Leasinvest Real Estate - audited annual results financial year 2005/2006 (period from 1 July 2005 till 30 June 2006)

         Net profit, share of the group : 19.7 million EUR (+ 58.4% compared to 12.4 million EUR)

         Net profit, share of the group, per diluted[1] share rises from 4.09 EUR to 5.94 EUR

         Increase of the occupancy rate from 91.15% to 95.87%

         Fair value of the real estate portfolio rises by 74%[2] from 268 million EUR to 467 million EUR thanks to acquisitions

 

Expected gross dividend of 3.75 EUR (3.72 EUR on 30/06/05) 

 

Consolidated real estate portfolio key figures	1/07/2005-	1/07/2004-
	30/06/2006	30/06/2005
Fair value (1,000 €) (a)	467,182	268,584
Investment value (1,000 €) (b)	479,170	275,460
Rental yield based on fair value	7.45%	7.32%
Rental yield based on investment value	7.26%	7.14%
Occupancy rate (c) (d)	95.87%	91.15%

(a) Fair value: the investment value as defined by an independent valuer
and of which the transaction costs have been deducted; the fair value is the accounting value under IFRS.
(b) The investment value corresponds to the previously used term 'investment value' and is the value as defined
by an independent valuer and of which the transaction costs not have been deducted.
(c) 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).
(d) 30/06/2005: the occupancy rate and the rental yield on 30/06/05 take into account the lease of Extensa Square I as from 01/07/05 and 100% of the building Square de Meeûs. Leasinvest Real Estate owned 50% + 1 share in Square de Meeûs 5-6 SA, which was integrally consolidated. Excluding the lease of Extensa Square I the rental yield amounted to 6.74% on 30/06/05.
30/06/2006: the occupancy rate and the rental yield take into account 100% of the portfolio, although Leasinvest
Real Estate owned 50% + 1 share in Square de Meeûs 5-6 SA (in the meanwhile LRE owns 100% of the shares) and 90.12% in Dexia Immo Lux. Both participations are integrally consolidated.

 

The consolidated real estate portfolio of Leasinvest Real Estate has substantially risen during the past financial year thanks to the acquisitions of 2 portfolios[3]: the Luxembourg portfolio of the sicav Dexia Immo Lux (13 buildings) on the one hand and a portfolio of 4 buildings of Extensa Group SA on the other hand. The total fair value of these portfolios amounts to 193.8 million EUR, the investment value to 198.9 million EUR on 30/06/2006.

 

The increase of the occupancy rate from 91.15% to 95.87% is due to the acquisitions (the occupancy rate of the Dexia Immo Lux and Extensa Group SA portfolios amounts to respectively 95.1% and 100%), mentioned above on the one hand and to successful commercial efforts relating to the existing portfolio on the other hand.

 

The rental yield based on the fair value is 7.45% and 7.26% based on the investment value.

Consolidated IFRS key figures	1/07/2005-	1/07/2004-
	30/06/2006	30/06/2005
Net asset value, part of the group (NAV) (1.000 €)	237,849	180,048
Number of issued shares	4,012,628	3,249,221
Pro rata number of shares	3,318,241	3,047,255
Net asset value, part of the group, per share (€)
- based on fair value	59.28	55.41
- based on investment value	61.00	57.47
Closing price (€)	65.90	64.40
Average price (€)	66.12	59.33
Net current result per diluted share (€) (a)	8.17	5.78
Net result per diluted share, part of the group (€)	5.94	4.09
Debt ratio RD 21/06/06 (%)	44.15%	28.92%
Pay out ratio (%)	114% (b)	92.9%
Proposed gross dividend (€)	3.75	3.72
Dividend yield (%) (c)	5.67%	6.27%

(a) Given the capital increase which took place as a result of the bringing in of the Extensa Group SA portfolio by
 AXA Belgium SA, 763,407 new shares have been created. These participate in the dividends as from 29/05/2006.
The results per diluted share are calculated taking into account the pro rate of the number of shares.
(b) based on the non-consolidated distributable result
(c) gross dividend / average share price

Consolidated balance sheet and results

 

 

 

The consolidation scope on 30/06/2006 has been modified compared to 30/06/2005 following the acquisitions of the past financial year. On 30/06/2006 Leasinvest Real Estate includes, additionally[4], through integral consolidation, the following participations: the Luxembourg sicav Dexia Immo Lux SA, Dexia Immo Lux Conseil SA, Warehouse Finance SA, De Leewe SA and Logistics Finance I SA. Also through integral consolidation, Leasinvest Real Estate Facility Services SA is included, a company established during the past financial year.

 

The consolidated results and these comments relating to the financial year 2005/2006 comprise, unless stated differently, next to the share of the group[5], also the minority interests, namely the minority interests in the sicav Dexia Immo Lux SA and in Square de Meeûs 5-6 SA.

 

The contribution to the consolidated results of the acquisitions Dexia Immo Lux SA, Dexia Immo Lux Conseil SA, Warehouse Finance SA, De Leewe SA and Logistics Finance I SA amounts (next to other components taken into account through badwill[6]) to 6 months.

