Rabo Vastgoed
Financial results
47 Rabobank Group Annual Report 2004
Core activities
Breakdown by financing type
4
Investment financing 69%
H Property for own
business use 10%
Uitpond financing 8%
Other 13%
Land portfolio
in hectares
2,000
1,600
1,200
800
400
0
2001
2002
2003
2004
FGH Bank's services are not restricted to real estate financing. Clients can
turn to FGH Vastgoed Expertise for such matters as advice, portfolio
analysis, market research and plan assessments as well as for commercial
real estate appraisals. FGH Asset Management acquires Dutch real estate
and manages real estate funds and items of real estate. FGH Asset
Management is currently involved in six private funds, including
CV Winkelcentrum Ypenburg. In collaboration with Schretlen Co,
this fund was placed with approximately 800 private investors in the
autumn of 2004. The shopping centre is being developed by 'RaFo VOF'
development combination, which consists of Rabo Vastgoed (houses)
and Foruminvest BV (shops).
Rabo Vastgoed is Rabobank Group's real estate developer. Thanks to
successful collaboration with government authorities, construction
enterprises, housing corporations and other stakeholders, Rabo Vastgoed
was able to significantly expand its activities in recent years. Its land
portfolio grew from 740 hectares in 2001 to 1,790 hectares in 2004.
Rabo Vastgoed buys up the land in order to build a strategic position for
future projects. Regionalisation has extended Rabo Vastgoed's operating
area from the Randstad area, i.e. the west of the country, to the whole of
the Netherlands, resulting in strong growth. The land portfolio has
potential for 28,675 houses and 915,000 rm2 of industrial space, increases
of 38% and 12%, respectively, on 2003. Rabo Vastgoed's turnover was
7% higher in 2004 at EUR 283 (264) million. The order portfolio, which
comprises approved and current projects, grew by 9% to EUR 3.6 (3.3)
billion. The development portfolio comprises over 11,000 houses and
254,000 m2 of industrial space. The number of houses sold fell by more
than 600 to 1,114. This is a one-off decline, owing to the build up of the
portfolio. In 2005, house sales should return to their 2003 level.
Involvement of local population in housing projects
Rabo Vastgoed develops projects with respect for the surrounding envi
ronment. It aims to develop houses in locations that are both attractive
and safe and that capture the enthusiasm of users for many years.
In order to achieve this, Rabo Vastgoed works closely together with the
local Rabobanks. By listening to the needs and desires of members and
clients of local banks and by participating in municipal competitions,
Rabo Vastgoed successfully completed a number of attractive housing
projects in the past few years. Apart from owner-occupied houses,
Rabo Vastgoed develops rented (council) houses in consultation with or
commissioned by investors and housing corporations.
In 2004, Rabobank Group's real estate operations achieved an operating
profit before taxation of EUR 85 million. Because of the acquisition of
FGH Bank in October 2003, a proper results comparison cannot be
made. Thanks to its excellent year, FGH Bank provided a large number
of new loans, while Rabo Vastgoed successfully completed a number of
projects. This resulted in higher interest income, which includes results
on projects. Income was EUR 117 million, more than 90% of which was
interest income. In the year under review, operating expenses were
EUR 32 million.
IFRS
For the time being, the new financial reporting standards will have a
limited impact on FGH Bank's results. It is not yet clear how the market
will respond to the changed accounting rules for leasing and renting
and how they might affect FGH Bank's results.
Under IFRS, Rabo Vastgoed's land positions will continue to be valued
on the basis of acquisition price. The volatility of Rabo Vastgoed's results
might even decrease, reflecting the predominantly project-related
character of its activities. Under IFRS, results will be recognised in relation
to a project's progress, instead of at the time the project is completed.
