47 / 236
ASSUMPTIONS
2016 FORECAST
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Healthcare real
estate
Offices
Property of
distribution
networks
14.3
1.8
1.2
1.2
8.9
10.2
41.7
4.8 0.6
17.0
6.9
8.8
0
10
20
30
40
50
Valuation of assets
The fair value, i.e. the investment value of the properties net of transac-
tion costs, is included on the consolidated balance sheet. For the 2016
provisional balance sheet, this valuation is entered as an overall figure
for the entire portfolio, increased by major renovation expenses.
Maintenance and repairs -
Major renovation works
The forecasts, produced by building, include the maintenance and
repair expenses, which are entered under operating expenses. They
also include the large-scale renovation costs, which are capitalised
and met from self-financing or borrowing. The large-scale renovation
expenses taken into account in the forecast amount respectively
to 38.1 million EUR for the office buildings and 4.8 million EUR for the
pubs/restaurants.
Investments and divestments
The forecast takes into account the following investment and divest-
ment projects:
•
the purchase of healthcare real estate in Belgium, France, the
Netherlands and Germany for 74.4 million EUR, resulting from the
delivery of new units or extensions of existing units for which
Cofinimmo is legally committed;
•
sale of Pubstone pubs/restaurants for 4.7 million EUR.
Rents
The rent forecast takes into account assumptions for each lease
as to tenant departures, analysed on a case-by-case basis. The
forecast also includes redecoration costs, a rental vacancy period,
rental charges and taxes on unoccupied spaces as well as agency
commissions at the time of the relocation that apply if the tenant
leaves. Letting forecasts refer to the current market situation, without
anticipating either a possible upturn or deterioration in the market.
The property result also incorporates the writeback of lease payments
sold and discounted relating to the gradual reconstitution of the full
value of buildings of which the leases have been sold to a third party.
A 1.00% positive or negative change in the occupancy rate on the office
portfolio leads to a cumulative increase or reduction in the net current
result per share and per year of 0.04 EUR. The ongoing contracts are
indexed.
Inflation
The inflation rate used for the evolution of rents ranges from 1.00%
to 1.30%, depending on the countries, for the leases being indexed in
2016. The sensitivity of the forecast to changes in the inflation rate is
low over the considered period. An expected inflation change of 50
basis points, positive or negative, leads to a cumulative increase or
reduction in the net current result per share and per year of 0.05 EUR.
Financial charges
The calculation of the financial charges is based on the assumption
that interest rates will evolve as anticipated by the future rates curve,
and on the current bank and bond borrowings. Considering the hedg-
ing instruments in place, the estimated cost of debt in 2016 should be
less than 3.00% (margins included). No assumption of changes in the
value of financial instruments due to the evolution of rates is taken into
account in the 2016 forecasts, both on the balance sheet and on the
income statement.
Consolidated income statement
Given the uncertainty of a forward projection of the future market
values of the properties, no reliable assessed forecast can be provided
for the unrealised result on the portfolio.
This result will depend on trends in the rental market, changes in
their capitalisation rates as well as anticipated renovation costs of
buildings.
Changes in shareholders’ equity will depend on the current result, the
result on the portfolio and the dividend distribution.
2016 Investissement programme (x 1, 000 ,000 EUR)
43