CREA TING V A L UE IN REAL EST A TECCREA TING V A L UE IN ...€¦ · As of 30 September 2002, the...

A N N U A L R E P O R T 2 0 0 2A N N U A L R E P O R T 2 0 0 2A N N U A L R E P O R T 2 0 0 2A N N U A L R E P O R T 2 0 0 2

C R E A T I N G V A L U E I N R E A L E S T A T EC R E A T I N G V A L U E I N R E A L E S T A T EC R E A T I N G V A L U E I N R E A L E S T A T EC R E A T I N G V A L U E I N R E A L E S T A T E

A N N U A L R E P O R T 2 0 0 2A N N U A L R E P O R T 2 0 0 2

C R E A T I N G V A L U E I N R E A L E S T A T EC R E A T I N G V A L U E I N R E A L E S T A T E

0.00

1.00

2.00

3.00

4.00

5.00

6.00

1998 1999 2000 2001 2002

key figures

KEY FIGURES 2002 (as of 30/09/2002)

TOTAL SURFACE AREA OF PORTFOLIO

VALUEOF PORTFOLIO(1)

OCCUPANCY RATE

EQUITY

BOOK VALUE(PER SHARE)

527 842 m2

EUR 1 074 202 000

95.87%

EUR 605 597 000

EUR 61.83

CURRENT PROFIT PER SHARE (EUR)

(1) Current rules oblige us to communicate both the sale value and the acquisition value of the portfolio; the latter is termed the “deed in hands” value and is the assessed value on the date of acquisition. It includes variable transaction costs that can total as much as 13%. These are the costs that an investor would have had to pay if he had made a direct real estate investment. Consequently, in the event of the sale of a portfolio at the assessed value, the net sale value for the Sicafi would be between EUR 951.7 million and EUR 1,074.2 million.

Ce rapport annuel estégalement disponibleen français.

Dit jaarverslag is ookverkrijgbaar in hetNederlands.

1

R E P O R T P R E S E N T E D T O T H E O R D I N A R Y

G E N E R A L M E E T I N G O F S H A R E H O L D E R S

O F 1 0 D E C E M B E R 2 0 0 2

fiscal year 2002

contentsletter to shareholders

management report

key events

the real estate market

about Befimmo

the portfolio

the real estate expert’s conclusions

financial results

appropriation of results

events taking place after year-end

business outlook, dividend policy

Befimmo shares

corporate governance

financial report

balance sheet

income statement

summary of the valuation rules

notes to the accounts

details about the accounts

cash flow statement

debts, guarantees and rating

report of the statutory auditor

obligatory information

general information

identification

registered capital

the founder of Befimmo SCA

“société en commandite par actions”

name and qualifications of the experts

the legislative framework

real estate Sicaf

4

6

6

8

11

12

17

18

21

21

22

24

29

37

38

40

42

44

49

50

51

53

54

55

56

57

58

58

58

59

68

2

Befimmo 2002

3

C R E A T I N G V A L U E

I N R E A L E S T A T E

Befimmo is pursuing its goal of

creating value. It manages its

real estate portfolio actively with the

aim of anticipating the market

and meeting clients’ expectations.

4

letter to shareholders

Dear Shareholders,

The year 2002 saw the integration of the Cibix real estate investment trust (SICAFI) portfoliointo Befimmo. This move was so successful that Befimmo was able to press ahead with itsstrategy of refocusing on property in the city center.

Given the more difficult economic climate, this turned out to be a prudent approach. Propertyvalues in suburban areas are falling rapidly as a result of the lack of any driving forces andbecause developers are having to complete projects they have already started.

At present some 75% of Befimmo’s properties are within the 19 communes making up theBrussels region, and a full 60% of this portfolio lies within the Central Business District, wherevalues are continuing to rise because supply in the area is limited and national and internation-al institutions are still on the lookout for properties there.

Thanks to this strategy, Befimmo can once again offer its shareholders a return of almost 10%this year. Since it was created in 1995, the Sicafi’s profit on its ordinary operations have risenyear on year, increasing by nearly 15% per share over the last financial year.

This has been the result of a calm, pragmatic approach to expansion, focusing on high-qualitycash flows and streamlining operating costs; this also allows Befimmo to expand its own team,thereby boosting its autonomy.

Property is no “safe haven”, but rather a specific type of investment that belongs in any portfo-lio. Shareholders must examine the strategy of each fund in which they plan to invest and assessthe credibility of the forecast returns. Of course, Befimmo does not escape the economic down-turn, but we believe we have done everything in our power to minimize its impact.

For the Sicafi’s promoter, the Bernheim group, 2002 was a year of major change, for it wasbought out 100% by Fortis AG, the country’s leading property owner. This has reinforcedBefimmo's established position in the European property industry as that sector consolidates.Befimmo relies on its promoter for support in its intended expansion.

5C R E A T I N G V A L U E I N R E A L E S T A T E

We would also like to pay tribute to the massive contribution to the Sicafi’s creation and suc-cess by Mr Jean-François van Hecke, Chairman of the Board of Directors up to the end ofAugust. As early as 1995, he realized just what investors and savers had to gain by setting up areal property operator, an investor with a strategy and strong management capable of generat-ing value. His departure from the Sicafi does not affect the desire of the Board of Directors andManagement to continue with work already begun.

Once again we would like to thank all our shareholders for their continuing support and inter-est, as demonstrated by the significant increase in the liquidity of shares since the beginningof the year.

Brussels, 10 December 2002.

The Managing AgentBefimmo SA

Benoît De BlieckManaging Director

6

management report

Business development

I N V E S T M E N T S A N D D I S P O S A L S

The companies Bastionen Parc Léopold SA and Immobilière du Triomphe SA, which were joint-ly acquired with Fortis Bank on a 50:50 basis in December 2000, were fully integrated intoBefimmo at its Extraordinary General Meeting on 11 December 2001.

Following the public offer to exchange Befimmo shares for Cibix shares, the shareholders ofBefimmo approved the merger between the two Sicafis at the Extraordinary General Meetingheld on 11 December 2001. The exchange was effected by issuing 2 new Befimmo shares for3 Cibix shares, thereby increasing the total number of Befimmo shares to 9,794,227. Theincrease in the number of shares helped to significantly improve the share's liquidity.

The integration of Cibix’s portfolio marked a continuation of Befimmo’s strategy of investing inhigh-quality buildings capable of generating value, while boosting its presence in both theCentral Business district and the Brussels Leopold district. It is there that the vacancy rate islowest, with excellent mobility and sufficient accessibility by public transport. Since 1 October2001, the value of Befimmo’s buildings located in these districts has increased, totalingEUR 9,690,000.

