Earnings Release • Feb 8, 2013
Earnings Release
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Press release Annual results 2012
Antwerp, 8 February 2013
The gross dividend of Intervest Offices & Warehouses increases to € 1,76 per share in 2012 (€ 1,73 in 2011).
The average remaining duration of the lease contracts of the property investment fund has increased in 2012 from 3,7 years to 4,5 years through the prolongation of lease contracts with, among others, PwC, Estée Lauder and UTi Belgium.
The total occupancy rate of Intervest Offices & Warehouses remains stable in 2012 and amounts to 86 %. The occupancy rate of the office portfolio has increased by 1 %, taking this to 85 % in 2012.
Intervest Offices & Warehouses has expanded in 2012 its real estate portfolio by € 15 million or 2,6 %, mainly in the logistic segment.
In 2012, the fair value of the real estate portfolio has decreased by € 14 million1 or 2,4 %, mainly in the office segment.
1 Based on an unchanged composition of the real estate portfolio compared to 31 December 2011.
Despite the continuing economic crisis, the property investment fund Intervest Offices & Warehouses succeeded in closing 2012 with a better operating distributable result than in 2011. Besides the increase in rental income due to acquisitions and lower property charges, the decrease in the interest charges of the property investment fund, as a result of new interest rate swaps taking effect at lower interest rates, has also contributed significantly to the improvement of the result as compared to 2011. This has allowed the property investment fund to offer its shareholders a gross dividend of € 1,76 for financial year 2012 as compared to € 1,73 for financial year 2011, which represents an increase of 2 %. Furthermore, a number of important lettings and extensions, both in the logistic and office portfolio, has resulted in an increase in the average remaining duration of the property investment fund's lease contracts from 3,7 years to 4,5 years in 2012.
The gross dividend of Intervest Offices & Warehouses amounts to € 1,76 per share in 2012 (€ 1,73 in 2011)
In 2012, Intervest Offices & Warehouses has again expanded its position in logistic real estate. By now, 39 % of the real estate portfolio consists of highquality logistic real estate in prime locations. This makes Intervest Offices & Warehouses the second largest investor in logistic real estate in Belgium at present2. The market for logistic real estate has withstood the difficult economic conditions relatively well. Despite the crisis and the decreased transaction volume, the level of interest in available spaces has remained satisfactory.
Despite the overall market demand being lower than in 2011, Intervest Offices & Warehouses has succeeded to conclude some excellent transactions.
2 Source: Expertise Top 100 - Investors Directory 2013
In addition to the expansion of the logistic site in Oevel with a space of approximately 5.000 m², the lease contracts with both Estée Lauder and UTi Belgium have been renewed at favourable terms, for 4,5 and 6 years respectively, till the end of 2023.
A lease agreement for a term of 15 years has been signed with the PSA Group for converting the front part of the Neerland 1 building in Wilrijk, located next to Ikea, into the new Antwerp showroom and garage for Peugeot.
While both transactions are important because of the long-term cash flow, they also prove that Intervest Offices & Warehouses is recognised in the logistic real estate market as a real estate partner that can provide solutions in more complex tailormade cases.
During the past year, the primary focus of the office portfolio has been to ensure the continuity of the lease contracts. In difficult market conditions and a full-scale economic crisis, where demand for offices is decreasing, the property investment fund has managed to increase the occupancy rate of its office portfolio by 1 %, taking this to 85 %.
The most important transaction of 2012 has been the prolongation of the lease contract with the largest tenant, PwC, in the Woluwe Garden building. From 1 January 2013, a new lease contract comes into effect for the same space (21.272 m², including 23.712 m² of archives) for a fixed period of nine years. In view of the difficult office market, this will result in a decrease of approximately € 1,4 million in annual rental income but, on the other hand, the cash flow of the property investment fund is guaranteed for nine years.
In 2012, there has been a lot of media attention for the unfavourable office market and structural oversupply of offices. For a long time, the office market has been largely a replacement market, where relatively recent offices are often vacated for new offices which are frequently customised to the needs of large corporates. As such the tenant Deloitte decided to vacate the buildings in Diegem over time and move to a building to be developed, a few kilometres away at the airport. The agreements with Deloitte continue until early 2016 and longer, so that there is sufficient time to recommercialise these buildings. Given the location of this site near Diegem-station and the quality of the buildings (BREEAM-Very Good), these offer an excellent opportunity to meet a potential demand for large office spaces. Some concrete scenarios for dealing with the departure of Deloitte are outlined here. The buildings could be redeveloped into a multi-tenant campus offering extensive services, based on the example of what was achieved at Mechelen with RE:Flex. In the other scenario of a single tenant, the three buildings could be connected to each other. A concrete design for this has already been drawn up.
