RNS Number : 0358E
Summit Germany Limited
23 September 2008
SUMMIT GERMANY LIMITED
SUMMIT RESILIENT AS GERMAN REAL ESTATE MARKET PROVES STABLE
Summit Germany Limited ("Summit" or "the Group"), the AIM quoted real estate company invested in assets in Germany, has today announced
interim results for the six months to 30 June 2008.
Financial Highlights:
6 months to 6 months to Year to
30 June 30 June 31
2008 2007 December
2007
Net profit from operations EUR 6.3m 3.9m 7.4m
Net (loss)/profit attributable to EUR (16.2m) 11.5m 6.7m
equity shareholders
Net asset value per Ordinary Share EUR 1.112 1.200 1.153
Net asset value change (excluding % (1.27) 12.40 8.90
dividends)
Earnings per Ordinary Share EUR (0.059) 0.072 0.031
Dividend per Ordinary Share EUR 0.023 0.024 0.051
John Lamb, Chairman of Summit commented:
"As recent events have demonstrated, these are tough times and the Company's portfolio has reduced in value by EUR23m (2.4%). However,
the Group has continued to perform well despite recent fluctuations in the global economy and our business model remains robust, as
demonstrated by an operating profit of EUR6.3m, which has allowed the Directors to declare a dividend of 2.3 cents per share as a first
interim dividend for the current financial period ending 31 December 2008."
"We continue to let our properties to strong tenants on long leases at improved rental levels. Our tenant base provides the Group with a
solid cash flow and the potential for reversion in the portfolio underpins our plan to enhance shareholder value."
"Our objective remains to produce secure dividends along with sustainable growth both in terms of income and capital value. Our
management team has performed well and they continue to deliver innovative ways of improving rental income."
Zohar Levy, Chief Executive of Summit Management Company commented:
"Our focus remains to drive growth and enhance revenue through active asset management. We have experienced a significant amount of
letting activity in the period. Our management team has signed 50 lease agreements alone, since the beginning of 2008 with a total value of
almost EUR5m."
"Demand for our space in Germany remains strong and the rental market is in good health. Summit is well positioned to take advantage of
this trend and enhance value over the medium and long term."
"With an average yield of 7% across the portfolio, rising to 7.7% on full occupancy, we have the platform for future growth. Summit's
cash balance is strong at EUR125m, giving us both flexibility and security. As ever, we remain confident in our outlook for the future."
-ends-
Date: 23 September 2008
For further enquiries contact:
Summit Germany Fairfax I.S. PLC City Profile
John Lamb, Chairman Jeremy Porter William Attwell
07802 440 714 020 7598 4382 020 7448 3244
Chairman's Statement
I am pleased to present the half-yearly Report and Results for the six months ended 30 June 2008. Summit Germany Limited (the "Company")
continued to perform well in those six months despite the uncertain times.
The net asset value )"NAV" (per share was EUR1.112 at 30 June 2008 compared to EUR1.153 as at 31 December 2007. This reflects a decrease
of 1.27% after excluding the second interim dividend of 2007. This decrease is the direct result of the downward revaluation of our
properties by EUR23 million.
Results for the period
Profit from operations before tax and revaluations for the first six months of 2008 amounted to EUR6.3 million compared to EUR7.4
million for the year ended 31 December 2007. After the downward revaluation of our property portfolio by EUR23 million, the loss for the
first half of 2008 was EUR16.2 million compared to a net profit of EUR6.7 million for the year ended 31 December 2007.
Dividend
The 2007 second interim dividend of 2.65 cents per Ordinary Share was paid on 30 April 2008.
On 22 September 2008, the Board declared a first interim dividend relating to the year ended 31 December 2008 of 2.3 cents per Ordinary
Share, to be paid on 31 October 2008 to Shareholders on the share register on 3 October 2008.
Bank Borrowings
As at 30 June 2008, the Company had bank borrowings amounting to EUR754 million, fixed at an average total cost of 5.44% per annum on a
blended basis. The Company's finance is long term and is committed for an additional period of 5.5-6 years. The Company has interest rate
hedges in place in order to mitigate its exposure to interest rate risk.