The mergers enabled Befimmo to expand its real estate portfolio by 71%, progressing from avalue of EUR 621,208,000 as of 30/09/2001 to EUR 1,064,818,000 as of 30/09/2002.

Expanding the portfolio has also enabled the company to diversify its risks, especially in thesuburbs, where the rental situation is more problematic due to the current state of the econo-my. It also increased the number of new or renovated buildings less than 5 years old from 37%to 51%.

R E N T A L S

As of 30 September 2002, the occupancy rate of Befimmo’s overall portfolio was 95.87%.

During the financial year, Befimmo concluded leases for a total of 16,275m2 of offices and12,508 m2 of storage and multi-purpose facilities.

In all, 48.53% of Befimmo’s transactions concerned leases renewed in direct negotiations withits clients.

One of the biggest rental deals clinched this year was the Schuman building (4,284 m2) leasedto General Electric for a firm 9-year period and for an amount close to the current prime renton the Brussels market.

Other new clients occupying Befimmo buildings include Stanbrook & Hooper, NautaDutilh,Hogan & Hartson, Global Marketing, TG Europe, Harco, Wincor, Nixdorf, Neopost, and others.

key events


Portfolio development

Befimmo is constantly striving to better its quality and performance and consequently makesimprovements to its buildings on a very regular basis. Thus, over the past fiscal year it madeextensive investments totaling EUR 6,804,000.

The main investments made are as follows:

Schuman 3: Renovation completed and the building rented out to General Electric for9 years (total investment: EUR 2,842,000),

Brederode 1: Renovation completely finished and the building rented out to the lawfirmLinklaters De Bandt for 12 years (total investment: EUR 1,362,000),

Mons, rue du Joncquois: Renovation work has been completed. Befimmo took delivery ofthe building in October 2002 (total investment: EUR 514,000).

Befimmo also pursued its investments in the Ikaros business park, acquiring 4 buildings forfuture completion for an amount of EUR 13,861,000.

For fiscal year 2003, Befimmo will pursue its investment policy:

Major renovation work on the Schuman 11 building (EUR 8 million) will begin in early 2003and will be completed a year later.

Befimmo is looking into renovating the Justice and Borschette buildings in the near future.

Due to a difference of opinion arising from work carried out by La Poste on tower 2 of the WorldTrade Center, which La Poste had rented for 25 years, Befimmo and La Poste agreed to call inan expert to carry out a full survey on the asbestos still present in the tower.

Insofar as the necessary renovation work was agreed with La Poste and carried out between 1997and 1999, Befimmo does not consider any further work to be necessary.

8

the real estate market

Rental market

The economic slowdown which we forecasted in our last annual report duly occurred, and theprospects of recovery are being delayed from month to month.

This phenomenon is not without its consequences for the Brussels rental market. Since thethird quarter of 2001 we have witnessed a significant decrease in new occupations, especiallyby companies in the telecoms and technology sectors.

The impact of this shifting trend has not been the same on all sub-markets.

In the Central Business District (Leopold district, north and center), where there are goodtransport links, the vacancy rate in leased properties remained at a historic low. Rental returnsremained at the level of the previous year. Demand from the European institutions, Belgianadministrative authorities and major national and international companies was met by a rela-tively limited range of new projects on offer. This situation looks set to continue for some timeuntil the new regional land use plan (PRAS), which was finally adopted in 2001, starts havingan effect.

In this context, real estate values continued to rise because the yield demanded by investorsdiminished further, while interest rates remain particularly low.

In decentralized areas, and even more so in the suburbs, rental returns are diminishing.Commercial concessions (period of free occupation and payment for work done by the lessee)are becoming more popular. In fact there was no stopping the large number of projectslaunched to respond to the growing needs of the new economy; moreover, competition toattract the few remaining tenants, is very stiff. In such a situation, the vacancy rate, primarilyin the Zaventem-Diegem area, is approaching - or may even exceed - 20%.

As a result, the experts who value the portfolios of Sicafis each quarter have lowered the valueof buildings situated in these areas.

Befimmo’s policy of aiming to conclude long-term leases with major would-be occupantsenables it to present reassuring prospects with regard to the continuity of its long-term yield,as the graphic below indicates. This will prevent us from suffering too much from the difficultconditions on the current market.


0

10

20

30

40

50

60

70

80

90

100

20142002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Investment buildings

While the situation on the rental market appears worrying, investment activities remainextremely buoyant.

Following the absorption of Cibix in 2001, Befimmo’s consolidation continued, the main eventsbeing the takeover of Banimmo, of a few large buildings belonging to Dexia, of Bernheim byFortis in July 2002 and of Siref. Dutch investors (acquisition of the Tour des Finances) andGerman investors (purchase of the Mondrian Project) also remained extremely active.

Some major portfolio changes should be finalized in the coming months. Befimmo, which hasan investment capacity in excess of some EUR 130 million, is making sure that it can seize theopportunities that will enable it to meet its objectives of creating value.

PERCENTAGE OF GUARANTEED CURRENT INCOMEACCORDING TO THE REMAINING LEASE TERM

% of current income guaranteed accord-ing to the final termination of leases

% of current income guaranteed accord-ing to the first lease expiration

R I G O R O U S L Y

S E L E C T E D B U I L D I N G S

10 11

the spirit of real estate

Befimmo was created in 1995 with a portfolio worth EUR 130 million. Since the mergers thattook place in December 2001, the value of this consolidated portfolio (excluding real estate cer-tificates) has risen to EUR 1,065 million.

The structural ties between the SICAFI and its promoter, Bernheim-Comofi (itself owned byFortis since July 2002), are such that Befimmo can call on 35 years of experience and know-howas a property owner, developer and operator.

This relationship gives Befimmo a competitive edge over its rivals.

The creation of future value

Befimmo is an experienced real estate owner that aims to create shareholder value on an ongoingbasis through an active portfolio management policy. This involves:

permanently seeking the highest possible occupancy rate for its entire portfolio. Befimmo’s realcash flow is consequently almost as high as the theoretical maximum cash flow, making it pos-sible for the company to pay out a high dividend while at the same time building up its reserves.

