12 retail properties were sold for a net selling price of EUR 17.87 million. Globally speaking, these properties were sold at the estimated investment value. At 30 September 2012, 11 retail properties were sold for a net selling price of EUR 8.86 million.
Retail Estates NV is of the opinion that, based on
no additional measures need to be taken to prevent the debt ratio exceeding 65%. It is the intention of the real estate fund (bevak) to maintain the debt ratio around 55%. This level is evaluated regularly and will be reviewed by the board of directors if deemed necessary in the light of changing market and influencing factors.
During the first half of the financial year, Retail Estates NV expanded its property portfolio with 85 retail premises. These represent rental income of EUR 7.44 million. In the consolidated figures as of 30 September 2012 these new premises represent a rental flow of EUR 1.50 million.
A number of properties were also divested in the first 6-month period. These represent rental income of EUR 0.50 million. In the consolidated figures as of 30 September 2012, these properties represent EUR 0.10 million.
| Rental income (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| Rent | 19,513 | 17,321 |
| Guaranteed income | ||
| Operational leasing payments received | 369 | 383 |
| Rent reductions | ||
| Rental benefits (incentives) | ||
| Compensation for premature termination of lease contracts | ||
| Total rental income | 19,882 | 17,704 |
The rise in rental income is mainly due to the growth of the real estate portfolio and the indexation of the rents.
The following table uses a theoretical exercise to show the amount by which annual rental income could potentially drop on the assumption of tenants not renewing their leases on expiry of their contracts and no subsequent reletting taking place. This does not detract from the theoretical risk of all tenants exercising their legal right of termination at the end of the current three-year period. In this case, all retail premises will by definition be vacant within 3 years and 6 months. Rents in the table below are the expected annual rentals and therefore deviate from the total rental income in the above table.
| in 000 € | 30.09.12 | 30.09.11 |
|---|---|---|
| Within 1 year | 2,381 | 1,507 |
| Between 1 and 5 years | 15,196 | 7,046 |
| More than 5 years | 28,628 | 27,600 |
The Group concludes commercial rental contracts for its buildings, for a minimum period of 9 years, which can usually be terminated upon expiry of the third and sixth year, subject to 6 months' notice prior to the expiry date. Rents are usually paid monthly in advance (sometimes quarterly). They are indexed annually on the anniversary of the lease.
Taxes and levies, including the advance levy on income derived from real estate, the insurance premium and the communal charges, are in theory borne by the lessee. To guarantee compliance with the obligations imposed on the lessee by virtue of the agreement, the lessee must provide a rental guarantee, usually in the form of a bank guarantee amounting to three months' rent.
At the start of the lease an inventory of fixtures and fittings is drawn up between the parties by an independent real estate expert. On expiry of the lease the lessee must return the rented premises in the state described in the inventory of fixtures and fittings drawn up when it took up occupancy, subject to normal wear and tear.
The lessee may not transfer the lease or sublet the premises wholly or in part, other than subject to prior written permission from the lessor. The lessee is obliged to register the lease at its own expense.
| Investment and revaluation table |
Investment properties |
Assets held for sale | TOTAL | |||
|---|---|---|---|---|---|---|
| in 000 € | 30.09.12 | 31.03.12 | 30.09.12 | 31.03.12 | 30.09.12 | 31.03.12 |
| Balance at the end of the preceding financial year |
537,472 | 505,588 | 13,159 | 10,778 | 550,631 | 516,366 |
| Acquisition via purchase of real estate companies |
63,678 | 1,526 | 7,319 | 70,997 | 1,526 | |
| Capitalised financing costs |
583 | 982 | 583 | 982 | ||
| Acquisition of investment properties |
37,007 | 41,397 | 37,007 | 41,397 | ||
| Disposal via sale of real estate companies |
0 | |||||
| Disposal of investment properties |
- 3,427 | - 6,415 | - 5,751 | - 11,011 | - 9,178 | - 17,426 |
| Transfer to assets held until sale |
- 934 | - 15,032 | 934 | 15,032 | 0 | |
| Change in fair value (+/-) | 2,576 | 9,427 | - 187 | 2,389 | 9,427 | |
| Other | - 1,63911 | - 1,639 | ||||
| Balance at the end of the financial year |
636,955 | 537,472 | 15,474 | 13,159 | 652,429 | 550,631 |
| Investment value of the property |
652,099 | 551,289 | 15,861 | 13,488 | 667,960 | 564,777 |
11 Decrease in valuation of non-built land in Westende, processed through equity last year. This decrease is processed in the first semester through a variable price adjustment in the contract.
