Profit and dividend per share
Share Price/Net asset value
(at December 31, before distribution of profit)
Summary of past 5 years
2001
2002
2003
2004
2005
Results
(x EUR 1,000) Rental income 20,807 21,805 20,874 21,201 21,830 Profit 24,141 41,375 19,357 22,271 28,688 Direct result 20,212 19,648 19,485 19,989 20,182 Indirect result 3,929 21,727 – 128 2,282 8,506Balance sheet
(x EUR 1,000) Investments2 301,024 303,650 304,525 307,194 319,894 Shareholders’ equity 298,697 320,877 320,506 323,231 333,824Number of shares
5,331,947 5,331,947 5,331,947 5,331,947 5,331,947Fair value investment portfolio
2(x EUR 1,000)
Retail 136,025 146,200 155,625 168,339 180,050
Offices 164,999 157,450 148,900 138,855 139,844
301,024 303,650 304,525 307,194 319,894
Share data
(x EUR 1)Direct result 3.79 3.69 3.65 3.74 3.79
Indirect result 0.74 4.07 – 0.44 1.59
Profit 4.53 7.76 3.65 4.18 5.38
Gross dividend 3.60 3.70 3.70 3.70 3.75
Net dividend 3.06 3.15 3.15 3.15 3.19
Net asset value before profit distribution 56.02 60.18 60.11 60.62 62.61
Direct result per share 3.79 3.69 3.65 3.74 3.79
Profit per share 4.53 7.76 3.65 4.18 5.38
1Figures before 2004 are based on Belgian GAAP. As from 2004, consolidated figures are based on IFRS; figures up to 2004 have been recalculated
by adding realised and not realised gains or losses to the profit.
2Fair value has been computed after deduction of the transaction costs incurred at the sales process; transaction costs contain mainly registration
taxes of 10%-12.5%. The independent appraiser has carried out the valuation in conformity with “International Valuation Standards” and “European Valuation Standards”. 7 6 5 4 3 2 1 0 2005 2001 2002 2003 2004 Dividend Profit 0 10 20 30 40 50 60 70 80 2005 2001 2002 2003 2004
Net asset value Share Price
The board of Directors of Management Company’s
activities
The Board met four times in 2005. Regular items on the agenda of these meetings were the company’s results and asset perfor-mance, developments on the Belgian property markets, invest-ments and disinvestinvest-ments, financing and the dividend policy. The members of the Board were present at all meetings except Mr. G.C.J. Verweij who was excused on the meeting of August 3, 2005.
During 2005, the Board of Directors discussed about the design and functioning of the internal risk control and monitoring system. No adaptations are needed. In November 2005 the Board of Directors decided to appoint an audit committee. Other committees are not deemed necessary due to the size of the Board. The audit committee consists of Mr. B. De Corte (chairman) and Mr. B. Graulich.
Mr. R.L.M. de Ruijter stepped down as director and managing director of the Management Company. Mr. de Ruijter carried out this mandate at Comm. VA Wereldhave Belgium SCA since 1999. The Board of Directors decided to co-opt Mr. J. Buijs as director and to appoint Messrs. G.C.J. Verweij and B. Graulich respectively as Managing Director and Chairman of the Board of Directors.
The General Meeting of Shareholders of the Management Com-pany, to be held on May 12, 2006, will be invited to ratify the appointment of Mr. J. Buijs.
Members of the Board of Directors do not derive any advantage in any other way from the activities of Comm. VA Wereldhave Belgium SCA or its affiliated companies. The Board of Director members do not hold any shares or option rights in Comm. VA Wereldhave Belgium SCA. No loans, advances or guarantees have been extended to the Board of Directors members by Comm.VA Wereldhave SCA.
The Board of Directors of the Management Company is compo-sed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director.
In 2005 no business transactions took place between the mem-bers of the Board of Directors of the Management Company and the company.
N.V. Wereldhave Belgium S.A.
(Statutory Management Company)Represented by its Board of Directors
G.C.J. Verweij Managing Director Chairman Wereldhave N.V. B. De Corte Director Independent Director B. Graulich Director Independent Director J. Buijs DirectorDirector of Wereldhave Management Holding
Financial agenda
April 12, 2006
Annual General Meeting of Shareholders
April 21, 2006
Dividend payableMay 9, 2006
Publication of first quarter results 2006
August 8, 2006
Publication of half-year results 2006
November 7, 2006
Publication of first 9 months results 2006
March 2007
Annual Report 2006Wereldhave Belgium comprises an integrated organisation for the investment in and management of commercial property. Wereldhave Belgium has permanent access to reliable and up to date information on property markets, also in the international scope. This means that the company is in a position to react swiftly to changing circumstances.
Structure
Wereldhave Belgium has been a Real Estate Investment Fund (Sicafi) since January 15, 1998. The fund is governed by the Royal Decree of April 10, 1995 and is recognized as such by the Banking, Finance and Insurance Commission.
The company has the fiscal status of a Real Estate Investment Fund and is, therefore, not subject to corporate tax, except on possible exceptional and favourable advantages and on rejected expenditures.
The company is managed by N.V. Wereldhave Belgium S.A. that acts as sole statutory Management Company. The Board of Directors is composed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director. The Board of Directors meets at least four times per year.
At December 19, 2005 Mr. R.L.M. de Ruijter stepped down as director and managing director of the Management Company. Messrs. G.C.J. Verweij and B. Graulich are appointed respec-tively as Managing Director and Chairman of the Board of Direc-tors. Mr. J. Buijs has been co-opted as director; this decision will be ratified by the General Meeting of Shareholders on May 12, 2006.
Wereldhave Belgium shares are traded at the Euronext continu-ous stock exchange in Brussels and are included in the "Next Prime" segment of Euronext.
Wereldhave N.V., The Hague, held 68.2% of the shares directly or indirectly at December 31, 2005.
Fortis Bank N.V. acts as deposit bank and ING Financial Markets as liquidity provider.
Information
Information is available from Wereldhave Belgium: Tel: +32 2 732 19 00
E-mail: investor.relations@wereldhavebelgium.com Website: www.wereldhavebelgium.com
Strategy outline
Mission and corporate aim
Wereldhave Belgium’s mission is to make available, when and where needed, the right type of commercial and residential property. Wereldhave Belgium offers an attractive yield com-bined with a low risk profile on its property portfolio.
Strategy
The end-user is Wereldhave Belgium's foremost consideration when making decisions on property investment. The strategic policy is to apply portfolio renewal for the optimal satisfaction of tenants’ changing demands. Wereldhave Belgium has a prefer-ence for investing in modern, adaptable and identifiable build-ings in readily accessible locations in knowledge based areas, where there is a liquid property market. Wereldhave Belgium considers that this policy will engender both a continuous increase in earnings per share and an attractive growth in net asset value.
Wereldhave Belgium attempts to limit the risks of the cyclical property market. This is achieved both by geographical portfolio diversification between various Belgian locations and by invest-ing in offices, shoppinvest-ing centres, industrial property and residen-tial property. Diversification facilitates portfolio renewal.
Through its in-house management, Wereldhave Belgium can recognise changes in the preferences of tenants, property main-tenance requirements and marketability at an early stage and adopt a pro-active stance. This enables Wereldhave Belgium to react swiftly to the latest developments. The experience
acquired by the management team clearly stimulates the portfo-lio renewal.
