Intervest Offices NV/SA, a Belgian property investment fund, is today publishing its figures for the third quarter. With an operating profit of â‚¬ 19 million, the fund is nicely on track.
The operating result as at 30 September amounts to â‚¬ 18.98 million and is therefore in line with expectations. Rental income experienced a slight fall which was attributable to a higher level of vacancies in the portfolio. This had, however, been taken into account at the time the forecasts were drawn up. In addition, a number of costs turned out lower than expected.
The result on the portfolio is negative and amounts to around â‚¬ -23 million. This is mainly attributable to the one-off writing down of the merger difference with Siref in the sum of â‚¬ 15.75 million. Besides this, the value of the portfolio has fallen by â‚¬ 7.37 million. The reason for this is the deteriorating economy as a result of which the vacancy rate of the office portfolio has risen to 8.34%. The vacancy rate of the semi-industrial portfolio amounts to 9.38% so that the overall percentage of vacancies in the investment fund amounts to 8.84%.
This brings the profit for the first nine months to â‚¬ -4.1 million. However, this will have no impact on the dividend distribution. It will be proposed to the shareholders to withdraw â‚¬ 15.75 million from the existing reserves so that they experience no financial consequences. The operating profit of â‚¬ 18.98 million will thereby continue qualifying for distribution. This means that â€“barring unforeseen circumstancesâ€“ it will be possible to distribute the anticipated gross dividend for 2002 of â‚¬ 2.16.
The net asset value per share, deed in hand (DIH), including profits for the period, amounts to â‚¬ 26.26. In comparison with the stock price of â‚¬ 23.20 as at 30 September, this represents a discount of 11.65%. Intervest Officesâ€™ debt ratio is presently 41.14%.
The intention is to add approximately â‚¬ 112 million of properties to the portfolio by a merger on 23 December: on the one hand, three office buildings with a total surface area of 35,000 mÂ² located in Kortenberg, Diegem and Mechelen, and on the other two semi-industrial properties located in Puurs and Merchtem. Given that financing capacity is insufficient for this purpose, a part will have to be offset by the issue of 1,516,024 new shares. The debt ratio will increase to around 47% as a result of the merger.
As at 30.09.02, Intervest Officesâ€™ portfolio consisted of 78.5% offices and 21.5% semi-industrial properties. More than 50% of the offices are located on the Brussels periphery. The semi-industrial properties are all situated on the Brussels-Antwerp axis.
Intervest Offices operates mainly in the market for peripherally located offices. This market is having to contend with considerable vacancy rates and rents that are under pressure. Besides its diversification into more stable semi-industrial property, the investment fund has many long-term tenancy agreements. After the planned merger on 23 December, almost 40% of its office portfolio will consist of properties on long-term lets (on average of 11 years). These measures limit the investment fundâ€™s risk profile considerably.
Since its flotation in March 1999 (then Perifund), the value of the portfolio has risen from â‚¬ 64 million to â‚¬ 499 million (DIH) as at 30.09.02. After the planned merger of 23 December 2002, the size of the portfolio will amount to more than â‚¬ 600 million.