The decrease in the value of the real estate properties, as a result of this new lease agreement with PwC at lower rental incomes and the announced departure of the tenant Deloitte, has already been included in the figures as at 31 December 2012.
The average remaining duration of the lease contracts of the property investment fund has increased in 2012 from 3,7 years to 4,5 years
Deloitte Campus 2 - Diegem
Intervest Offices & Warehouses focuses on an investment policy based on the principles of high-quality professional real estate and the principles of risk diversification based on building type and geographic spread and the nature of tenants.
On 31 December 2012 this risk spread is as follows:
Geographic spread of offices
Geographic spread of logistic properties
| REAL ESTATE PATRIMONY | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Fair value of investment properties (€ 000) | 581.280 | 581.305 |
| Investment value of investment properties (€ 000) | 595.812 | 595.919 |
| Occupancy rate (%) | 86 % | 86 % |
| Total leasable space (m²) | 614.308 | 627.096 |
In 2012, the fair value of the real estate portfolio of the property investment fund has remained stable and amounts on 31 December 2012 to € 581 million (€ 581 million on 31 December 2011).
The fair value of the logistic portfolio has increased by € 18 million, primarily through the purchase of the leasehold rights and extension of the second distribution centre in Oevel, the delivery to Nike Europe of a second office block in Herentals Logistics 2, the ongoing renovation, redevelopment and expansion projects in Herentals Logistics 1 and Neerland 1 in Wilrijk and the extension of the lease contracts with Estée Lauder and UTi Belgium at the site in Oevel until 31 December 2023.
The fair value of the office portfolio decreases by € 18 million mainly as a result of the lease contract concluded in October 2012 with PwC in Woluwe Garden (till end 2021), the announced departure of tenant Deloite in Diegem in 2016 and the general adjustment of the estimated rental value for offices in the Brussels periphery.
On 31 December 2012, the fair value of the real estate portfolio amounts to € 581 million
On 31 December 2012, the total occupancy rate of the real estate portfolio of Intervest Offices & Warehouses amounts to 86 % (86 % on 31 December 2011):
୭ compared to 31 December 2011, the occupancy rate of the office portfolio has slightly increased to 85 % (84 % on 31 December 2011). This is due to the letting to Viabuild and the extension of MC Square, both at Mechelen Campus, and the extension of Biocartis in Intercity Business Park in Malines.
୭ for the logistic portfolio the occupancy rate has decreased by 2 % compared to 31 December 2011, to 89 % on 31 December 2012. This decrease comes mainly from the departure from a tenant in a building in Duffel (Stocletlaan).
In 2012, the total occupancy rate of Intervest Offices & Warehouses remains stable at 86 %
For offices as well as logistic real estate the number of new lettings has noticeably decreased compared 2011 and 2010. On the opposite, the successfully negotiated m² at end of lease renewals, extensions or prolongations of lease contracts has considerably increased compared to 2011.
In the office portfolio of Intervest Offices & Warehouses new lease contracts have been signed in 2012 for a total space of 3.200 m², attracting 6 new tenants (on a total office portfolio of approximately 231.000 m²). This is less compared to the new lettings of 2011, when still 13 new tenants were attracted for a total space of 9.755 m².
In 2012, the most important transactions are:
In the office portfolio of the property investment fund, current lease contracts have been renegotiated or prolonged in 2012 for a space of 45.761 m² in 30 transactions. In 2011 a total space of 26.306 m² was renegotiated in 36 transactions.
In 2012, the most important transactions are:
3T Estate - Vilvorde
In the logistic portfolio of the property investment fund, new lease contracts have been concluded in 2012 for a total space of 16.552 m² in 4 transactions. This is noticeably lower than in 2011, which was an exceptional year due to the transaction with Nike Europe in Herentals for almost 51.000 m².
In 2012, these transactions are:
Renewals at end of lease contracts, extensions and prolongation of lease contracts
In the logistic portfolio, lease contracts for a space of 82.487 m² have been renewed, extended or prolonged in 2012 in 12 transactions. This is noticeably more than in 2011 when 6 transactions were concluded for a space of 26.385 m².
In 2012, these transactions are:
Wilrijk Neerland 1&2 - Wilrijk
Intervest Offices & Warehouses has prolonged in October 2012 the lease contract with its largest tenant PwC in the Woluwe Garden office building, located in Sint-Stevens-Woluwe. The lease contract, for a space of 21.272 m² offices (23.712 m² including archives), has been concluded for a fixed period of 9 years as from 1 January 2013 till 31 December 2021. This tenant currently represents on 31 December 2012 approximately 10 % of the rental income of the property investment fund.
This lease contract ensures a long term future rental income to the property investment fund in the very competitive Brussels office area Diegem-Zaventem where vacancy reaches summits of 20 % and more. The annual rental income of the property investment fund will decrease by approximately € 1,4 million or € 0,10 per share as from financial year 2013. As a result here of and because of the general market circumstances in the Brussels periphery has the fair value of this building decreased in 2012 by € 14 million.
