Profit
Compared to the previous year, the profit for the first three quarters of 2011 decreased by € 5.5 mln to € 73.1 mln, of which € 2.8 mln due to a decrease in the direct result and € 2.7 mln by a lower indirect result. The profit amounts to € 3.14 per share (2010: € 3.45 per share).
Direct result
The direct result for the first nine months of 2011 amounts to € 84.8 mln, a € 2.8 mln decrease compared to 2010. The lower direct result can be attributed to higher interest charges and negative exchange rate differences.
As a result of property acquisitions and disposals, net rental income rose by € 4.0 mln and the like-for-like rental growth contributed € 0.3 mln (0.2%) to the increase of net rental income. Due to negative exchange rate differences (€ -2.2 mln), the increase of net rental income stood at € 2.1 mln.
The interest charges rose by € 7.1 mln, caused by a larger size of the loan portfolio and higher interest rates. The average nominal interest rate as per September 30, 2011, rose to 3.0% (September 30, 2010: 2.5%). The general costs remained stable, in comparison with the first three quarters of 2010. Exchange rate differences had a negative effect on the direct result of € 1.9 mln, as average exchange rates prevailing for the first nine months of 2011 were lower than in 2010. Taxes on the direct result decreased by € 1.6 mln.
The direct result for the first three quarters of 2011 amounts to € 3.70 per share, which represents a decrease of 3.9% or € 0.15. This includes a dilution of € 0.03 caused by the increased number of shares in issue in connection with the optional dividend for the year 2010.
The EPRA occupancy rate as at September 30, 2011 amounts to 90.6%, a 0.4% increase compared with June 30, 2011. The occupancy rate of the retail portfolio decreased by 1.1% during the third quarter to 94.9%. This can be attributed to the acquisition of ca 4,300 m2 partially vacant retail space, adjacent to the Dolphin Shopping Centre in Poole, United Kingdom, and strategic vacancy in Helsinki in connection with the refurbishment. The occupancy rate of the office portfolio improved by 2.1%, especially in Belgium and the United Kingdom, but also in Spain and the United States. The occupancy rate of the investment category other rose by 0.3%, primarily due to higher occupancy rates in the residential projects in Texas, United States. Broken down per sector, the EPRA occupancy rates as at September 2011 (June 30, 2011) are: retail 94.9% (96.0%), offices 85.8% (83.7%) and other 94.7% (94.4%).
Indirect result
The indirect result for the first three quarters of 2011 amounts to € -11.7 mln (2010: € -9.0 mln).
The total valuation result amounts to € -8.8 mln, consisting of a property valuation of
€ -9.1 mln, or -0.3% of the portfolio, and a revaluation of financial instruments (interest derivatives) of € +0.3 mln. The average cap rate for the valuation of the portfolio remained nearly stable at 6,4%. There was a positive property revaluation in Belgium, France and Finland, the valuation remained more or less stable in The Netherlands and the United Kingdom and decreased in Spain and the United States.
A surplus of € 2.9 mln or 4.4% of the latest book value was made with the sale of five smaller properties in the United Kingdom, six logistic properties in the Netherlands and an office Building in Belgium for a total consideration of € 67.6 mln.
Equity/debt
At September 30, 2011 shareholders’ equity (including minority interest) stood at € 1,702.6 mln (December 31, 2010: € 1,728.1 mln). The net asset value per share at September 30, 2011, including current profit amounted to € 73.19 (December 31, 2010: € 75.12). Compared to June 30, 2011, the solvency ratio remained unchanged at 58% (December 31, 2010: 59%), The Loan to Value rose slightly to 41% (December 31, 2010: 39%).
Property portfolio
The purchase of ca 4,300 m2 retail space directly next to the Dolphin Shopping Centre in Poole, United Kingdom, for € 12.4 mln, was the only property acquisition during the first nine months of 2011. In the United Kingdom, five smaller properties were sold, in The Netherlands six logistic buildings and in Belgium an office building in Brussels. As at September 30, 2011 the value of the investment portfolio amounted to € 2,777.4 mln and the value of the development portfolio and the value of the development portfolio stood at € 201.4 mln.
The revitalisation of the Itäkeskus shopping centre has started. The renovation of the parking garage under the Bulevardi will be completed before the X-mas season and talks are ongoing with several large retailers about a relocation within the centre, to improve the tenant mix.
Development portfolio
In Belgium the expansion of the Nivelles shopping centre is proceeding according to plan. The centre is expected to be fully let when opening in spring 2012.
In the United States the construction of the San Antonio project is also proceeding according to plan. The first apartment building will be completed in November 2011, the last apartments will be completed during the first quarter of 2012. Letting of the apartments has started, now that apartments have become available for visits by prospective tenants.
One of the two office buildings in San Antonio is now 55% let as a multi-tenant property. The second building, marketed as a single tenant property, is still vacant. A 20-year lease agreement has been signed for the hotel, which will be completed during the fourth quarter and will open doors to the public in spring 2012. The hotel will be operated as a Luxury Hotel & Spa, to be managed by Interstate, the largest independent hotel operator in the United States with over 350 hotels worldwide.
Events after balance sheet date
During the fourth quarter, in Finland Wereldhave has sold a department store in Tapiola, Helsinki, for € 45 mln, well above the book value. The sale has been completed on October 31, 3011. The building will become part of a large redevelopment scheme of the prime shopping area of Tapiola and has a dominant position within this area.
In The Netherlands agreement has been reached on the sale for € 24.2 mln of two buildings that are rented out to Makro, also above book value. The transaction will be completed in December 2011.
Also during the fourth quarter Wereldhave acquired two smaller office buildings in Arnhem, The Netherlands, for € 3.9 mln, to become part of the redevelopment scheme for the Kronenburg Shopping Centre.
Prospects
Wereldhave maintains its earlier forecast that, assuming stable currency rates, the direct result for the full year 2011 will be between € 4.85 and € 4.95 per share, thus enabling Wereldhave to maintain dividend at the 2010 level.
The results will be explained during a conference call, to be held today at
14.00 h CET. The conference call can be followed by audiocast on www.wereldhave.com. Questions can be put by e-mail via this webcast.
The Hague, November 3, 2011 Board of Management Wereldhave NV
Charles Bloema