Wereldhave Belgium attaches great importance to durable inno-vative measures which lower total costs and raise tenant flexibil-ity, while simultaneously relieving the pressure on the environ-ment. Waste products will increasingly be taxed, making demoli-tion and renovademoli-tion increasingly expensive. Wereldhave Belgium anticipates this problem by applying its own environmental and durability criteria to the choice of materials and to its buildings’ energy and water requirements.
The right accommodation at the right time and on the right
spot
Portfolio renewal
Diversification by geographical area and type of property
In-house real estate management
A total of 30 new leases and lease renewals were contracted in 2005 of which 22 were related to the three shopping centres. The average rent increase in the shopping centres amounts to 13%.
The office market is still quite weak. A key concern for Wereld-have Belgium is improving its office portfolio occupancy rate in Vilvoorde and Berchem-Antwerp.
At April 13, 2005, Wereldhave Belgium acquired 4 commercial units alongside the shopping centre in Nivelles for an amount of EUR 3.9 mln.
The sectoral diversification of the portfolio seemed succesful: the reduced valuation of a number of office buildings was com-pensated by an increase in value of the shopping centres. As from 2004, Wereldhave Belgium has a stake in the stock exchange listed real estate certificate ‘Kortrijk Ring Shopping Centre’. In 2005 this stake has been revaluated till EUR 8.2 mln (2004: EUR 6.5 mln).
In 2005 the direct result increased from EUR 3.74 to EUR 3.79. Over 2005 a gross dividend of EUR 3.75 per share will be pro-posed to the General Meeting of Shareholders. Our firm balance sheet equilibriums enable us to continue with this high pay-out level. The dividend is payable at Fortis Bank, ING Bank and KBC Bank against delivery of coupon 9.
As from January 1, 2006, the “Corporate Governance” recom-mendations have been applied. A detailed description can be found on page 55.
As from the annual accounts 2005, the Sicafi applies IFRS. The figures for 2004 have been adjusted accordingly. The non con-solidated statutory annual accounts are established according to Belgian GAAP.
The consolidation of the participation in the company J-II has been incorporated for 100%.
Fair value remains the principle of valuation for investment pro-perties. Under IFRS, revaluation is accounted for in the profit and loss account.
Lettings and relettings
Portfolio
Dividend
Corporate governance
Results
Direct result
The direct result consists of the net result, corrigated with the result on the portfolio. Over 2005, the direct result of Comm. VA Wereldhave Belgium SCA increased to EUR 20.2 mln (2004: EUR 20.0 mln). This increase is the result of higher net rental income (EUR 0.6 mln), lower costs for unoccupied buildings and a release of provisions (EUR 0.7 mln), higher taxes (EUR 0.1 mln) and a lower financial result (EUR 1.0 mln). The direct result per share amounts to EUR 3.79 (2004: EUR 3.74).
Indirect result
The indirect result consists of the revaluation and the result on the disposal of assets. The revaluation of the investment portfo-lio amounts to EUR 8.5 mln (2004: EUR 2.3 mln). This increase is due to the positive revaluation of the commercial centres. During the year under review, no capital gains were realised.
Profit
The profit consists of the direct and indirect result. The profit for 2005 rose from EUR 22.3 mln to EUR 28.7 mln. This is the result of a higher positive revaluation (EUR 6.2 mln), a higher operating result before result on the portfolio (EUR 1.3 mln) and higher taxes (EUR 0.1 mln). The financial result decreased (EUR 1.0 mln) due to the loss off an exceptional financial result in 2004.
Equity and Debt
Shareholders’ equity at the end of 2005 before distribution of profit amounted to EUR 333.8 mln, i.e. 99.2% of the balance total (2004: EUR 323.3 mln or 99.0%).
At December 31, 2005 the fair value of the portfolio amounted to EUR 319.9 mln, compared with EUR 307.2 at December 31, 2004. The increase of EUR 12.7 mln net can be attributed to the purchase of 4 commercial units alongside the shopping centre in
Nivelles for an amount of EUR 3.9 mln, to investments in build-ings of EUR 0.3 mln and to the positive revaluation of the portfo-lio of EUR 8.5 mln.
To December 31, 2005 the debt ratio on the total of assets amounts to 0.8% (IFRS) and, according with the Royal Degree of April 10, 1995, applicable on the Sicafis, the debt ratio amounts to 5.8%. The second method of calculation of the debt ratio (5.8%), applied hitherto, is in accordance with Article 52 of the Royal Degree of April 10, 1995 and interpreted by the super-visory authorities. The disputed fiscal claim of EUR 50.9 mln is not taken into account in the calculation. For that matter, the total sum of the fiscal claim is guaranteed by Wereldhave NV, shareholder of Comm. VA Wereldhave Belgium SCA.
Stock market development
In 2005, Wereldhave Belgium shareholders achieved a total return (assuming reinvestment of the dividend) of 24.2%. This is 4.4% higher than the annual performance of the ING property index, composed of Belgium’s largest listed property investment funds. The price/direct result ratio at the end of 2005 was 18.2.
Shareholders
Of the 5,331,947 shares in circulation at December 31, 2004, 37.99% were held by Wereldhave N.V., 30.21% by N.V. Wereld-have International and 31.80% by the general public.
Contracted rent
(as a%)
Rental Income vs. market rent
(x EUR mln)
Share price 2005
0 10 20 30 40 50 60 70 80 90 100 2006 2007 2008 2009 2010 01/05 02/05 03/05 04/05 05/05 06/05 07/05 08/05 09/05 10/05 11/05 12/05 50 50 60 65 70 75 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 15 Rental Income Market Rent Retail Officesthe financial year
After the year end no important events occurred which influ-enced the development of the company or the annual accounts of December 31, 2005.
Financial instruments
The company does not make use of financial instruments.
Research and development
In view of the nature and specific activity of the company, no operations are connected to research and development.
Development of the property portfolio
The commercial centres, Belle-Ile in Liège, Les Bastions in Tour-nai and the commercial centre in Nivelles maintain their status as popular shopping destination in their respective district. The combination of the following facilities: accessibility, free parking, safety, branche mix and animation, makes these shopping cen-tres especially attractive. In the short/long term this guarantees added value to this kind of properties. Substantial rent increases were agreed during recent lease renewals.
Ultimo 2005, Wereldhave Belgium has a stake in the listed stock exchange real estate certificate ‘Kortrijk Ring Shopping Centre’ of 15.8%. The fair value amounts to EUR 8.2 mln per December 31, 2005 (2004: EUR 6.5 mln).
The average occupancy rate of the portfolio over 2005 amounted to 82.9% (2004: 79.0%).
The vacancy concerns only the office portfolio.
The office building located at 28 Medialaan in Vilvoorde and
Antwerp are not or partly leased due to an oversupply in the peripheral area.
The value of the investment properties portfolio amounts to EUR 319.9 mln at December 31, 2005.
