Leasinvest Real Estate - audited year results of the financial year 2006/2007 (period of 1 July 2006 till 30 June 2007)

24 augustus 2007 Leasinvest Real Estate realised a substantial increase of the consolidated net result (share of the group) of 19.7 million EUR (or 5.94 EUR per share) on 30 June 2006 to 34.9 million EUR (or 8.71 EUR per share) on 30 June 2007 (+ 77%, or +47% per share), thanks to: - The contribution of the Luxembourg subsidiary Leasinvest Immo Lux and of the acquisition in the financial year 2005/2006 of the "Extensa" portfolio - Increases in value of the portfolio (16.6 million EUR) - And a realised net capital gain on the sale of two buildings ("Extensa Square") (1.49 million EUR) The proposed gross dividend for the financial year 2006/2007 amounts to 3.8 EUR per share compared to 3.75 EUR the previous financial year, or an increase of 1.33%. 1. Consolidated key figures of the real estate portfolio Consolidated real estate portfolio key figures (a) 1/07/2006- 1/07/2005- 30/06/2007 30/06/2006 Fair value (1,000 EUR) (b) 445,859 467,182 Investment value (1,000 EUR) (c) 457,310 479,170 Rental yield based on fair value 7.22% 7.45% Rental yield based on investment value 7.04% 7.26% Occupancy rate (d) 97.01% 95.87% (a) Takes into account the "Investment properties" (non-current assets) and the "Assets held for sale" (current assets). The development projects are hereby not included. (b) Fair value: the investment value as defined by an independent real estate expert and of which the transaction costs, as defined on page 75 of the annual brochure 2005/2006, have been deducted. The fair value is the accounting value under IFRS. (c) The investment value corresponds to the previously used term 'investment value' and is the value as defined by an independent real estate expert and of which the transaction costs have not yet been deducted. (d) The occupancy rate has been calculated based on the estimated rental value. All buildings of the Leasinvest Real Estate portfolio have been taken into account, excluding the development projects. The consolidated real estate of Leasinvest Real Estate on 30 June 2007 is composed of 50 buildings in operation, covering a total surface of 266,247 sqm, of which 38 buildings in Belgium and 12 in Luxembourg. The office building Bian in Luxembourg and the castle-farm 'Torenhof' situated in Merelbeke (see infra "5. Acquisition") are being entirely renovated and are consequently not included in the key figures of the real estate portfolio[1]. The value of the marketable buildings on 30 June 2007 amounted to 445.86 million EUR in fair value, or a decrease of 5% compared to the previous year (467.18 million EUR). This decrease is, among other things, the consequence of the sale of 2 office buildings, part of 'Extensa Square' in Brussels and the sale of a building in Wommelgem. The total value of the real estate, including development projects, amounted to 459.26 million EUR on 30 June 2007. The rental yield of the marketable buildings based on the fair value amounted to 7.22% for the past financial year (compared to 7.45% on 30 June 2006), and based on the investment value, to 7.04% (compared to 7.26% on 30 June 2006). Thanks to our successful commercial efforts in Belgium and Luxembourg Leasinvest Real Estate succeeded in raising the occupancy rate, only applicable on the marketable buildings (development projects excluded) from 95.87% on 30 June 2006 to 97.01% on 30 June 2007. The occupancy rates of the Belgian and Luxembourg portfolio amounted to, respectively, 97% (96.19% on 30 June 2006) and 97.03% (95.14% on 30 June 2006). 2. Consolidated IFRS key figures Consolidated IFRS key figures 1/07/2006- 1/07/2005- 30/06/2007 30/06/2006 Net asset value, share of the group (NAV) (1,000 EUR) 262,071 237,849 Number of issued shares 4,012,832 4,012,628 Pro rata number of shares 4,012,832 3,318,241 Net asset value, part of the group, per share (EUR) - based on fair value 65.31 59.28 - based on investment value 68.13 62.10 Closing price (EUR) 78.10 65.90 Average price (EUR) 75.96 66.12 Operating result per diluted share (EUR) (a) 10.88 8.17 Net result per diluted share, share of the group (EUR) (a) 8.71 5.94 Debt ratio RD 21/06/06 (%) 40.93% 44.15% Proposed gross dividend (EUR) 3.80 3.75 Dividend yield (%) (b) 5.00% 5.67% (a) The results per diluted share are calculated based on the pro rata number of shares. This is the number of shares taking into account the entitlement to dividends of the shares. Following the capital increase which took place with the bringing in of the "Extensa" portfolio in the financial year 2005/2006, 763,407 new shares were created , which were entitled to dividends as from 29/05/06. (b) gross dividend / average share price 3. Consolidated balance sheet and results (in 1,000 EUR) 30/06/07 30/06/06 ASSETS IFRS IFRS NON-CURRENT ASSETS 454,174 469,946 