Befimmo is able to achieve such a high rate for several reasons:

Befimmo invests in high quality real estate meeting the long-term expectations of its customersin terms of location, visibility, accessibility, size, fittings and flexibility. Befimmo always givespriority to the real estate perspective in its investment strategy since this is where value is real-ly created, as opposed to a purely financial strategy based on generating immediate profits fromcurrent leases. In addition, for each chosen investment, Befimmo carries out an in-depth duediligence examination from every angle, ranging from planning permission to technical, envi-ronmental, legal and tax issues.

Befimmo further enhances the quality of its investments by building up a relationship of trustwith its tenants based on:

understanding and anticipating their needs;

optimizing the total real estate costs, rents and charges per person;

a policy of ongoing investment in the properties owned in order to maintain andimprove investment performance over time;

swift action and good judgment making it possible to seize any value-creation opportu-nities that may arise.

Befimmo intends to generate capital gains for all its shareholders, in line with its investmentstrategy.

about Befimmo

12

1

23

1

2

3

4 5

67

1

2

3

4

1

24

1

2

3

the portfolio

Investment strategy

Befimmo is looking to acquire three types of property:

office buildings located in Brussels or in the suburbs,

semi-industrial buildings in the Brussels-Antwerp corridor,

shopping centers in Belgium.

Befimmo’s investment strategy is based on ensuring first and foremost that the projectedinvestment has the potential to create long-term value. Extensive research and analysis work isdone to understand and anticipate trends on the real estate market.

The immediate income generated by the planned investment is assessed according to its dura-tion; ideally this should be short-term if the capital gain potential is short-term, and long-termfor potentially long-term capital gains.

Befimmo acquires quality properties that meet all its criteria in terms of situation, visibility,accessibility, size, flexibility and facilities. An in-depth due diligence procedure is followed foreach acquisition.

PROFILE (as o f 30/09/2002)

TYPE OF ASSETS (1) AGE OF BUILDINGS (1) GEOGRAPHICAL BREAKDOWN (1)

• 1 96% offices

• 2 1% commercial

• 3 3% semi-industrial

• 1 23% Brussels“Espace Nord”

• 2 18% BrusselsLéopold district

• 3 19% BrusselsCenter

• 4 16% Brusselsdecentralized

• 5 21% Brusselssuburbs

• 6 1% Antwerp

• 7 2% other

DURATION OF LEASES (2) OCCUPANTS (2)

• 1 48% 0-5 years

• 2 26% 6-10 years

• 3 15% 11-15 years

• 4 11% more than15 years

• 1 54% < 9 years

• 2 46% > 9 years

• 1 36% nationalinstitutions

• 2 38% multinatio-nal corporations

• 3 17% othercompanies

• 4 9% internationalinstitutions

(1) Percentages are expressed in terms of theassessed “deed in hands” value as of30 September 2002. Real estate certificatesare not covered by these charts.(2) Percentages are expressed in terms ofcurrent leases as of 30 September 2002.

13

SUMMARY TABLE OF ASSETS OWNED, BY TYPE (as o f 30/09/2002 - in thousands o f EUR)

(1) The insured value is the rebuilding value (excluding land).The insured value of the Joseph II building insured by the European Union is estimated at its assessed value.

(2) It is not in the shareholders’ interests to publish the acquisition values and assessed values for each individual building. The acqui-sition value is understood to be the assessed value on the day of the acquisition or of the contribution or, in the case of a merger,the day on which the exchange ratio was calculated.

(3) The assessed value is established on the basis of the “deed in hands” value which includes the variable transaction costs (of atleast 13%) that an investor would have had to pay to invest directly in real estate.

SURFACE INSURED ASSESSED ANNUALAREA (m2) VALUE (1) VALUE (2)(3) RENT

OFFICESCENTER 282 228 539 526 634 006 46 339DECENTRALIZED 61 189 166 437 162 018 11 527SUBURBS 117 408 149 505 218 992 15 163OTHER 15 122 18 748 16 171 1 947

TOTAL OFFICES 475 947 874 216 1 031 187 74 976

SEMI-INDUSTRIAL 49 599 27 872 28 131 2 509

COMMERCIAL 2 296 1 705 5 500 425

TOTAL 527 842 903 794 1 064 818 77 910

CHANGE IN PORTFOLIO YIELD (as o f 30/09 - in thousands o f EUR)

(1) The occupancy rate is calculated as being the ratio between the current rent and the same rent plus the estimated rental value ofthe unoccupied surface area.

(2) The yield of the real estate portfolio is calculated as the ratio between current rents plus the rental value of the unleased surfacearea and the assessed value.

(3) The percentages relative to the breakdown of the portfolio are shown on the basis of the assessed value “deed in hands” as of 30September. As of fiscal year 1999 they concern only directly owned real estate assets.

1998 1999 2000 2001 2002

TOTAL SURFACE AREA (m2) 173 362 299 094 303 068 339 935 527 842

BOOK VALUEREAL ESTATE PORTFOLIO 282 523 556 261 543 036 621 208 1 064 818REAL ESTATE CERTIFICATES 7 482 7 600 6 813 7 646 9 384

TOTAL ASSETS 290 005 563 861 549 849 628 854 1 074 202

OCCUPANCY RATE (1) 94% 98% 98% 96% 96%

YIELD (2)

ON REAL ESTATE PORTFOLIO 7.65% 8.06% 7.65% 7.64% 7.71%BREAKDOWN (3)

m2 OFFICE SPACE 123 763 247 199 251 173 288 040 475 947m2 SEMI-INDUSTRIAL 49 599 49 599 49 599 49 599 49 599m2 COMMERCIAL - 2 296 2 296 2 296 2 296% OFFICE SPACE 88% 94% 94% 94% 96%% SEMI-INDUSTRIAL 9% 5% 5% 5% 3%% COMMERCIAL 3% 1% 1% 1% 1%

The value of the real estate portfolio (476,000 m2 of offices) as of 30 September 2002 amounted toEUR 1,074.2 million. This compares with a value of EUR 628.9 million at the start of the financial year.The difference of EUR 445.3 million results from the integration of the Cibix and Bastionen portfolio(EUR 422.3 million), investments made since the start of the financial year (EUR 22.2 million) and theincrease in value of the portfolio, comprising buildings and certificates, i.e. EUR 0.8 million.

The overall increase in the value of the portfolio of buildings was 0.6 million EUR, i.e. 0.06% of the port-folio’s value, but below the forecasts made a year ago (+ 1%). Nevertheless, this demonstrates the mer-its of the investment strategy implemented since mid-2000: in a more difficult economic environment,the value of the portfolio of buildings remained steady.

