Rodamco AB


Pressmeddelande   •   Feb 26, 2007 14:00 CET

Article Rotterdam, 26 February 2007 – Rodamco Europe NV reports strong results for 2006. Direct result after tax is up 8.3% and Triple NAV per share grew by 26.5%, showing a strong operational performance and continuing growth in triple net asset value. Property assets grew by 16.4% and total pipeline increased by 8.9%. Rodamco Europe proposes an increase of 8.5% in dividend over 2006.



Rotterdam, 26 February 2007 – Rodamco Europe N.V. reports strong results for 2006. Direct result after tax is up 8.3% and Triple NAV per share grew by 26.5%, showing a strong operational performance and continuing growth in triple net asset value. Property assets grew by 16.4% and total pipeline increased by 8.9%. Rodamco Europe proposes an increase of 8.5% in dividend over 2006.

Key figures 2006 (amounts in € mln):
2006 2005 Change
Property assets €10,582 €9,095 16.4%
Property assets in retail sector (%) 94.0% 90.3% 3.7%
Net initial yield investment property (%) 5.4% 6.1% 0.7%

Committed pipeline €1,308 €894 46.3%
Uncommitted pipeline €1,320 €1,519 -13.1%
Total pipeline €2,628 €2,413 8.9%

Triple NAV (NNNAV) €6,853 €5,418 26.5%
Triple NAV (NNNAV) per share (in €) €76.45 €60.44 26.5%

Direct result after tax €369.1 €340.9 8.3%
Indirect result after tax €1,156.2 €941.2 22.8%
Net shareholders’ profit €1,525.3 €1,282.1 19.0%

Direct result after tax per share (in €) €4.12 €3.80 8.3%
Indirect result after tax per share (in €) €12.90 €10.50 22.8%
Net shareholders’ profit per share (in €) €17.02 €14.30 19.0%

Net rental income €563.1 €503.5 11.8%
Net rental income like for like growth (%) 4.5% 4.9% -0.4%
Overall occupancy rate (%) 98.4% 97.9% 0.5%
Retail occupancy rate (%) 98.9% 98.6% 0.3%

Valuation result investment property €1,270.6 €964.5 31.7%

Market capitalization €9,036 €6,302 43.4%

• Proposed final dividend for 2006 of €2.34 per share, total proposed dividend 2006 of €3.71 per share, an 8.5% increase (2005: €3.42 per share); 3.7% dividend yield.
• Outlook: direct result after tax for full year 2007 is expected to grow by 3% or more. This growth figure excludes, among others, revaluations of the investment portfolio. See page 8.

CEO Maarten Hulshoff: “In 2006 we succeeded in further rebalancing the quality of our portfolio, with divestments of non-core, low to medium quality assets, taking advantage of strong investor demand and high prices. We have taken advantage of the strong market conditions in the current “sellers” market. Prices for retail properties are at historic highs, as a result of which we have also been selective with acquisitions of standing investments and focusing on future growth through pipeline. Our chosen focus on top quality assets resulted in a like-for-like growth in net rental income of 4.5% and our loss of rent went down to 3.8% coming from 4.6%. We are pleased with another year of these strong operating results and also with a continuing increase in the value of our properties.
In 2006, we succeeded, primarily through our pipeline, in further growing our pan-European business into a company with a portfolio of high quality assets of over €10 billion, with stable cash flows, secured growth through the pipeline and a sound financial structure.
In 2007 new opportunities will arise from the expected widening of the FBI regulations, which will allow us to cautiously integrate development for own use in our business model.


Property assets increased by €1,487 million to €10,582 million in 2006 compared to €9,095 million at the end of 2005. The contributors to this increase were the substantial valuation results of investment property (€1,270 million) and pipeline (€37 million), acquisitions (€125 million), capital expenditures in investment properties (€64 million), capitalized costs, interest and investments in pipeline projects (€198 million at cost), offset by divestments (minus €239 million) and various other movements (€32 million).

During the 4th quarter of 2006, Rodamco Europe divested a portfolio of high street shops in the Netherlands for an amount of €41 million at a net initial yield of 5.1% and the factory outlet center Batavia Stad, the Netherlands for an amount of €38 million at a net initial yield of 5.6%.