Investment properties 436,376 467,182 Development projects 13,397 101 Other tangible assets 17 54 Non-current financial assets 4,384 2,609 CURRENT ASSETS 23,028 13,713 Assets held for sale 9,483 Current financial assets 6,626 2,616 Trade receivables 4,000 4,697 Tax receivables and other current assets 252 357 Cash and cash equivalents 1,472 5,518 Deferred charges and accrued income 1,195 526 TOTAL ASSETS 477,202 483,659 LIABILITIES TOTAL SHAREHOLDER'S EQUITY 272,046 262,555 SHAREHOLDER'S EQUITY ATTRIBUTABLE TO 262,071 237,849 THE SHAREHOLDERS OF THE MOTHER COMPANY Capital 44,128 44,126 Share premium account 70,622 70,611 Own shares (-) -12 0 Reserves 117,205 99,051 Result 34,934 30,597 Impact on fair value of estimated transaction costs -6,219 -6,910 resulting from hypothetical disposal of investment properties Change in fair value of financial assets and liabilities on financial assets available for sale 336 0 on hedging instruments 1,077 375 MINORITY INTERESTS 9,975 24,706 LIABILITIES 205,156 221,104 NON-CURRENT LIABILITIES 88,943 95,581 Provisions 1,751 27 Non-current financial debts 86,300 94,800 Other non-current financial debts 33 82 Other non-current liabilities 859 672 CURRENT LIABILITIES 116,213 125,523 Current financial debts 100,321 108,524 Trade debts and other current debts 6,698 8,529 Other current liabilities 1,125 1,004 Accrued charges and deferred income 8,069 7,466 TOTAL SHAREHOLDER'S EQUITY, MINORITY INTERESTS AND 477,202 483,659 LIABILITIES CONSOLIDATED RESULTS 30/06/07 30/06/06 (in 1,000 EUR) IFRS IFRS (+) Rental income 33,154 23,958 (+) Writeback of lease payments sold and 0 0 discounted (+/-) Related rental expenses 0 1 NET RENTAL INCOME 33,154 23,959 (+) Recovery of property charges 228 31 (+) Recovery income of charges and taxes normally 2,168 3,457 payable by tenants on let properties (-) Costs payable by tenants and borne by the -143 -129 landlord for rental damage and refurbishment at end of lease (-) Charges and taxes normally payble by tenants -2,168 -3,500 on let properties (+/-) Other related rental expenses and income -236 0 PROPERTY RESULT 33,003 23,818 (-) Technical costs -2,406 -2,152 (-) Commercial costs -400 -179 (-) Charges and taxes on unlet properties -569 -1,019 (-) Property management costs -2,004 -1,494 (-) Other property charges -514 -242 PROPERTY CHARGES -5,893 -5,086 PROPERTY OPERATING RESULT 27,110 18,732 (-) Corporate operating charges -1,944 -770 (+/-) Other operating charges and income 417 5,234 OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO 25,583 23,195 (+/-) Result on disposal of investment properties 1,486 0 (+/-) Changes in fair value of investment 16,609 3,923 properties OPERATING RESULT 43,678 27,118 (+) Financial income 3,406 2,286 (-) Interest charges -10,316 -4,592 (-) Other financial charges -364 -700 FINANCIAL RESULT -7,274 -3,006 PRE-TAX RESULT 36,404 24,112 (+/-) Corporate taxes -469 -787 (+/-) Exit tax -415 0 TAXES -884 -787 NET RESULT 35,520 23,325 Attributable to: Minority interests 586 3,602 Group shares 34,934 19,723 4. Comments on the consolidated balance sheet and on the results of the financial year 2006/2007 In the first quarter of the past financial year Leasinvest Real Estate became a 100% shareholder of Square de Meeûs 5-6 SA (30 June 2006: 50.07%) followed in December 2006 with a merger by acquisition on which 204 new Leasinvest Real Estate shares[2] were issued. Since then, the total amount of shares reaches 4,012,832. a. Consolidated results The following observation has to be made: during the financial year 2005/2006 the companies Warehouse Finance SA, De Leewe SA and Logistics Finance SA ("Extensa portfolio") have not yet contributed to the current result of Leasinvest Real Estate[3] and the contributions of Leasinvest Immo Lux and Leasinvest Immo Lux Conseil were limited to 6 months. Consequently, the rental income has risen by 38% to 33.2 million EUR compared to 24 million EUR the previous year. If, for the calculation of the total rental income of the previous financial year, 12 months of rental income for Leasinvest Immo Lux and the "Extensa portfolio" were taken into account, the increase would amount to 1.1%, notwithstanding the sale of "Extensa Square" and Wommelgem, and the vacancy of the building Bian in Luxembourg (due to renovation). The increase of the property charges amounted to 16%, to 5.9 million EUR (5.1 million EUR on 30 June 2006) and takes into account the full annual impact of the management fee of Leasinvest Real Estate Management SA (the statutory manager of the real estate fund), calculated based on the total real estate portfolio[4], and the higher real estate agent fees, resulting in a further improvement of the occupancy of the portfolio. The increase of the corporate operating charges from 0.8 million EUR to 1.9 million EUR is, among other things, due to exceptional consultancy costs. The other