PEPR Annual General Meeting Statement
(Thomson Reuters ONE) -
News release
Annual General Meeting Statement
Wednesday 22 June 2011
Luxembourg - 22 June 2011 - Peter Cassells, CEO of ProLogis European Properties
(Euronext: PEPR), Europe's largest owner of modern distribution facilities, will
make the following statements at today's AGM to be held from 09:00am CET at the
offices of Prologis, 34-38 Avenue de la Liberté, L-1930, Luxembourg.
Increased Prologis ownership
In April 2011, Prologis (NYSE: PLD) announced an increase in its ownership of
PEPR to approximately 38% and a mandatory tender offer to acquire all of the
outstanding ordinary units and convertible preferred units it did not own. The
initial offer price of ?6.10 per unit for both ordinary and preferred units was
revised to ?6.20 per unit in May. At the time of the revised offer price,
Prologis owned 59.9% of PEPR's ordinary units.
The Management Company of PEPR, in consultation with the Independent Members of
the PEPR Board and having received external legal and financial advice,
concluded that the Prologis offer did not reflect PEPR's full value potential.
However, unitholders were advised that the offer could potentially represent a
liquidity event for those unitholders who may consider, amongst other aspects,
(i) that the risk return profile of PEPR is not in line with their investment
objectives and/or (ii) that any further increase in Prologis' holding in PEPR
may have an effect on the future market liquidity of the units.
At the end of the offer period, Prologis owned 89.58% of the ordinary units and
94.62% of the preferred units. As a 95% holding was not achieved, Prologis was
not in a position to use its squeeze-out right. Furthermore, as a 90% holding
was not reached either, the remaining unitholders are not in a position to
exercise any sell-out rights which would require Prologis to purchase their
units.
Prologis' offer document indicated that it would continue to operate PEPR as a
listed entity if it did not achieve a holding of 95% at the end of the offer
period, with no operational changes in management anticipated and the renewal of
the management agreement to occur in 2016.
Financial results and operating performance
In February this year, PEPR reported financial results for 2010 ahead of
guidance and strong operating performance. We maintained high occupancy levels
throughout the sustained market downturn and completed record levels of leasing
in 2010, resulting in a high level of customer retention for the year. In
addition, we continued to work towards achieving an investment grade rating - we
repaid or refinanced over ?480 million of outstanding debt, reducing loan-to-
value to 53.0% at the end of 2010.
The first quarter 2011 results, announced in April, saw PEPR continue to achieve
robust operational performance and financial results firmly in line with the
guidance set at the beginning of the year. Portfolio occupancy of 93.2% at the
end of March is in line with expectations and remains above logistic market
averages. The volume of leasing, particularly new leases, completed during the
quarter demonstrates that our modern, pan-European portfolio remains highly
sought-after to existing and prospective customers.
With no debt maturing until late 2012 and a sustained focus on deleveraging the
business, PEPR continues to make progress in its efforts to return to an
investment grade credit rating. Loan-to-value was reduced to 52.6% at March
2011 from 53.0% at the end of December 2010 and post quarter end was reduced
further to 51.5% following the early repayment of one of our more expensive debt
facilities. While our credit rating remains at Ba1, Moody's improved PEPR's
corporate credit rating outlook to positive from stable in early June, a
positive step towards achieving investment grade.
Market outlook
Overall, the steady recovery in the European logistics market continues, with
economic forecasters predicting modest positive real GDP growth across Europe of
between 1.5 and 2.0% during 2011-2012 despite concerns over sovereign debt and
the potential impact on global supply chains of the earthquake and tsunami in
Japan. However, there is continued evidence of varying rates of recovery across
Europe, with Germany, France and Central Europe benefitting more from the global
recovery while the UK is still feeling the impact of its austerity measures.
On the occupier side, demand remains relatively strong and customer confidence
continues to improve. However, activity may fluctuate as the result of a number
of factors: firstly, the pent-up demand from projects that were temporarily
shelved during the crisis may have been largely satisfied in the latter part of
2010; inventory restocking after the downturn could have worked its way through
the system; GDP growth rates have slowed slightly since the rebound of last
year; and finally, an absence of alternative available modern supply may temper
leasing volumes in some markets. However, we should not lose sight of the fact
that leasing volumes have recovered to a level close to their long term average
and the flight to quality in terms of modern, well located buildings is set to
continue.
New supply remains limited to build-to-suit projects, with a small amount of
speculative development. As a result, market values and rental levels are
expected to remain flat in the near term with modest rental growth in prime
markets expected in the latter part of 2011.
The recovery of the European logistics investment market remains on track, with
sustained investor interest in the sector, although transaction volumes are
being held back somewhat by a lack of available product and a continued
concentration around the prime end of the sector. As a result, the cap rate
compression seen at the beginning of 2011 has decelerated and overall, market
yields are back in line with the 10 year average.
PEPR's future priorities
Our main operational priority for 2011 is to continue to drive cash flow from
the portfolio through proactive asset management, exemplary customer service and
sustained high levels of leasing activity. In addition, where excess supply of
space has been absorbed, we will look to push for higher rents. Finally, based
on our success on the leasing front and the resultant cash flow, we will
actively further deleverage our balance sheet and continue on our path to return
to an investment grade rating.
-Ends-
For further information, please contact:
Investor relations
Jennifer Crooke
+44 207 518 8708
jcrooke(at)prologis.com
Media
M:Communications
Charlotte McMullen
+44 20 7920 2349
mcmullen(at)mcomgroup.com
About ProLogis European Properties (PEPR)
ProLogis European Properties, or PEPR, is one of the largest pan-European owners
of high quality distribution and logistics facilities. PEPR was established in
1999 as a closed-end, real estate investment fund, externally managed by a
subsidiary of Prologis, a leading global provider of industrial distribution
facilities. In September 2006, ordinary units in PEPR were listed on the
Luxembourg Stock Exchange and Euronext Amsterdam.
As at 31 March 2011, PEPR had a portfolio of 232 buildings, covering 4.9 million
square metres in 11 European countries, with an estimated market value of ?2.8
billion. The portfolio has an occupancy level of 93.2% and an average of 3.4
years to the next lease break or 5.3 years to lease expiry.
PEPR Annual General Meeting Statement:
http://hugin.info/139145/R/1525147/460836.pdf
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Source: ProLogis European Properties via Thomson Reuters ONE
[HUG#1525147]
Unternehmensinformation / Kurzprofil:
Datum: 22.06.2011 - 08:04 Uhr
Sprache: Deutsch
News-ID 55754
Anzahl Zeichen: 9027
contact information:
Town:
Luxembourg
Kategorie:
Business News
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