VastNed Offices/Industrial N.V., specialised in investments in offices, logistics centres and industrial premises in the Netherlands, Belgium and France, in the first nine months of this year realised a gross rental income of Euro 88.3 million, an increase of 6.8% compared to the first nine months of 2001 (Euro 82.7 million).
This increase is due to higher rents as a result of indexation, and to expansion of the property portfolio, mainly in Belgium. This was set off by lower rental income in the Netherlands due to sales at the end of 2001. The direct investment result increased marginally to Euro 42.6 million (30/9/2001: Euro 42.1 million).
The indirect investment result (the balance of unrealised and realised value changes of investments, movements in deferred taxes and the costs of capital management) came to Euro 18.9 million negative (30/9/2001: Euro 0.5 million negative) and was mainly due to the write-off of purchase costs in Belgium and a limited write-down of the Belgian property portfolio.
The revaluation of the Dutch property portfolio was marginally positive. The total investment result came to Euro 23.7 million (30/9/2001: Euro 41.6 million). The value of the property portfolio at the end of the reporting period was Euro 1,454 million (30/9/2001: Euro 1,406 million).
The direct investment result per share came to Euro 2.34 (30/9/2001: Euro 2.37), calculated over the average number of ordinary shares issued of 18,219,308 in the reporting period (30/9/2001: 17,782,607). The indirect investment result per share came to Euro 1.03 negative (30/9/2001: Euro 0.03 negative). Shareholdersâ€™ equity per share including current profits as per September 30, 2002, amounted to Euro 29.81 (30/9/2001: Euro 31.65).
The property portfolio
Due to the weak economic climate, vacancy in the property portfolio during the reporting period amounted to approximately 6.1% (30/9/2001: approximately 3.3%).
In order to pursue a more conservative policy concerning the finance ratios, properties will be sold in the Netherlands to a total of approximately Euro 130 million. It is anticipated that over half of those may be realised even this year at or just above the most recent appraisal value.
The continuing unfavourable economic climate clearly impacts the office market and the market for industrial premises. No improvement is expected for the time being. Vacancy in VastNed Offices/Industrialâ€™s property portfolio has increased to 8% at present, mainly due to some recent bankruptcies, especially in Belgium. Vacancy is also causing additional removal expenses and the economic climate forces us to set additional provisions for doubtful debtors.
For the full year 2002, in contrast to earlier expectations, a direct investment result per share is anticipated of approximately Euro 3.10 (2001: Euro 3.16). The indirect investment result is expected to be negative.