Leasinvest Real Estate - Half-year results financial year 2004-2005 (period 01/07/2004-31/12/2004)

- Regulated press release

1. Key figures
2. Balance sheet and results (x 1,000 EUR)
3. Notes to the balance sheet and results for the first semester of the financial year 2004-2005
On 31/12/04 Leasinvest Real Estate communicates again consolidated figures, due to the acquisition of a controlling interest in the société anonyme Square de Meeûs 5-6. On 31/12/03 Leasinvest Real Estate had no subsidiaries.
The net current result amounts to 6.59 million EUR (including the drawing back of provisions for an amount of 1.44 million EUR for maintenance and renovation and exit tax) and remains entirely in line with the net current result on 31/12/03, which was 6.54 million EUR.  Per share[1] this means 2.33 EUR on 31/12/04 compared to 2.31 EUR on 31/12/03.
The net rental income on 31/12/04 is 6.9% below the one on 31/12/03 and amounts to 9.69 million EUR compared to 10.4 million EUR.  This difference is due to a decrease of the occupancy rate of 3% and a number of divestments (Mechelsesteenweg 30/34 in Antwerp, Kontichsesteenweg 17 in Aartselaar), which still represented a rental income of 0.2 million EUR on 31/12/03. The current occupancy rate is 92.4%[2] (31/12/04).  The decrease in the net rental income has been produced by these two factors and could not entirely be compensated by the investments of the semester (Montoyer 63 and Square de Meeûs 5-6, both in the Central Business District) because Montoyer 63 and Square de Meeûs have only contributed to the rental income for 7 days and 1.5 months respectively.
On 31/12/04 the operating result amounts to 7.8 million EUR, which is 6.6% below the operating result of 8.35 million EUR on 31/12/03. Thanks to keeping under control the operational cost structure and the positive contribution of compensations for rental damage and breach of contract, Leasinvest Real Estate has managed to make up partly for the loss in rents for an amount of 0.16 million.
The financial result ended at -1.9 million EUR on 31/12/04.  On 31/12/03 it was still -1.7 million EUR.  This drop of 0.2 million EUR can be explained by the fact that the majority of the credits is covered by fixed interest rates.
The circular letter by the Minister of Finance has clarified the calculation of the exit tax. This allowed to take back provisions, formerly made for the exit tax, of 0.73 million EUR. The taxation for 31/12/04 is therefore positive for an amount of 0.7 million EUR.
The net result on 31/12/04 amounts to 5.4 million EUR compared to 6.7 million EUR for the semester ending on 31/12/03.  This is due to the evolution of the real estate market values, leading to a change in market value of the portfolio of -1.2 million EUR.
The share of the group in the net result amounts to 4.9 million EUR or 1.74 EUR per share.
On 31/12/04 the portfolio represents an estimated investment value of 294.9 million EUR, or an increase of 13% or 39 million EUR compared to the previous quarter (30/09/04). This last quarter Leasinvest Real Estate invested in 2 buildings in the Central Business District of Brussels.
The debt ratio is 34.58%, which allows an investment capacity of approximately 86 million EUR.
4. Important events in the first semester 2004-2005
Framework agreement with AXA Belgium SA
On 16 July 2004, a framework agreement was entered into between Leasinvest Real Estate, its statutory manager Leasinvest Real Estate Management SA, Leasinvest SA and AXA Belgium SA in order to support the growth of the real estate portfolio of Leasinvest Real Estate.
In the meantime AXA has a participation of 9.23% in Leasinvest Real Estate following the acquisition of shares created as a result of the partial splitting-up mentioned hereafter, which is considered as part of the execution of the investment programme to which AXA has committed itself, resulting in the fact that AXA does not have to make contributions in real estate anymore for the amount of the acquired shares.
Important investments in Central Business District announce new growth phase for Leasinvest Real Estate
Leasinvest Real Estate has acquired, in November 2004, via the take-over of the majority of the shares of the 'Société Anonyme' Square de Meeûs 5-6, a very well situated office building in the Central Business District in Brussels. The building is entirely let to a diplomatic Representation with the European Union and an international association.
Leasinvest Real Estate acquired, jointly with partner AXA Belgium SA, 80% of the shares (50.07% for Leasinvest Real Estate and 29.93% for Axa Belgium).
The office building consists of 5,971 m2 of offices, 120 m2 of archives and 87 parking spaces. The building was constructed in 1974 and has been substantially renovated in different phases (period 1996-2002). The investment value of this building on 31/12/04 was 15.61 million EUR.[3]

