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28/10/2010

Further deleveraging;

Focus on return to investment grade

ProLogis European Properties (Euronext: PEPR), one of Europe’s largest owners of modern distribution facilities, today reports results for the third quarter and nine months ended 30 September 2010.

Highlights

  • Generated €63.4 million of distributable cash flow over nine months
  • Loan-to-value ratio improved to 52.5% from 53.3% at 30 June and 55.0% at end 2009
  • Increase in EPRA net asset value by 2.6% to €6.31 per ordinary unit since year end 2009
  • As anticipated, portfolio occupancy decreased by 1.0% to 92.7% – still comfortably above the market
  • Significant leasing activity completed during the quarter, including lease renewals on over 250,000 square metres in France and Spain
  • Closed on new €50 million, three-year, unsecured revolving credit facility giving extra flexibility to meet ongoing working capital requirements
  • Amended terms of unsecured debt facility to permit return to paying ordinary dividends
Quarter to 30 September 2010 Nine months to 30 September 2010
  • EPRA earnings €0.10 per ordinary unit (Q3 2009: €0.14 per ordinary unit)
  • IFRS earnings of €0.06 per ordinary unit (Q3 2009 €0.42 loss per ordinary unit)
  • EPRA net asset value €6.31 per ordinary unit (Q2 2010: €6.27 per ordinary unit)
  • IFRS net asset value €6.04 per ordinary unit of (Q2 2010: €5.99 per ordinary unit)
  • 35 lease transactions covering 312,000sq m, compared to 23 transactions covering 217,800sq m in Q3 2009
  • EPRA earnings €0.31 per ordinary unit (9M 2009: €0.46 per ordinary unit)
  • IFRS earnings of €0.11 per ordinary unit (9M 2009: €1.67 loss per ordinary unit)
  • EPRA net asset value €6.31 per ordinary unit (2009: €6.15 per ordinary unit)
  • IFRS net asset value €6.04 per ordinary unit (2009: €5.97 per ordinary unit)
  • 97 lease transactions covering 1,013,800sq m, compared to 57 transactions covering 615,800sq m in HY 2009


Commenting on the results, Peter Cassells, chief executive officer of PEPR, said: “We are pleased with the progress we have made on improving our liquidity profile and reducing PEPR’s loan-to-value ratio. We remain firmly focused on maintaining industry-leading occupancy and deleveraging the business to ensure a return to an investment grade rating. With that in mind, we intend to continue to retain distributable cash flow for the foreseeable future.

“Since quarter end, we received approval from our unsecured bank syndicate to partially remove the restrictions on making ordinary dividend payments, reflecting the confidence our bank syndicate has in our business and the progress we have made in improving our liquidity profile.

“We are further encouraged to announce another quarter of significant leasing activity in spite of macro economic uncertainties and continued softness in occupier demand. Although there are signs of improving market fundamentals, we continue to expect a patchy economic recovery across Europe and remain cautious about rental levels in the near term.

“We have delivered financial results in line with our guidance, with EPRA earnings and distributable cash flow for the nine months at €0.31 and €0.33 per ordinary unit respectively. As anticipated, our portfolio occupancy declined slightly to 92.7% although we remain above general logistics market averages. We believe that we are very well placed to benefit from increased occupier demand as and when market conditions improve.”

View the full Results for the quarter and nine months ended 30 September 2010 in PDF format (664KB)

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