Results 2009 Key items - Direct result per share stable at EUR 4.93 (2008: EUR 4.92) - Property revaluation -9.1% (until Q3 2009: -8.3%) - Net asset value EUR 73.77 per share (2008: EUR 83.74) - Solvency stable at 70% (2008: 71%) - Use of convertible by purchase of four Dutch shopping centres - Optional dividend EUR 4.65 per share (2008: EUR 4.65) Hans Pars (CEO Wereldhave N.V.) comments:"In these times of economic head wind, we have closed the year 2009 with an increase in the direct result of EUR 1.7 mln. In spite of the increased number of shares due to the stock dividend that was paid out in 2009, direct result per share rose by EUR 0.01. The increase of direct result can mainly be attributed to the fact that we chose to be financed at variable interest rates. Lower interest charges have fully compensated the decrease in occupancy. Good news is that we have succeeded in diminishing vacancy in the office portfolio with lettings in Washington D.C., Paris and Manchester, which demonstrates that that even in a difficult market good quality office buildings can be successfully let. That underpins the quality of our portfolio. During the third quarter of 2009 we have successfully launched a EUR 230 mln convertible bond, increasing our immediately available funds to approx. EUR 390 mln as at December 31, 2009. On February 15, 2010 we used the convertible for the purchase of stakes in five Dutch shopping centres for EUR 249.5 mln including transaction costs in Purmerend, Capelle a/d IJssel, Roosendaal, Eindhoven and Utrecht. The net initial yield of this investment amounts to well over 6%. The acquisition of the shopping centre in Utrecht has been cancelled since a third party used a first right of refusal. The purchase price will be lowered by EUR 29.7 mln including transaction costs. Completion is scheduled for March 16, 2010. This transaction immediately contributes to the profit per share for the year 2010. We want to use attractive investment opportunities and mainly seek expansion in the United Kingdom (shopping centres), France (offices in Paris) and Spain (offices in Madrid). We will pay a lot of attention to the improvement of the occupancy rate. We propose to shareholders a dividend of EUR 4.65, equal to the dividend in respect of the year 2008. Of the dividend, EUR 3.20 will be paid in cash and EUR 1.45 in cash or in shares, at the option of the shareholder." Profit / loss The profit for 2009 amounted to EUR -102.3 million or EUR -5.07 per share (2008: EUR 8.8 million or EUR 0.02 per share). The profit decrease was caused by a downward revaluation of the portfolio in all countries. This can be attributed mainly to higher yields and lower market rents. The revaluation totalled EUR - 245.8 million (2008: EUR - 112.6 million). Exchange rate differences had a positive effect on the profit of EUR 6.0 million (2008: EUR -1.6 mln). Negative property revaluations were clearly lower during the fourth quarter, resulting in a profit for the quarter. Direct result The direct result over 2009 amounted to EUR 111.1 million and was EUR 1.7 mln higher than the figure for 2008. Rising vacancies, especially in two office buildings in Washington D.C. and Paris, resulted in a decrease in the net rental income of EUR 5.8 million. The increase (including exchange rate differences) of the direct result was therefore primarily caused by a decrease in interest charges of EUR 8.5 million. General costs increased by EUR 1.3 million, primarily due to changes in the composition of the Board of Management and the costs of consultants. Exchange rate differences ultimately had a minimal effect on the direct result. The decrease in interest expenses was a result of the sharply lower interest rates, especially in the United States. Wereldhave benefited significantly from the low interest in 2009 because a large part of its loans are financed at variable interest rates. The average interest rate declined sharply over the first nine months of the year, but the 5-year convertible bond loan of EUR 230 million issued on 16 September at 4.375% caused the average interest at year-end to increase again to 3.3% (2008: 3.7%). Indirect result The indirect result for 2009 totalled EUR - 213.4 million (2008: EUR - 100.6 million). The average yield on the portfolio applied in the valuation increased by approx. 50 basis points in 2009, bringing the weighted net initial yield on the portfolio to approximately 6.7% (2008: 6.2%). The increase in the initial yields and lower market rents resulted in a downward revaluation of the property portfolio as at 31 December 2009. The revaluation on financial instruments amounted to EUR -1.2 million (2008: EUR 4.7 mln). A result on property disposals was achieved in 2009 of EUR 0.8 million (2008: EUR 4.3 million). Lower property valuations and a release of deferred taxes in the United Kingdom brought a decrease in deferred taxes on the indirect result of EUR 34.8 million (2008: 10.0 million) Interest expenses in the indirect result increased by EUR 0.4 million to EUR 2.0 million, in particular due to the issue of a EUR 230 million convertible bond in 2009. Other financial income and expenses improved by EUR 6.1, as a result of one-off pension expenses in 2008 and of exchange rate differences. Equity As at year-end, equity including minority interests before appropriation of the proposed divided amounted to EUR 1,686.5 million. This represents a 70% solvency (2008: 71%). The Loan to Value amounted to 30% (2008: 27%). This places Wereldhave between the five best capitalised European property investment funds. A total of 495,253 new shares were issued in 2009 in connection with the distribution of an optional dividend. The total number of ordinary shares in issue at year-end 2009 amounted to 21,276,988. The net asset value per share before profit appropriation as at December 31, 2009 was EUR 73.77 (year-end 2008: EUR 83.74). Property portfolio The composition of the portfolio remained virtually unchanged in 2009. In comparison with 2008, the occupancy level fell by 5 percentage points to 89.7%. Occupancy levels per sector over 2009 were 81.3% for offices, 97.8% for