VastNed Offices/Industrial presents its 2005 first quarter results today. The total investment result for the first quarter of 2005 amounted to EUR 0.7 million, compared to EUR 11.3 million in the first quarter of 2004.
The sharp decrease of the total investment result is particularly due to higher unrealised value decreases in the property portfolio. In the context of the introduction of IFRS, as from January 1, 2005 financial year VastNed Offices/Industrial's entire property portfolio will be appraised at the end of each quarter. Until last year half of the property portfolio was appraised as per June 30 and the remaining part as per December 31. This change was an important reason for the value decrease in the first quarter of 2005.
Composition investment result first quarter 2005
In the first quarter of 2005, gross rental income amounted to EUR 22.3 million (EUR 24.7 million*). This decrease of the rental income is the consequence of considerable sales in the 2004 financial year and a lower average occupancy rate. The reduced occupancy rate also led to an increase of non-recoverable service costs to a level of EUR 0.5 million (EUR 0.2 million). Operating expenses fell to EUR 3.1 million (EUR 3.5 million*) due to the abovementioned sales. Expressed as a percentage of gross rental income, operating expenses remained virtually unchanged at 14.1% (14.0%). Net rental income came to EUR 18.6 million (EUR 21.0 million*).
The (un)realised value movements of the property investments in the first quarter of 2005 amounted to EUR 11.4 million negative (EUR 2.8 million negative*). The total value movement can be attributed to: the Netherlands EUR 7.0 million negative and Belgium EUR 4.4 million negative. The lower value of the properties is a reflection of the difficult underlying letting market.
The sales realised on balance took place above the latest appraisal value, leading to a net profit of EUR 1.3 million. In the Netherlands, total sales of EUR 27.8 million were realised.
Net financing costs in the first quarter of 2005 rose to EUR 5.9 million (EUR 5.5 million). This increase was particularly due to the cessation of the capitalisation of construction interest on the TriNovium project in Nieuwegein, the Netherlands. Conversely, actual interest paid decreased due to the sales realised in 2004. General expenses amounted to EUR 1.2 million (EUR 1.2 million*).
Income tax expenses in the first quarter of 2005 amounted to EUR 0.2 million (EUR 0.8 million*). This decrease was due to the fact that virtually all Belgian investments have been incorporated in the tax-free entity Intervest Offices.
The investment result attributable to minority interests in subsidiaries of VastNed Offices/Industrial in the first quarter of 2005 amounted to EUR 0.5 million (EUR 2.0 million*).
The direct investment result in the first quarter of 2005 amounted to EUR 8.3 million (EUR 11.1 million*). The indirect investment result in the first quarter of 2005 amounted to EUR 7.7 million negative (EUR 0.2 million*).
The direct investment result per share in the first quarter of 2005 amounted to EUR 0.43 (EUR 0.59*), the indirect investment result per share amounted to EUR 0.40 negative (EUR 0.01*) and the other movements were nil (nil).
The size of the property portfolio in the first quarter of 2005 decreased to EUR 1,126 million (December 31, 2004: EUR 1,164 million) due to negative value movements and the sales realised in the first quarter of 2005.
The average financial occupancy rate of the property portfolio in the first quarter of 2005 amounted to 81.4% (84.9%). The occupancy rates in the respective countries amounted to: the Netherlands 80.9% (88.0%) and Belgium 81.8% (80.5%). The commercial spot occupancy rate as per March 31, 2005 amounted to 81.7%. In the respective countries they were: Netherlands 82.7% (December 31, 2004: 80.5%) and Belgium 82.2% (December 31, 2004: 81.5%). In the development of the occupancy rate of the Dutch property portfolio, the sales of a number of