According to the credit facility agreements there are several finance covenants the borrowers should comply with. Those covenants are
kept under regular review by the Board and at the date of this report they were all successfully met.
Property Portfolio
The Company portfolio consists of 113 properties with an aggregate valuation of EUR934.5 million.
The entire portfolio produces annual rental income of approximately EUR66 million (reflecting an average net yield of 7% rising to 7.7%
on full occupancy). The majority of the leases are linked to the German CPI or include fixed uplift of 1.5%-3% per annum and an average
lease length of approximately seven years.
As part of the process of disposal of non-strategic investments, in May 2008, the Company's subsidiary, Deutsche Real Estate AG
("Deutsche RE"), sold its share in a property located in Cologne. The property was held through a joint venture in which Deutsche RE's share
is 40%. The property had a net rentable area of 14,800 sqm and the bank borrowings in the joint venture amount to EUR15 million.
Deutsche RE's share in the net cash flow from the sale amounted to approximately EUR2 million.
Post balance sheet events
During the period, one of the tenants in two of the Company's properties had gone into receivership. The Company entered into an
agreement to acquire the EUR11.6 million bank debt related to those properties for a cash consideration of EUR6.6 million resulting in a
profit of more than EUR5 million.
The Company recently signed a new triple net lease agreement for one of the properties. The new agreement is for an eight year period
and in total will be equal to the rental income from this property prior to the insolvency of the original tenant.
Directorship
In June 2008, Dr. Johannes Beermann resigned from the Board of Directors, following his nomination as secretary of state in the cabinet
of the German State Saxony. We would like to thank Dr. Beermann for his contribution to the Board since the Company's inception.
Outlook
The Company's position has proven to be resilient. We have substantial cash balances, our financing is fixed for long terms, and all our
finance covenants are met.
The excellent tenant base has continued to provide solid operational cash flow and the recent progress in letting empty space augurs
well for future growth in value.
The German real estate market remains interesting and offers huge opportunities for the Company. Our excellent team is enhancing value
in our portfolio. Our properties are performing well with occupancy levels increasing and improving rent levels. We believe we can deliver
further value for our shareholders.
John Lamb
Chairman
22 September 2008
Asset Manager's Report
Investment Objective and Policy
The Company's investment objective is to achieve income and capital growth primarily from a diversified portfolio of real estate
properties located throughout Germany. The Company's investment policy is mainly to hold good quality properties let on long leases to
strong tenants with an upside potential to be achieved through active asset management. This will provide an income sufficient to pay the
Ordinary Shares dividend and to provide good prospects for growth in both rental income and capital value for the long term benefit of the
Ordinary Shareholders.
German Real Estate Market
In the first half of 2008, the global economy was negatively affected by the crisis in the real estate and financial sectors in the USA
and the resultant worldwide financial market turbulence.
In Germany, economic development remained overall positive; the price-adjusted GDP increased by 1.8%. Although economic growth has
fallen compared with the two previous high growth rate years, Germany's overall economic situation is regarded as stable.
This relatively favourable economic situation is thanks to the continuing profitability of German business enabling companies to
continue to invest in their businesses. Germany has also managed to improve its competitiveness over the last few years, whereby unit labour
costs have been falling for several years and have positively influenced exports in other EU countries.
The unemployment rate in March 2008 was 8.4%; this is 1.4 percentage points lower than a year ago; nevertheless, 3.5 million people are
still registered as unemployed. Disposable income began to rise in 2008 as a result of wage increases in various economic sectors.
However, a major constraint on economic development is the trend of consumer prices. In Q1 2008, consumer prices increased by 3.1%, as
much as the average over the whole of 2007.
Nevertheless, economic commentators consider that Germany is well placed to withstand the effects of the crisis. The German Economic
Institute anticipates GDP growth for the whole of 2008 of 1.8%.
