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Antwerp, 19 February 2008 - Public property investment fund Intervest Offices[1] releases today its consolidated results on 31 December 2007. (comparable figures 31 December 2006 between brackets)
In 2007, the fair value of the real estate portfolio of the property investment fund Intervest Offices shows a revaluation of Eur 13,0 million (Eur 20,6 million). This increase in value results from the important demand on the investment market, mainly for semi-industrial buildings.
At the end of 2006 the property investment fund proceeded to the sale of five office buildings with an important vacancy. In 2007 the liberated financial means have been used for the reinvestment in the office buildings Exiten and Mechelen Campus Tower and in the logistic complex Herentals Logistics. As a result of this reorganisation of the real estate portfolio of the property investment fund, the rental income slightly decreases in 2007 with 3 % to Eur 41,2 million (Eur 42,5 million). In 2007, the occupancy rate of the real estate portfolio remains stable and amounts on 31 December 2007 to 92 % (92% at the end of 2006).
On 31 December 2007, the property charges amount to Eur 4,0 million (Eur 3,8 million). This rise is mainly due to the increase of the technical costs for maintenance works and the increase of the commercial costs resulting from the marketing efforts of the property investment fund. The general costs and other operating income and expenses amount to Eur 1,2 million which is Eur 0,1 lower than previous year.
The financial result improves considerably to - Eur 9,5 million (- Eur 12,0 million) due to the significant decrease in 2007 of the credit withdrawals as a result of the sale transaction end 2006. Furthermore, in spite of the important rise of the short-term interest rates, Intervest Offices has maintained its average interest rate lower than in 2006 by the refinancing of its credit facilities at the beginning of 2007 at considerable more attractive conditions and by the use of interest rate swaps. On 31 December 2007 this interest rate swaps have a market value of Eur 4,1 million (Eur 2,9 million). The increase of the market value of these financial instruments results from the rise of the interest rates in 2007.
Finally, the property investment fund has received at the beginning of 2007 moratory interests for an amount of Eur 0,8 million from the sale transaction of five of its office buildings. Hence, the settlement of this sale transaction has in totality a one-time positive effect on the net result of the investment property fund of Eur 0,2 million. The average interest rate amounts to 4,1 % in 2007 compared to 4,4 % in 2006.
As a result of the important decrease of the financial charges and in spite of the lower rental income, the distributable operating result of Intervest Offices has strongly improved in 2007. Taking into account the 13.900.902 shares, this means for the financial year 2007 a gross dividend of Eur 1,94 per share compared to Eur 1,87 in 2006. This represents an increase of the dividend with nearly 4 % per share.
The net result of the property investment fund for the financial year 2007 is Eur 4,5 million lower and amounts to Eur 39,7 million, compared to Eur 44,2 million in 2006. This net result can be divided in Eur 26,7 operating result (Eur 25,7 million) and Eur 13,0 million result on the portfolio (Eur 18,5 million). The decrease of this net result is due to the lower not realised capital gain on the real estate portfolio resulting from the valuation of external independent property experts.
On 31 December 2007, the fair value of investment properties amounts to Eur 565 million (Eur 507 million). This rise is due to the increase in value of the existing buildings for Eur 13 million and the acquisition of the Exiten building for Eur 8 million, the Mechelen Campus Tower building for Eur 27 million, the semi-industrial building of Herentals Logistics for Eur 8 million, as well as the realised investments within the portfolio.
In 2007, the total amount of shares increased with 18.240 units as a result of the merger by acquisition carried out on 18 October 2007 with the limited liability companies Zuidinvest sa and Mechelen Campus 3 sa. All 18.240 new shares are allocated to Belle Etoile sa, subsidiary of VastNedOffices/Industrial sa. The new shares are entitled to dividend in the result of Intervest Offices as from 1 January 2007. Consequently, on 31 December 2007 the amount of shares amounts to 13.900.902.
On 31 December 2007 the net asset value (fair value) of the share amounts to Eur 25,07 (Eur 23,99). Given that the share price on 31 December 2007 is Eur 29,65, the Intervest Offices share is quoted with a premium of 18 % compared to this net asset value (fair value).
According to the calculation method of article 6 of the RD of 21 June 2006, the debt ratio amounts to 39 % on 31 December 2007 (45 %).
On the short term Intervest Offices aims to continue to improve the quality of the portfolio by reinvesting the financial means, coming from the sale end 2006 of properties difficult to rent, in high qualitative buildings. In this frame Intervest Offices has already concluded in November 2007 a framework convention for the acquisition of the adjacent vacant land parcels along the motorway E313 on the Siemens site in Herentals. These parcels are meant for the development of 40.000 m² logistic buildings next to the present Siemens building, which will be realised in two phases as from the beginning of 2008. In the first phase the logistic development comprises the building of 20.000 m². The delivery is presently planned for August 2008, whereby Intervest Offices obtains from the developer a rental guarantee during one year, conforming market conditions. In a later stage, Intervest Offices can proceed on this land to the further development of 20.000 m² logistic buildings for its own account. The investment value of this transaction amounts to about Eur 15 million for the first phase of the logistic development. The net initial yield, after complete development of the logistic site, will amount to about 7 %. This transaction will contribute immediately to the operating result of 2008.
Furthermore, Intervest Offices will in 2008, together with its commercial team, continue to improve the occupancy rate of the present portfolio.
Note to the editors: for more information, please contact:
Intervest OFFICES SA, Jean-Paul Sols - CEO or Inge Tas - CFO, tel. 03/287.67.87, www.intervest.be
[1] Intervest Retail is a public property investment fund listed on Euronext Brussels.
