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07/02/2008

Robust financial and operational performance in challenging environment

Luxembourg – 07 February 2008 – ProLogis European Properties (Euronext: PEPR), Europe’s largest owner of modern distribution facilities, today reports results for the quarter and year ended 31 December 2007.

2007 Highlights

  • €0.87 distribution per unit
  • NAV broadly flat
  • Execution of growth strategy through investment in ProLogis European Properties Fund II
  • €1.4 billion of unsecured credit facilities agreed, in spite of credit market turbulence
  • €659 million of direct asset acquisitions and disposals in 2007
  • 97.2% occupancy through proactive leasing
  • Strong Balance Sheet with loan to value of 44.3%

Quarter to 31 December 2007   Year to 31 December 2007
  • €0.22 distribution per unit, a 10.0% increase over the third quarter
  • Adjusted net asset value per unit1 of €13.81, a €0.40 decrease since 30 September 2007 primarily due to the impact of revaluations; IFRS net asset value per unit was €11.73
  • Adjusted earnings2 decreased 5.6% for the quarter to €34.3m (Q4 2006: €36.3m) IFRS pre-tax loss was €5.1 million
  • 19 lease transactions covering 71,900m2
  
  • €0.87 distribution per unit
  • Adjusted net asset value per unit decreased 1.1% to €13.81 over the year, mainly due to the issuance of new units (2006: €13.97); IFRS net asset value per unit decreased to €11.73 (2006: €11.88)
  • Adjusted earnings increased 11.7% to €151.3m (2006: €135.4m); IFRS pre-tax profit was €40.2 million
  • 120 lease transactions covering 543,000m2, compared to 85 transactions covering 289,000m2 in 2006

Commenting on the results, Robert Watson, chief executive office of PEPR, said:

“We continued to deliver exemplary financial and operational results in the fourth quarter and throughout 2007, a clear indication that our business plan is working, despite challenging condition in the credit markets. Global trade and the global economy are still growing and our customers continue to reconfigure their supply chains to maximise efficiency, thereby driving strong demand for our modern properties. This demand is evidenced by the fact that we have maintained occupancy in our wholly-owned assets at 97.2%, and through our investment in ProLogis European Properties Fund II improved combined portfolio occupancy to 97.6%.

“We successfully moved towards an unsecured financing strategy in the face of a deteriorating financial market. Both our debut €500m unsecured Eurobond and recent €900m senior revolving credit facility and term loans were over-subscribed. This refinancing gives us the flexibility to execute our growth plans without requiring any further financing until mid 2009.

“We believe that adjusted earnings more accurately reflects the performance of our business. Our 11.7% increase in adjusted earnings to €151.3 million for the year, enables us to deliver €0.87 distribution per unit. Our adjusted NAV of €13.81 per unit has remained broadly flat over a turbulent year where upward revaluations on the continent have been offset by negative sentiment in the UK. This graphically demonstrates the benefits of our geographically diverse, high-quality portfolio which is well-let to globally focused customers.

"We are in sound financial shape with low gearing, secure, long-term income streams from our state-of-the-art portfolio and growing revenue from our investment in ProLogis European Properties Fund II. We believe this combination will enable us to outperform the industry.”

Notes
1 Adjusted net asset value per unit excludes deferred tax arising on revaluation movements and purchasers’ costs
2 PEPR’s measure of underlying earnings is calculated as IFRS post-tax profit excluding revaluation movements, result on disposal of properties and non-recurring events

View the full press release in PDF format (114 KB)

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