The new index for the real estate climate in Germany showed initial optimism, then scepticism: the investment market was dominated from the
outset by the scepticism, the positive mood was borne by the lettings market. Market participants expect a fall in purchase prices and
reduced demand for investment. Prices have become strongly differentiated once again with an increased focus upon prime property in respect
of which we have seen little change in prices and yields compared with Q4 2007.
In general, we believe that the German real estate market is in good health and a downturn in demand for space and in rents is not
expected.
Performance
During the first half of 2008, the Company generated net profit, excluding the downward revaluation of investment properties, of EUR6.9
million compared to EUR12 million for the twelve months in 2007 despite the increase in operating expenses, which largely reflect the
consolidation of Deutsche RE from August 2007. The NAV as at 30 June 2008 was 111.2 cents, a decrease of 1.27% (after excluding the
dividend) in the first half of 2008.
Portfolio Valuation and Yields
In the first half of 2008 the portfolio was revalued downwards by EUR23 million (2.4%), giving a value of EUR934.5 million. On the other
hand, the net rental income is expected to be increased by 2.2% to circa EUR66 million per annum due to recent lettings of vacant areas. The
net blended yield of the portfolio is currently 7% and 7.7% on full occupancy. The Company's property portfolio consists of 113 properties
diversified across office, logistic and retail sectors. The portfolio as a whole has a weighted average lease length of approximately seven
years.
Management Activities
After aggregating the portfolio in the last few years we have shifted our focus in order to maximise the performance of the existing
portfolio. The major activities included:
* Substantial letting activity with 50 lease agreements signed since the beginning of 2008
* Digesting the properties acquired in 2007, especially the Deutsche RE portfolio
* Stabilising properties with high vacancy rates through new lettings, extension of leases, restructuring the tenant base and
improving cost efficiencies
* Improving property management procedures and cutting operational and G&A costs in Deutsche RE
* Rehabilitation of some tenant relationships in Deutsche RE
* Disposal of problematic tenants
* Collection of old debts
* Settlements with service providers and partners
* Disposal of non strategic holdings
* Adopting a new property management software
* Internalising our bookkeeping activity
The positive effects of these activities have partly been seen, and will have a greater effect in the second half of 2008 and on the
2009 results.
Letting Activity and Occupancies
The immediate result of the Asset Manager's efforts is the net letting of 15,000 sqm of vacant space. 50 lease agreements have been
signed since the beginning of 2008, out of which 35 are new leases and 15 are renewals of expired lease agreements. The average lease length
of those agreements is seven years.
In addition, the Company has agreed terms with potential tenants and expects to sign in the coming weeks additional lease agreements for
approximately 4,500 sqm which will contribute rental income of EUR0.5 million per annum.
The impact of those agreements net of the impact of expired leases is an increase of approximately EUR1.6 million in annual rental
income. In addition, a further saving of void costs is expected.
The total decrease in vacancy including the effect of expected leases will amount to 19,500 sqm representing a decrease of 24% from 2007
vacancy. Vacant area as at 30 June 2008 amounted to 67,000 sqm (7.25% of the lettable area) compared to 82,000 sqm as at 31 December 2007
(9.11% of the lettable area).
Major Letting Developments
We have let our vacant areas in Rostock by signing a lease agreement for 2,670 sqm with a governmental health insurance company. The ten
year lease will contribute an average net rental income of EUR507,000 per annum. The basic rent is EUR13.8 per sqm per month with additional
annual charges to the tenant of 3% fixed indexation and 8% for facility management. The required investment is approximately EUR1 million.
The average rent per sqm per month of this property prior to the new lease was EUR8.3.
Furthermore, the Company has leased an additional 9,000 sqm in its Osram Hofe property in Berlin. The new lease agreement with the
Berlin State hospital is for an average term of 6.5 years for approximately EUR1.1 million per annum, of which EUR0.9 million is net rental
income and EUR0.2 million is derived from a saving of void costs.
The basic rent is EUR8.5 per sqm per month with additional annual charges to the tenant for indexation and facility management. The
required investment in adjusting the property for the tenant's use is marginal. The average rent per sqm per month of this property prior to
the new lease was EUR6.3.