 

 

The rental income for the financial year 2005/2006 amounts to 23.9 million EUR, or a net increase of 20.6% compared to the previous year. Through Dexia Immo Lux rental income rose by 26.3%, while the existing portfolio knew a decrease in turnover with 5.8%, mainly due to divestments at the end of the financial year 2004/2005  and to the granted rental free periods in favour of extensions of existing leases. Per diluted[7] share the rental income reaches 7.22 EUR (6.52 EUR on 30/06/05) or an increase of 10,7%.

 

The property charges have only increased by 5.5% due to the expansion of the portfolio.  The operating result before the portfolio result rose by 62.6% from 14.3 million EUR to 23.2 million EUR. Per diluted[8] share this results in 6.99 EUR compared to 4.68 EUR on 30/06/05, or an increase of 49,3%. Next to the increase of the rental income mentioned above, this is mainly due to badwill realized on the acquisitions of the financial year 2005/2006.

 

The portfolio result has risen by 17,7% from 3.3 million EUR to 3.9 million EUR. Contrary to the financial year ended on 30/06/05, no divestments took place and the portfolio result consists of a net positive evolution of the value of the real estate of 3.9 million EUR compared to 2.2 million EUR on 30/06/05.

 

The net financial result amounted to - 3 million EUR and is 37% lower than the - 4.79 million EUR of the financial year 2004/2005. Ignoring the one off-costs during the financial year 2004/2005, the net financial result amounted to - 4 million EUR. The difference of + 1 million EUR, is due to the extended consolidation scope on the one hand and to positive revaluations of the hedging instruments on the other hand.

 

The net result has substantially increased from 13.1 million EUR to 23.3 million EUR (+ 77.8%), while the share of the group thereof amounted to 19.7 million EUR (30/06/2005: 12.4 million EUR, + 58.4%). The contributions to this amount of the acquisitions, including the badwill, is 7.8 million EUR, the balance of 11.9 million EUR is the net result, share of the group, of the group before the acquisitions of the financial year. The recurring net result, i.e. making abstraction of the portfolio result and the badwill, amounted to 14.2 million EUR, or 4.27 EUR per diluted share. On 30/06/05 the recurring net result, also making abstraction of the portfolio result an one-off items, amounted to 9.86 million EUR or 3.24 EUR per diluted share.

 

Per diluted[9] share the net result, share of the group, amounts to 5.94 EUR (compared to 4.09 EUR the previous financial year) or a rise of 45.5 %.

 

The net cash flow[10], share of the group amounted to 9.8 million EUR compared to 10.3 million EUR on 30/06/05.  The net cash flow, share of the group, per diluted6 share results in 2.96 EUR compared to 3.38 EUR on 30/06/05.

 

 

The shareholder's equity, share of the group was 237.8 million EUR on 30/06/06 compared to 180 million EUR at the end of the previous financial year. The increase is largely due to the contribution in kind by AXA Belgium SA of 3 companies, resulting in an increase of the shareholder's equity of 47.7 million EUR. Per share the net asset value on 30/06/06 amounts to 59.28 EUR in comparison with 55.41 EUR the previous year, or an incrase of 6.97%. Based on the investment value of the real estate portfolio the net asset value amounts to 61 EUR (57.47 EUR on 30/06/05).

The minority interests have risen from 7.9 million EUR to 24.7 million EUR, which mainly results from the minority interests in Dexia Immo Lux.

The debt ratio according to the RD of 21/06/2006 increased from 28.92% to 44.15% mainly by the acquisition in cash of Dexia Immo Lux SA. Thanks to the increase of the maximum allowed debt ratio from 50% to 65%, Leasinvest Real Estate still has a remaining investment capacity of 288 million EUR.

The fair value of the real estate portfolio has been estimated by the real estate experts at 467.2 million EUR, the investment value at 479.2 miljoen EUR, or a rise of 73.9% compared to the previous financial year. Concerning the buildings in the Grand Duchy of Luxembourg, to define the fair value of real estate of which the value amounts to more than 2.5 million EUR, the fixed transaction costs of 2.5% also have been applied, by comparison with the real estate in Belgium (see BEAMA press release of 08/02/2006). The Statutory Manager of Leasinvest Real Estate Management SA concludes that this method can be applied.

 

 

 

Leasinvest Real Estate has acquired 90.12% of Dexia Immo Lux in different phases.

 

On 22 March 2006 Leasinvest Real Estate (LRE) has acquired the joint participation Dexia Banque Belgique and Ethias Group of a total of 51.13 % in the listed sicav Dexia Immo Lux (DIL) and their 100% participation in Dexia Immo Lux Conseil SA (DIL Conseil). This acquisition of approximately 111 million EUR has been entirely paid in cash. The capitalisation and distribution shares of DIL are listed on the Luxembourg stock market and on Euronext Brussels. The price amounted to 3,150.20 EUR and 1,467.57 EUR (coupon number 15, equal to a gross dividend of 70 EUR, detached) for respectively the capitalisation and distribution shares. The transaction price was based on a price, for 100% of the shares of DIL and DIL Conseil, of 177.3 million EUR.

