Hans Pars, CEO of Wereldhave N.V., comments:
“The direct result per share for the year 2011 amounts to € 4.93. The 3.3% decrease compared to 2010 was mainly due to higher interest charges and negative exchange rate differences. In addition, during the year 2011 we have disposed of many properties and only just before the end of the year we purchased the Ealing Broadway shopping centre. Shopping centres now make up 57% of our property portfolio and this has improved our risk profile.
The expansion of the Nivelles shopping centre will be completed during the first quarter of 2012 and is nearly fully let. In December 2011 we have contracted MediaMarkt as the new anchor tenant for the Planetocio shopping centre in Spain. The shop will open doors on July 1, 2012. Furthermore, the largest tenant of the Itäkeskus shopping centre has been committed to move within the centre and fully take the Piazza, resulting in a total addition of 11,000 m² of floor space to the centre. Finally, in the Netherlands we are putting a lot of effort in revamping the websites of our shopping centres. Last week the new Purmerend website went live and the next two months the other centres will follow. The new website is fully integrated with social media and interactive.
The indirect result amounts to € -50.4 mln. The largest revaluation was at the Eilan development project in San Antonio. The US investment portfolio has also been adjusted downwards. Last week, we have announced that we will dispose of our American activities within a timeframe of two to three years. Some sales are already in progress for the 1st quarter of 2012.”
Profit
Compared to the previous year, the profit for 2011 decreased by € 32.1 mln to
€ 63.0 mln, of which € 2.5 mln due to a lower direct result and € 29.6 mln due to a lower indirect result. The profit per share amounts to € 2.38 per share (2010: € 4.15 per share).
Direct result
The direct result for the financial year 2011 amounts to € 113.4 mln, a € 2.5 mln decrease compared to 2010. The lower direct result can largely be attributed to higher interest charges and negative exchange rate differences (€ -1.6 mln).
Net rental income rose by € 3.4 mln, of which a like for like rental growth of € 1.2 mln (0.9%). The interest charges rose by € 8.1 mln. The increase is caused by a larger size of the loan portfolio and higher interest rates. The average nominal interest rate as at December 31, 2011 rose to 3.0% (December 31, 2010: 2.6%). The general costs rose by € 1.0 mln in comparison with 2010, due to higher personnel expenses. Other income rose with € 0.9 mln. Taxes on direct result decreased by € 2.3 mln.
The direct result for 2011 amounts to € 4.93 per share, which represents a 3.3% or
€ 0.17 decrease compared to 2010. This includes a dilution of € 0.05 caused by the increased number of shares in connection with the optional dividend for the year 2010.
The EPRA occupancy rate as at December 31, 2011 amounts to 91.4%, an increase of 0.8% compared to September 30, 2011. Broken down per sector, the EPRA occupancy rates as at December 31, 2011 (September 30, 2011) are: retail 95.1% (94.9%), offices 86.9% (85.8%) and other 94.4% (94.7%).
Indirect result
The indirect result for the financial year 2011 amounts to € -50.4 mln (2010: € -20.8 mln).
The total valuation result stood at € -51.4 mln, almost completely composed of a negative valuation result on the property portfolio of € -51.3 mln, or -1.6% of the total portfolio. The operational property portfolio has been revalued downwards with € 26.5 mln, whereas the value of the development portfolio decreased with € 24.8. There were positive revaluations of the operational portfolio in Belgium, France and the United Kingdom, the valuation remained more or less equal in the Netherlands and Finland and there were lower property values in Spain and the United States. Of the development portfolio, the Eilan project in San Antonio was impaired by € 38.1 mln. The development projects in Nivelles and Richmond underwent positive revaluations of € 10.6 mln and € 2.7 mln respectively.
Due to the larger share of shopping centres in the portfolio, the average cap rate for the valuation of the portfolio decreased from 6.5% to 6.3% during 2011. During the year, Wereldhave disposed of properties to a total sales volume of € 217.0 mln, generating a result on disposals of € -4.1 mln, 1.9% below book value. However, with the disposals of properties in Finland, a € 6 mln release of deferred tax was generated.
Equity/debt
At December 31, 2011 shareholders’ equity (including minority interest) stood at € 1,714.0 mln (December 31, 2010: € 1,728.1 mln). The net asset value per share at December 31, 2011, including current profit, stood at € 73.44 (December 31, 2010: € 75.12). During the fourth quarter, the solvency ratio decreased from 58% to 56% (December 31, 2010: 59%). Due to the negative property revaluations, the (EPRA) Loan to Value increased in 2011 to 41% (December 31, 2010: 37%). As at December 31, 2011 there were 21,679,608 ordinary shares in issue. During 2011, no convertible bonds opted for conversion.
