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Nextensa SA — Annual Report 2012
Feb 22, 2013
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Annual Report
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Leasinvest Real Estate – year results financial year 2012
- Realization of the further strategic reorientation of the portfolio to a bigger retail part and the Grand Duchy of Luxembourg;
- Growth of the real estate portfolio by 22.5% to 617.8 million euro;
- Increase of the occupancy rate from 92.57% end-2011 to 94.9% end-2012;
- Rise of net and net current result by respectively 63% and 11%;
- Increase of the dividend to 4.40 euro gross per share (+6%).
1. Activity report period 01/01/12-31/12/12
Investments and divestments
Investments
Real estate certificates shopping center Schmiede (Luxembourg)
In August 2012 an agreement in principle, subject to different conditions precedent, was signed with the owner of two shopping centers located in the North of the Grand Duchy of Luxembourg
In execution of this agreement Leasinvest Real Estate has subscribed at the beginning of last September, via its 100% subsidiary Leasinvest Immo Lux SA, to privately issued real estate certificates for an amount of 74.5 million euro with regard to the refinancing of the Knauf shopping center located in Schmiede, through which transaction its economic property was acquired.
This shopping center consists of 40 shops with over 30,000 m² GLA and has since decades been one of the most important shopping centers in the North of Luxembourg. The shopping center is nearly entirely let to different renowned retail brands.
The signing of this framework agreement was a very important step in the focused strategy of Leasinvest Real Estate in reorienting its portfolio towards more retail.
The net result and the net current result on an annual basis will consequently encounter a significant positive impact in 2013. The impact of the net rental result on the 2012 figures amounted to 1.4 million euro for approximately 4 months.
Leasinvest acquires a top location in the city centre of Luxembourg
On 05/12/12 Leasinvest Immo Lux SA has acquired an existing building used as a hotel (known under the name "Hotel Rix"), with parking, at the important boulevard Royal in the city of Luxembourg.
After the demolition of the Hotel Rix (which has stopped its activities end 2012) a new office building of circa 5,000 m² which will meet high energy performance standards will be built at this top location, subject to obtaining the necessary permits. Apart for unexpected circumstances, the building is foreseen to be operational by the beginning of 2015.
The architecture of the future office project will be designed by Christian de Portzamparc, architect and urban planner, renowned throughout the world, who received the Pritzker Prize in 1994 and who realized the Luxembourg Philharmonic in the city of Luxembourg. With his team he works on a wide variety of ambitious projects with an international dimension. This project will have unique characteristics to both its design and its functionality.
This office development fits within the strategy of Leasinvest that can be considered to be one of the main foreign real estate investors on the Luxembourg market. This well-located project is the logical combined result of our knowledge of the Luxembourg real estate market acquired over the last 8 years and of our experience in similar realized redevelopments in Cloche d'Or and avenue Monterey in the city of Luxemburg.
Increase of the participation in Retail Estates1
In July and at the beginning of August 2012 Leasinvest Real Estate has acquired 166,772 additional Retail Estates shares through different transactions on and off the stock exchange, among which the contribution of its dividend rights against new shares. The average share price of these transactions amounted to 49.91 euro. As a consequence, the participation increased to 10.03%.
Divestments
Sales of business center Torenhof in Merelbeke (Belgium)
At the end of December 2012, Leasinvest Real Estate has sold, in execution of a previously concluded sales obligation , the Castle Farm "Torenhof" that was converted into a business center, to Axxes Certificates SA for an amount of 3.3 million euro (excluding costs and VAT).
Sale of a floor in the building Mercure in the Grand Duchy of Luxembourg
Mid-December 2012 Leasinvest Immo Lux SA has sold for a net amount of 915,200 euro a floor of the office building "Mercure" in co-ownership (located avenue de la Gare in the city of Luxembourg), where Leasinvest Immo Lux still holds 2 floors.
Developments and redevelopments
Completion of the State Archives Bruges (Belgium)
The construction works of the new State Archives Bruges have evolved entirely according to plan and the new State Archives were provisionally accepted by the beginning of September 2012.
In September Leasinvest Real Estate has acquired 100% of the shares of RAB Invest SA that built the new State Archives in Bruges, rented by the federal government represented by the Buildings Agency, for a fixed period of 25 years.