Together with additional lettings in this property, total vacancy has been reduced from 30,000 sqm to 17,000 sqm, which represent 28%
vacancy compared to a 50% rate when the Company acquired this property as part of the Deutsche RE portfolio. The result is a 65% increase of
the original net operating income attributed to this property.
Rental Income
Annual income as at 1 January 2008 amounted to EUR64.6 million. Such income was increased by EUR3.7 million (5.8% increase) due to
letting of vacant areas and indexation of some leases. After the impact of expired leases the current annual income will amount to EUR66
million.
Sale of Properties
The Company's policy is to sell properties which have achieved their improvement potential. Currently, the Company is in different
stages of negotiation for a number of such properties.
Financing and Covenants
Our financing is fixed on long terms, with loans maturing between 2013 and 2014 and bearing a fixed interest rate of 5.44%.
Financing covenants can include interest and debt service coverage ratios as well as loan to value ("LTV") covenants. Our average LTV
bank covenants are 87% while actual LTV as at 30 June 2008 was 80% of the applicable borrowings. The Company's steady cash flow also meets
the interest cover ratio and debt service cover ratio covenants.
Outlook
We are well positioned to take advantage of the current market situation and to experience both internal and external growth in the
medium to long term.
We have proven that our portfolio has a substantial upside potential and our strong management team is able to generate further growth
due to active asset management, including cycling of equity, letting vacant properties, restructuring properties and developing land. In
addition, our cash balance helps keep us flexible for any development in the market.
Zohar Levy
Summit Management Company SA.
22 September 2008
Directors' Responsibilities
The Directors are responsible for preparing these unaudited half-yearly results and are required to:
* prepare the half-yearly results in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting";
* include a fair review of important events that have occurred during the period, and their impact on the half-yearly results,
together with a description of the principal risks and uncertainties of the Company for the remaining six months of the financial year; and
* include a fair review of related party transactions that have taken place during the period which have had a material effect on
the financial position or performance of the Company, together with disclosure of any changes in related party transactions in the last
annual financial statements which have had a material affect on the financial position or performance of the Company in the current period.
The Directors confirm that the unaudited half-yearly results comply with the above requirements.
On behalf of the Board.
Charles Wilkinson
Director
22 September 2008
Consolidated Statement of Operations
For the six month ended Year ended 31 December 2007
EUR '000 30 June 2008 30
June 2007
Unaudited Unaudited Audited
Rental income 32,884 13,606 39,512
Operating expenses (2,741) (637) (2,180)
Gross profit 30,143 12,969 37,332
General and administrative (4,988) (1,871) (7,808)
expenses
Financial expenses (21,836) (8,300) (25,035)
Financial income 2,974 1,112 2,905
Revaluation of investment (23,261) 7,120 (6,215)
properties
(Loss)/profit before taxes on (16,968) 11,030 1,179
income
Tax benefit on income 608 502 4,663
Net (loss)/profit (16,360) 11,532 5,842
Attributable to:
Equity Shareholders (16,190) 11,508 6,746
Minority interests (170) 24 (904)
(16,360) 11,532 5,842
Earning per share - basic and (0.059) 0.072 0.0309
diluted (Euros)
Consolidated Balance Sheet
EUR '000 Note 30 June 2008 31 December 2007
Unaudited Audited
NON-CURRENT ASSETS:
Property, plant and equipment 248 254
Investment properties 5 934,523 953,440
Deferred tax assets 12,300 12,174
Other long-term assets 47,458 32,386
994,529 998,254
CURRENT ASSETS:
Cash and cash equivalents 117,294 137,509
Trade receivables 3,810 3,771
