Annual report 2008 - Altarea Cogedim

Business review
Rental income includes:
• Rent increases to be applied on lease renewals;
• The normative vacancy rate;
• The impact of future rental capital gains resulting from
the letting of vacant premises;
• The increase in rental income from incremental rents;
• The renewal of leases coming up for expiry.
Appraisal valuations concern only properties in operation
at 31 December 2008, not including the present or future
value of projects in the portfolio or under construction,
which are stated at cost.
The building permit for Bercy Village was obtained in the
second half of 2008. A discount is therefore no longer
justified, as confirmed by legal expert Michel Marx.
These valuations are conducted in accordance with the
criteria set out in the RICS Appraisal and Valuation
Standards published by the Royal Institute of Chartered
Surveyors in May 2003. The surveyors’ assignments were
carried out in accordance with the recommendations of the
COB/CNC “Barthes de Ruyter working group“. Surveyors
are paid lump-sum compensation determined in advance
and based on the size and complexity of the appraised
properties. Compensation is therefore totally independent
of the results of the valuation assessment.
The number of shopping centre property transactions slowed
down significantly at the end of 2008. The few transactions
recorded concern primarily shopping malls attached to
hypermarkets in provincial areas. Depending on the quality
of these properties, the rate of return for investors varied
from 5.20% to 6.50%. Against this backdrop, appraisal
firms have revised the Group’s average rate of return.
2.3 Recurring operating profit
The contribution to consolidated recurring operating profit
increased by 26% to €104 million, mainly as a result of “full
year“ effects and the completion of properties.
(in €m) 12/31/2008 12/31/2007
Rental income 122.3 94.4
Other net income (entry rights) 4.3 3.6
Land expense (2.1) (0.7)
Unrecovered rental expenses (7.3) (4.6)
NET RENTAL INCOME 117.3 +26.5% 92.7
% of rental income 95.9% 98.2%
Net overhead expenses (9.5) (9.1)
Miscellaneous (3.9) (1.2)
OPERATING PROFIT 103.8 +26.0% 82.4
% of rental income 84.9% 87.3%
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