Nieuwe Steen Investments rediscovers the path towards growth (NL)

Nieuwe Steen Investments (NSI) took significant strategic steps during the second quarter aimed at the improvement and expansion of the portfolio.

NSI improves the quality of the portfolio by investing in shopping centers with floor areas of at least 10,000 m², in which NSI's proactive property management can add value, and in offices situated in West Holland's Randstad conurbation at locations in the inner cities with a minimum surface area of 5,000 m².

As part of this, NSI acquired the 10,500 m² Sterpassage, which is part of the 'In de Bogaard' shopping center in Rijswijk, for € 38.7 million. Gross rental income from Sterpassage amounts to €3.0 million per year and the gross initial yield is thus well above the target of 7% that NSI sets for shopping centers. The proceeds from the successful 9.99% share issue (€55 million) have been partly used for this acquisition.

NSI continues actively seeking other opportunities for acquisitions. In addition, during the first half of 2010, NSI sold six smaller properties for an amount of €11.1 million.

In the second quarter of 2010, NSI achieved a direct investment result of €12.0 million (Q1 2010: €12.8 million, excluding a one-off income item of €2.0 million).
The direct result for the first half of 2010 amounted to €26.8 million compared to €25.5 million in the first half of 2009.

NSI paid a dividend of €0.38 for the first quarter, including the effect of the one-off income item of €0.05.Due to the issuance of 9.99% new shares, the dividend per share for the second quarter is €0.28, which means the dividend per share for the first half of 2010 amounts to €0.66.

The departure of Ernst & Young out of the La Tour office building in Apeldoorn has been incorporated in full in the occupancy rate in the second quarter. Without this event with a 0.8% effect on the occupancy rate, the occupancy rate of the second quarter would practically have remained on the same level as in the first quarter. The total rental income of the Ernst & Young rental agreement has been paid as dividend in the first quarter. In the meanwhile, 85 parking spaces and 2,700 out of the 4,600 m² previously rented by Ernst & Young have been let again.

The downward revaluation of the Dutch properties amounted to €9.6 million in the second quarter of 2010.

The downward revaluation of the Dutch office portfolio by €6.8 million is mainly caused by the increased vacancy level and keeps pace with the downward revaluations in recent quarters. Yields remain unchanged.

The downward revaluation of the retail portfolio is largely explained by the acquisition costs of the Sterpassage.

Johan Buijs, CEO of NSI, said in a response: "In the second quarter, we took significant steps in the growth and improvement of our portfolio. The focus will remain emphatically on growth in the coming months. At the same time, we observe that the rental market, and especially the office market, has not yet recovered from the depression. During the past quarter we have therefore strengthened our internal letting organization to protect occupancy rates and we are pleased to have entered into new rental contracts and rent prolongations for 80,000 m²."

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Source: Nieuwe Steen Investments

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