Direct investment result (cash profit) increased by 8.3%; 4.5% per ordinary share. Prognosis for 2002: Direct investment result per ordinary share of approximately Euro 4.15 (2001: Euro 4.01).
In difficult market conditions VastNed Retail has held its own and has proved to be less vulnerable due to the composition and the balanced spreading of its property portfolio. VastNed Retail has a good regional spreading in the western and southern European countries, and lets to virtually all sectors in the retail trade. The expiry and extension dates of the tenancy agreements are evenly distributed over the next years.
We maintain our prognosis of an increase of the direct investment result per ordinary share for the full 2002 year. At present, a direct investment result of approximately Euro 4.15 is being anticipated (2001: Euro 4.01).
In the first half year of 2002 gross rental income increased by 12.5%, from Euro 53.8 million in the first half of 2001 to Euro 60.5 million in the comparable period in 2002. This increase is mainly due to expansion in Spain and France. Operating expenses came to Euro 9.0 million (first half 2001: Euro 6.9 million), and amounted to 14.9% of gross rental income (first half 2001: 12.8%). This percentual increase was mainly due to one-off extra maintenance costs and a provision for doubtful debtors in Germany.
Total interest expenses came to Euro 15.0 million (first half: Euro 13.7 million).
The direct investment result (cash profit) increased to Euro 31.8 million, an increase of 8.3% compared to the first half year of 2001 (Euro 29.3 million).
The direct investment result per ordinary share, calculated over the average number of ordinary shares issued due to stock dividend, came to Euro 2.07 (first half year 2001: Euro 1.98).
The indirect investment result per ordinary share amounted to Euro 0.24 (first six months 2001: Euro 0.24).
Developments in the property portfolio
Acquisitions in the first half of 2002 were limited to the purchase of a retail property in Spain (Madrid) for Euro 6.7 million. Sales were executed in The Netherlands at prices well exceeding the appraisal value to a total of Euro 4.6 million and in Belgium to a total of Euro 1.7 million, at appraisal value. These facts represent some of the steps taken in the strategy of achieving a more balanced distribution over the countries in which VastNed Retail operates.
The results of the appraisals of about half of the property portfolio showed a (strong) positive revaluation of Euro 19.5 million in all countries except Germany, which showed a write down of Euro 10.1 million. On balance, the reappraisal of the property portfolio amounted to Euro 9.4 million. In view of the disappointing results of the German property portfolio, the properties in that country will be divested. The intention is to complete a part of these divestments even in the course of 2002.
Letting transactions and contract extensions were satisfactory. Vacancy in the property portfolio decreased to 2.2% in the first half year. (First half 2001: 2.6% and 2.5% over 2001.)
Holders of 84.2% of the ordinary shares exercised the option of taking up part of the 2001 dividend as stock dividend. In the preceding year 62% did so. As a consequence, the number of ordinary shares issued increased by 472,909 shares to 15,645,974.
Group equity including current profits expressed as a percentage of the investments in property amounts to 51.2% as per June 30, 2002 (year-end 2001: 52.5%). Net asset value per ordinary share amounted to Euro 48.09 as per June 30, 2002 (June 30, 2001: Euro 47.98).
Due to disappointing macro-economic results, expectations for a quick economic recovery are very modest worldwide. It is anticipated that this recovery will only set in in the course of 2003. This is set off by the fact that the expected interest increases will for the time being not be realised. In some quarters there is even speculation about new interest decreases. How all this will impact consumer spending and co