Striving for further transparency, Rodamco Europe has added one new category to its pipeline definitions - “under consideration”. See the glossary added to this press release.
The total pipeline - committed, uncommitted and under consideration - adds up to around 1 million m2 (approximately one third of our total standing portfolio). The committed and uncommitted pipeline add up to a GLA of approximately 650,000 m2 and as per year end 2006 amounts to €2.6 billion (end of 2005: €2.4 billion), of which around 50% is committed and 50% uncommitted.
In addition to the approximately 350.000 m2 of GLA added through the under consideration category, an additional approximately 130,000 m2 of new GLA was added to the pipeline in 2006, mainly as a result of the following projects: Metropolis in Moscow (Russian Federation), an extension to our shopping center Täby in Stockholm (Sweden), a shopping center project in Badajoz (Spain) and an extension to Parly 2 in Paris (France) as well as other projects. Due to completions, the committed pipeline decreased during Q4 2006 with 12,750 m2 of which 4,350 m2 are completions (of parts) of projects in the Netherlands (Woensel in Eindhoven, Parade in Bergen op Zoom, Stadshart Almere in Almere), and 8,400 m2 relates to the completion of the extensions of Barnasud (Barcelona, Spain: 6,400 m2) and Villeneuve 2 (Lille, France: 2,000 m2).

Including the completions earlier that year, in the full year 2006 a total amount of €259 million (market value) came into operation, resulting in a positive revaluation of €39 million. The impairment of pipeline was €2 million.

IFRS ignores some business aspects in valuing real estate companies. In line with the Best Practice Policy Recommendations of the European Public Real Estate Association (EPRA) for transparent, uniform and comparable financial information by real estate companies, Rodamco Europe reports the triple net asset value (“Triple NAV” or “NNNAV”). This performance measure does not replace the IFRS disclosure, but provides additional information to help the investors understand the performance of Rodamco Europe even better.

(in € mln)
2006 2005 Change
Net Asset Value 6,487 5,272 1,215
Valuation surplus pipeline projects 93 45 48
Nominal deferred taxes provisions 559 361 198
Discount deferred taxes provisions -304 - 193 -111
Marked-to-market value of loans and borrowings 18 -67 85
Triple NAV (NNNAV) 6,853 5,418 1,435

The Triple NAV increased by 26.5% to €6,853 million at the end of 2006, or €76.45 per share (end of 2005: €60.44) after final 2005 dividend per share of €2.17, which was paid in April 2006, and interim dividend 2006 of €1.37 per share which was paid in October 2006. The increase of €1,435 million was supported by the net shareholders’ profit of €1,525 million, final 2005 dividend and interim dividend 2006 minus €318 million, a positive movement in the marked-to-market value of loans and borrowings of €85 million, as a result of interest rates moving up, a €48 million higher committed pipeline revaluation potential and a positive impact of deferred tax provisions of €87 million.

2006 2005 Change
NAV after tax €6,487 €5,272 23.1%
Triple NAV (NNNAV) after tax €6,853 €5,418 26.5%

NAV after tax per share €72.37 €58.81 23.1%
Triple NAV (NNNAV) per share €76.45 €60.44 26.5%
Share price end of period €100.80 €70.30 43.4%
Premium share price versus Triple NAV 31.9% 16.3%

Rodamco Europe focuses on direct result after tax as the key operational performance indicator and for its dividend policy. Direct result after tax increased 8.3% to €369.1 million in 2006, compared to €340.9 million in 2005. This was largely driven by pipeline projects coming into operation and the net positive effect of acquisitions and divestments.

The gross rental income increased 9.8% to €652.4 million (2005: €594.3 million). This increase is primarily the result of rent generated from acquisitions during 2005 (€17.7 million; mainly Stadshart Amstelveen in the Netherlands and Jumbo in Finland), acquisitions in 2006 (€5.0 million; mainly Aupark in Slovakia), from properties coming into operation during 2005 and 2006 (€33.1 million; mainly shopping centers in the Netherlands: Vier Meren (Hoofddorp), Spazio (Zoetermeer), parts of Stadshart Almere and parts of Parade, Bergen op Zoom, Parquesur extension in Madrid, Spain, Albacenter in Albacete, Spain and Chodov in Prague, the Czech Republic) and rent increases of €14.5 million. Furthermore, gross rental income increased, mainly as a result of higher specialty leasing income and lower vacancy.
The increase in gross rental income was partially offset by the effect of disposals, mainly MECC (exhibition, office, and hotel in 2005) and the high street shop portfolios (in 2006) in the Netherlands, the shopping centers Hallunda and Sollentuna in Sweden, Pontis Haus (offices) and Rozalia Park (logistics) in Central Europe and two offices in Paris (Marceau and Serbie) in France which reduced the gross rental income by €17.6 million in 2006.
Net rental income increased 11.8% to €563.1 million, compared to €503.5 million in 2005.
Overall occupancy increased to 98.4% at the end of 2006 compared to 97.9% at the end of 2005; retail occupancy increased slightly to 98.9% (year end 2005: 98.6%).
Like-for-like growth in net rental income was 4.5% against a weighted average indexation of 1.6%, which is relatively higher compared to the 4.9% like-for-like net rental growth in 2005 against an average indexation of 2.3%.
The loss of rent improved during 2006 to 3.8% (in 2005: 4.6%) due to solid operational management (mainly lower vacancy) and divestments.
Property operating expenses (excluding net service charges) decreased by 1.5% to €84.0 million in 2006 (2005: €85.3 million). This decrease is mainly the result of lower maintenance costs and a one off refund of property taxes in Denmark.