 

On 15 May a voluntary public take over bid was launched, at the same conditions in Belgium and in the Grand Duchy of Luxembourg, on all remaining capitalisation and distribution shares of DIL, which was reopened on 9 June at the same conditions.

 

On 29 June, at the end of the public take over bid Leasinvest Real Estate owned 90.12% of the shares of Dexia Immo Lux. The total investment of the public take over bid amounted to approximately 52 million EUR.

                                                         

 

Dexia Immo Lux (DIL) is real estate investment fund with variable capital (sicav) established in the Grand Duchy of Luxembourg. DIL owns 13 buildings with a total surface of 48.651 m², which are exclusively situated in the Grand Duchy of Luxembourg. These buildings are mostly multi-tenant and are composed of offices (78%), 1 semi-industrial building (15%) and 2 supermarkets (7%). Geographically the buildings are rather well spread across Luxembourg City (78%) and the periphery (22%).

On 29 March 2006 Leasinvest Real Estate acquired directly, in cash, from Extensa Group SA (previously Leasinvest SA) for a price of 2.7 million EUR a semi-industrial building consisting of offices and storage, situated in Forest (Brussels), rue Lusambo and the long lease on the land.

 

 

On 29 March 2006 AXA Belgium SA acquired 100% of the shares of 3 subsidiaries of Extensa Group SA (previously Leasinvest SA), the promoter of Leasinvest Real Estate (LRE).  These shares have subsequently been contributed in kind[11] by AXA Belgium SA on 29 May 2006 in LRE against newly created shares of the same type of the existing shares[12]. As a result the shareholder's equity rose by 47.7 million EUR.

 

This contribution in kind was part of the framework agreement signed in July 2004 between AXA Belgium SA, Leasinvest Real Estate Management SA, LRE and Leasinvest SA, stating that AXA Belgium SA would subscribe to 1,154,047 new LRE shares by the contribution in kind of real estate or real estate companies. With this transaction the investment program to which AXA Belgium SA had committed itself in the aforementioned agreement has been fully realised.

 

 

The portfolio consists of an office building and a logistics centre in Malines of respectively approximately 14.000 m² and 6.000 m².  The office building is leased and the logistics centre is let, both to Wolters Kluwer België SA. Furthermore the portfolio comprises a distribution centre composed of storage and offices, situated Heesterveldweg in Tongres, with a total surface of 26.000 m². For this building a sale & rent back transaction has been concluded with SKF SA. All buildings are occupied for 100%.

 

 

By two subsequent transactions, Leasinvest Real Estate has become a 100% shareholder of Square de Meeûs 5-6 SA.

 

 

The profit for appropriation of the current financial year amounts to 8,979,023.36 EUR.  Taking into account the profit brought forward from the past financial year of 10,677,697.23 EUR this results in a profit for appropriation of 19,656,720.59 EUR.

 

The Board of Directors of the Statutory Manager proposes to the Ordinary General Meeting of shareholders to appropriate the profit of 19,656,720.59 EUR as follows:

-          7,213,316.84 EUR to be carried forward to the next year and

-          12,443,403.75 EUR to pay out as dividends.

 

The proposed dividend amounts to over 114%[13] of the non-consolidated result (compared to 92.9% the previous year), and is considerably higher than the minimum 80% of the result as imposed by the RD of 10 April 1995 on real estate closed-end funds (sicafi).

 

Consequently the gross dividend is 3.75 EUR, compared to 3.72 EUR the previous year and net, free of witholding tax, 3.19 EUR (compared to 3.16 EUR the previous year) according to the participation in the dividends of all 4,012,628 shares[14].

 

Subject to the approval of the ordinary general meeting, dividends will be paid out on presentation of coupon nr. 7 as from 23/10/06 at the branches of ING Bank, Dexia Bank, Fortis Bank and Bank Degroof.

 

Declaration of the auditor

The auditor has confirmed that his audit, which has been fully completed, has not shown any important corrections, which should be made to the accounting data, presented in this press release.

 

Given the important growth of the real estate portfolio, realised at the end of 2005/2006, of which the full annual impact will be felt during the current financial year 2006/2007, except in case of unforeseen circumstances, a good net result before portfolio result and without taking into account exceptional transactions (f.i. badwill) is expected for the financial year 2006/2007.

 

 

The annual brochure, comprising the annual accounts, the annual report and the report of the auditor, will be available as from 30/09/2006 and can be obtained on simple request at the following address:

Leasinvest Real Estate SCA

Mechelsesteenweg 34 (administrative office)

2018 Antwerp

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)

 

 

 

Real estate fund Leasinvest Real Estate SCA invests in high-quality and well situated offices, logistics and retail buildings in Belgium and 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 284.9 million EUR (on 8 August 2006).