Rodamco Europe is reporting good results for the first six months of 2006. Direct result after tax is up 9.7% and Triple NAV per share grew by 11.3% to 67.27 per share. Rodamco Europe is focusing on these two items in evaluating its performance: direct result after tax for its operational performance and Triple NAV for the intrinsic value. Triple NAV growth was supported by a substantial valuation result, which was also the main contributor to the 63.0% growth of net shareholders' profit in the first half year of 2006.
F.l.t.r.: CFO Peter van Rossem, CEO Maarten Hulshoff, COO Retail Management Joost Bomhoff and CIO Willem Ledeboer.
CEO Maarten Hulshoff: "Employment and consumer confidence in the Euro area have been improving, resulting in stronger retail sales numbers in most of the countries we operate in. Especially Dutch retail sales, after a few years of stagnation, showed an exceptionally high increase in excess of 10%[6]. If the increased Dutch retail sales prove to be sustainable, we expect to benefit from this positive development in our largest home region.
Our operational performance during the first six months of 2006 showed strong like-for-like net rental income growth
of 4.3%, whilst the Loss of Rent ratio[7] improved from 4.6% (end of 2005) to 3.8%. Both are indicators of our top quality portfolio, spread over 14 European countries. Growth in our portfolio will benefit from our 2.3 billion pipeline coming into operation in various countries over the coming years.
We experienced a continuing strong investor demand in the retail property market throughout Europe resulting in a 30bp yield shift in our portfolio during Q2 2006 (40 bp during first six months of 2006). We, at Rodamco Europe, will continue to focus on top quality urban shopping centers at A1 locations which are dominant in their catchment areas."
Highlights first six months 2006
- Property assets increased 8.6% to 9.9 billion (end of 2005: 9.1 billion); 93.4% of portfolio is invested in the retail sector (Q4 2005: 90.3%);
- Triple NAV[1] (NNNAV) up 11.3% to 6,030 million (end of 2005: 5,418 million), NNNAV per share is 67.27[2] (end of 2005: 60.44[3]);
- Direct result after tax up 9.7% to 186.5 million (H1 2005: 170.0 million), driven by a 12.2% increase in gross rental income;
- Direct result after tax per share up 9.7% to 2.08 (H1 2005: 1.90);
- Net rental income up 14.6% to 278.7 million (H1 2005: 243.1 million), like for like[4] growth of net rental income was 4.3% (H1 2005: 3.8%);
- Overall occupancy rate increased slightly to 98.0% (Q4 2005: 97.9%); retail occupancy remained stable at 98.6% (Q4 2005: 98.6%);
- Net shareholders' profit up 63.0% to 669.1 million, which includes indirect result after tax of 482.6 million (H1 2005: 240.4 million);
- Valuation result of investment property 544.5 million; 80% due to yield shift and 20% due to rental income change; net initial yield[5] on investment property is 5.7% (end of 2005: 6.1%);
- Outlook remains unchanged, direct result after tax for full year 2006 is expected to grow by more than 7%;
- Interim dividend up 9.6% to 1.37 per share (H1 2005: 1.25), payable on 13 October 2006
Notes:
[1] Following the EPRA definition
[2] After final dividend 2005 of 2.17 per share; before interim dividend 2006 1.37 per share
[3] Before final dividend 2005 of 2.17 per share
[4] Following EPRA like-for-like definition
[5] Net initial yield is calculated by expressing estimated annual net rental income as percentage of gross open market value (including transfer costs); this follows the EPRA definition
[6] Source: CBS, May 2006 over May 2005
[7] Loss of Rent = rent reductions + rent loss due to vacancy + provisioning for doubtful debtors
Source: Rodamco Europe