operating charges and income have substantially decreased from an income of 5.2 million EUR to 0.4 million EUR. For the financial year ending on 30 June 2006 this item contained an important exceptional badwill[5] of 5.2 million EUR on the acquisition of Leasinvest Immo Lux and the "Extensa portfolio". This financial year, only a badwill of 0.8 million EUR has been included, as a result of the acquisition of the remaining shares of Square De Meeûs, and 0.2 million EUR following the increase of the participation in Leasinvest Immo Lux from 90.12% (30 June 2006) to 96.04%. The result on the portfolio consists of a realised gain of 1.5 million EUR on the sale of "Extensa Square" on the one hand, and a positive change in fair value of the portfolio of 16.6 million EUR (3.9 million EUR on 30 June 2006) on the other hand. Also thanks to the substantial increase of the portfolio result, the operating result has increased by 61% compared to the previous financial year, namely 43.7 million EUR on 30 June 2007 compared to 27.1 million EUR on 30 June 2006. The financing by bank debts of the acquisition of Leasinvest Immo Lux previous financial year, has led to an increase of the financial charges. The impact of the increasing market interest rate on the financial charges has partly been mitigated by an accurate hedging policy. The recurring net result, making abstraction of the portfolio result and the badwill, ended at 16.34 million EUR (this is 4.07 EUR per share) compared to 14.2 million EUR (this is 4.27 EUR per share) the previous financial year, or an increase of 16% (this is a decrease of 5% per share). The net result, share of the group, has risen by 77% and amounts to 34.9 million EUR compared to 19.7 million EUR the previous financial year. In terms of net result per share[6] this results in 8.71 EUR on 30 June 2007 compared to 5.94 EUR the year before, or an increase of 47%. b. Consolidated balance sheet The fair value of the investment properties and of the assets held for sale has been estimated at 445.86 million EUR by the independent real estate experts. The fair value is recorded in the consolidated balance sheet in application of the IAS 40 and IFRS 5 standards and is obtained by subtracting the transaction costs of the investment value. The investment value of the portfolio is the value as defined by the independent real estate experts, before deduction of the transaction costs. In terms of investment value the real estate amounted to 457.3 million EUR (479.17 million EUR on 30 June 2006). The decrease of the real estate portfolio is explained, on the one hand, by the sale in the second semester of 2006/2007 of the building in Wommelgem (fair value 30 June 2006: 2.5 million EUR) and of 2 office buildings, part of "Extensa Square" in Brussels (fair value 30 June 2006: 25.1 million EUR). On the other hand, the office building Bian in Luxembourg and the new castle-farm "Torenhof" situated in Merelbeke (see hereafter 5. Acquisition), are recorded as development projects, due to the complete renovation. The assets held for sale comprise the building Aubépines in Luxembourg for which a sale agreement has been concluded on 4 July 2007. The shareholder's equity, share of the group, amounted to 262.1 million EUR on 30 June 2007 compared to 237.8 million EUR at the end of the previous financial year. The debt ratio, calculated according to the RD of 21 June 2006, decreased from 44.15 % (30 June 2006) to 40.93% on 30 June 2007, because of the realised sales of "Extensa Square" and Wommelgem in the 2nd semester, of which the cash has been used to pay back loans. Based on the maximum allowed debt ratio of 65% Leasinvest Real Estate still had an investment capacity of 328 million EUR on 30 June 2007. 5. Important events during the financial year 2006/2007 Divestments Leasinvest Real Estate has divested its 2 office buildings part of "Extensa Square" in Brussels and the building in Wommelgem in the second semester of 2006/2007. Acquisition Leasinvest Real Estate has acquired a castle-farm called "Torenhof", during the third quarter of the financial year 2006/2007, for an amount of 1.5 million EUR. This building will be renovated as a facilitary service center for the neighbouring phase I of the Axxes Business Park in Merelbeke (Ghent). Torenhof will be fully operational in the spring of 2008. Conditional voluntary public take-over counter-offer in cash on Immo-Croissance In function of the complementarity with the portfolio of Leasinvest Immo Lux, Leasinvest Real Estate announced its intention to launch a conditional voluntary public take-over counter-offer in cash, on 26 June 2007, on all distribution and capitalisation shares issued by the Luxembourg collective investment fund Immo-Croissance. Following the counter-offer, considered to be too high, by the Iceland Baugur group, the manager of Leasinvest Real Estate has decided to withdraw its offer. 