annual results 2013
TRANSCRIPT
Vastned 2013 annual resultsTaco de Groot, CEO Vastned
Tom de Witte, CFO Vastned
Vastned makes significant progress in executing the high street strategy
2013 direct investment result encouraging and in line with expectations
Key targets achieved on the strategic pillars:
Share of high street shops increased to 69%
More hands-on and proactive organisation
Further diversification among financiers and a loan-to-value of 44.6% (39.7% after the disposal of the Spanish shopping centres)
Strategy update: Growth in premium cities
Strong performance of premium city high street shops in 2013
Spanish divestment of shopping centres/galleries earmarks quality improvement of the portfolio
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Vastned’s direct investment result and dividend in line with expectations
Strong premium city high street results
Spot occupancy rate: 99.2% Like-for-like rental growth: 4.2% Value movement: 2.2%
Estimated 2014 direct investment result between € 2.10 - € 2.30 per share
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2013 direct investment result and dividend in line with expectations
Direct investment result: € 2.85 per share
At top of the expected range of € 2.75 - € 2.85
Estimated dividend € 2.55 per share confirmed
Stable occupancy rates
Average occupancy rate of 94.0% in 2013/ 94.0% at year-end 2013
Value movements 5.8% negative, mainly due to Spanish portfolio
€ 269 million of divestments in 2013
Important quality improvement of the portfolio
Target of € 200 million exceeded
Sharpened high street strategy: Focus on growth in premium cities
Premium city high street shops have the highest preference of retailers and consumers
Premium cities are selected cities with:
Positive demographic development
Strong purchasing power
Historic inner city
Tourist destination
Presence of national and international institutions and universities
Growth of high street shops in premium cities to 75% of total portfolio
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Strong performance premium city high street shops
In %
Premium cityhigh street
shops
High street shops other
Other Total
Spot occupancy
99.2 94.7 89.7 94.0
Like-for-like rental growth
4.2 (1.1) (3.6) (1.1)
Value movements* 2.2 (2.0) (13.7) (5.8)
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* Excluding acquisitions
Divestments improve quality of the portfolio
Vastned sold several shopping centres and assets in smaller to medium-sized cities for € 269 million*
The divestments were on average 3.4% below book value mainly caused by the disposal of shopping centre Het Rond (6.3% below book value)
The divestment of these non-strategic assets improved the quality of the property portfolio substantially
The sales proceeds were used to strengthen the balance sheet and to acquire premium city high street shops
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* Including 100% of shopping centre Het Rond. Vastned owned a 50% stake.
Growth of premium city high street portfolio through acquisitions
Vastned acquired a total of € 104 million premium city high street shops in 2013
Bordeaux: € 47 million
Amsterdam, Utrecht and Maastricht: € 45 million
Bruges: € 12 million
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Nespresso, Cours de l’Intendance, Bordeaux
Leasing activity in 2013 increased to € 18.5 million
Total leasing activity € 18.5 million
(2012: € 18.3 million)
A total of 265 lease contracts were signed
On average leasing contracts were signed 12.7% below old rental levels mainly caused by an average 33.2% rent decline in the shopping centres in Spain
Premium city high street shops contracts achieved 3.2% rent increases
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Pull & Bear, Oudegracht, Utrecht
European retail market developments
Tough economic climate drives innovative retail concepts
Diverse demand for retail spaces: from small pop-up shops to huge flagship stores
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Clear shift from secondary to prime locations
Consumer confidence remains low throughout key markets in Europe
Multichannel strategy is the way to go for successful retailers
Location is key: retailers want to be where the consumer prefers to shop
2013 country performance
The Netherlands: Challenging market for retailers
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Dutch retail market still suffers from low consumer confidence
87 lease contracts signed for € 6.1 million e.g. with Schaap+Citroen and Pull & Bear
Divestment of non-strategic assets for € 110 million
Growth of premium city high street shops through acquisitions of € 45 million in Amsterdam, Utrecht, and Maastricht
Annelou de Groot started as country manager the Netherlands
Developments in 2013Key figures Total portfolio year-end 2013: € 623 million
Share of premium city high street shops: 36%
Occupancy rates Premium city high street shops: 98.9% Total: 96.8%
Schaap en Citroen, P.C. Hooftstraat, Amsterdam
France: Important quality improvement realised in the French portfolio
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French retail landscape experiences difficulties and the gap between the big cities and provincial towns is growing
18 lease contracts signed for a total of € 2.1 million e.g. with Italian cosmetics chain KIKO
Total divestments: € 152 million incl. shopping centres in Thoiry, Dunkirk and assets in smaller towns
Acquisition of cluster of high street shops in Bordeaux for € 47 million
Developments in 2013Key figures Total portfolio year-end 2013: € 359 million
Share of premium city high street shops: 70%
Occupancy rates Premium city high street shops: 99.2% Total: 95.4%
KIKO, Rue St. Catherine, Bordeaux
Belgium: Positive results
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New tenants like Armani Jeans and Rituals contribute to long term cash flow stability
Belgian premium city high street portfolio expanded with Steenstraat 38 in Bruges let to Massimo Dutti
Divestments in Belgium included € 7 million of assets in smaller towns