Property valuation at 01/01/05
Retail EUR 168,339,000 Offices EUR 138,855,000 EUR 307,194,000Property valuation at 31/12/05
Retail EUR 180,050,000 Offices EUR 139,844,000 EUR 319,894,000Insured value of property portfolio at 31/12/05
Retail EUR 136,125,000
Offices EUR 146,468,000
EUR 282,593,000
Prospective theoretical rent
(on the basis of 100% occupancy) for 2006
Retail EUR 13,529,000
Offices EUR 13,454,000
EUR 26,983,000
Breakdown of portfolio by age
(as a % of market value)
5-10 years < 5 years 10-15 years 45 40 35 30 25 20 15 10 5 0
Geographical breakdown
(as a % of rental income)
16% 28% 56% Brussels Flanders Wallonia
The Belgian property market
During the year under review almost 50% more office space was let than in 2004. Thanks to the expansion of the European Union the vacancy rate in the Brussels conurbation dropped slightly to 10.4%. No improvement was recorded in the Leopold district, where a relatively large amount of new buildings were completed in anticipation of this expansion. The European Union, however, has a preference for larger office buildings, for which no space is available in the Leopold district. As a result the EU is now moving to more peripheral office locations, resul-ting in increasing vacancies and falling rents (down 3% to EUR 285 per m2) in the Leopold district.
In the nearby Central district vacancies decreased but rents none-the-less fell by 10% to EUR 200 per m2. Other districts also recorded this remarkable combination of lower vacancy rates and falling rents. In view of the expected completion of 500,000 m2of new office space in 2006 landlords have been prepared to make concessions on rents. Tenants are sensitive to the quality of locations and of individual buildings. Initial rental yields amount to 6% in the Central Business District (Leopold), to 6.5% in the outlying areas (Ring) and 6.7% on the periphery. The take up of office space in Antwerp probably totalled around 70,000 m2in 2005, which is considerably less than the average for the recent past. Major road works on the outer ring-road, which lasted till the end of the year, were a contributory depres-sing element. The supply of office space peaked at the end of 2004 and hardly declined since. In view of the lower office rent levels conversion to residential accommodation is a more remu-nerative option than in Brussels. Initial rental yields on office pro-perties currently amount to circa 7%.
The vacancy level for shops in the traditional main shopping streets is attributed to the success of shopping centres and retail parks. In the last few years there has been a definite upgrading of the retail trade on the outskirts of towns, which are no longer dominated by discount outlets. In the city centres there is strong demand for good quality shops in A-1 locations. Since the end of 2004 rents in shopping centres have been rising rapidly. In the best centres higher rents (EUR 1,600 per m2) than in the main shopping streets (EUR 1,250 per m2) are already being paid. Rents in retail parks amount to EUR 135 per m2. Rental yields on top Belgian retail property are currently run-ning at 5% in the main shopping streets and 6% to 7.5% in shopping centres. Yields are under downward pressure as a result of the low level of interest rates and investors’ demand for retail property.
The weak demand for industrial property has affected rental levels, which in the case of semi-industrial buildings have scar-cely risen in the last ten years. Letting periods are getting suc-cessively shorter. Initial rental yields have fallen from 10% to 7% over the last few years.
Wereldhave Belgium purchased four adjacent shops as part of its plan to expand the Nivelles shopping centre. No other chan-ges took place in the portfolio in 2005. The application for the building permit for the expansion of 8,000 m2will be submitted in the spring of 2006. In anticipation of the expansion, the shop-ping centre will be renovated. In Tournai plans have been prepa-red for the expansion of the shopping centre by 4,500 m2. In view of this, on February 9, 2006 a plot of land was acquired to expand the parking facilities of the shopping centre.
In 2006, Wereldhave Belgium will mainly focus on seeking opportunities for extending its shopping centres, i.e. in Nivelles, and improving its offices portfolio occupancy rate.
The positive development of rental levels in the shopping centres continues. However, the letting of office space in peripheral areas continues to be a challenge due to oversupply. Wereldhave Belgium‘s profit development will be mainly dependent on improving the occupancy rate of the office portfolio
Statutory Management Company
N.V. Wereldhave Belgium S.A. B. Graulich, chairman B. De Corte
G.C.J. Verweij J. Buijs
Breakdown by sector
(as a % of market value)
Breakdown by sector
(as a % of rental income)
44% 56% Offices Retail 60% 40% Offices Retail
Portfolio summary on December 31, 2005
Location
Diversifica-
Rentable
Parking
Number
Rental
Average
tion of the
area
spaces
of
income
Occupa-portfolio
(in m
2)
(number)
tenants
in 2005
tion 2005
(in %)
(in EUR)
(in %)
Commercial
Shopping Centre 4020 Liège 35 31,252 2,200 99 8,097,416 100
"Belle-Ile" Quai des Vennes 1
Shopping Centre 1400 Nivelles 11 19,501 802 65 2,569,460 100
Nivelles Chaussée de Mons 18
Shopping Centre 7500 Tournai 9 14,178 1,260 58 2,136,935 100
"Les Bastions" Bd. W. de Marvis 22
Shop 4000 Liège 1 3,285 – 3 238,335 96
Rue de l´Université 14 Rue Cathédrale 84/86
Offices
Madou Centre 1000 Brussels 10 12,364 150 2 2,663,109 97
1-8 Bd. Bischoffsheim 302*
Regent 58 1000 Brussel 2 3,246 32 8 556,388 94
58 Bd. Régent 49*
Orion Centre 1000 Brussels 4 5,705 64 8 1,143,288 100
22-25 Bd. Bischoffsheim 25*
Jan Olieslagerslaan 1800 Vilvoorde 1 3,012 82 – – 0
41-45 J. Olieslagerslaan 29*
Business- & Mediapark 1800 Vilvoorde 3 5,495 178 5 833,856 85
30 Medialaan 201*
Business- & Mediapark 1800 Vilvoorde 2 3,932 123 5 722,570 98
32 Medialaan 120*
Business- & Mediapark 1800 Vilvoorde 6 12,743 305 – – 0
28 Medialaan 246* De Veldekens 2600 Berchem 5 11,976 238 2 1,570,075 89 1-2 Roderveldlaan 368* De Veldekens 2600 Berchem 6 16,020 316 8 1,081,674 52 3-4-5 Roderveldlaan 1,119* De Veldekens 2600 Berchem 5 11,192 217 3 217,039 15 76-78 Berchemstadion- 224* straat
Total
100
156,584
21,830,145
83
* Archives.Description of the portfolio
Investment portfolio
Madou Centre,
1-8 Boulevard Bischoffsheim, 1000 Brussels
Year of construction:1975 - Renovation: 2002
Location:along the inner ring road, in the Art-Loi quarter
Rentable area:12,364 m2offices and 302 m2archives
Parking:150 underground spaces
Orion Centre,
22-25 Boulevard Bischoffsheim, 1000 Brussels
Year of construction:1990
Location:along the inner ring road, in the Art-Loi quarter
Rentable area:5,205 m2offices, 25 m2archives and 4
apart-ments (500 m2)
Parking:60 underground spaces plus 4 parking spaces
along-side the apartments
Office building,
58 Boulevard du Régent, 1000 Brussels
Year of construction:1975 - Renovation: 1997
Location:along the inner ring road, in the Art-Loi quarter
Rentable area:3,246 m2offices and 49 m2archives
Parking:32 underground spaces
Office building,
41-45 Jan Olieslagerslaan, 1800 Vilvoorde
Year of construction:1998
Location: in the “Business Class” office park, just near the
station of Vilvoorde
Rentable area:3,012 m2offices and 29 m2archives
Parking:82 underground and above ground spaces
Business- & Mediapark,
30-32 Medialaan, 1800 Vilvoorde
Year of construction:1999
Location: in the immediate vicinity of the Brussels Ring Road
(exit 6) and the airport
Rentable area:
Medialaan 30: 5,495 m2offices and 201 m2archives