6. Important events after the closing of the financial year 2006/2007 Divestment On 4 July Leasinvest Immo Lux has sold the building Aubépines, situated in the Grand Duchy of Luxembourg to the "Commission de Surveillance du Secteur Financier (CSSF)", the Luxembourg supervising authority of the banking sector. On this sale a gain of 3.7 million EUR was realised. 7. Appropriation of the result - dividend payment The profit for appropriation of the current financial year 2006/2007 amounts to 17,046,902.54 EUR. Taking into account the profit carried forward from the past financial year of 7,810,240.87 EUR this results in a profit for appropriation of 24,857,143.41 EUR. The board of directors of the statutory manager proposes to the ordinary general meeting of shareholders to appropriate the profit of 24,857,143.41 EUR as follows: - 9,608,381.81 EUR to be carried forward to the next year and - 15,248,761.60 EUR to pay out as dividends. The proposed dividend amounts to 126% of the non-consolidated mandatory result to be distributed (compared to 114% the previous year), and is considerably higher than the minimum 80% of the adjusted result as imposed by the RD of 21 June 2006 on the accounting, annual accounts and consolidated annual accounts of public real estate closed-end funds (sicafis). Consequently the gross dividend is 3.8 EUR, compared to 3.75 EUR for the financial year 2005/2006 and net, free of withholding tax, 3.23 EUR (compared to 3.19 EUR for the financial year 2005/2006) according to the participation in the dividends of all 4,012,832 shares[7]. Subject to the approval of the ordinary general meeting, dividends will be paid out on presentation of coupon nr. 8 as from 22/10/07 at the branches of ING Bank, Dexia Bank, Fortis Bank and Bank Degroof. 8. Declaration of the auditor The auditor has confirmed that his audit of the consolidated annual accounts have been fully completed and has not shown any important corrections, which should be made to the accounting data, presented in this press release. 9. Outlook Given the sale of 2 buildings in Brussels, realised in the previous financial year, the sale of the building "Aubépines" realised at the beginning of the current financial year and the fact that the building "Bian" is being renovated, the rental income of the current financial year will decrease. The realised gains on the building "Aubépines" should compensate the loss in rental income. Except in case of unforeseen circumstances and without taking into account unrealized gains on the property portfolio, a net result comparable to the one of the financial year 2006/2007 is expected for the financial year 2007/2008. 10. Annual brochure The annual brochure, comprising the annual accounts, the annual report and the report of the auditor, will be available as from 30/09/2007 and can be obtained on simple request at the following address: Leasinvest Real Estate SCA Mechelsesteenweg 34 (administrative office) 2018 Antwerpen T +32 3 238 98 77 F +32 3 237 52 99 E investor.relations@leasinvest-realestate.com W www.leasinvest-realestate.com (brochure download 'investors', financial reports) Leasinvest Real Estate SCA Real estate fund (sicafi) Leasinvest Real Estate SCA invests mainly in high-quality and well situated offices, logistics and retail buildings in Belgium and in the Grand Duchy of Luxembourg. The sicafi is listed on Euronext Brussels in the NextPrime segment. Leasinvest Real Estate SCA has a market capitalisation of 276.4 million EUR (value on 16 August 2007). For more information, contact: Leasinvest Real Estate Jean-Louis Appelmans Investor Relations T: +32 3 238 98 77 E investor.relations@leasinvest-realestate.com [1] The buildings Bian in Luxembourg and the castle-farm 'Torenhof' are recorded in the balance sheet under 'Development projects'. [2] The newly issued shares participate in the result as from 1 June 2006. [3] The Extensa portfolio has contributed to the net result of the financial year 2005/2006 through the badwill. [4] The consolidated real estate portfolio takes into account the full consolidation of Leasinvest Immo Lux (previously Dexia Immo Lux), in which Leasinvest Real Estate had a stake of 96.04% on 30 June 2007 and the Extensa portfolio. [5] Badwill or negative goodwill equals the amount by which the stake of the party acquiring, in the fair value of the acquired identifiable assets, liabilities and contingent liabilities, exceeds the price of the business combination on the date of the transaction. [6] On 30 June 2007 the number of shares participating in the dividends, amounted to 4,012,832; on 30 June 2006 this was 3,318,241. [7] Following the capital increase which has taken place with the merger of Square de Meeûs SA with Leasinvest Real Estate, 204 new shares have been created. These participate in the dividends as from 1 July 2006.