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UPDATE 2-Wereldhave's direct result up on lower interest

Published 05/12/2009, 03:28 AM
Updated 05/12/2009, 03:32 AM

* Direct result 28.1 million euros

* Investment portfolio revalued lower by 31.8 million euros

* Lower interest expenses boost direct result (Recasts, adds shares, occupancy rates, interest rate details)

AMSTERDAM, May 12 (Reuters) - Dutch property group Wereldhave reported a 3 percent rise in its direct result on the effect of lower interest rates, but vacancies rose and the value of its portfolio fell.

The company also said on Tuesday it was not yet giving an outlook for 2009.

Shares in Wereldhave opened 1.1 percent lower at 55 euros but were up 0.7 percent at 55.97 euros by 0708 GMT.

Wereldhave said its first-quarter direct result was 28.1 million euros ($38 million) or 1.26 euros per share, compared with 27.4 million euros or 1.23 per share a year earlier.

Analysts had on average expected a direct result of 26 million euros, or 1.21 euros per share, according to a Reuters poll.

The direct result figure takes into account the company's rental income on properties minus its expenses. For real estate companies, this measure is preferred because it gives a closer view into the company's cash flow.

The group, which manages retail and office property in Europe and the United States, said the figure rose on lower interest expenses, while rental income declined on vacancies in France and the United States.

Because some 75 percent of the company's loans are on variable interest rates, recent central bank rate cuts around the world have helped its bottom line. Its average interest rate fell to 2.6 percent at March 31 from 3.7 at year-end, the company said.

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But the recession led to lower property values in all countries, for a total negative effect on its portfolio of 31.8 million euros. Wereldhave's investment portfolio rose 0.4 percent to 2.66 billion euros.

After the effect of the revaluation, the company swung to a loss of 1.5 million euros, or 16 cents per share, from a profit of 38.2 million euros, or 1.73 euros per share, a year earlier.

Its occupancy rate fell to 89.6 percent from 94.7 percent last year, with the greatest weakness in office and residential properties.

Its shares, which have fallen about 33 percent in the past year, closed at 55.59 euros in Amsterdam on Monday. (Reporting by Ben Berkowitz; Editing by Dan Lalor and Rupert Winchester) ($1 = 0.7349 euro)

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