In March 2012, Intervest Offices & Warehouses has concluded two additional lease contracts with biotechnology company Biocartis for additional space of respectively 1.254 m² for offices and 1.415 m² for laboratories at Intercity Business Park in Malines. Both lease contracts have a fixed term of 15 years, with a termination option after 9 years. This further extension of Biocartis represents a gross rental income of approximately € 420.000 an annual basis3. With a total space of 6.639 m² of offices and laboratories, leased for a long term, Biocartis is now the largest tenant of Intervest Offices & Warehouses at Intercity Business Park.
As a result of this re-letting transaction, the property investment fund has included in profit the first quarter of 2012 a part of the compensation received in 2010 from Tibotec-Virco, for an amount of € 0,5 million.
Besides, a lease contract has also been concluded in the first quarter of 2012 with Viabuild (road construction) for a surface area of 2.149 m² of offices and warehouse space at Mechelen Campus (building F, formerly leased by Tibotec-Virco). The lease contract has a duration of 9 years, with an option to terminate after 6 years.
As a result of the above-mentioned transactions with Biocartis and Viabuild, 96 % of the space previously leased by Tibotec-Virco has already on 31 March 2013 been re-leased to tenants within or outside the existing portfolio of Intervest Offices & Warehouses (being 18.725 m² out of a total of 19.526 m²).
3 For the period March 2012 to respectively November 2013 and October 2014, half of the net rental income from these lease contracts will be shared with Tibotec-Virco, according to the 2010 agreement regarding retrocession of rental income (see press release dated 3 June 2010).
In 2012 Intervest Offices & Warehouses has taken important steps towards further optimisation of its operational activities.
On 20 June 2012 Intervest Offices & Warehouses opened its new "RE:flex, flexible business hub" on the ground floor of Mechelen Campus Tower. This hub is a high-technical innovative office concept and has entirely been designed and created by Intervest Offices & Warehouses. For the furniture there has been a cooperation through a partnership with Steelcase, one of the leading manufacturers of office furniture. RE:flex gives, on the one hand, an answer to growing needs regarding flexibility and teamwork in a professional environment. A membership card (multiple formulas possible) gives access to a flexible "third working space" and a range of facilities and services. On the other hand RE:flex is equipped with 'state of the art' conference and meeting facilities, providing a good addition to the existing offer in the centre of Malines. The spaces are suitable for seminars, receptions, product presentations, team meetings, etc.
Intervest Offices & Warehouses has further profiled itself as provider of turn-key housing solutions. Different projects have been achieved, the most successful being the design from A to Z of the 5th floor (1.630 m²) at the Antwerp Gateway House for the new Antwerp office of DLA Piper.
In the first semester of 2012 Intervest Offices & Warehouses has started an online module "Officeplanner.be" for the further commercialisation of its available office spaces. This online module for drawing plans of office spaces has been realized in cooperation with Kantoorplanner.nl.
Officeplanner.be brings candidate-tenant and lessor together in a unique way. By introducing online the location and the number of desired working space the candidate-tenant acquires immediately a view of the available buildings and spaces. As soon as the candidate-tenant chooses a building, he sees instantly the future office in 3D and video, obtaining herewith a good image of the possible design of the office space.
www.officeplanner.be
As the logistic real estate market performed much better than the still difficult office market, Intervest Offices & Warehouses has focused on investments in the logistic segment.
Intervest Offices & Warehouses has expanded its real estate portfolio in May 2012 with an investment of € 7,9 million through the acquisition of the leasehold rights of a second distribution centre in Oevel. The site is located on the important logistic corridor Antwerp - Limbourg - Liège and is easy accessible via the E313 and the E314. This site is an extension of the 'state of the art' logistic site West-Logistics which was already acquired in 2011 and forms herewith one entity, enabling the further optimisation of both sites.
At the moment of the acquisition the building was entirely let to cosmetics concern Estée Lauder till 2019. This acquisition generates for the property investment fund a rental income of € 0,7 million on an annual basis and contributes immediately to the operating distributable result of the property investment fund.
Afterwards, the property investment fund concluded an agreement with Estée Lauder as well as with its logistic service provider UTi Belgium to further extend the logistic site. The buildings of West-Logistics and the distribution centre of Estée Lauder will be entirely integrated with each other. An additional logistic building of approximately 5.000 m² with parking spaces will be built between the two existing buildings. This site will be leased by UTi Belgium as from the delivery (probably 1 July 2013) till 31 December 2023 by means of a lease agreement.