During the first half of the financial year control was acquired of 2 real estate companies, for the amount of EUR 35.71 million, EUR 25.60 million was paid in cash and EUR 10.01 million by capital increase. This resulted in a EUR 72.75 million increase of investment properties, a EUR - 10.93 million variation of working capital and a EUR 14.11 million increase of financial debts. The participation also includes a minority interest of EUR 12.00 million (in purchasing). At 30 September the minority interest is EUR 11.28 million.
| Long and short term financial debts (in 000 €) | 30.09.12 | 30.09.11 |
|---|---|---|
| Long-term | ||
| Bilateral loans - variable or fixed interest rate | 292,033 | 257,423 |
| Financial leasing | ||
| Subtotal | 292,033 | 257,423 |
| Short-term | ||
| Bilateral loans – variable or fixed interest rate | 40,419 | 16,215 |
| Investment credits – variable or fixed interest rate | ||
| Advances on current account – variable interest rate | ||
| Financial leasing | ||
| Subtotal | 40,419 | 16,215 |
| TOTAL | 332,452 | 273,638 |
| 30.09.12 | 30.09.11 |
|---|---|
| 45,133 | 25,016 |
| 229,390 | 219,347 |
| 17,510 | 13,060 |
Of all loans, EUR 298.42 million have a floating interest rate. These are all long-term loans. 92.31 % of the loans are hedged via interest rate swap contracts that swap floating interest rates for fixed interest rates or have a fixed interest rate. The average interest rate of the loans is 4.65 %. Retail Estates NV has agreed in principle on a debt ratio of 60 % with its banks.
On 1 September 2012, a new store in Namur was released to Maison du Monde.
On 15 October 2012, a plot of land in Jambes was purchased for EUR 2.5 million and let to Quick Restaurants.
On 29 October 2012, 3 stores (let to Zeeman, Kruidvat and KBC Bank), were sold to a private investor for EUR 1.02 million.
The merger by acquisition of Belgian Wood Center NV and Champion Invest NV took place on 30 November 2012 without the issuing of new shares. The merger of these subsidiaries simplify the administration, and reduces the taxable income of the subsidiaries of Retail Estates NV.
We have performed a limited review of the accompanying consolidated condensed balance sheet, condensed income statement, condensed statement of comprehensive income, condensed cash flow statement, condensed statement of changes in equity and selective notes 5.1 to 5.11 (jointly the "interim financial information") of Retail Estates NV/SA ("the company") and its subsidiaries (jointly "the group") for the six-month period ended 30 September 2012.
The board of directors of the company is responsible for the preparation and fair presentation of this interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.
The interim financial information has been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the EU and implemented by the R.D. of 7 December 2010 with respect to public real estate investment trusts.
Our limited review of the interim financial information was conducted in accordance with international standard ISRE 2410 – Review of interim financial information performed by the independent auditor of the entity. A limited review consists of making inquiries of group management and applying analytical and other review procedures to the interim financial information and underlying financial data. A limited review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA). Accordingly, we do not express an audit opinion on the interim financial information.
Based on our limited review, nothing has come to our attention that causes us to believe that the interim financial information for the six-month period ended 30 September 2012 is not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU and implemented by the R.D. of 7 December 2010 with respect to public real estate investment trusts.