Prepaid expenses and other current 6 11,542 3,103
assets
Receivables from related parties and shareholders 51 52
132,697 144,435
Total assets 1,127,226 1,142,689
Note 30 June 2008 31 December 2007
Unaudited Audited
EUR '000 EUR '000
NON-CURRENT LIABILITIES:
Interest-bearing loans and borrowings 743,244 742,758
Other liabilities 1,818 1,602
Deferred tax liability 14,412 12,171
759,474 756,531
CURRENT LIABILITIES:
Trade payables 2,245 2,541
Payables to related parties and 3,990 6,437
shareholders
Tax liabilities 16,992 17,163
Other current liabilities 20,860 25,774
Interest-bearing loans and borrowings 5,016 6,316
49,103 58,231
Total liabilities 808,577 814,762
Net Assets 318,649 327,927
Represented by:
Equity attributable to equity holders
of the Parent
Share capital - 217,547
Distributable reserve 292,007 74,460
Hedging reserve 16,970 4,702
Retained earnings (3,066) 20,412
305,911 317,121
Minority interests 12,738 10,806
Total equity 318,649 327,927
Net Asset Value per Ordinary Share 1.112 1.153
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Parent
Share capital Share premium Distributable Cash flow hedge Retained earnings Total
Minority interests Total equity
reserve reserve
EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000
EUR '000 EUR '000
Balance as at 1 January 2008 *) - 217,547 74,460 4,702 20,412 317,121
10,806 327,927
Distribution of second interim - - - - (7,288) (7,288)
- (7,288)
dividend of 2007
Transfer to distributable (217,547) 217,547 - - -
- -
reserve **)
Change in fair value of cash - - - 12,268 - 12,268
952 13,220
flow hedges
Minority interest arising on - - - - - -
1,150 1,150
acquisition of subsidiary
Loss - - - - (16,190) (16,190)
(170) (16,360)
Balance as at 30 June 2008 *) - - 292,007 16,970 (3,066) 305,911
12,738 318,649
Balance as at 31 December 2006 *) - 72,480 74,460 293 20,486 167,719
110 167,829
Issue of shares, net of *) - 145,077 - - - 145,077
- 145,077
expenses
Change in fair value of cash - - - 8,846 - 8,846
26 8,872
flow hedges
Minority interest arising on - - - - - -
20 20
acquisition of subsidiary
Dividends paid - - - - (3,100) (3,100)
- (3,100)
Net profit - - - - 11,508 11,508
24 11,532
Balance as at 30 June 2007 *) - 217,557 74,460 9,139 28,894 330,050
180 330,230
Balance as at 31 December 2006 *) - 72,480 74,460 293 20,486 167,719
110 167,829
Issue of shares, net of *) - 145,067 - - - 145,067
- 145,067
expenses
Change in fair value of cash - - - 4,409 - 4,409
(91) 4,318
flow hedges
Minority interest arising on - - - - - -
11,691 11,691
acquisition of subsidiary
Dividends paid - - - - (6,820) (6,820)
- (6,820)
Net profit (loss) - - - - 6,746 6,746
(904) 5,842
Balance as at 31 December 2007 - 217,547 74,460 4,702 20,412 317,121
10,806 327,927
Consolidated Cash Flow Statement
For the six month ended Year ended 31
December 2007
EUR '000 30 June 2008 30 June 2007
Unaudited Unaudited Audited
Cash flows from operating
activities:
Net (loss)/profit (16,360) 11,532 5,842
Adjustments to reconcile net profit to net cash provided by operating activities:
Deferred taxes (744) (540) (4,798)
Financial expenses on interest-bearing loan and 709 277 404
borrowings
Depreciation of property, - - 88
plant and equipment
Amortisation of intangible - - 346
assets
Fair value adjustment of 22,460 (7,686) 5,101
investment properties
22,425 (7,949) 1,141
Changes in operating assets
and liabilities:
(Increase)/decrease in trade (39) 61 653
receivables
(Decrease)/increase in other (1,651) 2,057 4,465
current liabilities
Decrease in other non current (5) - (102)
liabilities
(Decrease)/increase in payables to related parties - (154) 1,853
and shareholders
Decrease in trade payables (296) (827) (2,244)
(Increase)/decrease in prepaid expenses and other (971) (963) 1,010
current assets
(2,962) 174 5,635
Net cash flows provided by 3,103 3,757 12,618
operating activities
Cash flows from investing
activities:
Acquisition of subsidiaries, (3,634) (13,674) (132,275)
net of cash acquired
Disposal 47 - -
Designated cash for - (59,877) -
acquisition of subsidiary
Additions to investment (3,586) (1,363) (39,897)