Simultaneously the existing lease contracts for warehouses with Estée Lauder as well as UTi Belgium are prolonged till 31 December 2023, being a prolongation of respectively 4,5 and 6 years of the existing lease contracts. This prolongation has resulted in 2012 in an increase in fair value of this logistic site by € 3,5 million or approximately 12 %.
The total estimated budget for the extension amounts to € 3,3 to € 3,8 million. The transaction will generate for the property investment fund, as from the third quarter of 2013 an additional annual rental income of approximately € 0,3 million. The added value of the entire transaction (extension of the site and prolongation of the lease contracts) is estimated at approximately € 7 million after complete realisation. The financing of this investment will be funded from the existing credit lines of the property investment fund.
The partial renovation of the logistic site Herentals Logistics 1 has been achieved in 2012. All renovated space, except for a limited office space, is meanwhile let to Kreate and Yusen Logistics.
Given the interest of some candidate-tenants for qualitative new logistic real estate on this location, the property investment fund currently prepares on the not yet renovated part of Herentals Logistics 1 the construction of a logistic warehouse with a space of approximately 19.000 m² that can be subdivided. This realisation will contribute to the further radiance of Herentals Logistics as logistic centre, along one of the most important logistic corridors of the country. On 31 December 2012 a space of 32.100 m² is valuated as spare land.
In 2012 the property investment fund has signed a property lease for 15 years with French car builder Peugeot (group PSA) for the renovation/conversion to a showroom and garage of the front part of the logistic building Neerland 1 in Wilrijk (located Boomsesteenweg next to Ikea), and this for the replacement of the current branch of Peugeot Antwerpen, located Karel Oomsstraat in Antwerp.
The transaction includes a built-up surface area of approximately 5.000 m² on a ground area of nearly 11.000 m² (including parking spaces). The other part of the building (the rear) and the building Neerland 2 maintain their logistic activities.
The total estimated budget for the renovation/ conversion amounts to approximately € 3,3 million. The transaction will generate for the property investment fund as from the fourth quarter of 2013 an annual rental income of approximately € 0,6 million. The financing of this investment will be funded from the existing credit lines of the property investment fund.
The agreement is concluded under the suspending condition of obtaining the necessary permits.
Herentals Logistics 1 Herentals
Intervest Offices & Warehouses has signed in 2012 a private deed for the sale of a non-strategic logistic building, constructed in 1997 and located in Antwerp, Kaaien 218-220. The total space of the building comprises 5.500 m² warehouses and represents only 0,9 % of the total leasable space of the property investment fund.
The sales price amounts to € 1,2 million and the buyer is the owner-user. The sales price is approximately 10 % higher than the carrying amount which amounted to € 1,1 million on 31 December 2011 (fair value as determined by the independent property expert of the property investment fund).
| in thousands € | 2012 | 2011 |
|---|---|---|
| Rental income | 41.207 | 38.587 |
| Rental related expenses | 49 | -76 |
| Property management costs and income | 1.097 | 2.435 |
| Property result | 42.353 | 40.946 |
| Property charges | -4.759 | -5.145 |
| General costs and other operating costs and income | -1.577 | -1.244 |
| Operating result before result on portfolio | 36.017 | 34.557 |
| Result on disposals of investment properties | 140 | 64 |
| Changes in fair value of investment properties | -13.953 | 2.294 |
| Other result on portfolio | -730 | -2.478 |
| Operating result | 21.474 | 34.437 |
| Financial result (excl. changes in fair value - IAS 39) | -11.156 | -12.018 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -3.128 | -4.175 |
| Taxes | -35 | -227 |
| Net result | 7.155 | 18.017 |
| Operating distributable result |
24.826 | 21.707 |
| Result on portfolio |
-14.543 | -120 |
|---|---|---|
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) |
-3.128 | -4.175 |
| Other non -distributable elements (subsidiaries ) |
0 | 605 |
4 Between brackets the comparable figures of financial year 2011.
For financial year 2012, rental income of Intervest Offices & Warehouses amounts to € 41,2 million. This increase of € 2,6 million or approximately 7 % compared to financial year 2011 (€ 38,6 million) is mainly the combined effect of:
In 2012, property management costs and income show an income of € 1,1 million (€ 2,4 million). This lower income compared to previous financial year results from higher refurbishment costs for offices to be let and a lower profit taking for compensations for rental charges (received from Tibotec-Virco) after the additional letting to Biocartis at Intercity Business Park in Malines.
For the financial year 2012, the property charges decrease by approximately € 0,4 million to € 4,8 million (€ 5,1 million) mainly from lower vacancy costs as a result of reduced vacancy in Herentals Logistics 1 and Mechelen Campus Tower.
General costs and other operating income and costs amount to € 1,6 million and have increased by € 0,4 million compared to previous year (€ 1,2 million) mainly through increased costs for personnel and advice.