Increase of occupancy rate business center The Crescent (Belgium)
By the beginning of 2012 The Crescent was entirely converted into a 'green intelligent building', used as a business center with different facilities (catering, meeting rooms, etc.). The objective for this building is to improve the 'good' score to 'very good' of the 'Breeam in use'-certificate.
Different services agreements were signed in the meantime, among which the most recent at the end of December 2012 relating to 2,300 m2 , for a fixed term of 6 year, that will enter into force on 01/07/13. Consequently the occupancy rate improved from 50% to 62.5% end-2012.
The further occupation of The Crescent proves that this site, that was converted into a technological and sustainable business center, responds to the needs of companies that are looking for a new form of flexible housing in a technological environment, where a whole range of services is offered, and that enhances their sustainable image.
1 For more details we refer to the half-year report 2012.
Lettings
The further commercialization of the lettings has evolved favourably in 2012, taking into account the challenging market situation.
In the second quarter of 2012 the offices part of Canal Logistics Brussels – phase 2 that was un-let at the end of December 2011, has been let. Consequently, the occupancy rate of phase 2 increased to 100% per end of June 2012. Also at the end of June 2012 a rental contract (minimum of 6 years fixed) was concluded with regard to Canal Logistics Brussels – phase 1 whereby the remaining 3,500 m² were let for 2,000 m² as from 1 August 2012 and will gradually increase in order to be fully let by 01/02/14.
Furthermore, renewals of the rental contracts with the current tenants of our office buildings located rue Montoyer in Brussels and at Kirchberg in Luxembourg were successfully concluded.
2. Consolidated key figures
| Key figures real estate portfolio (a) | 31/12/2012 | 31/12/2011 |
|---|---|---|
| Fair value real estate portfolio (€ 1,000) (b) | 617,763 | 504,443 |
| Fair value real estate portfolio, incl. participation Retail Estates (€ 1,000) (b) | 649,254 | 526,750 |
| Investment value real estate portfolio (€ 1,000) (c) | 633,301 | 517,488 |
| Rental yield based on fair value (d) | 7.30% | 7.23% |
| Rental yield based on investment value (d) | 7.14% | 7.05% |
| Occupancy rate (d) | 94.9% | 92.57% |
| Average duration of leases (years) | 4.86 | 4.03 |
(a) The real estate portfolio comprises the buildings in operation as well as the the development projects, the assets held for sale and the buildings presented under financial leasing in IFRS.
(b) Fair value: the investment value as defined by an independent real estate expert and of which the transfer rights have been deducted. The fair value is the accounting value under IFRS.
(c) The investment value is the value as defined by an independent real estate expert and of which the transfer rights have not yet been deducted.
(d) For the calculation of the rental yield and the occupancy rate only the buildings in operation are taken into account, excluding the assets held for sale.
The consolidated real estate portfolio of Leasinvest Real Estate at the end of 2012 is composed of 55 buildings (including the assets held for sale & the development projects) with a total surface of 408,128 m², of which 37 buildings are located in Belgium (47% of the fair value compared to 55% the previous financial year) and 18 in Luxembourg (53% compared to 45% the previous financial year). The breakdown according to asset class has changed with a strong increase of the asset class Retail compared to offices.
| 31/12/2012 | 31/12/2011 | % Var | |
|---|---|---|---|
| Retail | 29% | 20% | 9% |
| Offices Luxembourg | 26% | 27% | -2% |
| Offices Belgium | 21% | 27% | -6.0% |
| Logistics/Semi-industrial (incl. State Archives Bruges) | 24% | 26% | -1.6% |
The weight of retail in the consolidated portfolio has risen from 20% to 29% and the offices part consequently decreased from 54% to 47%.
The strong rise of the real estate portfolio from 504.4 million euro end-2011 to 617.8 million euro or by 22.5% end-2012 is explained by:
1/ the subscription of the real estate certificate issued by Porte des Ardennes Schmiede SA at the beginning of September (74.5 million euro) for the financing of the shopping center Knauf Schmiede, which is presented as an investment property at a consolidated level according to the valuation rules;
2/ the take-over of the shares of RAB Invest SA beginning of September 2012, that is the owner of the State Archives in Bruges, for 17.9 million euro and also the financing of the building;
3/ the acquisition of an existing building used as a hotel (known under the name "Hotel Rix") with parking at the boulevard Royal in the city of Luxembourg for 19.5 million euro.