This global increase in value reflects strong variations from one district to another. In the city centre(Pentagon, Léopold district and Espace Nord), values have increased by EUR 9.7 million (i.e. 1.5% of theinvestment value), while in the decentralized areas and the periphery values have fallen by EUR 1.3 mil-lion (i.e. <0.8%> of the investment value) and by EUR 7.7 million (i.e. <3.3%> of the investment value)respectively.

The portfolio’s average occupancy rate for the year was stable at 96%.

14

the portfolio

SUMMARY OF REAL ESTATE ASSETS (as o f 30/09/2002)

INVESTMENT YEAR BUILT/ RENTAL INITIAL RENTS CALLED PERCEN- CURRENT OCCUPANCYBUILDINGS YEAR SPACE DURATION DURING THE TAGE OF RENT AS RATE AS

RENOVATED (m2) OF LEASES FISCAL YEAR PORT- of 30/09/02 of 30/09/02(years) (in thousands FOLIO (1) (in thousands (%)

of EUR) (%) of EUR)

OFFICES

BRUSSELS CENTERSHELL 1997-2000 31 381 3/6/9 4 226 5.52% 4 301 99.63%BREDERODE 1 1990-2001 24 968 14 2 740 3.88% 3 020 98.03%EXTENSION JUSTICE 15 years + 18 795 9 2 916 3.79% 2 955 100.00%IMPÉRATRICE 1997-2000 17 072 9/12/15/18 2 412 3.13% 2 442 100.00%BREDERODE 2 1993 7 803 3 1 854 2.41% 1 877 100.00%EMPEREUR 1997 5 953 9 822 1.06% 822 100.00%

105 972 14 970 19.79% 15 417 99.50%

BRUSSELS LEOPOLD DISTRICTBORSCHETTE 1981 17 657 12 3 440 4.42% 3 444 100.00%RUE JOSEPH II, 27 1994 12 831 27 3 317 4.28% 3 335 100.00%WIERTZ 1996 10 816 3/6/9 2 436 3.19% 2 483 100.00%VIEW BUILDING 2001 10 297 6/9 1 574 1.93% 1 504 92.23%GUIMARD 1997 5 357 3/6/9 1 127 1.46% 1 135 100.00%SCHUMAN 1 1964 5 124 - 0 0.00% 0 0.00%SCHUMAN 2 2001 5 122 9 478 1.73% 1 345 100.00%

67 204 12 372 17.00% 13 245 90.13%

BRUSSELS “ESPACE NORD”WORLD TRADE CENTER 1975/1998 66 326 24 10 590 13.72% 10 690 99.71%NOORD BUILDING 1989 42 726 27 6 974 8.97% 6 987 100.00%

109 052 17 564 22.69% 17 677 99.82%

BRUSSELS DECENTRALIZEDLA PLAINE 1995 15 933 12/18 3 941 5.13% 3 999 100.00%TRIOMPHE I 1998 11 080 3/6/9 2 385 3.10% 2 413 100.00%TRIOMPHE II 1998 9 282 9 1 711 2.22% 1 731 100.00%JEAN DUBRUCQ 167-181 1991 7 744 9/12 748 0.97% 757 100.00%TRIOMPHE III 1993 7 173 3/6/9 1 368 1.79% 1 396 98.42%GOEMAERE 1988/1998 6 939 3/6/9 799 1.03% 802 62.08%RUE EUDORE DEVROYE, 245 1996 1 576 4/6/9 230 0.34% 265 100.00%CHÉE DE LA HULPE 1970 1 462 3/6/9 86 0.21% 164 70.79%

61 189 11 268 14.79% 11 527 95.21%

BRUSSELS SUBURBSIKAROS BUSINESS PARK (2) 1990 to 2002 40 965 3/6/9 3 312 4.57% 3 562 74.55%MEDIA 1999 18 651 9 3 018 3.93% 3 058 100.00%FOUNTAIN PLAZA 1991 16 690 3/6/9 1 865 2.27% 1 772 64.16%PLANET 2 1988 10 277 3/6/9 1 062 1.26% 982 80.92%EAGLE BUILDING 2000 8 661 6/9 1 351 1.77% 1 379 100.00%WOLUWE GARDEN B 1997 7 756 3/6/9 1 622 2.10% 1 632 100.00%WOLUWE GARDEN D 1994 7 673 3/6/9 1 547 2.00% 1 562 100.00%OCEAN HOUSE 1997 4 730 3/6/9 824 1.02% 795 100.00%WATERLOO OFFICE PARK 1992 2 005 6/9 418 0.54% 421 100.00%

117 408 15 019 19.46% 15 163 86.15%

MONSRUE DU JONCQUOIS 118 1974 7 851 18 1 054 1.26% 978 100.00%DIGUE DES PEUPLIERS 71 1976 7 271 9 1 057 1.24% 969 100.00%

15 122 2 111 2.50% 1 947 100.00%

TOTAL OFFICES 475 947 73 304 96.23% 74 976 94.25%


INVESTMENT YEAR BUILT/ RENTAL INITIAL RENTS CALLED PERCEN- CURRENT OCCUPANCYBUILDINGS YEAR SPACE DURATION DURING THE TAGE OF RENT AS RATE AS

RENOVATED (m2) OF LEASES FISCAL YEAR PORT- of 30/09/02 of 30/09/02(years) (in thousands FOLIO (1) (in thousands (%)

of EUR) (%) of EUR)

SEMI-INDUSTRIAL

BRUSSELS-ANDERLECHTRUE BOLLINCKX 1980 8 098 3/6/9 520 0.70% 548 100.00%BOULEVARD INDUSTRIEL 1976 7 790 1/2/3 339 0.43% 331 94.96%

15 888 859 1.13% 879 98.04%

BRUSSELS SUBURBSGREEN HILL 1986 7 187 3/6/9 554 0.72% 560 98.58%

7 187 554 0.72% 560 98.58%

ANTWERPKONTICH 1 1983 18 452 3/6/9 715 0.83% 646 90.51%KONTICH 2 1990 8 072 3/6/9 418 0.54% 424 99.74%

26 524 1 133 1.37% 1 070 93.95%

TOTAL SEMI-INDUSTRIAL 49 599 2 546 3.22% 2 509 96.37%

COMMERCIALCHARLEROI,RUE DE LA MONTAGNE 1995 2 296 commercial 424 0.55% 425 100.00%

TOTAL COMMERCIAL 2 296 424 0.55% 425 100.00%

TOTAL PORTFOLIO 527 842 76 274 100.00% 77 909 95.87%

(1) The percentage of the portfolio is calculated on the basis of current rents as of 30 September 2002.(2) Ikaros Business Park: the rental space includes the rental space in phase IV buildings purchased for future completion.

