SOURCE: Wereldhave NV

November 10, 2009 05:29 ET


THE HAGUE, NETHERLANDS--(Marketwire - November 10, 2009) -

Third quarter results 2009 Wereldhave N.V.

Key items

  - Direct result per share +4.9%

  - Property revaluation -8.3%

  - Net asset value EUR 73.20 per share

  - Solvency unchanged at 69%

  - Successful lettings achieved in Paris and Washington DC

Prospects 2009

  - Direct result per share between EUR 4.85 and EUR 4.90

  - Well positioned to take advantage of opportunities

Hans Pars (CEO Wereldhave N.V.) comments:"The direct result per share for
the first three quarters of 2009 rose
by nearly 5%. The higher direct result per share can be attributed
primarily to the fact that we are to a large extent financed at
variable interest rates. Our interest charges continued to drop during
the third quarter. The occupancy rate is lower in 2009, due
to office vacancies that arose at the end of 2008 in Paris
and Washington DC. The good news is that we have agreed three lettings
for approx. 15,000 m2 in these properties in difficult markets. That
underlines the quality of our investment portfolio.

During the third quarter we have issued a EUR 230 mln convertible bond.
This will cause interest charges to rise during the last quarter, but
with this convertible bond issue we have increased our immediately
available funds to EUR 350 mln, sufficient to take advantage of
attractive investment opportunities. In our strategy update of October
28, 2009, we have indicated that we will pursue solid positions in the
countries where we are currently present, targeting a minimal size of
EUR 400 mln per country and region. We seek to expand the share of
shopping centres in our investment portfolio to 50-60% of the balance
sheet total (currently 46%).

The indirect result reflects the sizeable negative revaluation of the
investment portfolio. In consultation with external experts, for the
internal valuation of September 30, 2009, we have adjusted the
valuation of a number of shopping centres in Europe and offices in the
United States, resulting in an increase of 35 basis points in
the weighted average net initial yield to 6.6%. Although there are
still very few market transactions as evidence, we are confident that
this revaluation is in accordance with current markets. Due to our
solid financial ratios, we can easily absorb this negative property
revaluation, since our solvency ratio still stands at 69%."

Profit / loss

The result for the first nine months of 2009 amounts to EUR -106.5 mln
or EUR -5.20 per share (until Q3 2008: EUR 65.3 mln or EUR 2.84 per
share). The decrease in the result is due to the negative property
revaluation in all countries. The total revaluation amounted
to - 222.4 mln (until Q3 2008: EUR -15.2 mln). Exchange rate
differences had a positive effect of EUR 3.0 mln on the result.

Direct result

The direct result for the first nine months of 2009 amounts to
EUR 85.8 mln, which is EUR 4.9 mln higher compared to 2008. The direct
result per share increased by 4.9% to EUR 3.82 (Until Q3 2008:
EUR 3.64). The operational result dropped by EUR 1.7 mln compared to
2008. The considerably higher vacancy, especially in Paris and in
Washington, was to a major extent compensated by additional rental
income from the acquisition of the DiamondView office building in San
Diego (in September 2008). The increase in the direct result can almost
be fully attributed to EUR 6.2 mln lower interest costs.

Due to the large share of loans at variable interest rates, interest
rate cuts by central banks have had a positive effect on interest
expenses, even with an enlarged loans portfolio due to the acquisition
of the San Diego office in September 2008. During the third quarter,
interest expenses dropped further, but as at September 30, 2009 the
average interest rate increased to 3.3% (Q2 2009: 2.2%). The increase
is caused by the issue of a 5-year convertible bond of EUR 230 mln at
4.375%. This convertible bond increased immediately available funds to
well above EUR 350 mln and lowered the percentage of loans at variable
interest rates from 73% to 42%.

Indirect result

In view of the turmoil on the financial and real estate markets and
given the very limited number of market evidence transactions,
Wereldhave has adjusted the internal valuation as at September 30, 2009
of a number of shopping centres in Europe and offices in the United
States, in close consultation with external experts. This caused a
rise in the weighted average net initial yield of the investment
portfolio by 35 basis points to 6.6% (June 30, 2009: 6.3%). As at
September 30, 2009, the value of the portfolio decreased by EUR 140.8
mln, bringing the total decrease during 2009 to EUR -221.8 mln. The
revaluation of financial instruments amounted to EUR -0.6 mln. The
lower property values resulted in a decrease of deferred taxes, which
had a EUR 28.8 mln positive effect on the indirect result.

