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GLOSSARY
ADJUSTED VELOCITY
Velocity multiplied by the free float zone.
BELGIAN CORPORATE GOVERNANCE CODE
Drawn up by the Corporate Governance Commission and including the
governance practices and provisions to be met by companies under
Belgian Law which shares are listed on a regulated market (the”2009
Code”).
BREAK
First option to terminate a lease.
BREEAM (BUILDING RESEARCH ESTABLISHMENT
ENVIRONMENTAL ASSESSMENT METHOD)
Method assessing a building’s environmental efficiency (www.breeam.
org).
CALL OPTION
A right to purchase a specific financial instrument at a preset price and
during a specific period.
CAP
A CAP is an interest rate option. The buyer of a CAP is paying for the right
to borrow at a maximum interest rate for a specific period. He only exer-
cises this right if the actual short-term rate exceeds the CAP’s maximum
interest rate. In order to buy a CAP, the buyer pays a premium to the coun-
terparty. By buying a CAP, Cofinimmo obtains a guaranteed maximum
rate. The CAP therefore hedges against unfavourable rate increases.
CASH POOLING
Management and transfer of cash resources between subsidiaries.
CONTRACTUAL RENTS
Rents as defined contractually in the leases at the closing date, before
deduction of rent-free periods or other incentives granted to the tenants.
DBFM (DESIGN-BUILD-FINANCE-MAINTAIN)
Complete real estate project assignment including the design, construc-
tion, financing and maintenance of a property.
DEALING CODE
Code of Conduct stipulating the rules to be followed by the Directors and
designated persons who wish to trade financial instruments issued by
the company.
DEBT RATIO
Legal ratio calculated according to the RREC legislation as financial and
other debts divided by total assets.
DERIVATIVES
As a borrower, Cofinimmo wants to hedge against a possible short-term
rise in interest rates. It is possible to hedge this interest rate risk to a lim-
ited extent by using derivatives (the purchase of a CAP, possibly accom-
panied by the sale of a FLOOR; IRS contracts).
DISPOSAL VALUE
Book value of the buildings as used in the IAS/IFRS balance sheet,
calculated by deducting from the investment value a portion of trans-
fer taxes currently set by the independent experts at 2.5% for assets
located in Belgium. However, for properties with an overall value of less
than €2.5 million, the taxes to deduct are the registration taxes of 10%
and 12.5%, depending on the region in which the property is located. For
assets located in France or in the Netherlands, the deducted transfer
taxes amount to respectively 6.75% and 4.89%. This disposal value is
used as fair value in Cofinimmo’s IAS/IFRS financial statements.
DIVIDEND YIELD
Gross dividend divided by the average share price during the year.
DOUBLE NET
So-called “double net” rental contracts (leases) or yields imply that the
maintenance costs are, to a greater or lesser extent, payable by the
owner (lessor). These costs include expenses for the maintenance of
roofs, walls and façades, technical and electrical installations, surround-
ings, water supply and drainage systems. This mainly concerns office
properties. Part or all of these maintenance costs can be charged to the
lessee in the special provisions of the lease.
DUE DILIGENCE
Procedure aiming to establish a complete and certified inventory of a
company (accounting, economic, legal and fiscal aspects) before a
financing or acquisition transaction.
EBIT (EARNINGS BEFORE INTERESTS AND TAXES)
Operating result. Net current result before interest charges and taxes.
EBITDA (EARNINGS BEFORE INTERESTS, TAXES,
DEPRECIATION AND AMORTISATION)
Net result before interest charges and revenues, taxes, depreciation and
amortisation. Under the RREC legislation, investment properties are not
amortised.
EBITDAR (EARNINGS BEFORE INTERESTS, TAXES,
DEPRECIATION, AMORTISATION AND RENTS)
Net result before interest charges and revenues, taxes, depreciation,
amortisation and rents.
EHPAD (ÉTABLISSEMENT D’HÉBERGEMENT POUR
PERSONNES ÂGEES DÉPENDANTES)
In France, this is the most widespread form of accomodation facility for
the elderly.
E-LEVEL
Primary energy consumption level of a building, according to the
European legislation.
EPB (ENERGY PERFORMANCE OF A BUILDING)
This index, issued from the European Directive 2002/91/EC, expresses the
quantity of energy required to meet the various needs for the normal use
of a building. It results from a calculation that takes into account the var-
ious factors that influence energy demand (insulation, ventilation, solar
and internal contributions, heating system, etc.).
EPRA (EUROPEAN PUBLIC REAL ESTATE ASSOCIATION)
Organisation grouping the listed European real estate companies with
the aim of promoting the sector and making it more attractive compared
to direct real estate investments by offering greater liquidity, accessibility
and transparency of the companies
(www.epra.com).
Glossary