retail/leisure, 98.9% for logistics, and 88.1% in the residential sector. The vacancy level increased compared to 2008 (occupancy rate 94.7%) when two office buildings (Paris and Washington D.C.) were vacated at the end of 2008. Some 10,400 m2 in Paris, representing about half of the vacancies in France, has been leased as from mid-February 2010. In Washington D.C. some 4,700 m2 or about 55% of the space vacated in December 2008 has been leased. The new rents exceed the old rent levels. Significant progress has also been achieved in leasing space in Manchester. Lease agreements were signed in December 2009 and January 2010 for 93% of the space available in this office building. A downward revaluation at the year-end rates was made to the investment portfolio of 9.1% (yield -7.7%, rents -1.4%). The value of the development portfolio as at year-end was EUR 81.6; the value of the investment portfolio amounted to EUR 2,418.2 million. On February 15, 2010, Wereldhave purchased (stakes in) five Dutch shopping centres for EUR 249.5 mln. Involved are the Eggert centre in Purmerend, De Koperwiek in Capelle a/d IJssel, Woensel XL in Eindhoven, de Roselaar in Roosendaal and Overvecht in Utrecht. The acquisition of the shopping centre in Utrecht has been cancelled since a third party used a first right of refusal. The purchase price will be lowered by EUR 29.7 mln including transaction costs. Completion is scheduled for March 16, 2010. This acquisition Marks a first important step in the strategic goal to expand the share of shopping centres to 50-60% of the portfolio. After completion, the share of shopping centres will amount to circa 50%. Development portfolio In Belgium, a permit has been obtained for the 12,000 m2 expansion of the Nivelles shopping centre. Construction of the expansion is expected to commence in June 2010. The permit for a retail park was cancelled by the Minister in appeal proceedings. In Tournai, also in Belgium, an application has been submitted for permits for a 4,500 m2 expansion of the shopping centre and a 10,000 m2 retail park. This permit is expected to be granted in the fourth quarter of 2010. In the United States, the first two office buildings in the Eilan project in San Antonio are scheduled to be put into operation in the second quarter of 2010. Construction of the rest of the first phase of this project consisting of some 500 homes, a hotel and a variety of commercial facilities commenced in 2009 and is scheduled for delivery starting in 2011. Dividend proposal An optional dividend of EUR 4.65 will be proposed to the General Meeting of Shareholders for 2009, of which EUR 3.20 in cash in order to comply with the fiscal distribution obligation, after deducting withholding tax, and EUR 1.45 in cash or in shares, at the option of the shareholder. The latter distribution will be charged to the reinvestment reserve and therefore no dividend tax will be due. With a dividend of EUR 4.65, the payout ratio amounts to 94.3%. The dividend is payable from 7 May 2010. Shareholders can make their choice between cash and shares from April 19, 2010 until May 3, 2010, 17.00 hr CET. If a shareholder does not communicate his choice, the dividend will be paid in shares. The optional dividend component in shares (as a percentage) will be set by dividing the optional dividend in cash by the average of share prices at closure of trading of the period April 26 up to May 3, 2010, with a 3%-5% margin. The maximum number of ordinary shares to be issued is this percentage, multiplied by the number of shares in issue. The exact number of shares issued will be communicated by press release on May 4, 2010, before trading hours. The newly issued ordinary shares bear equal rights as those already in issue and are entitled to dividend as from the financial year 2010 and further. Prospects With its solid balance sheet, Wereldhave's financial position is strong, despite the downward revaluation of the property portfolio in 2009. Wereldhave expects more property to be available for sale in 2010, certainly in those markets where Wereldhave would like to expand its position: the United Kingdom, France and Spain. Its strong financial position will enable Wereldhave to benefit. In doing so, Wereldhave will continue to focus on high-quality property and prime locations, as these provide a solid basis for a stable and growing direct result per share. Once its acquisitions start to take shape, Wereldhave will commence selling smaller projects involving less than EUR 20 million, provided that can be obtained a suitable price. Based on the quality of the shopping centres, Wereldhave expects the occupancy rate in the shopping centre portfolio to remain high. An upward trend can be seen in the occupancy rate for the offices portfolio, thanks also to excellent lease results in 2009 in Paris, Manchester and Washington D.C. in particular. This demonstrates that even in a difficult market, good quality office buildings can be successfully leased. Conditions on the office market will nevertheless continue to be challenging, with strong competition and pressure on prices in most markets. Top priority will continue to be devoted to maintaining and preferably improving the occupancy level in 2010. The results will be explained during a press conference, to be held today at 11.00 h CET at the Wyndham Apollo hotel, Apollolaan 2, 1077 BA Amsterdam. At 14.00 h CET in the same room an analyst meeting will be held to explain results in detail. This meeting can be followed by audio cast on www.wereldhave.com. Questions can be put by e-mail via this webcast. Click on, or paste the following link into your web browser, to view the associated PDF document. http://www.rns-pdf.londonstockexchange.com/rns/9949H_-2010-3-3.pdf The Hague, March 3, 2010 Board of Management Wereldhave N.V. For further information: Wereldhave N.V. Richard W. Beentjes Tel. + 31 70 346 93 25 Information for analysts: Wereldhave N.V. Charles F. Bloema Tel. + 31 70 346 93 25 www.wereldhave.com This information is provided by RNS The company news service from the London Stock Exchange END
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