Wereldhave Belgium : Results 2016

Vilvoorde, 2 February 2017

Regulated information 02/02/2017 - 08:00 AM

PRESS RELEASE RESULTS 2016

Vilvoorde, 2 February 2017

SAMENVATTING

Wereldhave Belgium heeft over 2016 een winst gerealiseerd van € 66,2 mln (2015: € 49,4 mln); het direct resultaat per aandeel bedroeg € 5,78 (2015: € 5,63). Aan de Algemene Vergadering van Aandeelhouders zal een dividend voorgesteld worden van € 5,10 bruto - € 3,57 netto (2015: € 4,90 bruto - € 3,577 netto).

De 'Like-for-Like' huurgroei over 2016 kwam uit op 4,5% (winkelcentra: 4,9%; kantoren: 2,7%) en de EPRA bezettingsgraad op 95,8% (2015: 94,6%).

De nettowaarde per aandeel vóór winstverdeling en dividenduitkering bedroeg € 86,41 (2015: €81,76). De schuldgraad bedroeg 27,6%.

RÉSUMÉ

En 2016, Wereldhave Belgium a réalisé un bénéfice de € 66,2 mln (2015: € 49,4 mln); le résultat direct par action a augmenté et s'élève à € 5,78 (2015: € 5,63). Lors de l'Assemblée Générale des Actionnaires, un dividende brut de € 5,10 - net € 3,57 par action sera proposé (2015: brut € 4,90 - net € 3,577).

Le 'Like-for-Like' des revenus locatifs sur l'année 2016 atteignait 4,5% (centres commerciaux: 4,9%; immeubles de bureaux: 2,7%) et le taux d'occupation EPRA s'élevait à 95,8% (2015: 94,6%).

La valeur nette par action, avant répartition du bénéfice et avant distribution du dividende, s'élevait à € 86,41 (2015: € 81,76).

Le taux d'endettement était de 27,6%.

SUMMARY

For 2016, Wereldhave Belgium postes a profit of € 66.2 mln (2015: € 49.4 mln); the direct result per share amounts to € 5.78 (2015: € 5.63). A dividend of € 5.10 gross - € 3.57 net per share will be proposed to the General Meeting of Shareholders (2015: € 4.90 gross - € 3.577 net).

The 'Like-for-Like' rental growth in 2016 amounts to 4.5% (shopping centers: 4.9%; offices: 2.7%) and the EPRA occupancy rate to 95.8% (2015: 94.6%).

The net asset value per share, before profit distribution and dividend payment, amounts to € 86.41 (2015: € 81.76). The debt ratio amounts to 27.6%.

1 WERELDHAVE BELGIUM PRESS RELEASE RESULTS 2016

Regulated information 02/02/2017 - 08:00 AM

1. STATEMENT OF THE BOARD OF DIRECTORS COMPRISING THE RESULTS ON 31/12/2016 (FOR THE PERIOD 01/01/2016 - 31/12/2016)

• Direct result per share € 5.78 (2015: € 5.63)
• 'Like-for-Like' rental income 4.5% (shopping centres: 4.9%, offices: 2.7%)
• EPRA occupancy rate 95.8% (2015: 94.6%)
• Net asset value per share € 86.41 (2015: € 81.76)
• Dividend proposal € 5.10 gross - € 3.57 net (2015: € 4.90 gross - € 3,577 net)
• Debt ratio of 27.6%

  KEY FIGURES

  (X € 1,000)

  01/01/15 - 31/12/15	01/01/16 - 31/12/16
  Profit	49,391	66,241
  Direct result	39,093	40,078
  Indirect result	10,298	26,163
  Direct result per share (x €1)	5.63	5.78
  Profit per share (x €1)	7.12	9.55
  Equity	31 December 2015	31 December 2016
  Investment properties excl. development projects	733,482	784,509
  Development projects	40,547	35,318
  Shareholders' equity	567,310	1)	599,586	1)
  Net asset value per share (x €1)	81.76	1)	86.41	1)
  Debt ratio on total assets	27.5%	27.6%
  Number of shares	6,939,017	6,939,017

  1) before profit distribution and dividend payment

  PROFIT

  The profit for 2016, consisting of the direct and indirect result, amounted to € 66.2 mln (2015: € 49.4 mln).

  Compared to the same period in 2015, the increase in profit is the result of a higher direct result (€ 1.0 mln) and a higher indirect result (€ 15.8 mln).

