Cofinimmo announces 1H2005 results (BE)

Highlights include: acquisitions over past 12 months (€662 million) boost rental income by 9.2%, 1.5% rise in occupancy rate (94.4%), net current result per ordinary share (€ 3.91) in line with forecasts, significant growth in net result per share (€ 4.04): +41.3%.

The situation of the Brussels office rental market has not changed substantially over the course of the first half-year 2005. Rent levels remain under pressure given the persisting low take-up during the first six months (237,000 m² compared with 235,000 m² at 30.06.2004 - source: Jones Lang LaSalle) and tenants are taking advantage of competition among property owners. Against this background, Cofinimmo continues to reap the rewards of an active internal management policy with respect to its properties and its clients. Consequently, a combination of renegotiating office space rental with existing clientele and the addition of new clients has reestablished the occupancy figure above the 94% mark for the marketable portfolio. The Cofinimmo occupancy rate is thus close to the end-2003 figure, whereas average occupancy rates in today's market are stationary at 89% (source: Jones Lang LaSalle).

The volume of office space acquisitions contracted a little during the first half-year 2005 (€712 million for the first six months of 2005 compared with €2.9 billion for 2004 - source Jones Lang LaSalle). Furthermore, in the context of low long-term interest rates, the dearth of quality properties available on the market compounded by the growing influx of foreign investors, has driven up prices of well-located and let properties. Cofinimmo remains on the look-out for any investment opportunity in tune with its strategy and is deploying its expertise as a local player to position itself favourably in this highly-competitive environment.

Cofinimmo is therefore very pleased with the recent acquisitions of North Galaxy and Tour Albert, concluded on advantageous terms and financing arrangements, particularly in the case of the North Galaxy operation.

This has enabled Cofinimmo to end the six-month period by announcing an overall increase in results at 30.06.2005. The net current result per ordinary share is in line with forecasts made in the 2004 Annual Report (€8.15 for 2005 as a whole) and augurs well for achieving the second half-year target set at the beginning of the year.

Consolidated accounts at 30.06.2005
Property income at 30.06.2005 came to €68.60 million, 7.3% up on the figure one year earlier, stemming from the admission to the portfolio in May 2004 of the Egmont complex and, during the second quarter 2005, of the North Galaxy building and Tour Albert. Rental income levels were boosted by the nearly 1.5% improvement in occupancy rate since 31.12.2004.

The operating margin worked out at 83.6%, higher by 1.7% than in 2004 as a whole. This good performance was achieved by keeping technical costs as well as property management costs and corporate operating costs firmly under control.

Combined direct and indirect operating costs made up 1.12% of the average value of the portfolio under management during the first six months of 2005, slightly down on 2004 (1.15%). Steep growth in this portfolio over recent years and sound control of these costs have helped bring this ratio down.

Financial income at 30.06.2005 chiefly comprised interest income on the long-term lease receivables relating to the Belliard I-II property (€3.9 million) and the payment of €0.5 million, at the rate of 5.85%, for the North Galaxy shares held by Cofinimmo until 21.04.2005, the date of that company's takeover (acquisition of the remaining shares and merger with Cofinimmo).

Financial charges at 30.06.2005 were down 16.2% on the same period one year earlier. The average interest rate on borrowings, including bank margins and the amortisation cost of derivative financial instruments providing interest rate cover for the six-month period, dropped back from 3.69% for 2004 to 3.14% for the first half of 2005.

The revaluation of derivative financial instruments foll

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