The increase in rental income and the decrease of property charges partly compensated by a decrease of property management income and the increase of general costs ensure that the operating result before result on portfolio increases by approximately 4 % or € 1,4 million, to € 36,0 million (€ 34,6 million).
The changes in fair value of investment properties are negative in 2012 and amount to - € 14,0 million compared to the positive changes of € 2,3 million in 2011. These negative changes in 2012 are the combined effect of:
The other result on portfolio comprised in 2011 mainly the immediate write off of the price difference of - € 2,0 million on the acquisition of the shares of the companies MGMF Limburg sa (owner of the logistic site in Houthalen) and West-Logistics sa (owner of the logistic site in Oevel).
The financial result (excl. changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) amounts in 2012 to - € 11,2 million (- € 12,0 million). The average credit facility withdrawal of the property investment fund has increased on an annual basis by approximately € 36 million in 2012 compared to 2011, due to the financing of acquisitions of investment properties in 2011 and 2012. Despite this higher credit facility withdrawal, the financing cost of the property investment has decreased in 2012 by € 0,8 million due to the use of new interest rate swaps at lower interest rates, as well as the further decrease of interest rates on the financial markets.
For financial year 2012, the average interest rate of the current credit facilities of the property investment fund amounts to 3,7 % (4,6%) including bank margins
The changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) include the changes in market value of interest rate swaps that, in line with IAS 39, cannot be classified as cash flow hedging instruments, in the amount of - € 3,1 million (- € 4,2 million).
Oevel 2 - Oevel
The net result of Intervest Offices & Warehouses for financial year 2012 amounts to € 7,2 million (€ 18,0 million) and may be divided into:
For financial year 2012, the operating distributable result of Intervest Offices & Warehouses amounts to € 24,8 million (€ 21,7 million). Given the 14.199.858 shares this represents € 1,75 per share compared to € 1,56 previous year.
In 2011 however, the operating distributable result increased by € 0,17 per share as a result of a change of the valuation rule for early terminated lease contracts. For financial year 2012 this change of valuation rule has still a positive effect of € 0,01 per share.
After revision of the operating distributable result as appears from the statutory annual accounts of the property investment fund, this means for 2012 a gross dividend per share of € 1,76 compared to € 1,73 for 2011. This represent an increase of 2 % per share. This gross dividend offers the shareholders of the property investment fund a gross dividend yield of 8,7 % based on the closing price of the share on 31 December 2012.
| RESULT PER SHARE | 2012 | 2011 |
|---|---|---|
| Number of shares entitled to dividend | 14.199.858 | 13.907.267 |
| Net result (€) | 0,51 | 1,30 |
| Operating distributable result (€) | 1,75 | 1,56 |
| Adaptation dividend to the changed valuation rule (€) | 0,01 | 0,17 |
| Gross dividend (€) | 1,76 | 1,73 |
| Net dividend5 (€) | 1,32 | 1,37 |
5 Pursuant to the Finance Act of 27 December 2012 (Belgian Official Gazette 31 December 2012) withholding tax on dividends of public property investments funds increases as from taxation year 2013 from 21% to 25% (subject to certain exemptions).
| in thousands € | 31.12.2012 | 31.12.2011 |
|---|---|---|
| ASSETS | ||
| Non-current assets | 581.588 | 581.672 |
| Current assets | 12.489 | 12.462 |
| Total assets | 594.077 | 594.134 |
| Shareholders' equity | 272.356 | 284.018 |
|---|---|---|
| Share capital | 129.395 | 126.729 |
| Share premium | 63.378 | 60.833 |
| Reserves | 72.389 | 78.398 |
| Net result of financial year | 7.156 | 18.018 |
| Minority interest | 38 | 40 |
| Non-current liabilities | 260.659 | 264.426 |
| Current liabilities | 61.062 | 45.690 |
| Total shareholders' equity and liabilities | 594.077 | 594.134 |
| Balance sheet data per share | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Number of shares entitled to dividend | 14.199.858 | 13.907.267 |
| Net asset value (fair value) (€) | 19,18 | 20,42 |
| Net asset value (investment value) (€) | 20,21 | 21,37 |
| Net asset value EPRA (€) | 19,73 | 20,76 |
| Share price on closing date (€) | 20,12 | 18,15 |
| Premium (+) / discount (-) to net asset value (fair value) (%) | 5 % | -11 % |
| Debt ratio (max. 65 %) (%) | 51,2 % | 49,9 % |
The fair value of the real estate portfolio amounts to € 581 million on 31 December 2012
Non-current assets consist mainly of the investment properties of Intervest Offices & Warehouses. In 2012, the fair value of the real estate portfolio remains stable and amounts to € 581 million on 31 December 2012 (€ 581 million on 31 December 2011). The underlying fact is that the fair value of the investment properties has known following evolutions in 2012:
୭ on the other hand, the decrease in fair value of the office portfolio by € 18 million or 5 % compared to the fair value on 31 December 2011, mainly as a result of the lease contract concluded with PwC in Woluwe Garden in October 2012 (till end 2021), the announced departure of tenant Deloitte in Diegem in 2016 and the general adjustment of the estimated rental values for the offices in the Brussels periphery.
