ANNUAL REPORT 2004 - Breevast

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MANAGEMENT REPORTStrategy and development of real estate activitiesIn line with the company’s disinvestment program in NorthAmerica that was initiated in 2003, three properties were soldto third parties during the year under review. In addition,the year saw the signing of a contract of sale for the ParkMcArthur property with delivery taking place in 2005. Thetotal transaction value of these four sales is approximatelyEUR 38 million.A number of projects and portfolios were examined in theUnited States, but this did not lead to any acquisitions duringthe year under review.Geographic distribution of portfolio (including thenon-consolidated subsidiaries as of December 31, 2004)on the basis of fair valuesThe Netherlands 66.7%Belgium 21.6%United States 11.5%Netherlands Antilles 0.2%BREEVAST ANNUAL REPORT 200416CuracaoA number of building lots in Plan Zuurzak on Curacao weresold during the year, but sales are still lagging behind theoriginal prognosis.GENERAL INFORMATIONIn the year under review, Breevast B.V. purchased real estatewith a value of EUR 68.9 million. The real estate sales hada total value of EUR 128.3 million. Based on the theoreticalannual rents, the gross rental rate of return of Breevast’s realestate management portfolio (after revaluation) amounted to9.1% (2003: 9%), with an occupancy rate of 86.9%(2003: 91%).The Breevast B.V. real estate management portfolio (includingthe share of non-consolidated subsidiaries) amounts to EUR842 million at the end of the year under review. The developmentportfolio amounts to EUR 115 million, so that the totalvalue of the real estate portfolio (including the share in subsidiaries)amounts to EUR 957 million on the basis of thecurrent value. The Breevast B.V. real estate portfolio is valuedon average at 11.03 (2003: 11.07) times the net rental rate ofreturn. The valuation is based on fair values; to verify this,25% of the consolidated Dutch portfolio was valued externallyin 2004. Valuations have also taken place abroad within thescope of planned sales.Distribution of stores / offices / industrial buildings(including the non-consolidated subsidiaries as ofDecember 31, 2004)Based on gross annual rentOffices 60.9%Industrial 19.2%Stores 15.5%Other 4.4%Based on fair valuesOffices 59.5%Industrial 17.0%Stores 18.6%Other 4.9%Based on gross floor areaOffices 44.4%Industrial 36.2%Stores 13.3%Other 6.1%
MANAGEMENT REPORTLegal action / Result and shareholders’ equityBREEVAST ANNUAL REPORT 200417LEGAL ACTIONDutch Government claimIt was alleged that with the sale of several corporations in1983, Breevast B.V. and its former partner FGH Bank N.V.should not in fairness have assumed that they were dealingwith a bona fide buyer and should have taken measuresto safeguard the interests of the tax authorities. At the endof 1996, the court in Utrecht established in an interlocutorydecree that the Dutch Government had failed to providesufficient proof for its position in the proceedings that wereinitiated in 1992. The Dutch Government appealed thisdecision to the Court of Appeal in Amsterdam. The judgmentof the court was that Breevast B.V. and FGH Bank N.V.did not act contrary to any rules of law with the sale in 1983and it rejected the claim of the Dutch Government and theInternal Revenue Service. The Dutch Government and theInternal Revenue Service then appealed the judgment of theCourt of Appeal in Amsterdam. In its ruling on February 1,2002, the Supreme Court of the Netherlands referred thejudgment to the Court of The Hague. The burden of proofin this case thus once again lies with the Dutch Governmentand the Internal Revenue Service.On February 2, 2005, a writ was served on the DutchGovernment and the Internal Revenue Service demandingthat the action be discontinued at both the Court ofThe Hague and the Court in Utrecht, as more than threeyears had elapsed since the last act of procedure. The DutchGovernment and the Internal Revenue Service contest this intheir memorandum of reply of February 17, 2005.RESULT AND SHAREHOLDERS’ EQUITYThe income from investments, particularly from propertiesunder management, decreased slightly in 2004 due toa minor slimming down of the portfolio. As at the balancesheet date, the vacancy rate was 13.1% (2003: 9%) of thetheoretical annual rents, including the empty Apollo officebuilding in Diemen and the office building on the PrinsesIrenestraat, Zuidas, in Amsterdam. Excluding these emptybuildings, the vacancy rate was 5.0% of the theoretical annualrents (2003: 4.5%).The results of the subsidiaries lagged behind expectations.The revolving real estate in a joint venture will be disposed ofentirely in 2005.The net profit before taxation increased by more than 46%from EUR 32.7 million to more than EUR 47.8 million.The adjustment from unrealized to realized changes in valueamounted to more than EUR 18 million. On balance, the netresult for 2004 after taxation fell in comparison to 2003 as aconsequence of a corporate income tax item of approximatelyEUR 21.5 million.The currency translation deficit of EUR 810,000 has beendebited directly from the shareholders’ equity under ‘otherreserves’. Including the result and after incorporation ofthe currency translation result, the shareholders’ equity onDecember 31, 2004 amounts to EUR 315 million(2003: EUR 289.5 million).Breevast B.V. acted in good faith when it sold the com paniesin 1983 and has always disputed the claim of the DutchGovernment. Breevast B.V. is holding the Dutch Governmentliable for any negative consequences from its claim.The outcome of further proceedings continues to be viewedwith confidence by the company.
Page 1: ANNUAL REPORT 2004
Page 4 and 5: RIJKSADMINISTRATIEFCENTRUM (RAC) AN
Page 7 and 8: K EY FI GURES(x EUR 1,000)INVESTMEN
Page 9 and 10: MOLENPOORT SHOPPINGMALL IN NIJMEGEN
Page 13: NO TICE OF THE SUPERVISORY BOARDTO
Page 16 and 17: MA NAGEMENT RE PORTStrategy and dev
Page 21 and 22: MANAGEMENT REPORTOutlook / Personne
Page 24 and 25: FI NANCIAL STATEMENTS 2004Accountin
Page 26 and 27: FINANCIAL STATEMENTS 2004Consolidat
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Page 30 and 31: FINANCIAL STATEMENTS 2004Notes to t
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Page 40 and 41: FINANCIAL STATEMENTS 2004Company pr
Page 42 and 43: FINANCIAL STATEMENTS 2004Group comp
Page 44: TANFORAN PARK SHOPPING CENTER IN SA
Page 47 and 48: O T HER INFORMATIONPROFIT APPROPRIA
Page 50: DISTRIBUTIONCENTRE, SCHARENBURG,WES
Page 54 and 55: FINANCIETOREN IN BRUSSELS,BELGIUM,
Page 56 and 57: DE WIJK NEAR MEPPEL,THE NETHERLANDS
Page 58: C ONTACT/C OLOPHONFOR FURTHER INFOR

ANNUAL REPORT 2004 - Breevast

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