VastNed Offices/Industrial has presented its 2005 Results. The investment result for 2005 amounted to €20.8 million (€2.2m*). This increase was mainly due to an improvement in the investment market for offices and industrial premises, which is causing appraisals to gradually stabilise and even rise once more.
Gross rental income in 2005 amounted to EUR 86.8 million (EUR 95.4m*). This lower gross rental income is the consequence of significant sales in 2004 and 2005. The decreased average occupancy rate in comparison with the same period in 2004, too, has had a downward pressure on gross rental income. Unrecovered service charge expenses amounted to EUR 1.7 million (EUR 1.2m). Operating expenses amounted to EUR 11.3 million (EUR 11.5m*). Operating expenses including unrecovered service charge expenses showed a relative increase from 13.3% to 15.0% of gross rental income. This increase was due to the decreased average occupancy rate, which caused part of the operating expenses to remain unrecovered, as well as with the one-off release of the provision for doubtful debtors in 2004. Net rental income amounted to EUR 73.8 million (EUR 82.8m*).
The value movements of the property investments in 2005 amounted to EUR 13.7 million negative (EUR 53.0m negative*). The value movements of the property investments in operation in the fourth quarter amounted to EUR 3.5 million positive. This is a continuation of the positive trend of value movements that set in in the third quarter of 2005.
In 2005 a significant amount in property investments were sold. The emphasis was on selling structural vacancy or expected structural vacancy. The 2005 market, in which project developers and opportunistic investors were prepared to buy vacant and semi-vacant properties, allowed VastNed Offices/Industrial to improve the average quality of its property portfolio. It concerned the following properties (in chronological order of sale): 10 Edisonweg in Woerden, 28-32 Catharijnesingel in Utrecht, 1-9 and 2-6 Deventerweg, 2-6 Doesburgweg, 1-7 and 4-12 Elburgweg, 2-28 Kampenringweg, 1-5 and 2-6 Muidenweg, all in Gouda, 2 Marconistraat in Rotterdam, 25 Distriboulevard in Moerdijk, 1 Tadingastraat in Leeuwarden, 14-19 Kanaalweg in Utrecht, 81A Parklaan in Eindhoven, 21 Edisonweg in Gorinchem, 1-54 Ridderhaven in Ridderkerk, 8-10 Antwerpseweg in Gouda, 114-118 Weesperstraat in Diemen, 31 Wijkermeerstraat in Hoofddorp, 14 Sterrebaan in Maarssenbroek, 68-72 Handelskade in Rijswijk, 17 Treubstraat in Rijswijk and 15 Amsterdamseweg in Uithoorn.
The proceeds after deduction of sales costs was EUR 115.7 million. The book result on these sales was EUR 1.4 million negative. Also, VastNed Offices/Industrial sold 349,556 shares in its subsidiary Intervest Offices during 2005. Thus a book result of EUR 1.2 million was realised. The total net sales result for 2005 thus came to EUR 0.3 million negative (EUR 4.2m positive).
Net financing costs in 2005 fell to EUR 22.6 million (EUR 22.8m). This marginal decrease was due on the one hand to a decrease of financial income (in particular capitalised interest) which is part of this item, and on the other hand to a marked decrease of interest expenses as a result of redemptions of interest-bearing loans following sales in 2004 and 2005.
General expenses amounted to EUR 5.0 million (EUR 5.7m).
Income tax due on the reporting period in 2005 fell to zero (EUR 0.8m). This was due to the fact that virtually all Belgian property investments in operation have been incorporated in the effectively tax-free subsidiary Intervest Offices, that the French portfolio was sold almost completely and that withholding tax on dividends to be received from Intervest Offices is no longer taken into account. The movement deferred tax liabilities amounted to zero (EUR 0.3m).
The investment result attributable to minority interests held in VastNed Offices/Industrial subsidiaries in 2005 increased to EUR 11.4 million negative (EUR 2.1m negative*). This means that a larger part of the direct investment result was attribu