The real estate portfolio recorded a limited positive (non-cash) valuation difference (2012: +1.3 million euro compared to 2011: - 6.6 million euro).
Notwithstanding the weaker offices rental market in Belgium the average occupancy rate of the buildings increased under the impulse of the realized investments and the successful re-lettings. At the end of 2012 it was 94.9% compared to 92.57% end-2011. The occupancy rate for Belgium increased to 90.89% (2011: 87.7%) while for the Grand Duchy of Luxembourg it remained constantly at a very high level: 99.3%.
The rental yield of the real estate portfolio in operation based on the fair value amounts to 7.30% (compared to 7.23% per end-2011), and based on the investment value to 7.14% (compared to 7.05% end-2011).
| Key results | 31/12/2012 | 31/12/2011 |
|---|---|---|
| Rental income (€ 1,000) | 37,959 | 36,647 |
| Net rental result per share (€) (2) | 9.46 | 9.17 |
| Net current result (€ 1,000) (1) | 21,113 | 19,070 |
| Net current result per share (€) (1), (2) | 5.26 | 4.77 |
| Net result group share (€ 1,000) | 20,508 | 12,587 |
| Net result group share per share (€) (2) | 5.11 | 3.15 |
| Comprehensive income group share (€ 1,000) | 9,744 | 2,792 |
| Comprehensive income group share per share (€) (2) | 2.43 | 0.70 |
(1) The net current result consists of the net result excluding the portfolio result and the changes in fair value of the ineffective hedges.
(2) The results per share are calculated based on the number of shares entitled to the result of the period.
The net current result increased by 11% from 19 million euro (or 4.77 euro per share) end-2011 to 21.1 million euro (or 5.26 euro per share) end-2012. This increase is the consequence of the higher rental income.
The net result, group share, amounted to 20.5 million euro compared to 12.6 million euro in 2011. In terms of net result per share this translates in 5.11 euro end-2012 compared to 3.15 euro end-2011. This rise is mainly the consequence of, besides the higher rental income mentioned above, a positive change in the fair value of the real estate portfolio in comparison with 2011.
Regulated information - Under embargo till 22/02/13 – 7.30h (AM)
| General key figures | 31/12/2012 | 31/12/2011 |
|---|---|---|
| Net asset value group share (€ 1,000) | 256,005 | 261,815 |
| Net asset value group share per share (1) | 63.8 | 65.51 |
| Net asset value group share per share based on investment value (1) | 67.67 | 68.78 |
| Net asset value group share per share EPRA (1) | 70.62 | 68.62 |
| Total assets (€ 1,000) | 667,026 | 538,417 |
| Financial debt (ex cash and market value financial derivatives (€ 1,000) | 364,409 | 247,946 |
| Financial debt ratio (pursuant RD 7/12/2010) | 56.19% | 47.29% |
| Average duration credit lines (years) | 2.64 | 3.4 |
| Average financing cost | 3.04% | 3.83% |
| Average duration hedges (years) | 5.43 | 5.84 |
(1) The net asset value per share is calculated based on the number of shares entitled to the result of the period.
3. Outlook financial year 2013
In 2013 Leasinvest Real Estate expects to further realize its strategic reorientation. Except for unforeseen circumstances and unexpected capital losses on its current real estate portfolio and hedges, the company expects to realize a better net result and a better net current result than in 2012.
