Wereldhave Belgium : Trading update 30 September 2021

Trading update

30 September 2021

Wereldhave Full Service Centers contribute to a more joyful and comfortable everyday life.

A one-stop location for groceries, shopping, leisure, relaxation,sports, health, work and other daily needs, allsupported bysmart concepts and digital services.

Byinvesting sustainablyto meet the needs of customers andlocal areas, weenrichcommunities, while caring fortheenvironment,and have a positive effect onthewaypeoplelive, work andshop.

Wereldhave Full Service Centers play a vital role inpeople'severyday lives in leading regional cities intheNetherlands,Belgium and France.

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Back to good footfall in the shopping centres, good performance of the portfolio tenants and confirmation of the indication of the result per share.

• Increasing net result from core activities per share by € 1.4 mln to € 38.6 mln as of 30 September 2021;
• Slight increase in the fair value of the investment properties portfolio compared to 30 June 2021 (+€ 2.9 mln or +0.3%);
• Stable EPRA occupancy rate in shopping centres (96.0%) compared to 30 June 2021 (96.2%);
• High percentage of receivables collection (96.7%) for the third quarter of 2021;
• Confirmation of the indication of the net result from core activities per share to € 4.30.

Key figures

(x € 1,000)			30 September 2021	30 September 2020
Results
Net rental income			38,605	37,174
Net result			21,826	-18,638
Net result from core activities 1)			28,183	27,619
Net result from non-core activities 2)			-6,357	-46,256
Profit per share (x € 1)			2.57	-2.39
Net result from core activities per share (x € 1)			3.31	3.54
Average number of shares			8,506,358	7,807,981
(x € 1,000)
30 September 2021		30 June 2021	31 December 2020
Balance sheet
Properties available for lease 3)	905,971		903,081	908,575
Development projects	12,728		13,290	12,635
Total investment properties	918,698		916,370	921,210
Shareholders' equity	654,2405)		644,5205)	650,5484)
Net asset value per share (x € 1)	75.275)		74.155)	78.204)
Debt ratio	29.1%		29.9%	30.0%
Share price	45.70		48.75	39.30
Number of shares	8,692,063		8,692,063	8,319,287

1. The net result from core activities is the operating result before the portfolio result minus the financial result and taxation, and excluding variations in the fair value of financial derivatives (that are not treated as hedge accounting in accordance with IFRS 9) and other non-distributable items on the basis of the company financial statements of Wereldhave Belgium.
2. The result from non-core activities comprises (i) the result on sale of property investments, (ii) the variations in the fair value of property investments, (iii) the other portfolio result, (IV) the variations in the fair value of financial assets and liabilities and (V) taxes on capital gain latencies and the exit taxes paid.
3. Fair value has been computed after deduction of the transaction costs (2.5%) incurred at the sales process. The independent valuation expert has carried out the valuation in conformity with 'International Valuation Standards' and 'European Valuation Standards'.
4. Before profit distribution and dividend payment.
5. Before profit distribution and after dividend payment.

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Operational activities

Back to a normalized operational situation

During the past quarter, the vaccination campaign continued and reached 72.9% of the Belgian population by 30 September 2021. Recording a strong decrease in infection rates, the authorities successively initiated the next phases of softening of sanitary measures during the summer, notwithstanding differences between the Regions. With respect to the measures affecting the Company's tenants, the restrictions applicable to stores and linked to a maximum number of people per square metre were lifted. The same applied to restrictions on the opening hours of Horeca establishments, the number of people at table, terraces, noise levels and bar service or standing room, which were also lifted.

Hence, after six quarters of activity strongly impacted by the pandemic, the situation appears to have stabilised during the third quarter of 2021 and, even if the authorities have indicated that a resurgence of the virus cannot be totally excluded, a normalisation seems to have set in. This is reflected in the Company's results for the past quarter, which show a positive trend, as outlined below.

Result of the last quarter

The rental income for the first nine months of this year was € 38.6 mln, i.e. an increase of € 1.4 mln compared to the same period in 2020. This increase is mainly attributable to the combination of the reduced impact of the Covid-19 pandemic with a slight decrease in income mainly from the office portfolio.

