Antwerp, 7 May 2007 - Public property investment fund Intervest Offices[1] releases today its results on 31 March 2007. (comparable figures for 2006 between brackets)
With the limited offer and the still increasing demand for qualitative logistic real estate, the yields for semi-industrial real estate reach a historical depth[2]. This yield shift is reflected in the valuations of the property experts on 31 March 2007. Consequently, in the first quarter of 2007 the semi-industrial real estate portfolio of Intervest Offices knows a revaluation of € 4,3 million or 3 %.
Furthermore, Intervest Offices obtained during the first quarter of 2007 the fiscal ruling which constituted the suspending condition for the disinvestment of five office buildings. The transaction has indeed been concluded at the end of 2006 under the suspending condition of obtaining a fiscal ruling by which the transfer, by means of the establishment of a long lease right against payment of a one time ground rent, followed by the transfer of the bare ownership, is not susceptible to requalification. Intervest Offices expects that the finalisation of this transaction and the transfer of the financial means for an amount of € 92,5 million will take place during the second quarter of 2007.
The rental income slightly decreases with 1,6 % to € 10,5 million (€ 10,7 million) during the first quarter of 2007. This decrease mainly results from the sale at of a semi-industrial property in Merksem the end of December 2006.
During the first quarter of 2007, new leases for a surface area of 2.035 m² have been concluded (4 new transactions) and 14 leases for a surface area of 12.779 m² have been signed with existing tenants. The new leases have mostly been realised in Antwerp (Gateway House) and Malines (Intercity Business Park). The total occupancy rate[3] on 31 March 2007 remains herewith at the level of 31 December 2006, i.e. 92 %.
The property charges amount to € 1 million for the first quarter of 2007 (€ 0,8 million). The rise is mainly due to the increase of the property management costs as a result of the reinforcement of the commercial team of the investment fund. The general costs amount to € 0,4 million, which is € 0,1 million lower than during the same period of prior year.
The operating result before the result on the portfolio amounts to € 9,3 million (€ 9,4 million).
During the first quarter of 2007, the positive change in fair value of the real estate portfolio amounts to € 4,7 million (€ 11,7 million). The fair value of the office buildings portfolio knows this quarter a limited rise of € 0,4 million while the semi-industrial properties increase in value by € 4,3 million. This results mainly from the important demand on the investment market of the logistic real estate.
The financial result remains at the same level as prior year (- € 2,8 million). In spite of the strong increase of the short-term interest rates, Intervest Offices could maintain the stability of its interest charges by the refinancing of its credits in 2006 and the use of interest rate swaps. On 31 January 2007, the syndicated credit was replaced by four long-term bilateral credits that Intervest Offices concluded with its existing European bankers at significantly more attractive conditions than the previous credit.
The net result of the first quarter of 2007 amounts to € 11,2 million (€ 18,3 million) and can be divided in operating result (€ 6,5 million compared to € 6,6 million on 31 March 2006) and result on the portfolio (+ € 4,7 million compared to + € 11,7 million on 31 March 2006). This represents for the first quarter of 2007 distributable earnings per share of € 0,47 (€ 0,48).
The fair value of the real estate portfolio on 31 March 2007 amounts to € 511 million (€ 507 million on 31 December 2006). The increase results almost entirely from the revaluation of the semi-industrial portfolio.
On 31 March 2007, the net asset value (fair value) of the share amounts to € 24,83 (€ 23,99). Given that the share price on 31 March 2007 is € 31,95, the Intervest Offices share is quoted with a premium of 29 % compared to this net asset value.
Finally, Intervest Offices continuesly aims in 2007 to improve the quality of the portfolio by investing the financials means, coming from the sale of five office buildings, in high qualitative buildings. Furthermore, the letting and marketing efforts will be maintained, as part of a creative marketing program in order to reduce the vacancy.
[1] Intervest Offices is a public property investment fund listed on Euronext Brusesls in the Next Prime Segment.
[2] Note: decreasing yields means increasing acquisition prices.
[3]The occupancy rate is calculated as the ration of the actual rental income to the same rental income plus the estimated
rental value of the vacant locations for rent.
Note to the editor: for more information, please contact:
Intervest Offices sa, Jean-Paul Sols - CEO or Inge Tas - CFO, tel. + 32 3 287 67 87, www.intervest.be.
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