Medialaan 32: 3,932 m2offices and 120 m2archives
Parking:301 underground and above ground spaces
Business- & Mediapark,
28 Medialaan, 1800 Vilvoorde
Year of construction:2002
Location:in the immediate vicinity of the Brussels Ring Road
(exit 6) and the airport
Rentable area:12,743 m2offices and 246 m2archives
De Veldekens I
1-2 Roderveldlaan, 2600 Berchem -
Antwerpen
Year of construction:2001
Location:alongside the Antwerp ring road
Rentable area: 11,976 m2offices and 368 m2archives
Parking: 238 underground and above ground spaces
De Veldekens II
3-4-5 Roderveldlaan, 2600 Berchem -
Antwerpen
Year of construction:1999
Location:alongside the Antwerp ring road
Rentable area: 16,020 m2offices and 1,119 m2archives
Parking: 316 underground and above ground spaces
De Veldekens III
7678 Berchemstadionstraat, 2600 Berchem
-Antwerpen
Year of construction:2002
Location:alongside the Antwerp ring road
Rentable area: 11,192 m2offices and 224 m2archives
Breakdown of portfolio by sector
(as a % of rental income)
0.73% 2.75% 6.52% 11.84% 2.95% 6.70% 17.07% 6.73% 5.36% 3.44% 5.08% 3.51% 2.16% 2.01% 1.95% 4.57% 16.64% Government Catering Food Shoes/leatherwear Ladieswear Mens’ wear Childrens’ wear Mixed wear Gifts Interior decoration Leasure and miscellaneous Beauty & Bodycare Services Supermarkets Financials Multinationals IT sector 16% 12% 16% 11% 36% 9% Brussels Vilvoorde Berchem-Antwerpen Nivelles Tournai Liège
Geographical breakdown
Description of the portfolio
Investment portfolio
“Belle-Ile” Commercial Centre
1 Quai des Vennes, 4020 Liège
Year of construction: 1994
Location: Belle Ile is located to the Southeast of Liège, by the
“Autoroute des Ardennes” - E25
Rentable area: 31,252 m2rentable floor area
The shopping centre houses 99 shops
Parking: 2,200 spaces
Shopping centre Nivelles,
18 Chaussée de Mons, 1400 Nivelles
Year of construction:1974 - Renovation: 1995
Location: The Nivelles Shopping Centre is located on the
out-skirts of Nivelles, at the “Nivelles-Sud” exit of the E19 motorway between Brussels and Paris
Rentable area: 19,501 m2rentable floor area (including 3,998 m2
retail warehouses)
The shopping centre houses 61 shops
Parking:802 spaces
“Les Bastions” Shopping Centre,
22 Boulevard Walter de Marvis, 7500 Tournai
Year of construction:1979 - Renovation: 1996
Location: The “Les Bastions” shopping centre is situated along
the ring road around Tournai
Rentable area: 14,178 m2rentable floor area (including 2,997 m2
retail warehouses)
The shopping centre houses 58 shops
Parking:1,260 spaces
Real estate expert report
Resolutions of the real estate expert TROOSTWIJK-ROUX C.V.B.A., prepared on December 31, 2005, following the valua-tion of the property portfolio at December 31, 2005, as referred to in article 56, paragraph 1, of the Royal Decree of April 10, 1995 with respect to real estate investment funds.
Evaluation principles for the property
portfolio
The valuation has been carried out in conformity with IVS and EVS.
Investment Properties
Investment properties are valued at fair value. Fair value is based on the market rent minus the operating costs. To determine the fair value, the net capitalisation factor and the net present value of the difference between market rent and contractual rent, of forecasted vacancy and of necessary future investments are determined for each object. This value is reduced by the stan-dard transaction costs (registration tax 10% - 12.5%, estate agent’s fees 1.2% and solicitor's fees 0.2%, i.e. 11.4% - 13.9% in total).
Development portfolio
The valuation of development portfolio is based on the cost price or the estimated lower fair value. The cost price includes the costs for contracted but not yet completed operations and capitalised interest.
The value is based on an inspection carried out by one or more chartered surveyors, taking into account the location, construc-tion type, zoning requirements and maintenance status at the time of assessment.
The valuations are also based on data supplied by the client and/or third parties if necessary, which we assume to be cor-rect.
Property portfolio analysis
44% of the property holding consists of offices and 56% con-sists of commercial properties.
At December 31, 2005 the fair value of the portfolio of Wereld-have Belgium amounted to EUR 320,250,000 consisting of:
Offices: EUR 140,150,000 Retail: EUR 180,100,000
Brussels, December 31, 2005 TROOSTWIJK - ROUX C.V.B.A.
Consolidated Annual
Accounts 2005
Contents
Consolidated balance sheet 22
Consolidated profit and loss account 23 Consolidated summary of movements in equity 24 Consolidated cash flow statement 25 Notes to the consolidated annual accounts
01. General information 26
02. Fiscal status 26
03. Accounting policies 26
04. Transition to IFRS 30
05. Direct and indirect result 38
06. Segment information 39
07. Investment properties 40
08. Other tangible assets 40
09. Trade receivables and other non current assets 41
10. Current financial assets 41
11. Current receivables 41
12. Cash and cash equivalents 41
13. Share capital 42
14. Loans 42
15. Provisions 42
16. Group Insurance 42
17. Other long term liabilities 42 18. Other short term liabilities 42
19. Securities 43 20. Rental income 43 21. Property charges 43 22. General expenses 43 23. Valuation differences 44 24. Financial result 44 25. Taxes on result 44
26. Result per share 44
27. Dividend 44
28. Risks 45
29. Internal risk control and monitoring system 46
30. Claims 47
31. Related Group companies 47
32. Events occured afterthe financial year 47
Auditors report 48
Consolidated balance sheet at December 31, 2005
(amounts x EUR 1,000)Notes
2005 2004
Assets
I
Non-current assets
C Investment properties 7 319,894 307,194E Other tangible assets 8 110 113
F Trade receivables and other non-current assets 9 4,627 4,839
324,631 312,146
II Current assets
B Current financial assets available for sale 10 8,197 6,535
D Trade receivables 11 71 150
E Tax receivables and other current assets 11 442 1,386
F Cash and cash equivalents 12 3,135 6,258
11,845 14,329
Total assets
336,476
326,475
Equity and liabilities
Equity
I
Shareholder’s equity
A Capital 13 224,969 224,969
D Reserves
Reserves available for distribution 5,627 5,627
E Result
Retained result 72,662 70,149
Result of the financial year 28,688 22,271
G Change in fair value of financial assets and liabilities 1,878 215
333,824 323,231
Liabilities
I
Non-current liabilities
A Provisions 15/16 33 21
E Other non-current liabilities 17 202 132
235 153
II Current liabilities
D Trade debts 18 114 201
E Other 18 427 294
F Accrued charges and deferred income 18 1,876 2,596
2,417 3,091
Consolidated profit and loss account
(amounts x EUR 1.000)Notes
2005 2004
I Rental Income 20 21,830 21,201
Net rental income
21,830 21,201V Recovery income of charges and taxes payable by
tenants on let properties (+) 1,870 2,012
VII Charges and taxes payable by tenants on let
properties (–) – 2,223 – 2,812
– 353 – 800
Property result
21,477 20,401IX Technical costs – 242 – 257
X Commercial costs – 151 – 243
XII Property management costs – 243 – 243
Property charges
21 – 636 – 743Property operating result
20,841 19,658XIV General costs 22
Staff costs – 607 – 634
Other – 255 – 229
XV Other operating charges – 237 – 341
– 1,099 – 1,204
Operating result before result on the portfolio
19,742 18,454XVII Gains or losses on disposals of other non financial assets 9 1
XVIII Revaluation of property investment 23 8,506 2,282
Operating result
28,257 20,737XIX Financial income 770 1,674
XX Interest charges – 89 – 35
XXI Other financial charges – 111 – 96
Financial result