The net result from core activities increased from € 27.6 mln as of 30 September 2020 up to € 28.2 mln as of 30 September 2021. This increase is due to a reduction in real estate expenses and an increase in other operating result (+€ 1.4 mln). The interest expense in the past quarter increased by € 0.8 mln due to the higher interest rate resulting from the private placement transaction of 31 March 2021

Investment properties

The fair value of the investment properties portfolio (excluding development projects) amounted to € 906,0 mln as of 30 September 2021 (€ 903.1 mln as of 30 June 2021). This increase is mainly due to the investments made during the past quarter and a slight revaluation within the investment property portfolio. As at 30 September 2021, the EPRA occupancy rate of the investment properties portfolio remained stable at 92.8% (92.9% as at 30 June 2021 and 91.9% as at 31 December 2020).

On 30 September 2021, the value of the Belle-Ile shopping centre within the Company's portfolio was 20.2%, above the legal threshold of 20%. This means that the derogation obtained from the FSMA and which is valid until the end of December 2022 still applies. In addition to several reporting requirements to the FSMA, the application of this derogation entails that the Company's debt ratio is limited to 33%, in accordance with the RREC-Law.

Retail portfolio

As at 30 September 2021, the EPRA occupancy rate of the retail portfolio was 96.0% (96.2% as at 30 June 2021 and 94.4% on 31 December 2020). During the third quarter, the dynamic leasing observed during the first half of the year continued with 15 leases and lease renewals concluded for a total annual rent of € 1.6 mln. On average, the leases concluded during the first nine months of the year as well as the renewal were concluded 5% above the estimated market value. Combined with continued high occupancy rate in a challenging market, this demonstrates once again the quality of the Company's assets and teams.

The number of visitors of the shopping centres continued the trend observed on 30 June 2021 and has again evolved favorably over the past quarter. Indeed, the Company's shopping centres welcomed 5% more visitors than in the same period last year, benefiting from the continued softening of sanitary measures in the third quarter. The footfall figures over the past quarter are even closer to those of 2019 as the difference amounts only to 9%. Furthermore, the comparison of the Company's shopping centres visitors figures for the third quarter of 2021 with those of the market for the same period in 2019, shows that the Company's assets are performing better than the market (+2%). In addition, reported sales figures for the early summer period were higher to those of 2019 for most sectors including fashion, food, restaurants, home decoration, health & beauty and sports, etc.

In the shopping centres, the Company's teams completed a number of projects in the third quarter of 2021; firstly, the launch of the new logo for the Ring Kortrijk shopping centre and the concomitant opening of its in-house "The Point" concept, which, combined with the start of renovation works on the façades, entrances and outdoor terraces, fit in perfectly with the "rebranding" of this shopping centre, which was acquired in 2015. In addition, after two years of renovation works on the interior of the Belle-Île shopping centre, the Company also unveiled its new identity. On this occasion, the Company confirmed that it benefits from all permits and authorizations to carry out its extension project and that, given the improvement in the health situation, the leasing of rental space had resumed.

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Office portfolio

During the third quarter, the EPRA occupancy rate of the office portfolio increased slightly to 75.5% as at 30 September 2021 (74.7% as at 30 June 2021), mainly due to the conclusion of two new leases.

In the fourth quarter, the Company will continue to invest in the portfolio to further implement its "The Sage" concept, including improving the technical and environmental qualities of the buildings, thereby increasing their attractiveness in the market.

Shareholders' equity, net asset value and financing policy

Shareholders' equity amounted to € 654.2 mln as of 30 September 2021 (€ 644.5 mln as of 30 June 2021). This increase is due to the result generated during the quarter.

The net asset value per share (total shareholders' equity / number of shares), including profit of the current financial year, amounted to € 75.27 as of 30 September 2021 (€ 74.15 as of 30 June 2021).

The Company has an average residual duration of its financial debt of 3.3 years and an average weighted financing cost of 1.25% in 2021.

On 30 September 2021, the debt ratio amounted to 29.1% (29.9% on 30 June 2021), providing available space for new investments.

Receivables collection

The receivables collection rate was over 96,7% (94% at 30 June 2021) for the third quarter of 2021, confirming a return to a normalized situation.

Prospects

In the press release on the results for the first half of 2021, the Company issued an indication of net result from core activities per share of € 4.30.

As at 30 September 2021, the health situation continues to improve, which has had a positive impact on both footfall and tenant activity.

Taking into account the above, the Company is in a position, unless unforeseen circumstances, to confirm the net result from core activities per share indication of € 4.30 for the full year 2021.

The Board of Directors of Wereldhave Belgium NV/SA