properties
Changes in marketable (7,500) - -
securities
Change in Deposits 158 (25) 44
Net cash flows used in (14,515) (74,939) (172,128)
investing activities
Cash flows from financing
activities:
Proceeds from issue of shares - 134,032 145,067
Proceeds from bank loans - - 283,335
Distribution of dividend (7,288) (3,100) (6,820)
Repayment of borrowings (1,515) (692) (207,441)
Net cash flows (used in)/provided by financing (8,803) 130,240 214,141
activities
(Decrease)/increase in cash (20,215) 59,058 54,631
and cash equivalents
Cash and cash equivalents at beginning of period 137,509 82,878 82,878
Cash and cash equivalents at 117,294 141,936 137,509
end of period
Notes to the Half-yearly Financial Statements
NOTE 1: GENERAL
Summit Germany Limited (the "Company") is a German property fund specialist whose shares are traded on AIM, a market operated by the
London Stock Exchange. The Company was incorporated and registered in Guernsey on 19 April 2006.
The principal activity of the Company and its subsidiaries (the "Group") is investment in real estate assets in Germany. This remains
unchanged from last year.
The Group owns and operates commercial assets in Germany including office buildings, logistic centres and others, which are leased to
numerous commercial and industrial tenants. The Group invests primarily in such properties that provide substantial occupancy rates and
income flows. The Group does not acquire properties for speculative purposes.
NOTE 2: BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated half-yearly results have been prepared in accordance with IAS 34, "Interim Financial Reporting".
The significant accounting policies and methods of computation applied in the preparation of the condensed consolidated half-yearly
results are consistent with those applied in the preparation of the audited financial statements for the year ended 31 December 2007.
NOTE 3:
Basic and diluted profit per Ordinary Share is based on profit attributable to equity holders for the period and on 275,000,000 Ordinary
Shares, being the weighted average number of equivalent Ordinary Shares in issue.
NOTE 4: EQUITY
a. Distributable reserve
At the Annual General Meeting of the Company, held on 24 June 2008, a resolution was passed to redesignate all of the share premium
account of the Company as a distributable reserve to be used for all purposes permitted by the Companies (Guernsey) Law, 1994, including the
purchase of the Company's own shares and the payment of dividends.
Since 1 July 2008, however, a new Company Law has come into force in Guernsey according to which such distribution is subject to a
solvency test to determine whether a company is able to distribute funds to shareholders.
b. Dividends payable on Ordinary Shares:
Number of Ordinary Shares EUR '000
First interim dividend for 2006
Paid 24 April 2007 155,000,000 3,100
First interim dividend for 2007
Paid 17 October 2007 155,000,000 3,720
Second interim dividend for 2007
Paid 30 April 2008 275,000,000 7,288
On 22 September 2008, the Board declared a first interim dividend relating to the year ended 31 December 2008 of 2.3 cents per Ordinary
Share, to be paid on 31 October 2008 to Shareholders on the share register on 3 October 2008.
NOTE 5: INVESTMENT PROPERTIES
EUR '000
As at 19 April 2006 -
Addition from acquisition of subsidiaries 340,510
Fair value adjustments 18,108
As at 31 December 2006 358,618
Addition from acquisition of subsidiaries 560,026
Addition in the period 39,897
Fair value adjustments (5,101)
As at 31 December 2007 953,440
Addition in the period 4,230
Disposal (47)
Fair value adjustments (23,100)
As at 30 June 2008 934,523
Investment properties are measured initially at cost, including direct transaction costs. Subsequent to initial recognition, investment
properties are stated at fair value, which reflects market conditions at the balance sheet date. Gains or losses arising from changes in the
fair values of investment properties are included in the income statement in the year in which they arise. Investment properties are not
systematically depreciated.
