Capital/Financing Update • Dec 21, 2018
Capital/Financing Update
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Regulatory information – inside information Ternat, 21 December 2018
RETAIL ESTATES REALISES € 122.86 MIO I N INVESTMENTS I N RETAIL PARKS AND CLUSTERS.
Spread over several transactions, Retail Estates has invested € 115.15 million in the expansion of its Belgian real estate portfolio, which generates a total rental income of € 7.02 million. Two different transactions resulted in the acquisition of four retail parks that cover a total surface area of 45,796 m2 and 46 retail units. A sale and rent back operation with a Belgian retail company resulted in the acquisition of 11 retail units with a total retail area of 11,158 m2 at 6 locations that fit in with the clusters where Retail Estates already owns a considerable number of units. In addition, two newly built properties were delivered to customers. According to the real estate experts, the fair value of these investments amounts to € 113.06 million. The gross initial yield generated by the additional Belgian investments is 6.10%.
In the Netherlands, the company invested € 7.71 million in the purchase of an additional retail unit at a successful retail park where Retail Estates systematically buys out co-owners when a suitable opportunity presents itself. The investment amounts to € 7.71 million and generates a net rental income1 of € 0.55 million. According to the real estate expert, the fair value of this investment amounts to € 6.83 million.2 The gross initial yield on the additional Dutch investment is 7.11%.
The investments are composed as follows:
1.1. The retail park in Mons is part of the site "Les Grands Prés - Shopping de Wallonie", which consists of a shopping mall, a Carrefour hypermarket and an IKEA store. The entire site has a surface area of approx. 101,000 m2 . The site's retail park part covers 11,779 m2 and consists of 7 retail units let to retail chains such AS Adventure, Maisons du Monde, Krëfel and Heytens.
1.2. The retail park in Arlon (Belgium, province of Luxembourg) is located on the Belgian side of the border between Belgium and the Grand Duchy of Luxembourg in the 'Sterpenich' shopping zone. The presence of IKEA and Decathlon guarantees a strong regional appeal for the zone. The retail park has a retail area of 11,123 m2 with six retail units. The tenants are retail chains in the home interior industry such as Maisons du Monde, Light Gallery and Extra. One retail unit of 1,812 m2 has not yet been let.
1.3. The retail park in Hasselt (province of Limburg) is located at the edge of the site where IKEA recently built a store at the Hasselt Zuid exit on the E311 motorway to Liège. The park measures 5,761 m2 and consists of 4 units. All tenants are active in the home interior industry. It concerns retail chains Mediamarkt, X2 O, Kwantum and Maisons du Monde. All retail units have been let.
Industrielaan 6 B-1740 Ternat I T: +32 2 568 10 20 I F: +32 2 581 09 42 I [email protected] I www.retailestates.com
1 The net rental price is calculated by deducting the Dutch equivalent of the property tax and the polder taxes from the contractual rental price so as to arrive at a rental price that is comparable with Belgian rental prices.
2 In the Netherlands, the fair value corresponds to the costs-to-buyer valuation (total investment minus 6% real estate transfer tax as well as notary fees and other acquisition costs).
1.4. These retail parks were obtained through the acquisition of the exclusive control over three real estate companies. The investment in this transaction amounts to € 60.00 million. An additional investment of maximum € 3.00 million will be made in the vacant retail unit after it has been let. The let retail units generate a rental income of € 3.67 million and represent a fair value of € 58.43 million.
Mons retail park: picture of IKEA
3 Please refer to the first press release of 21 December 2018.
4.1. In Nivelles, Retail Estates has realised a customised project for Aldi. An existing dilapidated retail property was demolished and replaced by a state-of-the-art supermarket with a retail area of 2,286 m2 . The use of this store is part of a long-term commitment of Aldi, who ordered the design of the property. The investment amounts to € 3.41 million and generates a rental income of € 0.26 million. According to the real estate expert, the fair value amounts to € 4.25 million.
4.2. In cooperation with a real estate promoter, three retail units were built in Waremme on a site previously acquired by Retail Estates. The investment amounts to € 1.83 million for a retail area of 1,281 m2 and generates a rental income of € 0.12 million. According to the real estate expert, the fair value amounts to € 1.78 million.
Industrielaan 6 B-1740 Ternat I T: +32 2 568 10 20 I F: +32 2 581 09 42 I [email protected] I www.retailestates.com
4 Please refer to the first press release of 21 December 2018.
The investment is financed for an amount of € 4.42 million by the issue of 68,000 new shares. The balance is paid through bank financing.
The new shares will be issued by the board of directors within the context of the authorised capital on 1 April 2019 after the approval of the FSMA will have been obtained.
The new shares will be issued at a contractually determined issue price of € 65 per share. They will participate in the profits as of the financial year that commences on 1 April 2019. They will represent a capital increase by € 1,530,026.49 and an issue premium for the balance of € 2,889,973.51. These shares will be listed on Euronext Brussels and Amsterdam on the date of detachment of the coupon for financial year 2018-2019, more in particular 29 July 2019.
The pro-forma effect of these transactions on the debt ratio is an increase to approx. 53.73% on 31 December 2018.
Retail Estates nv is a public regulated real estate company and more specifically a niche company that specialises in investing in out-of-town retail properties which are located on the periphery of residential areas or along main access roads into urban centres. Real Estates NV acquires these real properties from third parties or builds and commercialises retail buildings for its own account. The buildings have useful areas ranging between 500m2 and 3,000m2. A typical retail property has an average area of 1,000 m2.
As of 30 September 2018, Retail Estates nv has 834 premises in its portfolio with a total retail area of 977,170 m2, spread over Belgium and the Netherlands. The occupancy rate of the entire portfolio was 98.00% on 30 September 2018, compared to 98.11% on 31 March 2018.
The fair value of the consolidated real estate portfolio of Retail Estates NV as of 30 September 2018 is estimated at € 1,391.65 million by independent real estate experts.
Retail Estates NV is listed on Euronext Brussels and Euronext Amsterdam and is registered as a public regulated real estate company. As of 30 September 2018, the stock market capitalisation of the shares amounts to € 844.13 mio.
This press release contains a number of forward-looking statements. Such statements are subject to risks and uncertainties which may lead to actual results being materially different from the results which might be assumed in this press release on the basis of such forward-looking statements. Major factors that may influence these results include changes in the economic situation, commercial, tax-related and environmental factors.
Ternat, 21 December 2018
Jan De Nys, CEO of Retail Estates nv
Retail Estates nv, Jan De Nys – CEO, T: +32 2/568 10 20 – F:+32 475/27 84 12 Retail Estates nv, Kara De Smet – CFO, T: +32 2/568 10 20 – F: +32 496/57 83 58
Public RREC under Belgian law Industrielaan 6, B-1740 Ternat RLE of Brussels VAT BE 0434.797.847 T: +32 2 568 10 20 [email protected] www.retailestates.com
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