ABN AMRO Real Estate: Comments on press release VastNed O/I (Sell)

Yesterdaymorning VastNed O/I stated in a press release that ´recent publications focussing on VastNed O/I have in various ways painted a picture that the board of management contests.´ This press release does not change our view, it underlines it.

Last week we send out a company note in which we calculated a supply rate of 22.6% for VastNed O/I´s Dutch portfolio. The press release does not challenge this figure, it explains it. According to VastNed O/I 18% of leases are terminable in 2004. Of these, currently 35% has been extended automatically and 20% has been renewed. In addition, the company says that the vacancy rate of the Dutch portfolio was 11% at 1
January 2004. This information is not substantially different from ours. While we calculated VastNed O/I´s supply rate of 22.6% by looking through letting databases of real estate agencies, we can roughly check our calculation. We can add the percentage of lease that matures in 2004 (and has not been let yet, i.e. 45% of 18% = 8.1%) to the current vacancy rate of 11%, which gives a supply rate of 19.1%. However, this 19.1% does not include sub-lettings and some developments that are to let.

We stress that vacancy is different than supply and that the supply rate gives usefull information about future rental income. Based on a Dutch vacancy rate of 10% (currently 11%) we stick to our forecast that vacancy for the whole portfolio will rise from around 11% to 15.6% in 2005. In addition, we believe that not the supply rate is the biggest hurdle for the company, but the vicious cirlce in which it finds itself. We stick to
our sell recommendation.

Source: ABN AMRO Real Estate

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