NOTE 6: PREPAID EXPENSES AND OTHER CURRENT ASSETS
31 December 2007
EUR '000 30 June 2008
Unaudited Audited
Marketable securities 7,500 -
Prepaid expenses 2,115 2,507
Service charge 1,927 596
11,542 3,103
NOTE 7: BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Balances as at EUR '000 30 June 2008 31 December 2007
Receivables from related parties and shareholders 51 52
Payables to related parties and shareholders (3,990) (6,437)
for the six months ended for the year
ended
Transactions EUR '000 30 June 2008 30 June 2007 31 December 2007
Directors fees 100 98 198
Management fee 2,458 1,147 3,610
Acquisition of subsidiaries - 13,707 .
NOTE 8: SIGNIFICANT EVENTS DURING THE REPORTED PERIOD
a. One of the Company's tenants, a German printing company, went into receivership. The Company had pre-existing bank guarantees and
deposits in place, totalling EUR1.4 million, which guarantee rental payment for at least 12 months and a lessor lien on the premises. The
bank guarantees have not been realised, as most rental income for these properties have (the total area amounts to 22,290 sqm in Cologne and
a further 10,589 sqm in Neumunster) been fully paid or received through partial realisation of the lessor lien. For more information on the
acquisition of the financing bank loan of these two properties and the signing of new lease agreement in respect of one of the properties
please refer to Note 9.
b. On 31 March 2008, the Board of Directors of the Company declared a second interim dividend of EUR0.0265 per Ordinary Share, in
respect of the year ended 31 December 2007.
c. The Company sold its share in a property located in Cologne. The property was held through a joint venture in which Deutsche RE's
share is 40%. The bank borrowings in the joint venture amounted to EUR15 million.
NOTE 9: SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE
a. On 21 July 2008, the Company acquired the bank debt of the two properties mentioned in Note 8a. above for a cash consideration of
EUR6.6 million. The face value of the debt is EUR11.6 million resulting in a profit of EUR5 million
Furthermore, the Company signed a new triple net lease for one of the properties. The new lease agreement is for an eight year period
and will contribute average net rental income of EUR300,000 per annum. In addition, the Company will be compensated by the receiver with
approximately EUR360,000 for the collection of a bank guarantee related to the property, and a total of EUR140,000 in cash. The new rental
income, together with the compensation, will be equal to the rental income from this property, prior to the insolvency of the original
tenant.
b. The Company let our vacant areas in Rostock by signing a lease agreement for 2,670 sqm with a governmental health insurance company.
The ten year lease will contribute an average net rental income of EUR507,000 per annum. The basic rent is EUR13.8 per sqm per month with
additional annual charges to the tenant of 3% fixed indexation and 8% for facility management. The required investment is approximately EUR1
million. The average rent per sqm per month of this property prior to the new lease was EUR8.3.
Furthermore, the Company has leased an additional 9,000 sqm in its Osram Hofe property in Berlin. The new lease agreement with the
Berlin State hospital is for an average term of 6.5 years for approximately EUR1.1 million per annum, of which EUR0.9 million is net rental
income and EUR0.2 million is derived from a saving of void costs.
The basic rent is EUR8.5 per sqm per month with additional annual charges to the tenant for indexation and facility management. The
required investment in adjusting the property for the tenant's use is marginal. The average rent per sqm per month of this property prior to
the new lease was EUR6.3.
Together with additional lettings in this property, total vacancy has been reduced from 30,000 sqm to 17,000 sqm, which represent 28%
vacancy compared to a 50% rate when the Company acquired this property as part of the Deutsche RE portfolio. The result is a 65% increase of
the original net operating income attributed to this property.
NOTE 10:
A copy of this statement was sent to all Shareholders on the share register as at 23 September 2008. Further copies are available from
the Company's registered office or can be downloaded from the Company's website: http://www.summitgermany.co.uk
NOTE 11:
The half-yearly results were approved at a meeting of the Board of Directors held on 22 September 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
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過去 株価チャート
から 7 2023 まで 7 2024