4. Financial review
| Consolidated statement of comprehensive income | 12 months | ||
|---|---|---|---|
| (in € 1,000) | 31/12/2012 31/12/2011 | ||
| (+) (+) |
Rental income Writeback of lease payments sold and discounted |
37,959 0 |
36,647 0 |
| (+/-) Related-rental expenses | 47 | 18 | |
| NET RENTAL RESULT | 38,006 | 36,664 | |
| (+) | Recovery of property charges | 212 | 82 |
| (+) | Recovery income of charges and taxes normally payable | 3,463 | 2,633 |
| by tenants on let properties | |||
| (-) | Costs payable by tenants and borne by landlord for | 0 | - 4 |
| rental damage and refurbishment at end of lease | |||
| (-) | Charges and taxes normally payable by tenants on let properties | -3,463 | -2,633 |
| (+/-) Other related_rental expenses and income | -1,541 | -869 | |
| PROPERTY RESULT | 36,676 | 35,873 | |
| (-) | Technical costs | -1,042 | -1,189 |
| (-) | Commercial costs | -514 | -699 |
| (-) | Charges and taxes on unlet properties | -507 | -558 |
| (-) | Property management costs | -3,123 | -2,832 |
| (-) | Other property charges | -363 | -278 |
| PROPERTY CHARGES | -5,549 | -5,556 | |
| PROPERTY OPERATING RESULT | 31,127 | 30,317 | |
| (-) | Corporate operating charges | -1,824 | -1,789 |
| (+/-) Other operating charges and income | -302 | -22 | |
| OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO | 29,001 | 28,506 | |
| (+/-) Result on disposal of investment properties | 153 | 534 | |
| (+/-) Charges in fair value of investment properties | 1,342 | -6,565 | |
| OPERATING RESULT | 30,496 | 22,474 | |
| (+) | Financial income | 2,203 | 1,753 |
| (-) | Net intrest charges | -8,787 | -8,936 |
| (-) | Other financial charges | -1,076 | -2,037 |
| (+/-) Changes in fair value of financial assets | -2,101 | -449 | |
| FINANCIAL RESULT | -9,761 | -9,669 | |
| PRE-TAX RESULT | 20,736 | 12,805 | |
| (+/-) Corporate taxes | -228 | -216 | |
| (+/-) Exit tax | 0 | 0 | |
| TAXES | -228 | -216 | |
| NET RESULT | 20,508 | 12,589 | |
| OTHER ELEMENTS OF COMPREHENSIVE INCOME | |||
| Impact on fair value of estimated transfer rights and costs resulting from hypothetical disposal | -645 | 0 | |
| of investment properties | |||
| Changes in the effective part of the fair value of authorized hedges in hedge accounting as | -12,899 | -10,187 | |
| defined by IFRS | |||
| Changes in fair value of financial assets held for sale | 2,780 | 392 | |
| Other elements of comprehensive income | -10,764 | -9,795 | |
| Minority intrests | 0 | 0 | |
| Other elements of comprehensive income – group share | -10,764 | -9,795 | |
| COMPREHENSIVE INCOME | 9,744 | 2,794 | |
| Attributable to | |||
| Minority intrests | 0 | 2 | |
| Comprehensive income - group share | 9,744 | 2,792 |
Comments on the income statement
The rental income amounted to 37.96 million euro compared to 36.65 million euro a year earlier, an increase by 3.6% or 1.3 million euro. This growth is explained on the one hand by the successful letting of mainly Canal Logistics and on the other hand, by the contribution of four months of income generated by the investment in the shopping center Knauf in Schmiede and the State Archives in Bruges.
The property charges remained stable (5.6 million euro). The property management costs comprise the management fee paid to the statutory manager of the sicafi (Leasinvest Real Estate Management SA), and the costs of the personnel of Leasinvest Services SA, a 100% subsidiary of Leasinvest Real Estate, responsible for the technical management of the buildings.
The corporate operating charges increased by 2% to 1.82 million euro compared to 1.79 million euro in 2011.
The result on disposal of investment properties (0.2 million euro) consists of the realized capital gain on the sale of a floor of the office building "Mercure" in co-ownership (located avenue de la Gare in the city of Luxembourg) in which Leasinvest Immo Lux still holds 2 floors.
The changes in fair value of investment properties of 1.3 million euro (- 6.6 million euro end-2011) are the consequence of a higher valuation of the buildings by the external real estate expert.
The financial result amounts to - 9.8 million euro and is nearly identical to that of 2011. This result is however negatively influenced by the negative changes in fair value (non-cash) of the ineffective hedges (in conformity with IAS 39) of - 2.1 million euro (2011: - 0.5 million euro).