24 570 1,543Pre-tax result
28,827 22,280XXIII Corporate taxes 25 – 139 – 9
Taxes
– 139 – 9Net result
28,688 22,271Net result shares of the Group 28,688 22,271
Consolidated summary of movements in equity
(amounts x EUR 1,000)Notes Shareholders Total equity
Share Reserves Retained Revaluation
capital profit fair value
of financial assets
Balance to January 1, 2004 224,969 5,627 89,506 320,102
Differences 8 8
Profit of financial year 22,271 22,271
Distribution of dividend 2003 a – 19,728 – 19,728
Balance to December 31, 2004 224,969 5,627 92,057 322,653
Adjustments IFRS b 363 215 578
Balance to January 1, 2005 224,969 5,627 92,420 215 323,231
Revaluation financial assets
available for sale 1,663 1,663
Profit financial year 28,688 28,688
Distribution of dividend 2004 c – 19,728 – 19,728
Other – 30 – 30
Balance to December 31, 2005 224,969 5,627 101,350 1,878 333,824
Notes
a Dividend paid 2003
EUR 3.70 (net EUR 3.145) per share – 19,728
– 19,728
b Adjustments IFRS
Revaluation financial assets available for sale 215
Other 363
578
c Dividend paid 2004
EUR 3.70 (net EUR 3.145) per share – 19,728
Consolidated cash flow statement
(amounts x EUR 1,000)2005 2004
Cash flow from operating activities
Profit 28,250 21,910
Add: revaluation property – 8,506 – 2,282
Movements in receivables 1,607 1,837
Movements in current liabilities – 20,697 – 26,891
Net cash flow from operating activities – 27,596 – 27,336
Cash flow from investment activities
Investments – 4,221 – 917
Net cash flow from investment activities – 4,221 – 917
Cash flow from financing activities
Dividend received 438 361
Net cash flow from financing activities 438 361
Net cash flow – 3,123 – 5,982
Cash and bank balances
At January 1 6,258 12,240
Decrease cash and bank balances – 3,123 – 5,982
Notes to the consolidated annual
accounts
1. General Information
Comm. VA Wereldhave Belgium SCA (the company) has the sta-tus of a Real Estate Investment Fund with fixed capital (sicafi). The company invests in offices, shopping centres, industrial property and residential property. Comm. VA Wereldhave Bel-gium has a preference for investing in modern, adaptable and identifiable buildings in readily accessible locations in knowledge based areas, where there is a liquid property market.
The company is managed by the sole statutory Management Company, represented by the Board of Directors. The Board of Directors is composed of four members. Two are Executive Board members of Wereldhave N.V. and two have the legal position of Independent Director. On December 19, 2005, Mr. R.L.M. de Ruijter stepped down as director and managing direc-tor. The Board of Directors decided to co-opt Mr. J. Buijs as director and to appoint Mr. G.C.J. Verweij as Managing Director.
The company quotes at the Euronext continuous stock exchange in Brussels and is included in the "Next Prime" seg-ment of Euronext.
Fortis Bank N.V. acts as deposit bank and ING Financial Markets as liquidity provider.
The consolidated figures were approved of by the Board of Directors of the Management Company on February 22, 2006. The General Meeting of Shareholders will be held on April 12, 2006 at the registered offices of the company.
2. Fiscal status
The company has the fiscal status of a Real Estate Investment Fund and is, therefore, not subject to corporate tax, except on possible exceptional and favourable advantages and on rejected expenditures.
3. Accounting policies
3.1. Basis of preparation
The Group's functional currency is the euro and all transactions are presented in euro. The financial statements of Comm. Va Wereldhave Belgium SCA have been presented in euros, rounded to the nearest thousand. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). Comm. VA Wereldhave Belgium SCA did not make use of any early application of any standards. The consolidated financial statements and the company financial statements have been prepared on the historical cost basis, unless specified otherwise. Costs and loans issued and loans received are taken into account on amortised cost basis.
Comm. VA Wereldhave Belgium SCA has adopted IFRS rules as approved by the EU Commission and has implemented IFRS 1 as from the year 2005 with a transition date of January 1, 2004. Before 2005, the accounts were based on Belgian GAAP. Com-parative 2004 figures included in the 2005 accounts have been restated in accordance with relevant IFRS requirements.
The accounting policies below have been applied to the years presented. The standards adopted by Comm. VA Wereldhave SCA as from January 1, 2004 require retrospective application.
The company has elected to make use of the exemptions avail-able under IFRS 1 and to:
• Not apply IFRS 3 for the years before 2004;
• IAS 19: per January 1, 2004, the company has included all cumulative and actuarial profit and loss for employee benefits;
The accounts have been prepared before distribution of profit.
3.2. Consolidation
Subsidiaries are those entities, including special purpose enti-ties, controlled by the company. Control exists when the com-pany has the power, directly or indirectly, to govern the financial and operating policies of an entity. The financial statements of subsidiaries are included in the consolidated financial state-ments. Intra-group balances and unrealized gains and losses are eliminated. In case of control of less than 100%, subsidiaries are consolidated on a 100% basis. In these cases a minority share is shown in the balance sheet under equity as well as in the profit and loss account as a separate item.
The purchase method is used to account for the acquisition of subsidiaries. The acquisition is measured at the fair value of the assets and liabilities at the date of acquisition. Re-measurement at subsequent balance sheet dates is based on fair value. As soon as control ceases to exist, subsidiaries are deconsolidated.
3.3. Investment property
Investment properties are those properties which are held to earn rental income or for capital appreciation or for both. On acquisition, investment properties are recognised at cost. Invest-ment properties are stated at fair value at the balance sheet date. Fair value is based on market value, being the estimated amount for which a property could be exchanged on the date of valuation in an arm’s length transaction.
Fair value is based on the capitalisation of market rents less operating costs. The net capitalisation factor and the present value of the differences between market rent and contracted rent, of vacancies and of maintenance expenditure to be taken into account are calculated for each property individually. Trans-fer tax is deducted. After acquisition subsequent expenditure is added to the asset’s carrying amount when it is probable that future economic benefits will flow to the entity.
All other expenditure, such as repairs and maintenance, are charged to the income statement during the financial period in which they are incurred. The part property in own use is not sig-nificant and therefore not classified separately as property in own use.
The portfolio is valued quarterly at fair value by an independent external valuer in conformity with “Internation Valuation Stan-dards” and “European Valuation StanStan-dards”. Valuation differ-ences are recognised in the income statement.
3.4. Other tangible assets
Property and equipment are stated at cost less depreciation. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of the assets:
– Property: 33 years – Office furniture: 10 years – Equipment: 3 years – Cars (exl. residual value): 4 years
Gains and losses on disposal are recognised in the income statement.