Developments in 2013Key figures Total portfolio year-end 2013: € 362 million
Share of premium city high street shops: 39%
Occupancy rates Premium city high street shops: 98.6% Total: 95.4%
Armani Jeans, Leysstraat , Antwerp
Spain: After divestment of shopping centres, focus on premium city high street shops
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Spanish economy as well as retail turnover still under pressure
Nevertheless a total of 128 lease contracts were signed for € 5.6 million
On average lease contracts were signed at 24.8% lower rental levels
January 2014: sale of seven shopping centres and a retail park for € 160 million
Developments in 2013/2014Key figures*
Total portfolio year-end 2013: € 221 million
Share of premium city high street shops: 18%
Occupancy rates Premium city high street shops: 100% Total: 86.6%
* Including Portugal
Pepe Jeans, Calle Fuencarral , Madrid
Turkey: Pipeline projects completed
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High streets in Istanbul limitedly impacted by latest political turmoil
H&M flagship store opened on Istiklal Caddesi 85
Renovation of Abdi İpekçiCadessi 41 completed and leased to an international high-end fashion operator
Total leasing activity amounted € 2.3 million including a new lease contract with Koton for IstasyonCaddesi 27
Developments in 2013Key figures Total portfolio year-end 2013: € 129 million
Share of premium city high street shops: 100%
Occupancy rates Premium city high street shops: 100%
H&M, Istiklal Caddesi, Istanbul
2013 financial results Tom de Witte, CFO
Despite difficult retail market positive like-for-like gross rental growth for premium city high street shops
Premium city high streets
High street other
OtherTotal
portfolio
% % % %
The Netherlands 4.8 (0.6) (3.9) (1.1)
France 3.8 (4.9) 1.0 0.6
Belgium 0.4 1.4 2.0 1.4
Spain/ Portugal 18.8 3.4 (6.8) (4.7)
Turkey 3.3 n.a. n.a. 3.3
Total 4.2 (1.1) (3.6) (1.1)
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Positive value movements for premium city high street shops in 2013
ValuePremium city high streets
High street other
Other Total
In € million % % % %
The Netherlands 623 1.9 (5.7) (5.3) (3.7)
France 359 1.7 (0.8) (3.1) (0.4)
Belgium 362 8.2 9.6 6.2 7.6
Spain/Portugal 221* 0.6 (4.5) (39.8) (33.2)
Turkey 129 (1.8) n.a. n.a. (1.8)
Total 1.694 2.2 (2.0) (13.7) (5.8)
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* After the divestment of the seven shopping centres/galleries and the retail park in Spain the value of the portfolio will be € 63 million.
Divestment of non-strategic assets resulted in lower rental income
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Annualised rent(€ 1 million)
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Annualised rent endQ4 2012
Loss of tenants New Lettings Acquisitions andtransfer from
pipeline
Divestments Other Annualised rent endQ4 2013
134.6(8.7) 7.8
6.5 (19.2)
0.0121.0
Strong financial position
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0
50
100
150
200
250
300
Roll over 2014 2015 2016 2017 2018 2019
Contract revision by year
Interest revision by year
Average interest rate
1.6%
3.8%
4.9%
4.8%
4.4% 4.2%
4.9%
5.3%
Average interest rate increased from 4.1% to 4.3% (year-end 2013)
Interest coverage ratio: 2.8 (2012: 3.0)
Significant risk profile improvement after the sale of the Spanish shopping centres/galleries and redemption of secured loans
Loan to value at 44.6%* (year-end 2013)
Current unused credit facility of € 165.5 million
Short term debt 29% of total debt
83.4% of loan portfolio had a fixed interest rate
Total amount of private placements € 125 million (16.5%)
* After the sale of the Spanish shopping centres: 39.7%
2020 ev.
Net divestments improved quality of the portfolio and reduced direct investment result 2013
In € million FY 2013 FY 2012 Δ
Gross rental income 123.2 133.5 (10.3)
Operating expenses (16.5) (17.8) 1.3
Net financing costs (34.4) (35.9) 1.5
General expenses/taxes (11.3) (10.5) (0.8)
Non-controlling interests (6.8) (6.7) (0.1)
Direct investment result 54.2 62.6 (8.4)
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Movement direct investment result per share
in €Direct investment result per share 2012 3.31
Like-for-like net rental growth (0.04)
Increase due to acquisitions, net of interest 0.11
Decrease due to divestments, net of interest (0.49)
Taking into operation of investment properties in Istanbul
0.11
Capitalised interest (investment properties in pipeline and renovation)
(0.05)
Increase general expenses (0.01)
Increase income tax expense (0.03)
Increase due to stock dividend (0.03)
Decrease due non-controlling interest (0.03)
Direct investment result per share 2013 2.85
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Expected dividend € 2.55 per share confirmed
Total dividend: € 2.55 per share
Pay-out ratio: 89%
Ex-dividend date: 19 May 2014
Payment date of final dividend (€ 1.63* per share): 29 May 2014
Dividend policy unchanged: pay-out ratio at least 75% of the direct investment result
* Upon approval of the AGM at 15 May 2014
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Outlook 2014: Improved quality portfolio enables forecast for 2014 direct investment result
Vastned will continue to pragmatically execute the high street strategy with focus on growth in premium cities
Execution of strategy has significantly improved quality of the portfolio with more stable and predictable results
As announced before, high street strategy will lead to lower direct investment result in the short term, but to more stable and predictable results in the long term
Current portfolio provides sufficient ground to estimate direct investment result per share 2014 between € 2.10 - € 2.30, barring unforeseen circumstances
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Q&A
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Contact details
Vastned Investor Relations
Anneke Hoijtink
+ 31 10 24 24 368
+ 31 6 31637374
www.vastned.com
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