Dear Shareholders
Following the corona pandemic, in the past year, we faced an unexpected war and its economic and financial consequences that impacted our reality in several areas. Today it is reassuring to be able to look back on a year that, despite these turbulent circumstances, was completed with successful achievements.
A word of thanks to #TeamIntervest for building an organisation that has once again demonstrated its strength and agility. This team managed to successfully continue on its chosen path of reorientation from buying leased buildings to realising real estate projects itself from land position
to leased buildings at strategic locations to reputable tenants. In often difficult circumstances, the team remained motivated working together to achieve the #connect2022 strategy, with constant attention to the changing needs of our tenants.
I thank all our stakeholders, tenants, partners, suppliers and financiers for their continued confidence in Intervest, resulting in, among other things, the renewal of a number of important lease contracts, a stable operational margin, the realisation of a number of strategic development projects and the further improvement of the financial structure.
Naturally, a word of thanks to all shareholders who helped support the #connect2022 strategy and the turnaround. The exercise of the optional dividend by a significant number of shareholders, the green bond and the recent capital increase, are important indicators of the confidence in the strategy and in the achievements of Intervest over the past year.
#connect2022 has laid the foundations for the further realisation of sustainable value creation and growth carried by #TeamIntervest
In June 2020 Intervest outlined its strategy with #connect2022, based on four closely linked pillars: value creation, customer focus, sustainability and #TeamIntervest. Over the past year, Intervest has taken further steps in the implementation of this strategy, more specifically at the level of the further growth of the fair value of the real estate portfolio, in realising set sustainability objectives and in carrying out the (re)development of real estate projects, under in-house management, focused on sustainable value creation from the perspective of both investment and financing.
2022 can be summarised as a year with successful achievements in the growth plan #connect2022 and strong financial results, through strategic leases and sustainable value creation with own development projects
The strategy of Intervest is to invest in projects that create value, whereby the focus on logistics real estate has resulted in a division of the real estate portfolio at year-end 2022 of 47% logistics real estate in Belgium, 26% logistics real estate in the Netherlands and 27% offices in Belgium, respectively.
As at year-end 2022, the real estate portfolio has a fair value of € 1.333 million. This total value also includes € 99 million of project developments and land reserves in addition to properties available for lease amounting to around € 1.234 million. As at year-end 2022, Intervest still has 283.000 m² of projects and land reserves in the logistics segments.
In 2022, some significant lease transactions have been realised, increasing the average duration of leases until first expiry date from 4,3 years last year to 4,9 years for the total portfolio, (5,3 years for logistics Belgium; 6,5 years for logistics Netherlands and 2,9 years for offices). The occupancy rate as at year-end 2022 amounts to 90%.
Intervest closes 2022 with EPRA earnings of € 45,4 million or an increase of 1% compared to 2021. This means EPRA earnings per share of € 1,71 compared to € 1,74 in 2021. Intervest will propose a gross dividend of € 1,53 at the same level as for 2021. This represents a gross dividend yield of 8,0% (based on the closing price as at 31 December 2022).
Thanks to its investments in three real estate segments (logistics in Belgium, logistics in the Netherlands, offices in Belgium) with their own cyclical dynamics, a base of creditworthy and diversified tenants, sufficient financing capacity, a strengthened balance sheet and the achievement of important milestones in the strategic growth plan #connect2022, Intervest has a solid foundation for the future, #connect2025.
Building on its strategic realisations and outlined strategy, Intervest looks to the future with confidence. A confidence that materialises in the updated #connect2025 strategy, based on the well-known pillars: value creation, sustainability, customer focus and #TeamIntervest. The focus in the coming years will be on the logistics segment, which implies that the relative share in the office segment will gradually be strongly reduced in the coming years with a relatively limited share of offices remaining in the portfolio. Sustainability is embedded in Intervest’s DNA. The focus on ESG and innovation on both the investment and financing sides is an integral part of our value creation strategy.
Intervest’s financing structure has been further fine-tuned in 2022 with an increase of the hedging ratio to 72% and this on a long-term basis (5 years on average), sufficient liquidity buffer by € 200 million of unused credit lines, an average remaining maturity of long-term credit lines of 4 years and an average interest rate of 2,0% in 2022.
Sustainable entrepreneurship is embedded in Intervest’s DNA and therefore also the guiding principle when drawing up a detailed roadmap to outline the ESG policy on both the asset and financing side.
The Green Finance Framework, launched in May 2022, is a reference framework aimed at attracting green financing for green property investments and project developments, thus contributing to Intervest’s strategy for sustainable value creation. Following its launch, a first Green bond was concluded, thus embedding sustainability in Intervest’s financing activities. As at 31 December 2022, € 135 million or 16% of the credit portfolio consists of green financing linked to investments in sustainable real estate investments and project developments.
Volatile market conditions, deteriorating macroeconomic outlook, and rising interest rates create a climate of uncertainties in which doing business is not self-evident. Nevertheless, Intervest looks to the future with confidence, building on successful achievements and strengthened by the recent successful capital increase in which over € 49 million was raised that will be used to finance investment opportunities with a focus on sustainable logistics buildings on strategic locations, further realise the development potential, further focus on energy efficiency and other sustainability investments, reduce the debt ratio and further strengthen the balance sheet.
Looking ahead to 2023, Intervest expects to achieve EPRA earnings per share of minimum € 1,48 and also intends to target a gross dividend per share of at least € 1,53.
The new strategic growth plan #connect2025 ambitions EPRA earnings per share of € 1,85 in 2025 and a property portfolio of more than € 1,8 billion.
There is a team you can count on to lead Intervest on the laid out path and realise its growth. The trust of you and our stakeholders are of particular importance, as is the unfailing commitment of #TeamIntervest. I would like to take this opportunity once again to express to everyone my sincere appreciation and thanks for this.
Ann Smolders
Chairwoman supervisory board