A B A L A N C E D

P O R T F O L I O

16 17

BEFIMMO S.C.A.Chaussée de la Hulpe, 166

1170 BRUSSELS

BEF/frs/36.958Dear Sir,

Re: valuation as at 30 September 2002

In accordance with your instructions, we have pleasure in advising you as to our opinion of theinvestment value of Befimmo SCA’s property portfolio as at 30 September 2002.

The investment value includes acquisition costs of the various properties owned by Befimmoas at the date of valuation.

Our opinion of value is based on information provided by Befimmo which is assumed to becorrect.

We have based our valuation on the methods of capitalisation of future rental income, and onthe basis of market evidence of transactions available at the date of valuation.

Our valuation includes all relevant market information influencing property values available atthe date of valuation.

We have noted the following points in analysing the portfolio:

1) The portfolio (excepted projects, refurbishments and real estate claim) comprises ± 96.80%of offices; 55.09% are located in Brussels (19 municipalities) and ± 32.21% are let on a longterm basis to the European Commission, Citibank, the Flemish Government and the PostOffice.

2) The occupation rate of the entire portfolio is 95.87%.

3) The average level of the passing rents is currently approximately 7.99% above the averageestimated rental value, principally due to the rents paid for the buildings in the North areaof Brussels which are let on long lease contracts until at least 2015.

Having carefully considered the matter, we are of the opinion that the investment value includ-ing acquisition costs as at 30 September 2002 was: EUR 1,064,818,000 (ONE BILLION SIXTYFOUR MILLION EIGHT HUNDRED AND EIGHTEEN THOUSAND EURO). This amountincludes the valuation of the buildings carried out by Healey & Baker, CB Richard Ellis andCodemer.

On this basis, the initial yield (except projects and refurbishments) of the portfolio is 7.39%.Should the vacant accommodation be fully let at estimated rental value, the initial yield wouldbe 7.71%.

Brussels, 21 October 2002

WINSSINGER & ASSOCIATES SA/NV

Benoît FORGEUR Philippe WINSSINGER

the real estate expert’s conclusions

18

(as o f 30/09 - in thousands o f EUR a f te r appropr ia t ion)

(1) The return is the gross dividend for the fiscal year plus the increase in the book value during the fiscal year divided by thebook value at the beginning of the year.

(2) Revaluation gain transfer of EUR 4.838 million included.(3) The payout is equal to the gross dividend divided by the before-tax result. In accordance with Article 62 of the Royal Decree

on Sicafis, the capital gain made on the sale of the Van Maerlant rental debt is not included in the Sicafi’s net results.(4) This includes an unrealized depreciation of EUR 1,927 million on some buildings in the suburbs.

2000 2001 2002

BALANCE SHEET

ASSETSESTABLISHMENT COSTS 3 360 2 573 0VALUE OF THE REAL ESTATE PORTFOLIO 543 036 621 208 1 064 818VALUE OF THE REAL ESTATE CERTIFICATES 6 813 7 646 9 384OTHER ASSETS 19 409 68 633 10 198

TOTAL ASSETS 572 617 700 060 1 084 400

LIABILITIES AND SHAREHOLDERS’ EQUITYEQUITY 431 777 477 856 605 597PROVISIONS FOR LIABILITIES AND CHARGES 2 351AMOUNTS PAYABLE AFTER MORE THAN ONE YEAR 61 394 52 978 161 203AMOUNTS PAYABLE WITHIN ONE YEAR 61 602 151 029 308 249

FINANCIAL DEBTS 18 442 108 762 224 606TRADE DEBTS 6 545 4 210 39 880OTHER DEBTS 36 615 38 057 43 763

ADJUSTMENT ACCOUNTS 17 845 18 197 7 000

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 572 617 700 060 1 084 400

KEY FIGURESDEBT RATIO 21.48% 29.07% 43.30%RETURN ON EQUITY 11.7% 12.9% 9.4%SHARE PRICE AS OF 30 SEPTEMBER (EUR) 58.00 63.00 62.45BOOK VALUE PER SHARE (AFTER APPROPRIATION) (EUR) 57.20 60.43 61.83

INCOME STATEMENT

TURNOVER 41 146 48 002 76 275INCOME FROM REAL ESTATE CERTIFICATES 448 495 693TOTAL OF REAL ESTATE INCOME 41 594 48 497 76 968NET REAL ESTATE COSTS 1 219 1 549 4 940 (4)

NET OPERATING COSTS 3 595 3 941 5 156AMORTIZATION 829 836 -FINANCIAL INCOME 3 552 6 952 16 628TAX -18 - -66NET EXTRAORDINARY RESULTS 4 964 18 843 (2) -2 040

AFTER-TAX RESULT 37 381 54 062 (2) 48 270

KEY FIGURESRETURN PER SHARE (EUR)(1) 6.42 7.35 5.68EARNINGS PER SHARE (EUR) 4.95 6.84 4.93

GROSS DIVIDEND PER SHARE (EUR) 4.00 4.12 4.28

NET DIVIDEND PER SHARE (EUR) 3.40 3.50 3.64

PAYOUT (3) 80.8% 60% 86.8%

financial results


The following table has been drawn up to provide a comparison of Befimmo’s results withthose of “Sicafis” that publish their accounts pursuant to a derogation to the system estab-lished by the Royal Decree of April 1995.

(as o f 30/09 - in thousands o f EUR)

2000 2001 2002

RESULT BEFORE EXTRAORDINARY ITEMS

GROSS FEES AND RENTS 41 146 48 002 76 275+ CERTIFICATES COUPONS 448 495 693- NET REAL ESTATE COSTS -1 219 -1 549 -3 068- OPERATING COSTS -4 414 -4 777 -5 156= OPERATING PROFIT 35 961 42 171 68 744- NET FINANCIAL RESULT -3 552 -6 952 -16 628- TAXES 18 0 66

= EARNINGS BEFORE EXTRAORDINARY ITEMS 32 427 35 219 52 182

PORTFOLIO RESULT

- UNREALIZED UNDERLYING DEPRECIATION -1 927+ CAPITAL GAINS REALIZED ON PORTFOLIO DISPOSALS 4 533 20 152 -+ WRITE-BACKS OF DEPRECIATION AND PROVISIONS 421 3 55+ CHANGE IN MARKET VALUE 11 104 24 443 2 506

PORTFOLIO RESULT 16 058 44 598 634

NET EXTRAORDINARY RESULT 0 -1 312 -2 040

RESULT FOR THE PERIOD 48 485 78 505 50 776

REVALUATION GAIN TRANSFER -11 104 -29 281 -2 506

ECONOMIC RESULT FOR THE PERIOD 37 381 49 224 48 270

+ WRITE-BACK OF REVALUATION GAIN - 4 838 -

ACCOUNTING RESULT 37 381 54 062 48 270

Note on results

On the basis of the accounts as of 30 September 2002 which take account of the valuation of thereal estate assets on that date, the net asset value as of 30 September 2002, after appropriation,was EUR 605.6 million compared with EUR 477.9 million at the start of the financial year.

