Corio recorded good results over the first half of 2003. The direct investment result per share has risen by 7.1% to â⬠1.35 compared to â⬠1.26 in the first six months of 2002. The indirect investment result amounted to â⬠0.45 per share (2002: â⬠0.53). As a result, the total investment result per share came to â⬠1.80 in comparison to â⬠1.79 in the first half of 2002.
In the first half of 2003 the direct investment result increased by â⬠5.9 million to â⬠89.7 million. This increase of the direct investment result is particularly due to rent reviews at a constant occupancy rate of 95.5% (Q1 2003: 95.5%). The decrease of the short term interest rates as well as the early repayment of several high interest loans compensated the negative effects of the early payment of an interest-free convertible loan of â⬠90 million at year-end 2002. The indirect investment result came to â⬠30.1 million (2002: â⬠35.1 million). This comprises of upward revaluation of the property portfolio to the amount of â⬠34.7 million (2002: â⬠38.0 million) and of â⬠0.4 million (2002: nil) other movements, allocated administrative expenses of â⬠3.4 million (2002: â⬠2.9 million) were deducted as well as an addition to the provision for deferred tax liabilities of â⬠1.6 million (2002: nil) as a result of the revaluations in France and Italy.
Portfolio
The value of the property portfolio increased by â⬠59.4 million to â⬠3,686.8 in the first six months of 2003. The investments amounted to â⬠60.9 million. This concerns a.o. the purchase of the shopping centre ââ¬ËIl Maestraleââ¬â¢ in Senigallia in Italy and investments in the existing portfolio (â⬠37.5 million). During the first half year, property to the value of â⬠36.2 million was sold, including a book profit of â⬠0.8 million. In The Netherlands the shopping centre ââ¬ËDe Scholverââ¬â¢ in Capelle a/d IJssel and a residential complex in Eindhoven were sold. In France, the office building ââ¬ËLââ¬â¢Odysseeââ¬â¢ in Les Ulis was sold. In Spain the remaining part of the shopping centre ââ¬ËLa Ballenaââ¬â¢ in Las Palmas was sold. As a result, the share of retail property in the portfolio remained the same to that at year-end 2002: 70%. The upward revaluation of the property portfolio amounted to â⬠34.7 million (including book profit) in the first half of 2003. The average upward revaluation of the total portfolio came to 1.0% (retail The Netherlands: 1.5%, offices The Netherlands: -0.3%, industrial property The Netherlands: 0.5%, retail France: 0.3%, offices France: -0.4%, industrial property France: 2.4%, retail Italy: 1.9% and retail Spain: 2,5%).
Valuation policy
Corioââ¬â¢s complete portfolio is valued twice a year. At 30 June a representative half of the portfolio is valued externally and the other half is valued internally. At year-end the full portfolio is valued externally. In future, Corio will therefore only report on revaluations over the first and third quarter in exceptional circumstances.
Financial position
In the first half year shareholdersââ¬â¢ equity increased by â⬠119.8 million to â⬠2,048.0 million. As at 30 June 2003 the net asset value came to â⬠30.91 (year-end 2002: â⬠29.11 after profit appropriation). At the end of the first six months 2003 leverage was 40.4% (year-end 2002: 37.8%).
Outlook
Through its active investment strategy and centermanagement Corio expects to be able to achieve a direct investment result of â⬠177 million, or â⬠2.68 per share (+ 7.2%) in 2003. Corioââ¬â¢s upward adjustment of its expectations follows the good results achieved in the first half year of 2003. For the second half year of 2003, Corio anticipates, based on the current portfolio, a slight decrease of the total occupancy rate in contrast to positive rent reviews and a minimal rise in interest expenses.
Corporate Governance
Mr. B. Vos has been appointed vice-chairman of Corio N.V.ââ¬â¢s Supervisory Board. At the request of the Supervisory Board mr. J.A. de Kreij will continue his role as delegated member of the Supervisory Board