SOURCE: Wereldhave NV

February 23, 2007 02:05 ET

Wereldhave NV announces Results 2006

The Hague -- (MARKET WIRE) -- February 23, 2007 --

*   78% higher profit due to property revaluations and result on 
    disposals
*   1.3% higher occupancy rate
*   15% increase of net asset value

Profit

The profit for 2006 amounts to EUR 357.5 mln, an increase compared to 2005 of EUR 156.3 million, or 77.7%. This increase was primarily due to the higher property revaluations and the result of property disposals. Profit consists of a direct result and indirect result.

Direct result

The 2006 direct result amounted to EUR 113.3 million, which is EUR 3.2 million lower than in 2005. The direct result is the result that the company has realised from lettings after deduction of costs. In 2006, Wereldhave sold more properties than it acquired. The decrease of rental income due to these net disposals was set off to a significant extent by an increase in rents and a 1.3% fall in the vacancy rate, which jointly amounted to EUR 2.5 million. On balance, net rental income fell by EUR 0.6 million. Due to higher interest rates, interest costs increased by EUR 1.3 million. General costs rose by EUR 1.0 million compared to 2005. This increase relates to the costs of IFRS implementation and the one-off release of provisions in 2005 due to IFRS.

Indirect result

The indirect result for 2006 amounted to EUR 244.2 million, an increase of EUR 159.5 million compared to 2005. The indirect result is the result achieved primarily through realised and unrealised value increases of the portfolio. Property disposals resulted in a profit of EUR 39.9 million in 2006 (2005: EUR 7.4 million). The on-going fall of initial yields resulted in a considerable positive revaluation of the property portfolio as at December 31, 2006. Revaluations totalled EUR 266.1 million (2005: EUR 99.9 million). The average yield on the portfolio as used for valuation fell by 1% in 2006. The higher valuations of property and the adjusted deferred tax liability in the United Kingdom resulted in a EUR 63.3 million increase in deferred tax liabilities (2005: EUR 23.6 million). Other financial income and expenses, consisting primarily of positive movements in pension commitments, amounted to EUR 2.6 million.

Equity

The profit for 2006 of EUR 357.5 million, the dividend distribution for 2005 of EUR 94.6 million and other movements in equity resulted in an increase in equity of EUR 241.9 million. At year-end 2006, equity including minority interests amounted to EUR 1,890.2 million before deduction of the proposed dividend (2005: EUR 1,648.3 million). This corresponds to 71.3% of the balance sheet total (2005: 67.5%). The total number of ordinary shares in issue at year-end 2006 amounted to 20,781,735.

Portfolio

In 2006 the investment portfolio was revalued upwards by EUR 270.1 million, or 12%, due to positive revaluations in all countries. The average occupancy rate rose to 93.5% in 2006 (2005: 92.2%).

In January, 2007, Wereldhave sold an office building in Pittsburgh in the United States for USD 12 million and an office building in Philadelphia for USD 76 million. The net result on disposals amounted to USD 0.7 million. On January 24, 2007 Wereldhave bought a plot of land in Frisco, near Dallas, in the United States, for the construction of approximately 600 residential properties. The purchase price amounted to USD 7.4 million. Construction is not expected to start before 2008.

Dividend proposal

A dividend distribution for 2006 of EUR 4.60 in cash will be proposed to the General Meeting of Shareholders (2005: EUR 4.55). The proposed dividend of EUR 4.60 per share will be paid out fully in cash in compliance with the fiscal distribution requirement (2005: EUR 3.10 in cash to meet the fiscal distribution requirement, and EUR 1.45 charged to the reinvestment reserve). The increase in the distribution requirement is related to the fiscal distribution requirements for dividends received from France in connection with the disposal of the office property in Clichy.

Prospects

In 2007, Wereldhave will continue its policy of portfolio renewal. Portfolio renewal focuses on portfolio growth through investment in new or recently built property, but equally by disposing of property that no longer meets users' demands. In January 2007, Wereldhave sold two office buildings in the United States. Growth of the portfolio will be looked for in all markets and sectors in which Wereldhave is currently active. Additionally, Wereldhave will study the entry of the new markets of the west coast of the United States (San Diego region) and Turkey.

Now the economy is strengthening, Wereldhave expects an improvement of the occupancy rate of the portfolio. Wereldhave will expand its development portfolio in 2007. On December 31, 2006, the pipeline contained five projects: two shopping centre expansions in Belgium (in Tournai and Nivelles), a conference centre in Finland (Espoo), a shopping centre expansion in Leiderdorp in the Netherlands, and in the United States (San Antonio, Texas) a mixed development of 1,400 residential properties, offices, a hotel and central facilities. In January 2007 a project yet to be started was added, consisting of some 600 residential properties in Frisco, near Dallas, Texas. These developments, representing a total investment value of EUR 420 million, will start to contribute to the direct result as from 2008 and following years.

For further information: www.wereldhave.com

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