The increase in equity capital translates EUR 127.7 million from the mergers of December 2001(EUR 114.0 million) and the return for the financial year (EUR 55.7 million), after deducting thedividend (EUR 41.9 million).

The return for the financial year translates as the creation of value: it amounts to EUR 5.68 pershare, i.e. 9.4% of the equity capital at the start of the financial year.

This creation of value is generated by the net profit (EUR 48.3 million), the increase in the valueof the portfolio (EUR 2.7 million), comprising buildings and certificates, which has not beenposted to the profit and loss account, and by the accretive nature (EUR 4.7 million) of the afore-mentioned mergers.

20

financial results

Net profit was EUR 48.3 million, i.e. EUR 4.93 per share, comprising the current profit(EUR 50.2 million) and the extraordinary loss (EUR <2.0> million).

The current profit per share (EUR 5.12) is 15% higher than last year (EUR 4.45), despite the lesspropitious economic environment.

The fall in real estate values of buildings located in the periphery and in decentralized areas hashad a direct impact this year, amounting to <EUR 1.9 million>, but of course not realized in thecurrent profit. Indeed, Befimmo records in its profit-and-loss account certain capital losses inaccordance with the stipulations of the Royal Decree of 1995 on Sicafis.

The performance results from the integration of the Sicafi Cibix and the real estate companiesof the Bastionen group in December 2001, which were very accretive in terms of earnings.

The amount of rents invoiced during the financial year was in line with forecasts, and currentexpenses (both those related to real estate and operating costs), have continued to be steady,representing in total less than 1% of the value of assets.

Net real estate costs, totaling EUR 4.9 million, include:

net real estate charges not charged to the building occupants (mainly: withholding tax on realestate income, regional taxes, insurance charges and agency fees (EUR 0.6 million);

repair work and maintenance (EUR 2.4 million);

and unrealized depreciation on the historic buying price (EUR 1.9 million).

Recurring operating costs, totaling EUR 5.2 million, include:

Befimmo staff costs, own occupancy of office space and the fees owed to third parties(including the Bernheim group) for specific missions (EUR 2.3 million);

the cost of complying with legal formalities (depository bank, coupon payments, tax onmutual funds, meetings and annual report, and quarterly expert surveys) (EUR 1.6 million);

remuneration of the Managing Agent Befimmo S.A. (EUR 1.0 million)

and the costs of studies on investment projects (EUR 0.2 million).

The extraordinary loss translates mainly, on the one hand, the capital gain on the shares of theSicafi Cibix (EUR 5.3 million) following the share exchange offer and merger and certain capitalgains realised and, on the other hand, (EUR 7.7 million) by way of a charge for the amortiza-tion in full of all the intangible assets (see press release of 2 March 2002), as well as the costsof arranging the merger with the Sicafi Cibix and a syndicated loan.

The net asset value per share after appropriation is EUR 61.83.


The profit for this fiscal year totals EUR 48,269,779.75. In view of the profit carried forward fromthe previous year, the profit to be appropriated amounts to EUR 107,991,194.18.

In accordance with Article 60 of the Royal Decree of 10 April 1995 on real estate Sicafs, nodepreciation was booked on the buildings.

In accordance with Article 119 § 4 of the law of 4 December 1990 on closed-end mutual funds,no transfer was made to the legal reserves.

No event occurred during the fiscal year to justify setting up provisions as defined in Article 13of the law of 17 July 1975 on company accounting and annual accounts.

However, in accordance with the distribution policy followed to date, the Managing Agent pro-poses to the Ordinary General Meeting of Shareholders that EUR 66,048,857.38 be transferredfrom the profits to reserves.

This further reinforces the capacity to finance any expenses relating to the risks inherent in thecompany’s activities, while future dividend payments are also protected.

Dividend growth this year will be 4%, more than double the rate of inflation. We will proposeto the General Meeting that a dividend should be paid out in line with the forecasts publishedin the annual report for 2001.

We propose appropriating the amounts as follows:

PROFIT CARRIED FORWARD EUR 66,048,857.38

PROFIT FOR DISTRIBUTION EUR 41,942,336.80

If you approve this appropriation, the net dividend after deduction of the withholding tax onincome derived from securities will amount to EUR 3.64 (EUR 4.28 gross) for each of the9,794,227 shares. This will be payable as of 17 December 2002 on presentation of coupon no. 8,detached from the shares, at the following banks:

Dexia Bank

Bank Bruxelles Lambert

Fortis Bank

The proposed dividend is higher than the minimum of 80% of net profit required by Article 62of the Royal Decree of 10 April 1995. The distribution percentage is 87%.

appropriation of results

events taking place after year-end

Outside its day-to-day management duties, the Management Agent reports no specific eventstaking place after year-end.

22

business outlook, dividend policy

As in the past, Befimmo will continue to pursue a strategy of “well-considered” portfolio growthin order to improve liquidity and visibility, thereby creating value for its shareholders. Value cre-ation is a long-term goal, based on an annual return target of 10% of the book value at the startof the fiscal year.

Nevertheless, the forecasts below take account, for the forthcoming fiscal year, of the ongoingdecline in values in the Brussels suburbs.

This growth can, and moreover will, be achieved in two ways:

regular and gradual growth by direct and indirect acquisition, in line with Befimmo’s debtcapacity;

selective growth through mergers with other real estate portfolios, depending upon mar-ket opportunities.

Below we present the balance sheet and profit and loss account forecasts for the next three years,ending on 30 September 2003, 2004 and 2005.

The following parameters are taken into account:

Fluctuation in portfolio value:2003: suburbs: -5%

central business district: +1%others: 0%

2004 and 2005: overall: +0,5%

Health index to rise by 1%.

Short-term interest rate of 3.5% and long-term rate of 5%.

Debt ratio: 45%.

Investments of EUR 30 million in 2003 and EUR 10 million in 2004 and 2005 were factored in,return on new investments: 7%.