  DIRECT RESULT

  For 2016 Wereldhave Belgium posted a direct result of

  € 40.1 mln (2015: € 39.1 mln). The net rental income increased by € 2.3 mln, mainly due to the retail park in Tournai that became operational (€ 0.7 mln), additional rental income (€ 0.9 mln) related to paid parking in the shopping centre 'Genk Shopping I' and several higher rental income from, a.o. temporary leases, pop-ups, and rent adjustments (€ 0.7 mln).

  Property charges decreased slightly with € 0.7 mln; general costs and other operating income and charges are € 1.8 mln higher, mainly due to a lower capitalization of fees charged to development projects.

  Operational financial expenses decreased by € 0.5 mln thanks to lower nominal interest rates.

  The real estate certificate 'Basilix' was liquidated in 2015 and this had a one-off positive impact on the results of 2015 (€ 0.6 mln).

  The direct result per share amounts to € 5.78 (2015:

  € 5.63).

  EPRA Occupancy on 31 December 2016 stood at 95.8% (31 December 2015: 94.6%) . Occupancy levels

  per sector on 31 December 2016 (31 December 2015)

  were 95.9% (94.9%) for retail and 90.9% (93.4%) for offices.

  WERELDHAVE BELGIUM PRESS RELEASE RESULTS 2016 2

  Regulated information 02/02/2017 - 08:00 AM

  INDIRECT RESULT

  The indirect result amounts to € 26.2 mln (2015:

  € 10.3 mln). The indirect result arises mainly from realised and unrealised changes in the value of assets in the portfolio (€ 26.3 mln) and other result on portfolio (€ -0.1 mln).

  SHAREHOLDERS' EQUITY AND NET ASSET VALUE

  On 31 December 2016 the shareholders' equity amounts to € 599.6 mln (31 December 2015:

  € 567.3 mln).

  On 31 December 2016 the net asset value per share, including the profit for the current year, amounts to

  € 86.41 (31 December 2015: € 81.41).

  In 2016, the average interest rate on the outstanding loans amounts to 0.99% (average interest rate 2015: 1.19%).

  PROPERTY PORTFOLIO

  INVESTMENT PROPERTIES

  On 31 December 2016, the fair value of the investment properties portfolio - excluding development projects

  - amounts to € 784.5 mln (31 December 2015:

  € 733.5 mln).

  The net increase of € 51.0 mln is to be attributed mainly to:

• The transfer (reclassification) of the retail park (10,000 m²), adjacent to the shopping centre 'Les Bastions' in Tournai, from development projects to operational investment properties (€ 17.0 mln);

• Various additional investments in the existing portfolio (€ 3.7 mln);

• Depreciation lease incentives (€ -0,4 mln);

• Variation in the investment properties portfolio (€ 30.7 mln) - this variation is attributable to the

non-recurring positive effect of the change in the average transaction rate to 2.5% (€ 54.9 mln) and to a negative revaluation (€ -24.2 mln) from the existing portfolio mainly due to lower valuations for the buildings in Genk and the office building Madou.

2.5% Transfer duties rate

In the course of the second semester of 2016, a study (conducted by independent real estate experts) ordered by the association of REIT's (BE-REIT), confirmed that the average transfer duty percentage of 2.5%, which is applied by the sector, can still be considered as acceptable. The previous studies were completed 10 years ago. Due to legislative changes over the last years, there was some uncertainty as to the realistic nature of this rate. The outcome of the recent study confirmed this reality and thus removes such uncertainty.

Because Wereldhave Belgium was the only remaining REIT that did not apply the percentage of 2.5%, it decided to perform additional analysis of the sector study outcome by examining whether this lower rate may also be applied to the type of real estate in which it invests, i.e. shopping centres. Wereldhave Belgium ordered a legal analysis and entrusted one of its legal advisers to examine the various possible transaction scenarios for the Company (applying the lower rate). This legal analysis, as well as the recent legislative changes creating a framework for unlisted real estate investment companies (FIIS) and the announced modification of the REIT Act (expected in April 2017, and implying that REIT participations of less than 50% can be held in institutional REIT's or related companies (with a minimum level of 25%)), opens new perspectives to structure transactions with lower rates.

• Based on the above and its own market insights, the Company considers that the legal and practical reality to operate with lower rates is extended and that it is appropriate to apply the 2.5% rate.

• The Manager (Board of Directors) of Wereldhave Belgium believes that the pallet of possible scenarios offers a broader perspective for possible divestments and considers appropriate to asses and apply those scenarios for future divestment projects.

3 WERELDHAVE BELGIUM PRESS RELEASE RESULTS 2016