Cofinimmo; 2003: a year of consolidation

Cofinimmo has realised an excellent performance in 2003, in a more and more difficult real estate environment. This was illustrated by its introduction in the BEL20 index, showing if necessary that the real estate sector is to be fully considered in the management of every investment portfolio. Cofinimmo has again positioned itself as an investment of choice, offering shareholders a total return (stock price +reinvested gross dividend) of 17.34%.

This stock performance is the result of the continuation of Cofinimmo’s strategy. By optimising the operational management of its buildings and intensifying its active commercial approach, Cofinimmo succeeded in maintaining an operational margin over 80% and an occupancy rate clearly higher than the market (94.68% against 90.1% - source: Cushman Wakefield).

Cofinimmo has also been particularly active on the investment market. By means of different transactions, it has acquired, or has engaged itself to acquire, under certain conditions and according to diverse financing modes, more than EUR 450 million of assets.

Whereas both the rent levels as the occupancy rate continue to decrease and the evolution of the economic situation remains uncertain, the company has concentrated on investments in quality assets, which are perfectly located, rented on the long term to first class tenants and offering attractive returns. Most of these assets are under construction or renovation and will have effect on Cofinimmo’s result at their reception in 2005. The main transaction was the acquisition of 33% of the shares of North Galaxy SA. The construction risks are not borne by Cofinimmo.

In order to increase its presence in the prime districts of Brussels, mainly the Leopold District, and to be more competitive, Cofinimmo has acquired buildings that mostly will be subject to renovation in the coming years. These projects will integrate the activity of development for own account, aimed to improve the quality of and the durability of the buildings.

Considering the nature of the investments realised in 2003 (see above) and the ongoing difficult context in which the rental market will evolve in 2004, Cofinimmo expects to register a decline in its operational activity in 2004. The first net current result forecast for 2004 is slightly below EUR 8.00 per share, representing a decrease of about 5% compared to 2003. However, the objective for the operational margin (80%) should be achieved.

The year 2004 will be a more challenging year, but as of 2005 she should retrieve the net current result level of 2002 and 2003, taking into account the completion of its investments committed in 2003 and a slight improvement of the office rental market.
Cofinimmo will continue to apply its current strategy: improve the quality of its portfolio, increase its market share and maximise the shareholders’ return.

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