Vastned 2016 annual results
Direct result of Vastned slightly higher than expected due to continuous good results by premium city high street shops
High lights 2016
- Vastned acquired premium city high street shops for € 75.9 million and divested property for a total amount of € 94.9 million
- Share of premium city high street shops increases to 74%
- Premium city high street shops are virtually fully let at an occupancy rate of 99.2%
- Occupancy rate of total portfolio consistently high at 97.3%
- Premium city high street shops show a value increase of € 13.4 million despite a value adjustment of € 33.0 million of the Istanbul portfolio due to uncertain geopolitical and economic situation
- Value change of total portfolio (excluding acquisitions and divestments) € 4.7 million negative
- Like-for-like gross rent growth of premium city high street shops of 0.5%
- Loan-to-value at year-end 2016 of 41.8% within the desired range of 40% - 45%
- Direct result 2016 at € 2.42 per share exceeds previously announced range of € 2.30 - € 2.40 per share
- Mainly as a result of a smaller size of the portfolio estimated direct result for 2017 between € 2.10 and € 2.20 per share
In 2016, we continued our strategy of improving the quality of our portfolio. Not only did we acquire a number of unique locations in the best high streets of Amsterdam, Madrid, Paris and Utrecht, expanding our clusters in these cities, we also succeeded in attracting new tenants including Scalpers, Repeat Cashmere, Birkenstock and Zadig&Voltaire. Furthermore, we made progress in divesting non-strategic assets, especially in the Dutch portfolio, which was a key focus point in 2016.
We see that the market is continuously improving, consumer confidence is growing and consumer spending in Europe is rising. We expect especially retailers with shops in the best locations to profit from this. Furthermore, the results for 2016 once again confirm that especially the premium city high street shops generate steady and predictable results. With an occupancy rate close to 100%, a like-for-like gross rental growth of 0.5% and a value increase of € 13.4 million these assets performed very well again. This reinforces our conviction to continue focusing exclusively on the best retail assets in the popular high streets of the bigger European cities.
Given the uncertain geopolitical and economic situation in Turkey the value of the Istanbul portfolio declined strongly. We see that consumer spending is declining for quite some time now and tourists - a major source of income for the Turkish economy - avoid the country. Additionally the negative impact of the fall of the Turkish lira, increases the rental costs for retailers relatively strong. This combined will make it less attractive for retailers to be present in Istanbul, putting market rents under pressure in the coming years.
We have also taken these developments into account in our forecast for the direct result of 2017. Additionally we sold more assets than we aquired during the last year, which will impact next year's rental income as will the ratio of acquisitions and divestments, and the timing of them. As a result, we anticipate a direct result between € 2.10 and € 2.20 per share for 2017.
Vastned is a listed (Euronext Amsterdam) European retail property company focusing on venues for premium shopping. Vastned invests in selected cities in Europe and Istanbul, with a clear focus on the best retail property in the most popular shopping streets in the bigger cities. Vastned's tenants are strong and leading international and national retail brands. The property portfolio has a size of approximately € 1.6 billion.