Closed-end real estate investment company Warehouses De Pauw (Euronext: "WDP") reached an agreement in principle (subject a number of suspensive conditions including due diligence) for the takeover of the real estate portfolio of the Belgian fruit- and vegetable concern Univeg, also known as De Weide Blik.
With this takeover, WDP acquires eight sites with temperature controlled warehouses in Belgium and the Netherlands of which 90% is to be permanently leased for 20 years and 10% is to be permanently leased for 15 years to businesses within the Univeg Group. The initial investment comes to €100 million. The economic transfer of the portfolio will take place on 1 July 2007.
With this takeover, WDP also realizes, after the investments of the first phase, the second phase of its strategic growth plan, i.e., takeover of a real estate portfolio. After carrying out this second phase, WDP takes a major step for the further growth of the portfolio to over €700 million by the end of 2009.
Eight sites with warehouses at strategic locations with long-term lease contracts
The portfolio contains eight sites with a total of 120,000 m² of temperature controlled warehouses. Six sites are in Belgium with a total surface of 60,000 m² and two in the Netherlands also with a total surface of 60,000 m². The Belgian premises are situated in Asse-Mollem, Doornik and four premises in St. Katelijne-Waver where the Univeg Group head office is registered that also serves as the distribution center for all fruit and vegetable activities and the delivery centre for various distribution chains. In the Netherlands, there are sites in Ridderkerk (distribution center for fruit and vegetables for various Dutch retail chains) near Rotterdam and in Voorhout (distribution center for bulbs) near Aalsmeer. All sites largely consist of temperature controlled warehouses. Of the sites, 90% are permanently leased for 20 years and 10% are permanently leased for 15 years.
At the sites in Doornik, St. Katelijne-Waver (two projects) and Ridderkerk (NL), there are a total of four new construction projects planned that will be carried out by WDP in 2007, 2008 and 2009. The total investment for these projects is today estimated at €50 million. These projects are also now pre-leased to businesses within the Group.
Total investment value of €150 million and net return of 6.40%
This transaction includes WDP's takeover of the shares in NV Royvelden and its Dutch subsidiaries owned by Hein Deprez, which includes the real estate portfolio developed by the Univeg Group. The initial investment amounts to €100 million for the existing sites. The shares of these investments amount to 18% of the total WDP portfolio. With this purchase, the gearing rises to 50% whereby WDP still has a further investment margin of at least €200 million. The four planned new construction projects include an extra estimated investment of €50 million whereby the total investment value of this purchase amounts to €150 million.
The rental income on the portfolio currently amounts to €6.35 million per year, triple net. This means that the lease price is the net profit for the lessor. An initial indexation is also provided after six months, at the end of 2007. WDP will also accept €50 million worth of debts at 4% (fixed for 15 years) within the Royvelden companies.
This investment has a positive impact on the operational result from 2008 of at least €2.25 million per year.
Expected rise in profits per share and proportional increase in dividend of 10%
The closing of the transaction is anticipated for 13 July 2007. The economic transfer is anticipated for 1 July 2007. The new sites will participate in the profits of WDP with €1 million from the second half of 2007. With this takeover and addition to the WDP portfolio, WDP's expected profits rise and assume a new operating result of €26 million for 2007. This shows an increase in the operating profit per share of 10% for 200