07/11/2008 | Corporate News
Fair Value REIT-AG records sustained increase in rental results with solid long-term financing structure
74• Revenues of € 10.3 million in the first nine months of 2008
• Consolidated net income after nine months totals around € 1.4 million
• Funds from operations (FFO) up to € 0.28 per share
• Economic equity amounts to 51% of immovable assets
Munich, November 7, 2008 – Fair Value REIT AG has continued its positive growth in the first nine months of the current fiscal year according to preliminary figures. From January 1 to September 30, 2008 the company recorded revenues of € 10.3 million, of which around € 7.6 million stemmed from the fully consolidated majority interests in five closed-end real estate funds. In addition, Fair Value generated a further € 2.7 million from its portfolio of directly held properties. As of September 30, 2008 the net rental result totaled € 8.0 million.
At the same time, Fair Value REIT-AG also holds minority participations in a current total of eight closed-end real estate funds (associated companies). This resulted in income of € 2.2 million in the first nine months of 2008, which was booked as income from equity accounted participating interests in the financial result. After minority interests and net interest expense the financial result totaled € -2.1 million.
According to IFRS, Fair Value REIT-AG recorded consolidated net income of € 1.4 million in the first nine months of 2008, of which € 580 thousand stemmed from the third quarter alone. As a result, earnings per share totaled € 0.15 as of September 30, 2008.
Frank Schaich, Fair Value REIT-AG's CEO, has a positive view of the operative development: "Our business is currently running better than expected. The office property Airport Office II in Düsseldorf, which was completed in the third quarter, is now fully let and in future it will contribute around € 1.1 million to revenues each year. Consolidated net income (IFRS) totaled € 1.4 million, exceeding our forecast for the first nine months." In particular, the CEO highlighted the portfolio's great earnings strength: "After adjustment for changes in valuation and extraordinary income, funds from operations (FFO) as of September 30, 2008 totaled € 2.6 million. This corresponds to FFO per share of € 0.28."
The successful business in the first three quarters is also reflected in Fair Value REIT-AG's balance sheet. Compared to December 31, 2007, total assets increased slightly to € 233.3 million. The company's equity thus totaled around € 94.8 million on the balance sheet date, after taking a reserve for changes in the value of interest hedges into account. This resulted in net asset value (NAV) per share of € 10.08.
In addition, Frank Schaich underscored the high equity backing of the immovable assets and the solid financing structure: "Including minority interests in our subsidiaries, our economic equity totaled 51% of immovable assets totaling € 227 million. Around 84% of our bank loans including our participations in associated companies are fixed over the long term with an average remaining term for fixed interest rates of 5.5 years. Interest rates average 5.98% of all loans taken out and are partially hedged by derivatives. Only around 16% of bank loans have variable interest rates." As a result, Fair Value REIT-AG has a solid long-term financing structure and is mostly independent of the current situation on the credit markets. In view of the excellent operating growth and the strong financial basis, the Managing Board believes that it will be possible to achieve the targets for the current fiscal year subject to the market valuation of the properties and financial liabilities at the end of the year.
The full interim report for the first three quarters of 2008 will be published online at www.fvreit.de in the Investor Relations section on November 28, 2008.
2008
