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Annual Accounts /
Notes to the Consolidated Accounts
NOTE 5.
RENTAL INCOME AND RENTAL-RELATED EXPENSES
As a reminder, the amount of the early lease termination indemnities at
31.12.2012 includes the non-recurrent indemnity of €11.20 million paid by
Belfius Bank for the termination of their lease for the Livingstone I and II
buildings.
Except in some rare cases, the leases contracted by the Group are subject
to indexation.
The Group leases out its properties under operating leases and finance
leases. Only revenues from operating leases appear under rental income.
The amount under the item “Writeback of lease payments sold and dis-
counted” represents the difference between the discounted value, at the
beginning and at the end of the year, of the future inflation-linked payments
on the lease contracts which receivables have been sold. The writeback
through the income statement allows for a gradual reconstitution of the
gross initial value of the concerned buildings at the end of the lease. It is a
recurring and non-cash income item.
The change in the fair value of these buildings is determined by the inde-
pendent real estate expert and is taken as profit or loss under the item
“Changes in the fair value of investment properties”. This time, it is a non-re-
curring item as it depends on the expert’s assumptions as to future market
conditions.
Total rental income
When a lease is classified as a finance lease, the property is considered to
be disposed of and the Group to have an interest in a finance lease instead.
Payments received on the finance leases are split between “capital” and
“interests”: the capital element is taken to the balance sheet and offset
against the Group’s finance lease receivable and the interest element to
the income statement. Hence, only the part of the rents relating to interests
flows through the income statement.
Total income generated from the Group’s properties through operating and finance leases
(x €1,000)
2013
2012
Rental income from operating leases
195,191
202,424
Interest income from finance leases
3,598
3,176
Capital receipts from finance leases
2,973
3,033
TOTAL
201,762
208,633
Total minimum future rents under non-cancellable operating leases and finance leases in effect at December 31st
(x €1,000)
2013
2012
Operating lease
2,603,033
2,609,436
Less than one year
221,103
217,422
Between one and five years
582,939
561,178
More than five years
1,798,991
1,830,836
Finance lease
68,685
56,370
Less than one year
1,236
2,973
Between one and five years
18,827
9,295
More than five years
48,622
44,102
TOTAL
2,671,718
2,665,806
1
The gross potential income corresponds to the sum of the real rents received and the estimated rents attributed to unlet spaces.
2
The vacancy is calculated on unlet spaces based on the rental value estimated by the independent real estate experts.
3
Early termination compensations are recognised directly in full under the income statement, in accordance with IAS17.50.
(x €1,000)
2013
2012
Rental income
Gross potential income
1
207,688
203,153
Vacancy
2
-10,233
-10,873
Rents
197,455
192,280
Cost of rent-free periods
-2,479
-1,673
Client incentives
-631
-803
Indemnities for early termination of rental contracts
3
846
12,620
SUBTOTAL
195,191
202,424
Writeback of lease payments sold and discounted
25,276
22,994
Rental-related expenses
Rent payable on rented premises
-88
-49
Writedowns on trade receivables
-43
-58
Writeback of writedowns on trade receivables
125
40
TOTAL
220,461
225,351