Making abstraction of the dividend received from Retail Estates, the impact of the changes in fair value of the hedges and the premiums paid in 2011 the total funding cost slightly decreased from - 9 million euro in 2011 to -8.8 million euro in 2012, and this taking into account a higher average debt.
Thanks to the hedging policy applied and the evolution of the underlying interest rates, the average funding cost (not taking into account the spread of the premiums of the hedges) has decreased from 3.84% to 3.04%.
The net current result, or the net result excluding the portfolio result and the changes in fair value of the ineffective hedges, increased by 11% from 19 million euro (or 4.77 euro per share) end-2011 to 21.1 million euro (or 5.26 euro per share) end-2012. This increase is the consequence of the higher rental income.
The net result, group share, amounted to 20.5 million euro compared to 12.6 million euro in 2011. In terms of net result per share this gives a proportion of 5.11 euro end-2012 compared to 3.15 euro end-2011. This rise is mainly the consequence of, besides the higher rental income mentioned above, a positive change in the fair value of the real estate portfolio in comparison with 2011.
| (in € 1,000) | Period | Period |
|---|---|---|
| 31/12/2012 | 31/12/2011 | |
| ASSETS | ||
| I. NON-CURRENT ASSETS | 634,775 | 526,647 |
| Intangible assets | 2 | 3 |
| Investment properties | 578,163 | 501,584 |
| Other tangible assets | 1,212 | 1,316 |
| Non-current financial assets | 37,499 | 23,744 |
| Finance lease receivables | 17,899 | 0 |
| II. CURRENT ASSETS | 32,251 | 11,770 |
| Assets held for sale | 21,701 | 2,859 |
| Current financial assets | 1 | 1 |
| Trade receivables | 6,605 | 5,685 |
| Tax receivables and other current assets | 1,253 | 854 |
| Cash and cash equivalents | 2,436 | 1,998 |
| Deferred charges and accrued income | 255 | 373 |
| TOTAL ASSETS | 667,026 | 538,416 |
| LIABILITIES | ||
| TOTAL SHAREHOLDERS' EQUITY | 256,010 | 261,821 |
| I. SHAREHOLDERS' EQUITY ATTRIBUTABLE TO | 256,005 | 261,815 |
| THE SHAREHOLDERS OF THE PARENT COMPANY | ||
| Capital | 44,128 | 44,128 |
| Share premium account | 70,622 | 70,622 |
| Reserves | 120,747 | 134,478 |
| Net result of the financial year | 20,508 | 12,587 |
| II. MINORITY INTERESTS | 5 | 5 |
| LIABILITIES | 411,016 | 276,596 |
| I. NON-CURRENT LIABILITIES | 256,591 | 177,560 |
| Provisions | 0 | 0 |
| Non-current financial debts | 228,674 | 163,724 |
| - Credit institutions | 228,467 | 163,529 |
| - Other | 207 | 194 |
| Other non-current financial liabilities | 27,917 | 13,836 |
| Other non-current liabilities | 0 | |
| II. CURRENT LIABILITIES | 154,425 | 99,036 |
| Provisions | 0 | |
| Current financial debts | 135,942 | 84,222 |
| - Credit institutions | 63,000 | 12,563 |
| - Other | 72,942 | 71,659 |
| Trade debts and other current debts | 7,723 | 5,200 |
| - Exit tax | 0 | |
| - Other | 7,723 | 5,200 |
| Other current liabilities | 2,180 | 1,449 |
| Accred charges and deferred income | 8,580 | 8,165 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 667,026 | 538,416 |
| Debt ratio (RD 7/12/2010) | 56.19% | 47.29% |
Comments on the balance sheet
The increase by 15% of the investment properties, valued at fair value, from 501.6 million euro to 578.2 million euro is mainly the consequence of the investment in the shopping center Knauf located in Schmiede and the acquisition of an existing building used as a hotel (known under the name "Hotel Rix").
This increase has been compensated by the sale of a floor in the office building "Mercure" (- 0.8 million euro) and the presentation of two buildings as assets held for sale (21.7 million euro).
The non-current financial assets increased from 23.7 million euro to 37.5 million euro by mainly the increased participation in Retail Estates.