3.5. Development projects
Property that is being constructed or developed for future use as investment property is classified as a development project. Development projects are valued at cost or at estimated fair value if lower. Cost includes the (estimated) works performed, the costs of staff directly related to technical supervision and project management on the basis of time spent, and capitalised interest costs on the basis of amounts spent and money market rates up to the date of completion. An impairment loss is recog-nised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment losses are recog-nised in the income statement. Development projects are trans-ferred to investment properties on the date of technical comple-tion.
3.6. Trade receivables
Trade receivables are recognised initially at fair value, less trans-action costs and subsequently on amortised cost basis less pro-vision for impairment. A propro-vision for impairment of trade receiv-ables is established when there is objective evidence that the group company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the estimated future cash flows. The provision is recognised in the income statement.
3.7. Financial assets
Financial assets, classified under non-current assets, will include items due after more than twelve months. Financial assets are recognised at cost or at cost after transaction costs and subse-quently valued in conformity with IAS 39.
Loans
Loans issued and other receivables are taken into account, ini-tially at fair value less transaction costs and subsequently on amortised cost basis.
Capitalised rent free periods and other leasing expenses
The expenses are initially recognised at cost and are amortised over the term of the lease.
Financial assets available for sale
Financial assets available for sale are initially recognised at cost and subsequently valued at fair value. Valuation results are directly taken to equity. Negative permanent valuation results are incorporated in the profit and loss account.
3.8. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and cash deposits and are valued in conformity with IAS 39 . Cash equi-valents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.9. Share capital
Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares are shown as a deduc-tion from the proceeds.
3.10. Provisions
In conformity with IAS 37, a provision is recognised in the bal-ance sheet when a legal obligation would exist, as a result of a past event and when it is probable that an outflow of economic benefits will be required to settle the obligation.
3.11. Interest bearing debt
On acquisition, loans are initially recognised at cost, less trans-actions costs. Any difference between cost and redemption value is recognised in the income statement over the period of the interest bearing liabilities on the basis of the effective interest per loan. The short term portion of loans outstanding to be repaid within twelve months is shown under current liabilities.
3.12. Employee benefit plans
Defined benefit plansThe net receivable or liability in respect of defined benefit pen-sion plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned for their service in the current and prior periods. That benefit is dis-counted to determine its present value and the fair value of any plan assets is deducted.
The defined benefit obligation is calculated annually by inde-pendent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pen-sion liability. In markets where there is no deep market in such bonds, the market yields (at the balance sheet date) on govern-ment bonds are used.
Actuarial gains and losses arising from adjustments and
changes in actuarial assumptions are recognised in income over the average remaining service period of employees, if and so far
as the balance of these gains and losses exceeds 10% of the higher of the actuarial obligations or the value of assets.
3.13. Trade and other payables
Trade and other payables are taken into account, initially at cost less transaction costs. Any difference between cost and redemption value is recognised in the income statement over the period of the issued amount. The short term portion of loans outstanding to be repaid within twelve months is shown under current liabilities.
3.14. Leases
A. If a group company is the lessee, operating and financial leases could occur:
1. Operating lease:
Leases in which substantially all risks and rewards of owners-hip are retained by another party, the lessor, are classified as operating leases. Payments, including prepayments, made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
2. Finance lease:
Leases of assets where the group company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease pay-ments. The corresponding obligations, net of finance char-ges, are included in long term liabilities. The interest element of the finance cost is charged to the income statement over the lease period. The investment properties acquired under finance leases are carried at their fair value.
B. If a group company is the lessor, operating and financial leases could occur:
1. Operating lease:
Properties leased out under operating leases are included in investment property in the balance sheet.
2. Finance lease:
When assets are leased out under a finance lease, the pre-sent value of the lease payments is recognised as a receiva-ble. When the present value of operational leases of a pro-perty equals its value, the propro-perty is reclassified to receivab-les financial leasing.
3.15. Revenue
Rental incomeRental income from investment property leased out under oper-ating lease is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives having the nature of rent free periods are recognised as an integral part of the rental income. The incentives are amortised over the term of the lease, limited to the first break of the lease. Amortizations are charged to rental income.
Rental income does not include amounts charged to tenants in respect of common costs. Rental income is shown on an accrual basis.
3.16. Expenses
Charges and taxes payable by tenants on let properties (+/-) These are shown on a gross basis when the property owner acts as a principal. In the presentation on a gross basis costs and charges are shown separately. Costs and charges are shown on an accrual basis.
Property expenses
The amount consists of operating cost for the account of the owner attributable to the accounting period, such as: – technical costs
– charges and taxes of vacant properties – insurance premiums
– property management – commercial costs
Commercial costs include the depreciation of expenditure in connection with a letting. The expenditure is depreciated over the term of the lease.
Investment property depreciation charges are not recognised since investment properties are valued at fair value (see above under Investment properties). The fair value calculation takes into account technical and economical obsoles-cence.
General costs
The amount comprises general costs attributable to the accounting period. Direct staff costs relating to property man-agement are included in property expenses. Direct staff costs relating to supervising and monitoring development projects are capitalised on the basis of time spent.
3.17. Interest
Interest comprises interest attributable to the accounting period on loans, other debts, accounts receivable and cash and bank balances. Due to the amortised cost valuation of loans, interest will include interest addition to loans on the basis of effective interest rate per loan.
3.18. Corporate tax
Income tax on profit and loss for a year comprises current tax. Current income tax is the expected tax payable or receivable on the taxable income or loss for the period using tax rates prevail-ing at the balance sheet date and any adjustment to taxation in respect of previous years.
3.19. Direct and indirect result
Comm. VA Wereldhave Belgium SCA presents results as direct and indirect results, enabling a better understanding of results. The direct result consists of rental income, general costs, other gains and losses and financial income and expense. The indirect result consists of the valuation results, results on disposals and other results not taken into account for the direct result. This presentation is not obligatory under IFRS.
3.20. Segment reporting
Segment reporting presents results, assets and liabilities prima-rily per region and secondaprima-rily per sector. Sectors reported are determined in accordance with the type of investment property, namely offices and shops. Segment results and assets include items directly attributable to these segments. Unallocated items comprise mainly financing and other unattributable items such as overheads.
4. Transition to IFRS
Comm.VA Wereldhave SCA financial statements for the year ended December 31, 2005 are the first Comm.VA Wereldhave SCA annual financial statements complying with IFRS. The IFRS adoption date is January 1, 2004. Wereldhave has adjusted its opening balance sheet at January 1, 2004 to an IFRS opening balance sheet per that date. The following IFRS standards, including amendments up to December 31, 2005, are applied by Comm.VA Wereldhave SCA as from January 1, 2004 and are the most relevant to the Comm.VA Wereldhave SCA operations and financial reporting:
IAS 1 Presentation of financial statements IAS 7 Cash flow statements
IAS 8 Accounting policies, changes in accounting estimates and errors
IAS 10 Events after the balance sheet date IAS 12 Income taxes
IAS 14 Segment reporting IAS 16 Property and equipment IAS 17 Leases
IAS 18 Revenue
IAS 19 Employee benefits
IAS 21 The effects of changes in foreign exchange rates IAS 23 Borrowing costs
IAS 24 Related party disclosures
IAS 27 Consolidated and separate financial statements IAS 32 Financial instruments: disclosure and presentation IAS 33 Earnings per share
IAS 36 Impairment of assets
IAS 37 Provisions, contingent liabilities and contingent assets IAS 39 Financial instruments: recognition and measurement IAS 40 Investment property
and
IFRS 1 First-time adoption of international financial statements IFRS 3 Business combinations
IFRS 5 Assets held for sale
The adoption of these standards has not resulted in substantial changes in Wereldhave Belgium accounting policies. Amend-ments in accounting policies applied up to and including the financial year 2004 have been included as per January 1, 2004 in respect of:
• Tax liabilities:IAS 12 require tax assets and liabilities and movements in tax liabilities to be shown at nominal value; in conformity with IAS 12 and IAS 37, the disputed tax claim which was taken into account as receivable and debt in accordance with the advise of the Commission for Accounting Principles, does not have to be taken into account anymore (detail p. 47);
• Expenditure relating to leases:IAS 17 requires straight-lining of expenditure relating to the letting of space over the term of the lease;
• Employee benefits:IAS 19 requires the recognition of the net asset or liability resulting from defined benefit pension plans; • Consolidation:IAS 27 requires consolidation of controlled
sub-sidiaries on a 100% basis, showing a minority interest in equity and the income statement;
• Valuation of loans:IAS 39 requires valuation of loans at amor-tised cost.