“Extraordinary income” refers to projected margins generated on non-recurring transac-tions to be realized. In accordance with accounting law, these extraordinary operationsmust be understood to be the results of the Sicafi’s current activities, and Befimmointends to continue to manage its portfolio dynamically. However, in order to present acautious view on business outlook no such operation has been budgeted for future years.

The provisional accounts presented here in no way constitute a commitment on the part ofBefimmo and have not been certified by the company’s auditor.

Whether or not these forecasts prove to be accurate will of course depend on the actual devel-opment of the real estate and financial markets. In any event, Befimmo will be striving to out-perform these forecasts.


OUTLOOK (as o f 30/09 - in thousands o f EUR)

2002 2003 2004 2005

BALANCE SHEET

TOTAL ASSETS 1 084 400 1 118 244 1 133 833 1 149 500BUILDINGS 1 064 818 1 098 767 1 114 261 1 129 832CERTIFICATES 9 384 9 477 9 572 9 668OTHER ASSETS 10 198 10 000 10 000 10 000

TOTAL SHAREHOLDERS’ EQUITY 605 597 607 566 615 937 628 332TOTAL DEBT 478 803 510 678 517 896 521 168DEBT RATIO 43% 45% 45% 45%BOOK VALUE PER SHARE (EUR) 61.83 62.03 62.89 64.15

INCOME STATEMENT

INCOMEGROSS RENT 76 275 80 125 81 626 83 142REAL ESTATE CERTIFICATES 693 732 739 747EXTRAORDINARY INCOME -2 040 0 0 0

COSTSNET REAL ESTATE COSTS -3 067 -5 008 -5 102 -5 196UNREALIZED DEPRECIATION -1 873 -4 382 0 0NET OPERATING EXPENSES -5 156 -4 990 -5 040 -5 090TAXES 66 -470 -475 -479FINANCIAL EXPENSES -16 628 -19 640 -19 772 -19 924

NET RESULT 48 270 46 367 51 976 53 200TRANSFERRED TO RESERVES 6 351 2 783 6 727 6 188GROSS DIVIDEND 41 919 43 584 45 249 47 012

DATA PER SHARE (EUR)

PRICE ON 30 SEPTEMBER 2002 62.45BOOK VALUE AT BEGINNING OF FISCAL YEAR 60.43 61.83 62.03 62.89BOOK VALUE AT END OF FISCAL YEAR 61.83 62.03 62.89 64.15EARNINGS PER SHARE 4.93 4.73 5.31 5.43

GROSS DIVIDEND 4.28 4.45 4.62 4.80NET DIVIDEND 3.64 3.78 3.93 4.08

GROSS YIELD 6.9% 7.1% 7.4% 7.7%RETURN 9.4% 7.5% 8.8% 9.6%NUMBER OF SHARES 9 794 227 9 794 227 9 794 227 9 794 227

Dividend policy

Befimmo will continue to aim for annual dividend growth that outpaces the rate of inflation.The balance of the profit available for distribution will then be carried forward.

24

befimmo shares

Data per share (as of 30/09 - in EUR)

(1) This intrinsic value is calculated on the basis of the “deed in hands” value of the buildings, which includes variable transactioncosts up to a maximum of 13% that an investor would have had to pay if he had made a direct real estate investment.

(2) The return is the gross dividend for the fiscal year in question plus the increase in the book value over the same period,divided by the book value at the start of the year.

(3) The gross yield is equal to the gross dividend divided by the price on 30 September.

1998 1999 2000 2001 2002

NUMBER OF SHARES 4 366 082 7 549 042 7 549 042 7 907 420 9 794 227

STOCK MARKET PRICEHIGHEST 66.81 77.59 73.40 63.10 69.45LOWEST 56.40 64.00 51.10 55.10 59.00CLOSING 66.68 64.00 58.00 63.00 62.45

REVALUED NET BOOK VALUE (1) 53.00 54.78 57.20 60.43 61.83RETURN PER SHARE 5.06 5.63 6.42 7.35 5.68RETURN (2) 9.8% 10.6% 11.7% 12.9% 9.4%EARNINGS PER SHARE 4.39 4.64 4.95 6.84 4.93PAYOUT 85% 83% 81% 60% 87%GROSS DIVIDEND 3.74 3.84 4.00 4.12 4.28GROSS YIELD (3) 5.61% 6.01% 6.90% 6.54% 6.85%NET DIVIDEND 3.17 3.27 3.40 3.5 3.64

P.E.R. 15.20 13.79 11.72 9.21 12.67

Analysis of the Befimmo share

PERFORMANCE ON THE STOCK MARKET

SHARE PRICE BETWEEN NOVEMBER 1996 AND SEPTEMBER 2002 ( in EUR)

Past performance on the stock market is a reflection of Befimmo’s stability in a rather difficult economic context.This illustrates the poor correlation between real estate and other types of assets, such as shares and bonds.

0

10

20

30

40

50

60

70

80

EUR

nov-96 may-97 nov-97 may-98 nov-98 may-99 nov-99 may-00 nov-00 may-01 may-02nov-01


SHARE PRICE FROM OCTOBER 2001 TO SEPTEMBER 2002 ( in EUR)

MARKET CAPITALIZATION ( in mi l l ions o f EUR)

This trend was consolidated over the past year, with the share price rising from EUR 61.95 in February 2002 to EUR 62.45in September 2002, the most painful period for stock markets.

Since 1995, Befimmo’s market capitalization rose steadily, progressing from EUR 136 million in December 1995to EUR 612 million in September 2002.

59

60

61

62

63

64

65

66

67

EUR

oct. nov. dec. jan. feb. march april may june july august sept.

0

100

200

300

400

500

600

700

dec-95 june-96 dec-96 june-97 dec-97 june-98 dec-98 june-99 dec-99 june-00 dec-00 june-01 dec-01 june-02

BEFIMMO COMPARED TO THE BEL 20 ( in %)

Over the past year, the Befimmo share performed better than the BEL 20, showing far less volatility. This is a clearillustration of how real estate constitutes a more stable option for investors, in view of the current economicdownturn.

