In the first nine months of 2005, VastNed Offices/Industrial's investment result amounted to €12.0 million (€21.4 million). This decrease was attributable in particular to higher unrealised value decreases in the Dutch property portfolio in the first half year of 2005, and to lower net rental income.
Composition investment result first nine months 2005
Net rental income
Gross rental income in the first nine months of 2005 amounted to 66.0 million (71.8 million*). This lower rental income is the consequence of substantial sales in the 2004 financial year and of a decreased average occupancy rate compared to the same period in 2004. Unrecovered service costs amounted to 1.3 million (1.1 million). Operating expenses amounted to 9.3 million (9.0 million*). Operating expenses including unrecovered service costs showed a relative increase from 14.1% to 16.1% of gross rental
income. This increase is related to the reduced average occupancy rate, as a result of which part of the operating expenses could no longer be recovered, and to the one-off release of the provision for doubtful debtors in 2004. Net rental income amounted to 55.3 million (61.6 million*).
Value movements investment properties
The (unrealised) value movements of the investment properties in the first nine months of 2005 amounted to 17.2 million negative (19.1 million negative*). The value movements of investment properties in operation in the third quarter amounted to 0.8 million positive. This appears to mark an end to the value decreases of the past few years. In the third quarter, the value increase fully concerned the investment properties in operation, indicating that well-let properties are showing a stable value.
Net result on disposals investment properties
The total net result on disposals of investment properties amounted to 2.2 million positive. In the third quarter of 2005 the following properties were sold: the Smart Business Park industrial premises complex on 14-19 Kanaalweg in Utrecht, the office property on 81a Parklaan in Eindhoven, and an industrial premises on 21 Edisonweg in Gorinchem, all in the Netherlands. These sales, combined with the previously published sales, in the first nine months of 2005 totalled 70.6 million, with an average vacancy of 57%.
Net financing costs
In the first nine months of 2005 net financing costs rose to 17.3 million (16.6 million). This increase was caused by a decrease of financial income (in particular capitalised interest) which is a component of this entry, set off by a decrease of interest expenses due to sales in 2004 and 2005.
General expenses amounted to 3.6 million (4.2 million).
Taxes on income
Current income tax expenses in the first nine months of 2005 fell to 0.2 million (0.6 million). This was due to the fact that almost all Belgian investment properties in operation have been incorporated into the tax-exempt subsidiary Intervest Offices, and that withholding tax on the dividends (to be received) is no longer taken into account. The movement deferred tax liabilities
amounted to nil (0.5 million).
Investment result attributable to minority interests
The investment result attributable to third parties who held minority interests in subidiaries of VastNed Offices/Industrial in the first nine months of 2005 amounted to 7.2 million negative (2.3 million negative*). This means that a greater part of the investment result is due to third parties than in the comparable period last year. This is particularly due to on the one hand a proportional increase of the interest of third parties in Intervest Offices (interest VastNed Offices/Industrial 51.9%) due to VastNed Offices/Industrial's disposal of shares in Intervest Offices to the market and on the other to less strong negative revaluations in Intervest Offices' property portfolio.
Direct and indirect investment result
In the first nine months of 2005 the direct investment result amounted to 24.5 million