Diegem, 30 November 2012
The statutory auditor DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL
Represented by Kathleen De Brabander
2012-2013 half-yearly financial results I Retail Estates I 37
During the first six months of the 2012-2013 financial year, the stock market price fluctuated between EUR 49.21 and EUR 53.00. The graph above shows the share performance of the Retail Estates share in comparison with the BEL 20 since the stock exchange listing. The Retail Estates share has increased in value over the period by + 59.88 % while the BEL 20 has fallen by - 20.28 %. The average closing price during this period was EUR 51.02. 60
| NET ASSET VALUE PER SHARE (in €) 120 |
30.09.12 | 31.03.12 | 30.09.11 |
|---|---|---|---|
| 100 Net asset value per share (fair value)12 |
43.10 | 44.39 | 42.80 |
| Net asset value per share (investment value)13 80 |
45.78 | 46.99 | 45.18 |
| Net asset value per share (fair value)12 excl. dividend 60 |
41.65 | 41.59 | 41.40 |
| Net asset value per share (investment value)13 excl. dividend | 44.33 | 44.19 | 43.78 |
| 40 | |||
| Net asset value per share (fair value)12 excl. dividend excl. IAS 39 | 47.27 | 46.40 | 45.42 |
| 20 Net asset value per share (investment value)13 excl. dividend excl. |
|||
| 0 IAS 39 |
49.95 | 49.01 | 47.80 |
| Gross dividend | 2.8 | ||
| Net dividend | 2.212 | ||
| Share price on closing date | 50.41 | 49.21 | 49.09 |
The net asset value of the share in the case of a property valuation at fair value is EUR 43.10.
The change in net asset value is explained by the further decline in market value of interest rate hedging instruments and the payment of a dividend for the 2011-2012 financial year.
| Interim statement on results for the 3rd quarter of the 2012-2013 financial year |
15 February 2013 |
|---|---|
| Announcement of the annual results for the 2012-2013 financial year | 31 May 2013 |
| Dividend made available for payment | 12 July 2013 |
12 The net assets per share (fair value) is calculated as follows: shareholders' equity (attributable to shareholders of the parent company) divided by the number of shares.
13 The net asset per share (investment value) is calculated as follows: shareholders' equity (attributable to shareholders of the parent company) (excluding the impact on the fair value of estimated transaction rights and costs resulting from the hypothetical disposal of property investments) divided by the number of shares.
retail properties in Belgium and the Grand Duchy of Luxembourg
2012-2013 half-yearly financial results
I Retail Estates I 41
Retail Estates NV enlists the services of Cushman & Wakefield and CB Richard Ellis as its real estate expert. In practice, each real estate expert values a part of the real estate portfolio.
Cushman & Wakefield's report dated 30 September 2012 covers a portion of the property of Retail Estates NV and its subsidiaries.
"We have the pleasure to give you our valuation update as at 30 September 2012 of the Retail Estates Portfolio + Distri-Land Immobilière NV.
We confirm that we carried out this task as independent expert. We also confirm that our valuation was carried out in accordance with the national and international standards and their application procedures, amongst other in the valuation of "sicafi" (Belgian Reit) – (According to the present decisions. We preserve ourselves the right to review our valuation in case of modified decisions).
The fair value is defined as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. This definition corresponds to our definition of the market value.
The sale of a building is in theory subject to transfer rights collected by the government. This amount depends amongst other on the transfer manner, the profile of the purchaser and the geographical
situation of the building. The first two conditions and the amount to pay for the rights is only known when the sale has been concluded. As independent experts, we confirm that on the basis of a representative sample of the market (between 2002 and 2005) the weighted average of the rights (average transfer costs) is 2.5 % (for goods with a higher value than EUR 2,5 million)
The properties are here considered as a portfolio.
Our 'investment value' is based on the capitalisation with a Gross Yield of the passing rent, taking into account possible corrections like vacancy, step-rents, rent-free periods, etc. The Gross yield is depending on current output on the investment market, taking into account the location, the suitability of the site, the quality of the tenant and the building on the moment of the valuation.
In order to calculate the investment value of the retail park in Tongeren, we have capitalized its adjusted market rent. Two cases can occur. In those cases where the current passing rent (PR) is under this ERV, it is unlikely that in contract renewals with sitting tenants, the full ERV will be attained. It is standard market practice to take into account that no more than 60 % of the gap between the actual passing rent and the ERV can be bridged in renegotiations. This mainly due to the high legal protection for sitting tenants under Belgian commerce law.
When now the market rent (ERV) is under the passing rent however, the highest rent a landlord should hope to achieve is the market rent. Since, being prudent, one should assume that the sitting tenant will use the break to negotiate his rent downward and bring it in line with the market.