The account finance lease receivables for 17.9 million euro comprises the State Archives in Bruges presented as a financial leasing in conformity with IFRS.
Notwithstanding the realized net result of 20.5 million euro in the course of the financial year 2012, shareholders' equity, group share (based on the fair value of the investment properties) decreases by 5.8 million euro following the negative changes in fair value of the financial assets and liabilities (mainly marked-to-market of the effective hedges - 12.9 million euro) and the distributed dividend. The participation in Retail Estates valued at fair value had a positive impact on the shareholders' equity of 2.8 million euro in 2012.
Besides that, Leasinvest Real Estate has sold its total participation of 16,583 treasury shares at an average share price of 67.29 euro.
Shareholders' equity amounts to 256.0 million euro end-2012, or 63.8 euro per share, compared to 261.8 million euro end-2011, or 65.5 euro per share. The net asset value per share excluding the influence of the fair value adjustments on financial derivatives (EPRA) increases however and amounts to 70.62 euro end-2012 in comparison with 68.62 euro end-2011.
Due to the balance of the different investments and divestments the financial debts have increased from 247.9 million euro end-2011 to 364.4 million euro eind-2012. Consequently the debt ratio has increased from 47.29% (per 31/12/11) to 56.19%.
5. Important events and transactions after the closing of the financial year 2012
At the beginning of January 2013 the front part of the Vierwinden site (located in Nossegem) has been sold to Immobilière ASCO SA for a net amount of 3 million euro.
On that sale a limited capital gain was realized.
6. Appropriation of the result – dividend payment
The board of directors of the statutory manager proposes to the ordinary general shareholders' meeting to pay a gross dividend of 4.40 euro, and net, free of withholding tax of 25%, 3.30 euro on 27/05/13.
Subject to the approval of the ordinary general shareholders' meeting of 21/05/13, dividends will be paid out on presentation of coupon nr. 14 as from 27/05/13 at the financial institutions: Bank Delen (main paying agent), ING Bank, Belfius Bank, BNP Paribas Fortis Bank and Bank Degroof. The Ex-date is 22/05/13 and the Record date is 24/05/13.
7. Statement without reservation of the auditor
The auditor has confirmed that his audit of the consolidated annual accounts, established according to the International Financial Reporting Standards as adopted by the European Union, has been fully completed and has not shown any important corrections, which should be made to the accounting data, adopted from the consolidated accounts, and presented in this press release.
8. Financial calendar
| Year results (31/12/12) | 22/02/13 | |
|---|---|---|
| Annual financial report 2012 (online on website) | 29/03/13 | |
| Interim statement Q1 (31/03/13) | 14/05/13 | |
| Annual meeting of shareholders | 21/05/13 | |
| Dividend payment | 27/05/13 | |
| Ex-date | 22/05/13 | |
| Record date | 24/05/13 | |
| Half-year financial report according to IAS 34 | 26/08/13 | |
| Interim statement Q3 (30/09/13) | 14/11/13 | |
| Year results (31/12/13) | 18/02/14 |
9. Annual financial report
The annual financial report regarding the financial year 2012 in the form of a brochure, which comprises the annual accounts, the annual report and the report of the auditor, is available as from 29/03/13 (PDF online) and can be obtained, on simple demand, at the following address:
Leasinvest Real Estate SCA
Schermersstraat 42 (administrative office), 2000 Antwerp T +32 3 238 98 77 - F +32 3 237 52 99 E [email protected] W www.leasinvest.be (brochure download under investors information, financial reports)
For more information, contact:
Leasinvest Real Estate Jean-Louis Appelmans CEO T: +32 3 238 98 77 E: [email protected]
Leasinvest Real Estate SCA
Real estate investment trust (sicafi) Leasinvest Real Estate SCA invests in high quality and well-located offices, logistics and retail buildings in Belgium and the Grand Duchy of Luxembourg. At present the real estate portfolio of Leasinvest comprises 55 buildings, of which 37 are located in Belgium and 18 in the Grand Duchy of Luxembourg, with a total real estate value of over 600 million euro. The sicafi is listed on Euronext Brussels and has a market capitalization of approximately 282 million euro (value on 20 February 2013).