Invista European Real Estate Trust Full Year -19-
30 January 2015 - 6:01PM
UK Regulatory
for rental growth, vacancy, reletting costs,
Germany incentives and refurbishment costs. Office Yield 7.50%
----------------------------------------------------
Industrial
Yield 12.50%
Retail Yield 7.17%
-------------------------------------------------------------------------------------- -----------
The valuers valued each of the properties
in Belgium, Spain and France using the
traditional "all risks" yield method of
valuation having regard to comparable investment
transactions (where available) and current
market sentiment. These valuation calculations
have mainly been undertaken using the Argus
Capitalisation model, albeit that for Belgium
the valuers have used locally accepted
methodology which is driven by capitalising
the market rent and then explicitly adjusting
France for over/under-renting and other costs. Office Yield 8.35%
----------------------------------------------------
Industrial
Yield 9.35%
Retail Yield n/a
----------------- ---------------------------------------------------- --------------- -----------
Spain The valuers valued each of the properties Office Yield n/a
in Belgium, Spain and France using the
traditional "all risks" yield method of
valuation having regard to comparable investment
transactions (where available) and current
market sentiment. These valuation calculations
have mainly been undertaken using the Argus
Capitalisation model, albeit that for Belgium
the valuers have used locally accepted
methodology which is driven by capitalising
the market rent and then explicitly adjusting
for over/under-renting and other costs.
----------------------------------------------------
Industrial
Yield 8.50%
Retail Yield n/a
----------------- ---------------------------------------------------- --------------- -----------
The valuers valued each of the properties
in Belgium, Spain and France using the
traditional "all risks" yield method of
valuation having regard to comparable investment
transactions (where available) and current
market sentiment. These valuation calculations
have mainly been undertaken using the Argus
Capitalisation model, albeit that for Belgium
the valuers have used locally accepted
methodology which is driven by capitalising
the market rent and then explicitly adjusting
Belgium for over/under-renting and other costs. Office Yield 8.03%
----------------------------------------------------
Industrial n/a
Yield
----------------------------------------------------
Retail Yield n/a
----------------- ---------------------------------------------------- --------------- -----------
The Netherlands In arriving at their valuation for the Office Yield n/a
properties in the Netherlands the valuers
have used the Discounted Cash Flow (DCF)
method. They have used a cash flow period
varying from 20 years for the Netherlands.
The gross rents and the annual outgoings
are used to arrive at a net rent. These
cash flows are adjusted for rental growth,
vacancy, reletting costs, incentives and
refurbishment costs. For the Dutch properties,
the valuers have also used a capitalisation
approach as a secondary method. The valuers
have capitalised the net market rent and
have made adjustments for existing lease
terms. In addition the valuers have made
further adjustments in case of vacancy.
For this the period for which the vacancy
is most likely to continue was estimated.
At the assumed moment of reletting the
valuers allowed for reletting costs and
incentives. In case of a ground lease,
overdue maintenance or any other reasons
for adjustments, these have been made calculating
the net present value of these cash flows.
Using the above mentioned method(s), the
valuers arrived at a gross value for which
transfer Costs were deducted. Accordingly
a rounded net value was arrived at.
----------------------------------------------------
Industrial
Yield 9.76%
Retail Yield n/a
-------------------------------------------------------------------------------------- -----------
Sensitivity analysis
The significant unobservable inputs used in the fair value
measurement categorised within Level 3 of the fair value hierarchy
of the Group's investment properties are:
-- exit yield
-- long term vacancy rate
-- estimated rental value.
Significant increases (decreases) in estimated rental value (per
sqm p.a.) would result in a significantly higher (lower) fair value
measurement. Significant increases (decreases) in long-term vacancy
rate and exit yield in isolation would result in a significantly
lower (higher) fair value measurement.
Generally, a change in the assumption made for the estimated
rental value is accompanied by a directionally:
-- similar change in the rent growth p.a. and exit yield
-- opposite change in the long term vacancy rate
The table below presents the sensitivity of the changes in
valuation based on the significant assumptions underlying the
valuation of the investment properties:
Yield Shift Estimated Long term Yield Shift Estimated Long term
rental value vacancy rate rental value vacancy rate
--------------- --------------- --------------- --------------- --------------- ---------------
Sensitivity 25 basis 5% increase or 1% more or 25 basis 5% increase or 1% more or
Level points decrease less vacancy points decrease less vacancy
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
30 Sep 2014 30 Sep 2013
---------------- ------------------------------------------------- -------------------------------------------------
EUR(000) EUR(000) EUR(000) EUR(000) EUR(000) EUR(000)
Office 4,712 9,683 1,600 5,167 10,468 1,767
Logistics 8,335 11,210 2,181 6,533 13,077 1,965
Retail 3,283 5,542 1,183 4,529 6,120 1,656
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
13. Finance income
The table below represents the movement in financial income:
30 Sep 14 30 Sep 13
EUR000 EUR000
-------------------------------------- ----------- -----------
Finance income: movements
Interest received 15 49
-------------------------------------- ----------- -----------
Interest income 15 49
Derecognition of preference shares
held in treasury 135 -
Unrealised foreign currency loss
on preference shares and warrants - 1,650
Realised foreign currency gain
on monetary transactions 428 580
-------------------------------------- ----------- -----------
Total finance income 578 2,279
-------------------------------------- ----------- -----------
30 Sep 14 30 Sep 13
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