Thanks to a strict credit control, the number of days of outstanding customers is only 8 days
Current assets amount to € 12 million and consist mainly of € 1 million in assets held for sale (being the logistic building located Kaaien 218-220 in Antwerp), of € 5 million in trade receivables (of which € 3 million for advance billing of rents for financial year 2013 for the logistic portfolio), of € 3 million in tax receivables and other current assets and of € 2 million in deferred charges and accrued income.
Shareholders' equity of the property investment fund amounts on 31 December 2012 to € 272 million (€ 284 million). Total number of shares entitled to dividend amounts to 14.199.858 units on 31 December 2012 (13.907.267 units). The share capital of the property investment fund has increased in 2012 through the capital increase in the framework of the optional dividend for the financial year 2011 by € 2,7 million to € 129 million (€ 127 million) and the share premium by € 2,5 million to € 63 million (€ 61 million). The reserves of the company amount to € 72 million (€ 78 million).
On 31 December 2012, the net asset value (fair value) of the share is € 19,18 (€ 20,42). As the share price on 31 December 2012 of the Interest Offices & Warehouses' share (INTO) is € 20,12, the share is quoted on closing date with a premium of 5 % compared to the net asset value (fair value).
Non-current liabilities amount to € 261 million (€ 264 million) and comprise, on the one hand, non-current financial debts for an amount of € 252 million (€ 259 million), consisting of € 178 million of long-term bank financings of which the expiry date falls after 31 December 2013 and of the bond loan issued in June 2010 for an amount of € 75 million. On the other hand, non-current liabilities also comprise the other non-current financial liabilities representing the negative market value of € 8 million of the cash flow hedges which the property investment fund has concluded to hedge the variable interest rates on the non-current financial debts.
Current liabilities amount to € 61 million (€ 46 million) and consist mainly of € 48 million current financial debts (short-term financings progressing each time and a credit facility of € 10 million expiring in December 2013), of € 3 million trade debts and of € 10 million accrued charges and deferred income.
Herentals Logistics 2 - Herentals
The most important characteristics of the financial structure of Intervest Offices & Warehouses at the end of 2012 are:
On 31 December 2012, 82 % of the available credit lines of Intervest Offices & Warehouses are long-term financings. 18 % of the credit lines are short-term financings, with 15 % consisting of financings with an unlimited duration progressing each time for 364 or 30 days (€ 47 million) and 3 % being a credit facility which expires in December 2013 (€ 10 million). Besides, there is also an instalment of € 0,5 million on an investment credit facility.
Expiry calendar of available credit facilities
On 31 December 2012, the expiry calendar of the available credit facilities, including the bond loan of € 75 million expiring on 29 June 2015, gives the image above. The first expiring credit facility of the property investment fund is only in December 2013 (€ 10 million) as a result of which Intervest Offices & Warehouses does not need to carry out any major refinancing of its credit facilities in 2013. The weighted average remaining duration of the long-term credit facilities is herewith 2,8 years on 31 December 2012.
On 31 December 2012, the debt ratio of the property investment fund amounts to 51,2 % and has increased by 1,3 % compared to 31 December 2011 (49,9 %) mainly as a result of the acquisition of the leasehold rights of the second distribution centre in Oevel financed with borrowed capital and the devaluation of the office portfolio.
Given the difficult economic situation right now, the future demand for office space and logistical real estate is uncertain. In the present market conditions, it will be a challenge to keep the 2013 occupancy rate stable at the current level of 86 %.
As for the current lease contracts in the logistic portfolio, only a limited volume is expiring in 2013, which puts Intervest Offices & Warehouses in a relatively comfortable starting position. Expectations are that the demand for larger spaces will remain limited, just like in 2012. The full list of available logistic buildings in the property investment funds' portfolio are primarily located along the Antwerp-Brussels axis, which is in itself a much demanded rental market. It concerns, among other things, the building on the Stocletlaan in Duffel, of approximately 19.000 m² (leasable from approximately 4.000 m²), and the building on the Notmeir in Duffel of approximately 8.800 m². There is relatively little warehouse space over 10.000 m² available in the vicinity, which increases the rental chances for Intervest Offices & Warehouses.
Intervest Offices & Warehouses expects the occupancy rate in the offices segment to drop in 2013, partly due to the ending of lease contracts with some larger tenants, including BDO in the Sky Building and Elegis in Gateway House.