The administrative expenses increased 17.1% to €52.1 million in 2006 compared to €44.5 million in 2005. This was mainly caused by higher abortive purchase costs in connection with various large potential retail acquisition projects, an increase of ICT expenses, increased staffing due to the growth of the investment portfolio and an increase of compliance activities.

The average debt increased with approximately 12% (€370 million) from €3.0 billion over 2005 to €3.4 billion over 2006, which caused an increase in interest expenses of €17.3 million. The average interest rate during 2006 decreased to 3.93% in 2006 (4.04% in 2005). The €3.4 million positive effect of the lower average interest rate, was partly offset by lower interest income of €4.8 million, due to lower capitalized interest on pipeline projects and higher other interest expenses of €2.2 million.

This resulted in an increase of the net interest expenses by 18.7%, from €111.7 million in 2005, to €132.6 million in 2006.

2006 2005
Loan to value (total debt/ total capital) 33.6% 38.3%
Net interest coverage EBITDA 3.6 3.7
FFO/total debt 11.6% 10.5%

Under IFRS the foreign exchange result (minus €0.5 million) and the change in unhedged fair value of financial instruments are also included in the net financing result. In 2006, a positive fair value result of financial instruments of €6.9 million was reported (as part of the indirect result), primarily arising on valuation movements of unhedged interest rate swaps. These swaps are not directly linked to specific loans and are therefore not subject to hedge accounting treatment.

The movement in the deferred tax position as a result of valuation results of properties and the realization of deferred tax assets (tax losses carry forward) resulted in €180.8 million of deferred income tax expenses (2005: €103.1 million). The deferred tax expenses are calculated using the nominal tax rates for those countries where there is no tax efficient status like in the Netherlands (FBI) and in France (SIIC).

Income tax expenses amounted to €9.3 million, compared to €7.9 million in 2005. A part of the income tax expenses of 2006 (€1.5 million) is allocated to the indirect result since this relates to tax liabilities arising on indirect results. A number of tax positions are being challenged by local tax authorities or may be challenged in the future. Some items are being litigated before courts. The potential tax exposure may range from nil to a maximum of €68 million, of which €20 million is provided for in the balance sheet.

Net shareholders’ profit not only takes into account the direct result after tax, but also includes non-cash items (‘indirect result after tax’) such as the valuation result, the fair value result on derivative financial instruments, the deferred income tax expenses and, as cash item, the realized result on disposals of investment property and pipeline. The net shareholders’ profit under IFRS fully includes any minority share. Our net shareholders’ profit, as the main indicator for Rodamco Europe’s overall performance, excludes minority shares. The 11.8% increase in net rental income compared to 2005 is the main driver for the 19.0% growth in net shareholders’ profit to €1,525.3 million.

Direct result after tax per share increased 8.3% to €4.12 in 2006, compared to €3.80 in 2005. The net shareholders’ profit per share amounted to €17.02 in 2006, an increase of 19.0% compared to €14.30 in 2005.

The valuation result of Rodamco Europe’s property assets added €1,307 million in value in 2006. Approximately 65% of the valuation result on the investment property was attributable to yield shifts, while the remaining 35% was attributable to increased rental income. The net initial yield on investment property moved from 6.1% end of 2005 to 5.4% at the end of 2006.