A summary of amendments to the equity from Belgian GAAP to IFRS as well as the amended balance sheets at January 1, 2004 and December 31, 2004 and the amended income statement 2004 are shown hereafter.
(amounts x EUR 1,000)
January 1, 2004
December 31, 2004
Total equity according to Belgian GAAP 300,771 303,511
Revaluation of financial assets and liabilities 215
Liabilities relating to defined benefit pension plans – 22
Adjustment balance sheet valuation investment properties in respect of
book value of rent free periods and other leasing expenses – 397 – 228
Reclassification long leasehold rights agreement C&A 27
Profit adjustment 2003 (dividend) 19,728
Profit adjustment 2004 (dividend) 19,728
4.2. IFRS adjustments on the consolidated balance sheet as at January 1, 2004
(amounts x EUR 1.000)Notes
Belgian GAAP
IFRS
IFRS
adjustments
Assets
I Non-current assets
C Investment properties a 301,893 1,691 303,584
E Other tangible assets 177 177
F Trade receivables and other non–current assets b 5,141 5,141
302,070 6,832 308,902
II Current assets
Receivables > 1 year c 7,773 – 7,773
D Trade receivables 788 788
E Other receivables d 50,969 – 50,440 529
F Cash and cash equivalents 12,297 12,297
Other current assets e 498 – 498
72,325 – 58,711 13,614
Total assets 374,395 – 51,879 322,516
Equity and liabilities
Equity
I Shareholder’s equity
A Capital 224,969 224,969
D Reserves
Reserves available for distribution 5,627 5,627
E Result
Retained profit f 70,175 – 154 70,021
Result for the financial year f 19,485 19,485
300,771 19,331 320,102
Liabilities
I Non-current debts
E Other non-current debts 145 145
145 145
II Current debts
D Trade debts g 739 – 544 195
E Taxes g 50,939 – 50,938 1
E Salaries and social security 58 58
F Other debts g 19,939 – 19,728 211
F Accrued charges and deferred income 1,804 1,804
73,479 – 71,210 2,269
Total equity and liabilities 374,395 – 51,879 322,516
Number of ordinary shares in issue 5,331,947 5,331,947 5,331,947
Net asset value per ordinary share (x EUR 1) 56.41 3.62 60.03*
a Investment properties
Reclassification long leasehold rights agreement C&A 2,632
Reversal of commitments for works not yet carried out – 544
Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and
other leasing expenses – 397
1,691
b Trade receivables and other non-current assets
Reclassification long term receivables 5,141
5,141 c Receivables > 1 year
Reclassification long leasehold rights agreement C&A – 2,632
Reclassification long term receivables – 5,141
– 7,773 d Other receivables
Claim on Belgian Government related to a disputed tax claim.
A guarantee was submitted by Wereldhave NV to the SICAFI covering the full registered amount of
the disputed claim (cfr. page 47) – 50,938
Reclassification other current assets 498
– 50,440
e Other current assets
Reclassification other current assets – 498
– 498
f Equity
Rental costs are recognised in the reserve unavailable for distribution – 397
Reclassification result of the financial year 243
Dividend payable is added to the retained profit. Presentation of the balance sheet is done before
appropriation of profit 19,485
19,331
g Short term liabilities
Reversal of commitments for works not yet carried out – 544
Debt on Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV
to the SICAFI covering the full registered amount of the disputed claim (cfr. page 47) – 50,938
Reversal provision dividend payable – 19,728
4.3. IFRS adjustments on the consolidated balance sheet as at December 31, 2004
(amounts x EUR 1,000)Note
Belgian GAAP
IFRS
IFRS
adjustments
Assets
I Non current assets
C Investment properties a 305,320 1,874 307,194
E Other tangible assets 113 113
F Trade receivables and other non-current assets b 6,320 – 1,481 4,839
311,753 393 312,146
II Current assets
Receivables > 1 year c 7,444 – 7,444
B Financial current assets available for sale d 6,535 6,535
D Trade debts 150 150
E Tax receivables and other current assets e 51,276 – 49,890 1,386
F Cash and cash equivalents 6,258 6,258
Other current assets f 1,048 – 1,048
66,176 – 51,847 14,329
Total assets 377,929 – 51,454 326,475
Equity and liabilities
Equity
I Shareholder’s equity
A Capital 224,969 224,969
D Reserves
Reserves available for distribution 5,627 5,627
E Result
Retained profit g 72,915 – 2,766 70,149
Result financial year h 22,271 22,271
G Change in fair value of financial assets and liabilities i 215 215
303,511 19,720 323,231
Liabilities
I Non-current debts
A Provisions j 21 21
E Other non-current liabilities 132 132
132 21 153
II Current debt
D Trade debts k 752 – 551 201
E Taxes l 50,949 – 50,949
E Salaries and social security m 71 – 71
E Other n 19,918 – 19,624 294
F Accrued charges and deferred income 2,596 2,596
74,286 – 71,174 3,091
Total equity and liabilities 377,929 – 51,454 326,475
Number of ordinary shares in issue 5,331,947 5,331,947 5,331,947
Net asset value per ordinary share (x EUR 1) 56.92 3.70 60.62*
a Investment properties
Reversal of commitments for works not yet carried out – 530
Reclassification long leasehold rights agreement C&A 2,632
Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and
other leasing expenses – 228
1,874 b Trade receivables and other non-current assets
Reclassification stake real estate certificate ‘Kortrijk Ring Shopping Centre’ – 6,320 Long term receivables are classified as financial non-current assets (previously as current assets) 4,839 1,481 c Receivables > 1 year
Long term receivables are classified as financial non-current assets (previously as current assets) – 4,839 Reclassification long leasehold rights agreement C&A – 2,605 – 7,444 d Financial assets available for sale
Reclassification stake real estate certificate ‘Kortrijk Ring Shopping Centre’ 6,320 Revaluation stake real estate certificate ‘Kortrijk Ring Shopping Centre’ 215 6,535 e Tax receivables and other current assets
Claim on the Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV
to the SICAFI covering the full registered amount of the disputed claim (cfr. page 47) – 50,938
Reclassification deferred charges and accrued income 1,048
– 49,890 f Other current assets
Reclassification deferred charges and accrued income – 1,048
– 1,048 g Retained result
Reclassification result of the financial year – 2,543
Adjustment balance sheet valuation investment properties in respect of book value of rent free periods and
other leasing expenses – 228
Pension costs – 22
Reclassification amortisation of capital long leasehold rights C&A 27 – 2,766
h Result of the financial year
Reclassification result of the financial year 2,543
Reversal provision dividend payable 19,728
22,171