In 2013, Intervest Offices & Warehouses will continue to focus on increasing the share of logistic real estate in its portfolio. The existing Estée Lauder logistic distribution centre in Oevel will be expanded by approximately 5.000 m². Construction is expected to start in early 2013 with delivery by mid-2013. Furthermore, Intervest Offices & Warehouses expects to be granted a urban development permit in the first quarter of 2013 to convert the existing site at Neerland 1 in Wilrijk into a showroom and garage for Peugeot. The delivery of these works is planned for the autumn of 2013.
If the market conditions permit it, Intervest Offices & Warehouses will disinvest non-strategic buildings in order to put more focus on investments in high quality logistic real estate. Given the current debt ratio of 51,2 %, for the time being no new acquisitions, except for those ongoing commitments concerning the expansion of the logistic buildings, will be made.
The next maturity date of a creditfacility of the property investment fund is in December 2013 (€ 10 million), which means that Intervest Offices & Warehouses does not need to carry out any major refinancing of its credit portfolio in 2013. The weighted average remaining duration of the longterm credit facilities is 2,8 years as of 31 December 2012. Taking into account the market-related fact that banks want to reduce real estate financing ever further, Intervest Offices & Warehouses will study alternative sources of financing.
The early extension of a number of important lease contracts in 2012 results in an increased security regarding the rental income in the long term. The average duration of the rental agreements has been extended to approximately 4,5 years. Many of these extensions have been paired with lowering the rental price. The short-term consequence of this, together with the fact that the occupancy rate is under pressure, is that the 2013 operating distributable result is expected to be markedly lower than in 2012.
Record date dividend 2012 Thursday 2 May 2013
Dividend payment 2012 as from Friday 24 May 2013
୭ Interim statement on the results as at 31 March 2013: Tuesday 7 May 2013
The annual report for financial year 2012 will be available as from 25 March 2013 on the website of the company (www.intervestoffices.be).
INTERVEST OFFICES & WAREHOUSES SA, public property investment fund under Belgian law, Jean-Paul Sols - CEO or Inge Tas - CFO, T + 32 3 287 67 87, www.intervestoffices.be
| in thousands € | 2012 | 2011 |
|---|---|---|
| Rental income | 41.207 | 38.587 |
| Rental related expenses | 49 | -76 |
| NET RENTAL INCOME | 41.256 | 38.511 |
| Recovery of property charges | 1.408 | 1.261 |
| Recovery of charges and taxes normally payable by tenants on let properties | 8.992 | 6.700 |
| Costs payable by tenants and borne by the landlord for rental damage and refurbishment |
-652 | -142 |
| Rental charges and taxes normally payable by tenants on let properties | -8.992 | -6.680 |
| Other rental related income and expenses | 341 | 1.296 |
| PROPERTY RESULT | 42.353 | 40.946 |
| Technical costs | -840 | -940 |
| Commercial costs | -286 | -263 |
| Charges and taxes on unlet properties | -981 | -1.404 |
| Property management costs | -2.293 | -2.184 |
| Other property charges | -359 | -354 |
| PROPERTY CHARGES | -4.759 | -5.145 |
| OPERATING PROPERTY RESULT | 37.594 | 35.801 |
| General costs | -1.628 | -1.274 |
| Other operating income and costs | 51 | 30 |
| OPERATING RESULT BEFORE RESULT ON PORTFOLIO | 36.017 | 34.557 |
| Result on disposals of investment properties | 140 | 64 |
| Changes in fair value of investment properties | -13.953 | 2.294 |
| Other result on portfolio | -730 | -2.478 |
| OPERATING RESULT | 21.474 | 34.437 |
6 The statutory auditor has confirmed that his full audit, which has been substantially completed, has not revealed material adjustments which would have to be made to the accounting information disclosed in this press release and that an unqualified auditor's report will be issued.
