Presentation

Leasinvest Real Estate Comm. VA

AvH: 30%

(€ 1.000) 2017 2016
Net result 47,545 29,436
Shareholders' equity (group share) 382,206 356,407
Real estate portfolio
(faire value)
902,994 859,931
Rental yield (%) 6.44 6.78
Occupancy rate (%) 94.80 96.77
     
Per share:
Net asset value (in €) 77.40 72.20  
Closing price (in €) 96.00 105.50  
Gross dividend (in €) 5.00 4.90  

Key figures

Management

Pictures

Leasinvest Real Estate

Beneficial interest AvH: 30%
AvH Contact: Jan Suykens
www.leasinvest.be

Leasinvest Real Estate (LRE) is a public regulated real estate company which focuses on retail and offices in three countries (the Grand Duchy of Luxembourg, Belgium and Austria).

Information from the 2017 annual report

The economic situation continued to improve in the Grand Duchy of Luxembourg, Belgium and Austria in 2017. By diversifying into Luxembourg (since 2006) and Austria (end of 2016), LRE is turning outside Belgium towards countries with AAA rating, a healthy economy with low unemployment, high per capital GNP, and a steady growth.

In the Grand Duchy of Luxembourg, LRE is one of the prime foreign property investors. About as many office rentals were realized in that market in 2017 as in 2016, namely 213,000 m². The vacancy rate remained low at 4.4%. Retail rentals were on a comparable level with 2016. In Belgium, the office market recorded an 8% increase in rental volumes to 785,000 m² compared with 2016. Prime rents increased, while the vacancy rate decreased further to 8.2%. The rental volume in the retail market showed a negative trend, however, with a 9.5% decrease to 345,000 m². In Austria, the retail market is going through a transformation phase marked by a successful modernization of larger retail parks/clusters. With a growing population in and around Vienna, retail rentals are seeing a steady increase.

The strategy of Leasinvest Real Estate changed very significantly in 2017. In view of the lack of attractive additional investments in Switzerland, it was decided to reallocate the proceeds from the disposal of the Swiss portfolio to Austria. It was also decided to confine LRE’s presence to two asset classes and to dispose of the major part of the logistics portfolio. This realignment of focus will lead to a more efficient organization, an improved cost structure and quality of the existing portfolio.

Lre -en

 

Financial overview 2017

At year-end 2017, the fair value of the consolidated real estate portfolio, including project developments, amounted to 903.0 million euros (compared with 859.9 million euros as at year-end 2016).

The total occupancy rate remained high at 94.80%. The slight decrease compared with year-end 2016 (96.77%) is mainly explained by the redevelopment of the Montoyer 63 office building and the sale during 2017 of the fully let logistics buildings and the properties in Switzerland. Following additional investments in Lux Airport real estate certificates, LRE increased its stake in Lux Airport to more than two-thirds of the outstanding certificates, so that the income from this could also be recognized as rental income (1.3 million euros), besides a non-recurring capital gain of 8.1 million euros that was recognised in the financial statements of 2017.

The rental yield decreased from 6.78% at year-end 2016 to 6.44% at year-end 2017. The rental income increased slightly to 56.9 million euros compared with last year (56.6 million euros). The loss of rental income resulting from the sale of several properties in 2017 was more than compensated by the acquisition of two new properties in Austria, the increased occupancy rate of several buildings in portfolio (primarily Mercator and Riverside), and the recognition of the coupon of the Lux Airport certificates as rental income.

At year-end 2017, the equity (group share) stood at 382 million euros (2016: 356 million euros). The revalued net assets stood at 77.4 euros per share based on the fair value of the real estate (72.2 euros at year-end 2016), and 81.1 euros (75.6 euros at year-end 2016) based on the investment value. The financial debt remained stable at 540 million euros. The debt ratio (calculated according to the Belgian Royal Decree of 13/07/2014) decreased to 57.1% (58.0% at year-end 2016). The balance sheet total amounted to 999 million euros at the end of the financial year (2016: 988 million euros).

LRE ended its 2017 financial year markedly better than last year with a higher net result (group share) of 47.5 million euros (29.4 million euros at year-end 2016), or 9.63 euros per share (5.96 euros at year-end 2016), primarily thanks to substantial capital gains on the buildings portfolio.

The price of the LRE share fluctuated in 2017 between 93.99 euros and 107.95 euros. The closing price at the end of the year was 96.00 euros. The gross dividend per share for the 2017 financial year will amount to 5.00 euros, or a gross dividend yield (based on the closing price) of 5.2% (2016 financial year: 4.6%).

 

Operational overview 2017

At the beginning of January, demolition and construction work began on the Montoyer 63 office building, situated on Montoyerstraat in Brussels. Provisional acceptance is expected by the end of 2018.

At the beginning of May, Leasinvest Real Estate acquired the Mercator office building on Route d’Arlon in Luxembourg city. Only 42% of the building was occupied at the time of acquisition, but it was fully let by the end of 2017.

At the end of June, the semi-industrial property Vierwinden in Nossegem was sold for 2 million euros.

At the end of September, the renovation works for the first phase of Boomerang Retail Park in Strassen (Luxembourg) were successfully completed. The sitting tenants had extended their leases. Planning permission for the second phase was obtained at the end of 2017. The works will start in 2018.

Also at the end of September and the beginning of October, the logistics properties of the SKF site in Tongeren, Canal Logistics phase 1 in Brussels, and a third property situated in Wommelgem were sold on a long lease of 99 years to a foreign institutional investor for 60 million euros.

At the beginning of October, the two retail parks in Stadlau (Vienna) were acquired for a total price of 56.2 million euros.

Also at the beginning of October, the three retail properties in Switzerland were sold for 48 million Swiss francs.

At the end of December, the threshold of 66.66% in the listed real estate certificate Lux Airport was exceeded. This participation now amounts to 66.72%. In accordance with IAS 40, the financial assets were reclassified to investment property.

Also at the end of December, 25% of the Treesquare office building under construction in Brussels was pre-let (which will be provisionally accepted at the end of Q1 2018), while the rest of the Mercator building was fully let.

During 2017, several leases were concluded in Luxembourg, Belgium and Austria.

 

Outlook 2018

Jean-Louis Appelmans will retire at the end of May 2018, after nearly 19 years as CEO of Leasinvest Real Estate. He will be succeeded by Michel Van Geyte, current CIO and co-CEO.

For 2018, Leasinvest Real Estate expects rental income in line with 2017. The financing costs will decrease, partly by a restructuring of the derivatives portfolio. Consequently, barring exceptional and unforeseen circumstances, the dividend should be able to be maintained at least on the same level.

Open

Press releases

19/09/2018 Leasinvest Real Estate : Capital increase
14/09/2018 Leasinvest Real Estate acquires office building at top location in European district in Brussels (BE) & concludes important lease in Cloche d'Or (LU)
22/08/2018 Leasinvest Real Estate: Half-year results 2018