On balance, the indirect result for the first nine months of 2009
amounted to EUR -192.3 mln (until Q3 2008: EUR -15.6 mln). The 8.3%
negative revaluation is spread over all countries and sectors.


Shareholders' equity at September 30, 2009 stood at EUR 1,672.3 mln
(December 31, 2008: EUR 1,860.2 mln before distribution of
profits). The solvency ratio (equity/ equity + interest bearing debts)
remained unchanged compared to the second quarter at 69% (2008
year-end: 71%). The Loan to Value ratio amounts to 29.4% (2008:
28.4%). During the third quarter, there has been no change in the
number of 21,276,988 ordinary shares in issue. No convertible bonds
opted for conversion. The net asset value per share before profit
appropriation as at September 30, 2009 was EUR 73.20 (2008 year end:

Property portfolio

The occupancy rate remained practically unchanged during the third
quarter at 89.7%. Broken down per sector, occupancy rates for the first
three quarters of 2009 were: offices 81.4%, shopping centres
97.8%, industrial 98.8% and residential 89.6%.

The increase in vacancy compared to 2008 is caused by vacancies that
arose at the end of 2008 in 2 office buildings (Paris and Washington
DC). In Paris, a letting agreement has been signed with a large, first
class tenant for ca. 10,400 m2 of the Ilot Kleber office building in
Levallois-Perret as from mid February 2010, approximately half of the
building. In Washington DC Wereldhave has succeeded in letting ca 4,700
m2 of a the office building in two separate transactions, approximately
55% of the space that became vacant at year end 2008. The outstanding
quality and the first class locations of these properties have largely
contributed to the success in letting, in spite of difficult market
conditions. The new rents of the three transactions exceed the old rent

Wereldhave did not purchase any property during the first three
quarters of 2009. In line with the strategy, three smaller properties
were sold in the United Kingdom for EUR 2.8 mln, generating a surpluson
disposals of EUR 0.9 mln. Wereldhave has decided to dispose of
properties with a value below EUR 20 mln in due course. Logistic
properties will also be sold. Wereldhave wishes to expand the share of
shopping centres in the portfolio to 50-60% of the balance sheet total
(currently 46%). The total value of the properties to be sold amounts
to ca EUR 350 mln, or 15% of the investment portfolio. In number, these
properties represent approximately half the investment portfolio.

In a strategy update on October 28, 2009, Wereldhave announced that its
priority is an expansion of its investment portfolio in each of
the countries and regions where it is active to a minimum of EUR 400
mln. Wereldhave is currently active in six countries in Europe and
three regions in the United States. Per country or region, Wereldhave
will select a sector on which it wishes to focus. This enables
Wereldhave to focus management attention, allows for the recruitment
and retention of local knowledge and experience and makes Wereldhave an
important player in all these markets.

Development portfolio

The first two office buildings of the development in San Antonio which
total 20,000 m2 will be brought into exploitation at the end of the
first quarter of 2010, when the infrastructure will also be
completed. Because Wereldhave took more time to complete the
negotiations with construction companies, the start of the construction
of the remaining parts of the first phase of the project has been
postponed to the fourth quarter of 2009. This resulted in a better
procurement and a more attractive timing for completion, which is now
due for 2011.

The city of Nivelles, Belgium, has granted the building licence and the
social economical licence for the expansion of the shopping centre with
12,000 m2 and the development of a retail park of 11.500 m2.
Construction is expected to commence during the first quarter of 2010.
In Tournai, Belgium, plans have been made for the expansion of the
shopping centre by 4,500 m2 and a retail park of 10,000 m2. The city
of Tournai has advised positively on the Urban Zoning plan. It is
expected that the application for a building permit for the retail park
and the expansion of the shopping centre directly afterwards can be
submitted late 2009.


For the year 2009 Wereldhave forecasts a direct result per share
between EUR 4.85 and EUR 4.90, given stable exchange rates. For the
last quarter Wereldhave anticipates lower turnover rents in Finland,
higher interest costs due to the issue of the convertible bond,
maintenance expenses still to be incurred in 2009 and a lower exchange
rate for the USD compared to the first three quarters. In addition, an
incidental gain during the first half of 2009 will not be repeated in
the second half.

Wereldhave is a financially strong company and is well-prepared to take
advantage of opportunities in the market.

Conference call

In a conference call to be held today at 14.00 h CET (to be followed by
audiocast at an explanation to the results will be

                    This information is provided by RNS
          The company news service from the London Stock Exchange


Contact Information

  • For further information, please contact:
    Wereldhave N.V.
    Charles F. Bloema
    Tel. + 31 70 346 93 25