The portfolio of Distri-Land Immobilière NV has as at 30/09/2012 an investment value (corrections incl.) of EUR 18.16 million and a fair value of EUR 17.71 million. The investment value is remaining stable compared to 30/06/2012. This gives a yield of 7.25 % for Distri-Land Imobilière NV.
We obtain an investment value (corrections incl.) as at 30/09/2012 for the portfolio14 of EUR 399.33 million and a fair value of EUR 389.76 million. On the basis of the investment value, the portfolio increases in absolute terms with 2.45 % compared to 30/06/2012, due to the indexations, some refurbishments and renewals. This gives a yield of 6.82 % to the portfolio."
The report by CB Richard Ellis dated 30 September 2012 covers a portion of the property of Retail Estates NV and its subsidiaries. The investment value of this real estate is herewith estimated at EUR 254.37 million and the fair value at EUR 248.16 million. These properties account for a rent collection of EUR 17.77 million, representing a gross yield of 6.80 %.
14 Portfolio: Retail Estates NV + Belgium Retail 1 Luxembourg + Distri-Land Immobilière NV + Tongeren
The investment market is evolving in different directions under the influence of the world-wide economic uncertainties. On the one hand a number of foreign institutional investors have realised their investments faster than originally intended, in order to secure their capital gains and reinvest in their home markets where the credit crunch is offering new purchase opportunities. On the other hand the private market remains active, with wealthy private investors showing continuing interest in transactions of between EUR 1 and 5 million. The rental market remains active, but is more sensitive than in the past to quality of location, with a preference for retail properties on multi-shop sites (retail parks) or along major city access roads with strong concentrations of similar properties (retail clusters). Isolated buildings in well-populated residential areas are popular with food supermarkets.
Clothing and footwear shops (27.74 % compared with 31.49 % as at 31 March 2012) together with food, electrical goods and toy retailers account for more than 59.46 % of the leased space. The socioeconomic permits for these activities are the most difficult to obtain, and this makes these buildings more likely to appreciate in value, and tends to promote strong lessee loyalty to the location.
The larger margins in the interior decoration and home furnishings sector make it possible to obtain sizeable rent increases in favourable economic climates, but it is this sector that is hardest hit by any downturn in consumer confidence. This segment represents 19.95 % of Retail Estates NV's property portfolio (compared with 21.83 % as at 31 March 2012).
In principle Retail Estates NV only invests in suburban retail property. Under pressure from changing planning requirements more and more retail properties are being integrated into mixed-use buildings, i.e. buildings intended primarily as shop premises, but with office or residential functions on the upper floors. The company does not invest in office units or residential property. Since the selling of floors with different functions leads to complex ownership situations, Retail Estates NV prefers to retain ownership of the entire building.
Moreover, as part of package deals, Retail Estates NV acquires real estate portfolios containing properties with semi-logistic functions, like the Brantano office and distribution centre at Erembodegem.
The "other" (5.40 %) heading mainly contains apartments and SME premises. In theory Retail Estates NV only invests in properties with such as these when they are ancillary to retail premises or form part of a "package deal".
| RETAIL ESTATES | |||
|---|---|---|---|
| Key figures | 30.09.12 | 31.03.12 | |
| Estimated fair market value (incl. assets held for sale) | 634,794,480 | 519,759,539 | |
| Contractual rents | 44,814,242 | 35,838,296 | |
| Contractual rents incl. rental value of vacant buildings (fair value) | 45,549,685 | 36,279,318 | |
| Yield in % (fair value) | 6.91 %15 | 6.99 % | |
| Total m² premises in portfolio | 516,543 | 412,628 | |
| Number of premises | 506 | 432 | |
| Occupancy rate in % | 98.02 % | 98.19 % |
13 Based on the actual rent.
This is the term used for the purchase of a building. Any conveyance fees payable are included in the acquisition price.
NAV (Net Asset Value) means equity divided by the number of shares.
These are companies that have a central purchasing department and operate at least five different retail outlets.
The index-linked basic rents as set commercially in the lease agreements as of 30 September 2012, before deduction of gratuities or other benefits granted to tenants.
The debt ratio is calculated as follows: obligations (excluding provisions, accrued charges and deferred income, hedging instruments and deferred taxes), divided by the total assets (excluding hedging instruments).
