The tendencies observed on the Belgian office real estate market in 2005 have not much evolved during the 1st half of 2006. The rental market is still characterised by a fairly weak take-up (283,774m²) and by rent prices which are still under pressure in most of the geographic zones. Since the beginning of this declining rental market, Cofinimmo has intensified its commercial strategy both by reinforcing its own commercial teams and by opting for permanent and constructive contacts with real estate brokers. Moreover, given the low rental activity on the market, the commercial teams have concentrated on enhancing the existing clients' loyalty. As such, 46,327m² have been rented to existing clients during the 1st half year of 2006, whereas 38,010m² have been rented to new clients. The occupancy rate as at 30.06.2006 reaches 95.13%, which is much better than the market average (89.56%, source: CB Richard Ellis).
The Group has also pursued its investment strategy with success. In the office space investment market, where it becomes difficult to find properties fulfilling the financial requirements of the Group, the closing of the acquisition of Belgian European Properties SA (see hereafter), owner of an office complex in the heart of the Leopold District (on the corner of Square de Meeûs and rue du Luxembourg), constitutes a real success.
Cofinimmo has also identified a number of potential targets in the sector of the senior residences. The Group remains positive about the potential this sector has to provide a complement of profitable acquisitions and of opportunities of development for own account.
Through its commercial and investment strategies in the office sector, the specific sector of properties occupied by public bodies or more recently the senior residences, which are backed up by innovating financing structures, Cofinimmo looks to creating value for its shareholders and optimising occupation conditions for its clients.
The Group recorded promising consolidated results at the end of the 1st half year of 2006. The net current result per ordinary share, without considering the positive revaluation of the financial instruments resulting from the application of IAS 39, reaches 4.28 against 4.03 during the 1st half year of 2005, representing an increase of 6.2%. If the application of IAS 39 is taken into consideration, the net current result amounts to 4.87 as at 30.06.2006, against 3.80 at this date in 2005.
Taking into account the results as at 30.06.2006, the perspectives for the 2nd half of the year and in the
absence of accelerated interest rate increases, the net current result per ordinary share, excluding the impact of IAS 39, should be close to 8.50. This is in accordance with the forecast published in the Annual Report 2005. The dividend forecast for the year 2006 (payable in 2007) is 7.40 gross per ordinary share (87% payout of the net current result).