Valuation results on investment properties in all sectors were positive during 2006 (€1,270 million), revaluations on retail investment properties were €1,197 million, offices showed a positive revaluation of €63 million and logistic €10 million. Revaluation results on investment properties in all home regions over the period were as follows: the Netherlands and Belgium (€330 million), France (€313 million), Spain (€260 million), Nordic (€243 million) and Central Europe (€124 million).

A net valuation result of €37 million was realized on completed pipeline projects transferred to investment property mainly due to the completion of Stadshart Almere in the Netherlands and the Allee-Center extension in Magdeburg, Germany.

Rodamco Europe divested for a total sale price of €266 million, mainly consisting of two retail portfolios, our factory outlet center Batavia Stad and some offices in the Netherlands for an amount of €205 million. In Spain, we sold two parts of land from our logistic pipeline project in Ral Leganes for an amount of €14 million. In France, we divested part of our offices in the Tour Credit Lyonnais via a swap transaction for an amount of €19 million; additionally we divested some non-core retail units in France for a total amount of €25 million. The total net profit on disposal amounted to €27 million before tax.

Total debt remained stable at €3.3 billion at the end of 2006, at an average interest rate at year end of 4.06% (year-end 2005: 3.86%). Approximately 73% of the total debt was fixed rate funded.

As an indication of sensitivity , a change in interest rates of 100 basis points would have an impact of €9.0 million on direct result before tax per annum; a plus or minus yield shift of 50 basis points would affect 2006 indirect result before tax with negative €877 million (+50 basis points) to positive €1,056 million (-50 basis points); a 10% change in the SEK/€ exchange rate would have a €35 million impact on shareholders’ equity.


• On 11 January 2007, Rodamco Europe announced the divestment of the office building at Coolsingel 120 in Rotterdam, the Netherlands – also known as the Robeco-huis – to KanAm Grundinvest for an amount of approximately €75 million. This is approximately €5 million above the book value at 2006 year end. The transaction takes place at a net initial yield of 5.3% and the transfer of ownership is expected to be effective as per 25 June 2007.
• On 30 January 2007, Rodamco Europe agreed to the divestment of ‘Zeilgalerie’ shopping center in Frankfurt, Germany to Signature Capital, for an amount of €42.5 million, which is approximately €8 million above the book value at year end. The divestment will take place at a net initial yield of 5.3% and the transaction is expected to take effect in the first quarter of 2007.
• On 5 February 2007, Rodamco Europe acquired 6 office buildings in shopping center Leidsenhage in Leidschendam, the Netherlands, from IEF Capital for an amount of approximately €24 million. This transaction, which took place at a net initial yield of 4.0%, was done with the intention to convert the offices into retail units in future times.

• On 29 January 2007, Rodamco Europe announced that it will propose, at its next Annual General Meeting of Shareholders on 27 April 2007, to split its shares in a ratio of 4 new shares for 1 existing share.

During last year, as announced at the release of the interim results, we decided to sell around €400 million non-core, low to medium quality assets. We have now completed the divestiture program. As a result of this divestment program, taking advantage of the strong market conditions, over 2007, Rodamco Europe expects direct result after tax to grow by 3% or more. Our outlook reflects the short-term impact of our consistent long-term strategy. We pursued this strategy consistently through the continual upgrading of the quality of our portfolio and by a strong focus on growing our pipeline.
We have announced the Metropolis project in Moscow, a city we feel comfortable to grow our business through a local organization which we are putting in place. We will also start working on shaping our development organization as soon as the FBI legislation is passed through Dutch parliament.
As a result, administrative costs are increasing also due to increased ICT costs (our new SAP based platform).

This outlook is based on the current investment property and estimated timing of completion of pipeline projects and disregards changes in IFRS policies, the potential effects of additional acquisitions and divestments and the potential effects of significant changes in exchange rates, interest rates and the general economic environment.

3 April 2007 Publication Annual Report 2006
27 April 2007 Annual General Meeting of Shareholders
2 May 2007 Rodamco Europe N.V. shares will be listed ex-dividend
8 May 2007 Proposed date for final dividend payment
8 May 2007 Publication first quarter results 2007
6 August 2007 Publication interim results 2007
5 November 2007 Publication third quarter results 2007

The websites of some of the shopping centers mentioned in this press release are listed below:




For more information about Rodamco Europe, please visit our website:

Rodamco Europe with headquarters in Rotterdam, the Netherlands, is both investor and manager of its dominant shopping centers in its home regions The Netherlands & Belgium, the Nordic countries, France, Spain and Central Europe. Top quality shops and shopping centers form 94% of Rodamco Europe’s €10.6 billion property assets. This makes Rodamco Europe the largest listed property investment and management company in the retail sector in Europe. Rodamco Europe is listed on the Stock Exchanges in Amsterdam, Paris, Frankfurt and Brussels. A Euronext 100 company, Rodamco Europe is included in the Euronext AEX Index (AEX) and in the MSCI World Index. For more information on Rodamco Europe, please visit our website:

Note for the editor; for more information, please contact:
Rodamco Europe N.V.
Investor Relations PR & Communication
Vivienne van Asten - de Leeuw Arie C. Bos
Tel: +31 (0) 10 217 6480 Tel: +31 (0) 10 217 6400
E-mail: Mob: +31 (0) 6 2070 4212 E-mail:

Certain of the statements contained in this release are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The outlook is based on the current property portfolio and estimated timing of completion of pipeline projects and disregards the potential effects of acquisitions and divestments, or significant changes in exchange and interest rates. Actual results, performance or events may differ materially from those in such statements due to, among other things, (i) general economic conditions, in particular economic conditions in Rodamco Europe's core markets, (ii) performance of financial markets,(iii) interest rate levels, (iv) currency exchange rates, (v) changes in laws and regulations, and (vi) changes in the policies of governments and/or regulatory authorities. Rodamco Europe assumes no obligation to update any forward-looking information contained in this document.

Rodamco Europe Glossary/Definitions

Capital Expenditures
Expenditures are being capitalized on a property asset when it is probable that the future economic benefits that are being associated with these expenditures will flow to the group.

Direct result
Direct result after tax approximates the net cash earnings of the company over the period. It comprises net rental income, other income and expenses minus the administrative expenses (also referred to as EBITDAV) minus the net interest expenses, the net foreign exchange result, share of the profit of associates, the current part of income tax expense (excluding part related to indirect result) and a part of the minority interest.

Dividend yield
Paid interim dividend plus proposed final dividend in relation to the share price at period end.

Net rental income minus administrative expenses, plus net result on disposal of property assets plus net result of other income and expenses plus other operating leases.

Gross Rental Income
The minimal guaranteed rent for the period for let units (excluding vacant units) including turnover rent and other rental income, after taking into account the net effect of straight lining for net lease incentives.

Indirect result
Indirect result is defined as the total sum of revaluation result on investment properties, renovation projects and pipeline projects plus the result on disposal of property assets plus or minus the fair value result derivative financial instruments, minus the deferred income tax expenses minus the income tax expenses related the indirect result minus minority interest.

Like for like growth
Like for like growth compares the income growth of the part of the portfolio which has been consistently in operation during the full two periods under review (so called stabilized portfolio).

Total carrying amount debt, adjusted for bank overdrafts, operating leases and postretirement benefit obligations, expressed as a percentage of property assets adjusted for deferred tax.

Market value of investment property
The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each act knowledgeably, prudent and without compulsion. This value is excluding transfer costs.
Market value is also referred to as Net Market Value.

Net asset value per share
Shareholders’ equity divided by the number of shares outstanding at the end of the period under review.

Net initial yield
The estimated first year annual net rental income expressed as a % of gross open market value (Market value including transfer costs).

Net Rental Income
Gross rental income including service charge income and less property operating expenses and service charges expenses.

The net asset value corrected for fair value adjustments of equity elements which are not reported at fair value under IFRS. The following elements are corrected for fair value: pipeline projects, deferred tax, bonds, interest bearing loans and borrowings.

The total annualized minimum guaranteed rent of current occupied units at measurement date expressed as a percentage of the total annualized theoretical rental income. Vacant units for which a lease contract has been signed with a lease commencement date within 12 month of the reporting date are considered occupied. This ratio provides a spot (forward looking) measurement, rather than an average rate over the past reporting period (financial measurement).

Properties that are being (or will be) constructed or developed for future use as an investment property.

Committed pipeline
Stand-alone projects and/or extension projects with a commitment, construction has started or will start in the near future.

Uncommitted pipeline
Stand-alone projects and/or extension projects, internally initiated and/or approved, but not yet externally committed.

Under consideration
Other projects being pursued in various stages.

Property operating expenses
All expenses directly related to rental income and include costs such as day-to-day property management, property tax, maintenance, insurance premiums, appraisal costs, etcetera which are for the account of the property owner.