| in thousands € | 2012 | 2011 |
|---|---|---|
| OPERATING RESULT | 21.474 | 34.437 |
| Financial income | 20 | 72 |
| Net interest charges | -11.165 | -12.070 |
| Other financial charges | -11 | -20 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -3.128 | -4.175 |
| FINANCIAL RESULT | -14.284 | -16.193 |
| RESULT BEFORE TAXES | 7.190 | 18.244 |
| Taxes | -35 | -227 |
| NET RESULT | 7.155 | 18.017 |
| Note: | ||
| Operating distributable result | 24.826 | 21.707 |
| Result on portfolio | -14.543 | -120 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -3.128 | -4.175 |
| Other non-distributable elements (subsidiaries) | 0 | 605 |
| Attributable to: | ||
| Equity holders of the parent company | 7.156 | 18.018 |
| Minority interests | -1 | -1 |
| RESULT PER SHARE | 2012 | 2011 |
| Number of shares entitled to dividend | 14.199.858 | 13.907.267 |
| Net result (€) | 0,51 | 1,30 |
| Diluted net result (€) | 0,51 | 1,30 |
| Operating distributable result (€) | 1,75 | 1,56 |
| in thousands € | 2012 | 2011 |
|---|---|---|
| NET RESULT | 7.155 | 18.017 |
| Changes in the effective part of the fair value of the authorized hedging instruments for cash flow hedges |
32 | 2.561 |
| COMPREHENSIVE INCOME | 7.187 | 20.578 |
| Attributable to: | ||
| Equity holders of the parent company | 7.188 | 20.579 |
| Minority interests | -1 | -1 |
| ASSETS in thousands € | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Non-current assets | 581.588 | 581.672 |
| Intangible assets | 45 | 37 |
| Investment properties | 581.280 | 581.305 |
| Other tangible assets | 248 | 316 |
| Trade receivables and other non-current assets | 15 | 14 |
| Current assets | 12.489 | 12.462 |
| Assets held for sale | 1.225 | 4.005 |
| Trade receivables | 4.860 | 1.687 |
| Tax receivables and other current assets | 3.211 | 4.520 |
| Cash and cash equivalents | 753 | 407 |
| Deferred charges and accrued income | 2.440 | 1.843 |
| SHAREHOLDERS' EQUITY AND LIABILITIES in thousands € 31.12.2012 Shareholders' equity 272.356 Shareholders' equity attributable to the shareholders of the parent company Share capital 129.395 Share premium |
31.12.2011 | |
|---|---|---|
| Reserves | 284.018 | |
| 272.318 | 283.978 | |
| 126.729 | ||
| 63.378 | 60.833 | |
| 72.389 | 78.398 | |
| Net result of financial year | 7.156 | 18.018 |
| Minority interests | 38 | 40 |
| Liabilities | 321.721 | 310.116 |
| Non-current liabilities | 260.659 | 264.426 |
| Non-current financial debts | 252.253 | 259.143 |
| Credit institutions | 177.617 | 184.650 |
| Bond loan | 74.625 | 74.475 |
| Financial lease | 11 | 18 |
| Other non-current financial liabilities | 7.780 | 4.685 |
| Other non-current liabilities | 626 | 598 |
| Current liabilities | 61.062 | 45.690 |
| Provisions | 172 | 172 |
| Current financial debts | 48.018 | 34.018 |
| Credit institutions | 48.012 | 34.012 |
| Financial lease | 6 | 6 |
| Trade debts and other current debts | 2.822 | 2.641 |
| Other current liabilities | 354 | 399 |
| Accrued charges and deferred income | 9.696 | 8.460 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 594.077 | 594.134 |
| in thousands € | Share capital | Share premium |
Reserves | Net result of financial year |
Minority interests |
holders' equity Total share |
|---|---|---|---|---|---|---|
| Balance at 31 December 2010 | 126.729 | 60.833 | 81.289 | 19.977 | 41 | 288.869 |
| Comprehensive income of 2011 | 2.561 | 18.018 | -1 | 20.578 | ||
| Transfers through result allocation 2010: | ||||||
| Transfer to reserves for the balance of changes in investment value of real estate |
-8.675 | 8.675 | 0 | |||
| value of authorised hedging instruments that are not subject to liabilities to the reserve for the balance of changes in fair Transfer of changes in fair value of financial assets and hedge accounting |
655 | -655 | 0 | |||
| Other mutations | 23 | -2 | 21 | |||
| Allocation of additional result 2010 due to change in valuation rules to results carried forward |
2.545 | -2.545 | 0 | |||
| Dividend financial year 2010 | -25.450 | -25.450 | ||||
| Balance at 31 December 2011 | 126.729 | 60.833 | 78.398 | 18.018 | 40 | 284.018 |
| Comprehensive income of 2012 | 32 | 7.156 | -1 | 7.187 | ||
| Transfers through result allocation 2011: | ||||||
| Transfer to the reserves for the balance of changes in investment value of real estate |
1.245 | -1.245 | 0 | |||
| rights and costs resulting from the hypothetical disposal of Transfer of impact on fair value of estimated transaction investment properties |
-1.365 | 1.365 | 0 | |||
| liabilities to the reserve for the balance of changes in fair value of authorised hedging instruments that are not subject to Transfer of changes in fair value of financial assets and hedge accounting |
-4.175 | 4.175 | 0 | |||
| Allocation to results carried forward from previous years | 605 | -605 | 0 | |||
| Allocation to other reserves and minority interest | 13 | -12 | -1 | 0 | ||
| Issue of shares from optional dividend financial year 2011 | 2.666 | 2.545 | 5.211 | |||
| Dividend financial year 2011 | -2.364 | -21.696 | -24.060 | |||
| Balance at 31 December 2012 | 129.395 | 63.378 | 72.389 | 7.156 | 38 | 272.356 |
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