Antwerp, 7 May 2007 - Public property investment fund Intervest Retail[1] releases today its results on 31 March 2007. (comparable figures for 2006 between brackets)
The increasing demand for commercial real estate on the letting and investment market continues in 2007. Rental renewals in the commercial portfolio are thus concluded at higher prices. This tendency is reflected in the revaluation of the fair value of the real estate portfolio of Intervest Retail with € 7,2 million or 3 % during the first quarter of 2007 (compared to a depreciation of € 1,2 million on 31 March 2006). This revaluation as the result of the valuation of the property experts, is mainly due to the strong capital market of commercial real estate with persistently increasing prices on the investment market.
With 95 %, the occupancy rate[2] of Intervest Retail remains at a high level. Without taking into account the outlet centre Factory Shopping Messancy (FSM), the occupancy rate at 31 March 2007 even reaches 99,3 % (99,1 % end 2006).
During the first quarter of 2007 Intervest Retail hass paid a lot of attention to the commercialisation of Factory Shopping Messancy. An important newcomer who will soon open its doors, is the chair specialist Seats & Sofas, renting a surface area of 2.400 m². The total occupancy rate of FSM amounts to 82 % on 31 March 2007. In order to realise additional lettings, an exclusive letting agreement with the real estate agency Cushman & Wakefield has been concluded as from April 2007.
The possible sale of Factory Shopping Messancy has also been further organised during the first quarter of 2007. At the end of April 2007 an official bidding procedure has been internationally initialized in collaboration with Cushman & Wakefield. Intervest Retail expects in the second half of 2007 to be able to determine if the real estate property can be sold at sufficiently interesting conditions. The efforts related to marketing and lettings will continue invariably.
The procedure for the redeveloping of the Van De Ven shopping centre in Olen evolves to the tender for the works. The concrete timing of the execution of the project depends on the verdict of the Council of State concerning the demand of suspension of the building permit.
The net rental income of Intervest Retail decreases during the first quarter of 2007 to € 4,3 million (€ 4,5 million) as the result of the sale of investment properties mid 2006 and the financial incentives for the tenants of Factory Shopping Messancy. Indeed, the limited number of visitors and the turnover figures of the outlet centre during prior quarter necessitate financial incentives, which strongly reduce the actual rental income of Intervest Retail.
The property charges amount to € 1 million (€ 0,6 million). The increase is due to the higher operating costs in FSM. It concerns principally marketing and service charges which, from a commercial point of view, can not be charged to the tenants.
The operating result before the result on the portfolio amounts to € 3,0 million (€ 3,5 million). This decrease is mainly due to the lower rental income from the sale of investment properties mid 2006 and the increased operating costs in Factory Shopping Messancy.
The financial result amounts to - € 1,1 million (- € 0,9 million) due to the increase of the interest charges as a result of the raise of the short-term interest rates.
The net result of the first quarter of 2007 amounts to € 9,1 million (€ 1,2 million). The strong increase of this net result comes from to the revaluation of the real estate portfolio in 2007 (€ 7,2 million) compared to 2006 (- € 1,5 million). The operating result distributable as dividend amounts to € 1,9 million (€ 2,7 million at 31 March 2006). This represents for the first quarter of 2007 distributable earnings per share of € 0,38 (€ 0,53).
The fair value of the portfolio on 31 March 2007 amounts to € 288 million (€ 281 million). This increase results entirely from the increases in value of the commercial portfolio for an amount of € 7 million. The fair value of FSM remains unchanged compared to 31 December 2006.
The net active value (at fair value) of the share amounts to € 36,02 (€ 34,13). Given that the share price on 31 March 2007 is € 37,50, the Intervest Retail share is quoted with a premium of 4 % compared to this net asset value.
In accordance with the calculation method of article 6 of the RD of 21 June 2006, the debt ratio amounts to 37 % on 31 March 2007 (39 % on 31 December 2006).
The result of the financial year 2007 will largely depend on the commercial and financial evolution of Factory Shopping Messancy, as well as from the possible sale of this outlet centre. For the moment it is still difficult to estimate the impact.
[1] Intervest Retail is a public property investment fund listed on Euronext Brusesls in the Next Prime Segment.
[2] 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 Retail sa, Jean-Paul Sols - CEO or Inge Tas - CFO, tel. + 32 3 287 67 87, www.intervest.be.
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