i Revaluation of financial assets and liabilities
Revaluation stake real estate certificates ‘Kortrijk Ring Shopping Centre’ 215 215
j Provisions
Reclassification defined benefit obligations 21
21
k Trade debts
Reclassification defined benefit obligations – 21
Reversal of commitments for works not yet carried out – 530
– 551
l Taxes
Debt on Belgian Government related to a disputed tax claim. A guarantee was submitted by Wereldhave NV
to the SICAFI covering the full registered amount of the disputed claim. – 50,938
Reclassification liability (cfr. page 47) – 11
– 50,949
m Remuneration and social security
Reclassification liability – 71
– 71
n Other
Reclassification liability 11
Reclassification liability 71
Liability group insurance 22
Reversal provision dividend payable – 19,728
(amounts x EUR 1,000)
Note
Profit 2004
Profit 2004
IFRS
IFRS
Belgian GAAP
Adjustments
I Rental income 21,201 21,174 27
Net rental income a 21,201 21,174 27
V Recovery income of charges and taxes payable by
tenants on let properties (+) 2,012 2,012
VII Charges and taxes payable by tenants on let properties (–) – 2,812 – 2,812
Property result 20,401 20,374 27
IX Technical costs – 257 – 257
X Commercial costs – 243 – 243
XII Property management costs – 243 – 243
Property operating result 19,658 19,631 27
XIV General costs
Staff costs – 607 – 607
Other – 255 – 255
XV Other operational costs – 341 – 341
XVII Gains or losses on disposals of other non financial assets 1 1
XVIII Revaluation of property investment b 2,282 2,282
Operating result 20,737 18,428 2,309
XIX Financial income 1,674 1,674
XX Interest charges – 35 – 35
XXI Other financial charges – 96 – 96
Pre-tax result 22,280 19,971 2,309
XXIII Corporate taxes – 9 – 9
Net income 22,271 19,962 2,309
Shares ranking for dividend 5,331,947 5,331,947
Profit per share, ranking for dividend 4.18 3.74
Notes to the IFRS adjustments to the profit and loss account for 2004
a Rental income
Reclassification long leasehold rights agreement C&A 27
27 b Revaluation of property investment
Revaluation investment properties 2,282
5. Direct and indirect result
(amounts x EUR 1,000)
2005
Direct result
Indirect result
Rental income 21,830 21,830
Property charges – 989 – 989
General costs – 1,099 – 1,099
Operating result before result on the portfolio 19,742 19,742
Revaluation of property investment
– positive 11,165 11,165
– negative – 2,659 – 2,659
8,506 8,506
Gains or losses on disposals of other non financial assets 9 9
Net operating profit 28,257 19,751 8,506
Financial result 570 570
Pre-tax result 28,827 20,321 8,506
Tax on result – 139 – 139
Profit 28,688 20,182 8,506
Profit per share 5,38 3,79 1,59
2004
Direct result
Indirect result
Rental income 21,201 21,201
Property charges – 1,543 – 1,543
General costs – 1,204 – 1,204
Operating result before result on the portfolio 18,454 18,454
Revaluation of property investment
– positive 12,654 12,654
– negative – 10,372 – 10,372
2,282 2,282
Gains or losses on disposals of other non financial assets 1 1
Net operating profit 20,737 18,455 2,282
Financial result 1,543 1,543
Pre-tax result 22,280 19,998 2,282
Tax on result – 9 – 9
Profit 22,271 19,989 2,282
6. Segment information
(amounts x EUR 1,000)
Primary segmentation (geographical)
The segmentation of rental income and investments are segmented to the following regions:
2005
Flanders
Brussels
Wallonia
Total
Net rental income 4,425 4,363 13,042 21,830
Property investments 88,314 51,530 180,050 319,894
Revaluations 239 691 7,576 8,506
2004
Flanders
Brussels
Wallonia
Total
Net rental income 4,385 4,433 12,383 21,201
Property investments 88,092 50,763 168,339 307,194
Revaluations – 8,644 – 1,254 12,180 2,282
Secondary segmentation (per sector)
The segmentation of rental income and investments are segmented to the following sectors:
2005
Offices
Retail
Total
Net rental income 8,788 13,042 21,830
Property investments 139,844 180,050 319,894
Revaluations 930 7,576 8,506
2004
Offices
Retail
Total
Net rental income 8,819 12,382 21,201
Property investments 138,855 168,339 307,194
7. Investment properties
(amounts x EUR 1,000)2005
2004
Balance at January 1 307,194 303,584 Purchases/investments 4,221 931 Rent incentives – 27 397 Revaluations 8,506 2,282 Balance at December 31 319,894 307,194Investment properties valued at EUR 61.3 mln have been charged by way of mortgage.
The properties in the investment property portfolio were valued by CVBA Troostwijk-Roux at December 31, 2005.
Value investment properties according to the external valuation reports 320,250 Book value of rent free periods and other leasing expenses – 356
Balance sheet valuation 319,894
8. Other tangible assets
(amounts x EUR 1,000)
Office equipment
Cars
Total
Balance at January 1, 2005 102 11 113 Purchases 35 35 Depreciation – 22 – 16 – 38 Balance at December 31, 2005 80 30 110 Balance at January 1, 2004 129 48 177 Disposals – 10 – 10 Depreciation – 27 – 27 – 54 Balance at December 31, 2004 102 11 113
31/12/2005
31/12/2004
Total costs of acquisition 341 307
Total depreciation – 231 – 194
9. Trade receivables and other non current assets
(x EUR 1,000)31/12/2005
31/12/2004
Loans 4,281 4,531
Capitalised rent investments 2
Prepaid costs 17
Capitalised brokeragefees 103 186
Capitalised rent free periods 241 105
Total 4,627 4,839
10. Current financial assets
(x EUR 1,000)31/12/2005
31/12/2004
Current financial assets available for sale 8,197 6,535
Total 8,197 6,535
An interest of 15.8% (17,865 Real Estate Certificates) is being maintained in the shopping centre at Kortrijk - Kuurne. Fair value is established taking into account the average quotation during the last fortnight of December.
11. Current receivables
(x EUR 1,000)31/12/2005
31/12/2004
Trade receivables (tenants) 71 150
Tax receivables and other current assets 442 1,386
Total 513 1,536
The property tax to be recovered due to vacancy amounts to EUR 442 on December 31, 2005 (2004: EUR 233).
12. Cash and cash equivalents
(x EUR 1,000)31/12/2005
31/12/2004
Bank 3,135 1,958
Deposits 4,300
13. Share capital
(x EUR 1,000)Amounts
Number of shares
Issued capitalAt January 1, 2004 224,969 5,331,947
At December 31, 2004 224,969 5,331,947
At December 31, 2005 224,969 5,331,947
Bearer shares and registered shares
Registered 3,636,214
Bearer 1,695,733
Total 5,331,947
The Statutory Management Company is entitled to increase the authorised capital in one or more issues by a maximum amount of EUR 200,000,000. This authorisation has been approved on April 13, 2005, is valid for three years and is renewable.
14. Loans
At December 31, 2005 the company does not make use of external financing besides the short term liabilities.