Property portfolio
At December 22, 2011 in the United Kingdom Wereldhave acquired the Ealing Broadway shopping centre for € 182.2 mln, at a net initial yield of 6.5%. Also in December, in Paris Wereldhave purchased an office development, of which the total investment will amount to € 138 mln with an expected net initial yield of 7.3%. Construction is scheduled to commence during the second quarter of 2012 with completion during the third quarter of 2014. During the last quarter, there were property disposals in the United Kingdom (Towers Business Park), Finland (Tapiola and Meripuisto), The Netherlands (Makros Nuth and Best) and the United States (Arboretum Estates in Richardson and Corporate Center, Irving), for a total consideration of € 148.4 mln.
During 2011, Wereldhave acquired properties in the United Kingdom and the Netherlands for a total of € 202.9 mln and sold properties in the Netherlands, Belgium, Finland, the United Kingdom and the United States for a total sales volume of € 217.0 mln. As at December 31, 2011, the value of the investment portfolio stood at € 2,862.5 mln and the value of the development portfolio amounted to € 227.9 mln.
Starting in 2012, Wereldhave fully focuses on shopping centres in the Netherlands, Belgium, Finland and the United Kingdom and on offices in Paris and Madrid. The US portfolio with offices and residential properties in Washington DC, Texas and San Diego will be sold. The first sales are already in progress for the 1st quarter of 2012. Wereldhave will also continue to divest non-core assets in Europe to enhance focus. During the next two to three years, Wereldhave aims to divest well over EUR 1.1 billion, of which € 800 million relates to the US portfolio and € 300 mln to non-core European properties to be divested.
Development portfolio
The development pipeline is well sized with redevelopments of shopping centres in the Netherlands, Belgium and Finland and offices in Paris. During the first quarter of 2012, the expansion of the Nivelles shopping centre will become operational. The project is fully let and the nearly 20% upward revaluation above the property book value and the cost of the expansion, clearly show that value can be added by active shopping centre management.
For 2012, in Belgium the start of construction is planned for the expansions of the Tournai shopping centre and Genk shopping 1, whereas in Finland Wereldhave will work on the large scale refurbishment of Itäkeskus, involving an investment of € 90 mln, of which € 30 mln relates to the renovation and € 60 mln to the internal expansion of the centre with 11,000 m². With the commitment of MediaMarkt for the Planetocio shopping centre a major step has been set for the redevelopment of the centre. After the lease was signed, leasing of the other vacant units has commenced. During the first quarter of 2012, in Paris construction has commenced of an office building in Joinville, to be completed during the last quarter of 2013.
The Eilan development project in San Antonio will be completed during the second quarter of 2012. As at December 31, 2012, the valuation of the project was adjusted downwards by € 38.1 mln. The value was influenced negatively by the absence of a stable rental income during the start-up phase of the project. In addition, the land for the yet undeveloped part of the project was impaired. Wereldhave anticipates a slow but steady letting pace of approximately 25 apartments per month, depending on the season.
Proposed dividend
A dividend of € 4.70 in cash in respect of the year 2011 will be proposed to the Annual General Meeting of Shareholders. The dividend is payable as from May 2, 2012.
Prospects
Wereldhave fully focuses on shopping centres in the Netherlands, Belgium, Finland and the United Kingdom and on offices in Paris and Madrid. Wereldhave’s US property investments will be sold and in Europe Wereldhave will continue to divest non-core assets. Wereldhave aims to divest well over € 1.1 billion within the next two to three years. The first sales are in progress for the first quarter of 2012. Wereldhave believes that next to its development pipeline, attractive opportunities will arise to re-invest the sales proceeds.
Due to the exit from the US and the sale of non-core assets, the pace of property disposals will be high during the next few years. Since suitable reinvestments may not always be immediately at hand, Wereldhave envisages a volatile direct result during the transition phase. Wereldhave aims to maintain the dividend for 2012 and 2013 at
€ 4.70 per share.
Annual General Meeting of Shareholders
The Annual General Meeting of Shareholders of Wereldhave N.V. will be held on April 23, 2012 at 11.00 h CET at the Steigenberger Kurhaus Hotel, Gevers Deynootplein 30, Scheveningen. For this meeting vote- and meeting rights will be granted to those shareholders who are registered as such on March 26, 2012 after trading hours (record date) in a designated (partial) register. The convocation and the agenda for the meeting will be available as from March 12, 2012 on the Company’s website www.wereldhave.com.
Annual report 2011
The Annual report 2011 will be available as pdf on the website of Wereldhave as from March 7, 2012 and in hard copy as from March 15, 2012.
The results will be explained during a press conference today at 11.00 h CET in the Okura hotel in Amsterdam. Also today, an analyst meeting will be held at 14.00 h CET, which can be followed by audiocast on www.wereldhave.com. Questions can be put by webcast or e-mail.
The Hague, February 13, 2012
Board of Management Wereldhave N.V.
For further information:
Wereldhave N.V.
Richard W. Beentjes
Tel. + 31 70 346 93 25
Wereldhave. Value for tomorrow.
www.wereldhave.com
Information for analysts:
Wereldhave N.V.
Charles F. Bloema / Jaap-Jan Fit
Tel. + 31 70 346 93 25