The dividend yield is the gross dividend divided by the average stock market price of the share over the financial year.
The exit tax is a special corporation tax rate applied to the difference between the real value of the authorised capital of companies and the book value of its assets at the time that a company is recognised as a real estate investment company, or merges with a real estate investment company.
This value is equal to the amount for which a building could be swapped between properly informed parties, consenting and acting under normal competitive conditions. From the point of view of the seller, it must be construed minus the registration charges.
Gross dividend per share is the operating profit distributed.
The International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) were drawn up by the International Accounting Standards Board (IASB), defining international standards for the preparation of annual accounts. European listed companies are required to apply the rules in their consolidated accounts for financial years starting from 1 January 2005.
The International Financial Reporting Standards are a set of accounting principles and valuation rules prepared by the International Accounting Standards Board. The aim is to simplify international comparison between European listed companies. Listed companies are under obligation to prepare their consolidated accounts according to these standards starting from the first financial year beginning after 1 January 2005.
The intrinsic value of a share is the actual estimated value of the share, assuming that the company were to cash in all of its assets.
This is the value of a building as estimated by the independent real estate expert, including transfer costs and without deduction of the registration fee. This value corresponds to the formerly used term "value when sold with purchasing costs payable by the vendor" or "value deed in hand".
Total shareholders' equity divided by the number of shares.
Total shareholders' equity adjusted for the impact on the fair value of estimated transaction rights and costs in the event of the hypothetical disposal of investment properties, divided by the number of shares.
The net dividend is equal to the gross dividend after retention of 21 % withholding tax.
The occupancy rate is calculated as the ratio of the surface area actually leased out to the surface area available for leasing, expressed in m².
Retail premises grouped along roads leading into and out of cities and towns. Each out-of-town retail property has its own car park and an entrance and exit road connecting to the public highway.
Achieved and unachieved higher or lower values relative to the most recent valuation by the expert, including the exit tax owed on account of inclusion of the property of the acquired companies in the system of real estate investment companies.
Retail properties that form part of an integrated commercial complex and are grouped together with other retail properties. All properties use a central car park with a shared entrance and exit road.
This is the total number of shares at the end of the fiscal year multiplied by the closing price at the end of the fiscal year.
| NAME: | Retail Estates NV |
|---|---|
| STATUS: | Real estate investment company with fixed capital |
| established according to Belgian law | |
| ADDRESS: | Industrielaan 6, B-1740 Ternat, Belgium |
| TELEPHONE: | +32 (0) 2 568 10 20 |
| FAX: | +32 (0) 2 581 09 42 |
| EMAIL: | [email protected] |
| WEBSITE: | www.retailestates.com |
| REGISTER OF LEGAL ENTITIES: | Brussels |
| VAT NUMBER: | BE 434.797.847 |
| ENTERPRISE NUMBER: | 0434.797.847 |
| INCORPORATED ON: | 12 July 1988 |
| STATUS AS REAL ESTATE | 27 March 1998 |
| INVESTMENT COMPANY WITH | |
| FIXED CAPITAL GRANTED ON: | |
| STATUTORY PERIOD OF | Unlimited |
| ESTABLISHMENT: | |
| MANAGEMENT: | Internal |
| AUDITORS: | Deloitte auditors – Berkenlaan 8B 1831 Diegem, represented |
| by Mrs Kathleen De Brabander | |
| FINANCIAL YEAR CLOSING: | 31 March |
| CAPITAL: | EUR 130,797,517.19 |
| NUMBER OF SHARES: | 5,813,122 |
| GENERAL MEETING: | first Friday of July |
| LISTING: | Euronext - continuous market |
| FINANCIAL SERVICES: | KBC Bank |
| VALUE REAL ESTATE | investment value EUR 652.10 million – fair value EUR 636.96 |
| PORTFOLIO: | million (incl. value of "Distri-Land Immobilière NV" real estate |
| certificates) | |
| REAL ESTATE EXPERTS: | Cushman & Wakefield and CB Richard Ellis |
| NUMBER OF PROPERTIES: | 506 |
| TYPE OF PROPERTIES: | Suburban retail |
| LIQUIDITY PROVIDER: | KBC Securities |
Industrielaan 6 B - 1740 Ternat [email protected] www.retailestates.com
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