On the extraordinary general meeting of shareholders of 23 December 2004 approval was given to Leasinvest Real Estate to acquire a second office building in the Central Business District, i.e. the building situated Rue Montoyer 63 in 1000 Brussels. This building is entirely let to the European Parliament. The building has been acquired by Leasinvest Real Estate as the result of the partial splitting-up of Leasinvest SA against the creation of 418,850 new shares of Leasinvest Real Estate. The capital and reserves rose by 23.82 million EUR, which corresponded to the investment value of this building.
The office building Rue Montoyer 63 consists of 6,684 m2 of offices, 61 m2 of archives and 56 single and 6 double inside parking spaces. It was constructed in 1974 and partially renovated in 2003.
The importance of the Central Business District of Brussels in the Leasinvest Real Estate portfolio therefore rises from 9.05 % to 21.2 % and the share of offices evolves from 75.6 % to 78.9 % (compared to 30/09/04) .[3]

5. Important events that have occured after the end of the first semester 2004-2005

Leasinvest Real Estate is part of the EPRA Eurozone Total Return Index since 1 January 2005.
Leasinvest Real Estate is the 5th real estate fund (sicafi) to be part, as from 1 January 2005, of the prestigious european EPRA Index. The most important criteria for inclusion are: a free float of more than 50% and an annualised volume traded of > 25 million EUR and this for 2 consecutive trimesters.

Sale of Kontichsesteenweg 38A in Aartselaar.
Leasinvest Real Estate signed, on 9 February 2005, an in-principle agreement for the sale of the building situated Kontichsesteenweg 38A in Aartselaar for a total amount of 2,275,000 EUR. The investment value on 30/06/04 was 2,098,000 EUR, which allowed the realisation of a surplus value of 177,000 EUR.
6. Outlook
Except for extraordinary circumstances, a net current result comparable to that of the previous year, is expected. The net result will also be determined by the evolution of the real estate market values.
7. Financial calendar
Financial year 2004-2005
Trading update 3rd trimester (31/03/2005)                             20/05/2005
Announcement of year results (30/06/2005)                          26/08/2005
General meeting of shareholders                                          17/10/2005
Analyst's meeting about annual results                                 17/10/2005
Dividend payable from                                                          24/10/2005
Financial year 2005-2006
Trading update 1st trimester (30/09/2005)                             25/11/2005
Announcement of half-year results (31/12/2005)                    24/02/2006
 8. Statutory auditor's report for the limited review of the interim consolidated financial situation of the Leasinvest Real Estate SCA over the period 1 July 2004 - 31 December 2004
We have performed a limited review of the interim consolidated financial situation of Leasinvest Real Estate as of 31 December 2004, and for the six-month period then ended. This interim consolidated financial situation is the responsibility of the company's management and show a balance sheet total of 300,271,226.73 EUR and a profit for the period of 5,403,932.23.
Our review consisted principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. We conducted our review in accordance with the recommendation issued by the Institut des Réviseurs d'Entreprises / Instituut der Bedrijfsrevisoren. It is substantially less in scope than a full scope audit of the consolidated financial statements. Based on our review, we are not aware of any material modifications that should be made to the interim consolidated figures.
Brussels, 22 February 2005
Ernst & Young Réviseurs d'Entreprises SCC (B 160)
Statutory auditor
Represented by
Danielle Vermaelen
Leasinvest Real Estate Comm. VA
Real estate fund Leasinvest Real Estate SCA invests in high-quality and well-situated office buildings (Brussels / Ghent / Antwerp), as well as in logistic buildings and retail premises.
The investment value on 31 December 2004 was 294.9 million EUR.The portfolio represents an area of more than 192,000 m2, in 16 different locations and spread across 39 buildings.
The real estate fund is listed on the Euronext and was included in January 2002 in the Next Prime segment. Leasinvest Real Estate SCA has a market capitalisation of 168 million EUR (value on 7 February 2004).

(*) In this case 100% of Square de Meeûs 5-6 SA is taken into account due to the integral consolidation of this company. Leasinvest Real Estate owns in this company a participation of only 50% + 1.
[1] The results per share presented in the current press release are calculated compared to the number of listed shares. The issued, but not yet listed, shares (418,850) as a result of the capital increase for the acquisition of the building Montoyer 63, will only participate in the results as from 23/12/2004.
[2] The occupancy rate is calculated, by substracting the estimated rental value of the vacancy, from the current rent, divided by the current rent.
(3) In this case 100% of Square de Meeûs 5-6 SA is taken into account due to the integral consolidation of this company. Leasinvest Real Estate owns in this company a participation of only 50% + 1.