70

75

80

85

90

95

100

105

110

%

oct-01 nov-01 dec-01 jan-02 feb-02 march-02 apr-02 may-02 june-02 july-02 aug-02 sept-02

Befimmo

Bel 20

26

befimmo shares

MONTHLY VOLUMES (No. o f shares )

DIVIDEND ( in EUR)

EUR 1998 1999 2000 2001 2002

GROSS DIVIDEND 3.74 3.85 4.00 4.12 4.28

NET DIVIDEND 3.17 3.27 3.40 3.50 3.64

NUMBER OF SHARES 4 366 082 7 549 042 7 549 042 7 907 420 9 794 227

0

50

100

150

200

250

× 1 000

75 2

8635

386

36 5

66

24 6

08

37 9

15

32 4

31

30 5

36

23 3

68 39 6

14

83 2

77

90 4

41

38 4

21

72 0

28

111

694

104

535

119

857 16

0 56

3

84 3

75

67

759

207

530

163

529

150

977

112

253

162

262

oct. nov. dec. jan. feb. march april may june july august sept.

2001

2002

The merger operations in December 2001 increased the liquidity of the share significantly.Total October 2000 - September 2001: 544,591 shares exchanged i.e. a rate of 6.89%Total October 2001 - September 2002: 1,520,620 shares exchanged i.e. a rate of 15.53%

PREMIUM AND DISCOUNT BETWEEN APRIL 1996 AND SEPTEMBER 2002 ( in %)

Befimmo share price reflects its book value. Since 2000 this has definitely been the case, comparing the low dis-count with which the share is traded and its book value.

-15-10-5

50

10152025303540%

oct-96 apr-97apr-96 oct-97 apr-98 oct-98 apr-99 oct-99 apr-00 oct-00 apr-01 oct-01 apr-02


Shareholders

Befimmo’s capital is owned by a large number of shareholders. The table below was drawn upon the basis of the latest declarations of transparency received (for stakes > 5%).

SHAREHOLDING (as o f 30/09/2002)

DECLARANTS DATE TOTAL NUMBER OF %OF DECLARATION DECLARED VOTING RIGHTS

BERNHEIM GROUP COMPANIES 11/10/2001 791 998 8.09

MR. ALAIN DE PAUW 08/02/2000 721 152 7.36

MR. PATRICK DE PAUW 08/02/2000 712 382 7.27

FREE FLOAT 7 568 695 77.28

Key dates for shareholders

DATE

PAYMENT OF THE 2002 DIVIDEND AT THE COUNTERS OF THE BANKS DEXIA, BBL AND FORTIS fromUPON PRESENTATION OF COUPON No. 8 17 December 2002

PUBLICATION OF THE BOOK VALUE AS OF 31 DECEMBER 2002 11 March 2003

PUBLICATION OF THE FIRST-HALF RESULTS AND BOOK VALUEAS OF 31 MARCH 2003 8 May 2003

PUBLICATION OF THE BOOK VALUE AS OF 30 JUNE 2003 21 August 2003

PUBLICATION OF THE FULL YEAR RESULTS AND THE BOOK VALUESAS OF 30 SEPTEMBER 2003 18 November 2003

ORDINARY GENERAL MEETING 2003 9 December 2003

PAYMENT OF THE 2003 DIVIDEND AT THE COUNTERS OF THE BANKS DEXIA, BBL AND FORTIS fromUPON PRESENTATION OF COUPON No. 9 16 December 2003

R E S P E C T F O R

T H E E N V I R O N M E N T ,

A N I N V E S T M E N T I N T H E F U T U R E

28 29


Independent managementin the sole interest of all shareholders

P H I L O S O P H Y

The Sicafi Befimmo is organized under the Belgian legal structure “Société en commandite paractions”.

There are two main categories of partner:

partners or shareholders, who own the actual shares. They are only liable for the amount oftheir contribution and are not jointly or severally liable with the other shareholders;

the acting partner, Befimmo SA, the Managing Agent of the Sicafi. Befimmo SA has verywide-ranging management powers and unlimited liability for the Sicafi’s undertakings.

The company’s founder, Bernheim-Comofi SA, opted for this partnership structure because:

it allows for the consistent application of the rules of corporate governance.

The statutory Managing Agent, Befimmo SA, is run by a Board of Directors operatingwholly independently, assisted by its Audit Committee and in compliance with the RoyalDecree of 10 April 1995 and the controlling measures stipulated therein.

A majority of the directors are also totally independent of the Befimmo SA shareholders.The Managing Agent is thus better able to perform its legal task of managing the Sicafi inthe sole interest of its shareholders and is subject to controls that are at least as effectiveas those of a General Meeting of a public limited company.

Befimmo SA is entitled, in its capacity as the statutory Managing Agent, to receive remu-neration in proportion to the net result generated by the Sicafi. Its interests are thereforefully in line with those of all the Sicafi’s shareholders.

it enables the Sicafi Befimmo SCA to benefit on a long-term basis from the Bernheimgroup’s 35 years of experience as a real estate owner, developer, operator and issuer of realestate certificates.

This experience is offered via the statutory Managing Agent Befimmo SA which is whollyowned by Bernheim-Comofi SA and its subsidiary Bernheim Asset Management SA.

The Bernheim group is involved in the Sicafi at three levels:

shareholder of Befimmo SA: the Managing Agent’s interests are identical to those of allother shareholders in the Sicafi;

shareholder of the Sicafi itself, Befimmo SCA: same status as all other shareholders;

service provider: building management services and help in structuring operations is pro-vided under normal market conditions while offering the best value for money and in com-pliance with the conflict of interest rules laid down in the Companies Code and the RoyalDecree of 10 April 1995.

30


Structure and organization

The shareholders

Shareholders owning shares listed onthe Brussels stock exchange are thenon-acting partners in the SicafiBefimmo SCA

The Sicafi BEFIMMO SCA

The Sicafi Befimmo SCA is listed on theBrussels stock exchange.

It is managed by a team of professionalsunder the direction of Befimmo SA, itsstatutory Managing Agent.

Befimmo SA is the acting partner of the Sicafi Befimmo SCA. As the statutory ManagingAgent of the Sicafi Befimmo SCA, it enjoys wide-ranging powers for managing the Sicafi.

Befimmo SA is run by a Board of Directors, most of whom are fully independent of thePromoter of the Sicafi. An Audit Committee is in charge of all internal controls.

Bernheim Group

Bernheim Asset Management, thePromoter, and Bernheim-Comofi hold100% of the statutory ManagingAgent Befimmo SA

Befimmo SA


Decision-making bodies: befimmo sa,the statutory managing agent of the sicafi befimmo sca

B E F I M M O S A M A N A G E S T H E S I C A F I

Befimmo SA’s registered capital, which on 30 June 2002 stood at EUR 119,144, is wholly ownedby the Bernheim group. In accordance with its articles of association as Managing Agent,Befimmo SA is empowered to carry out all acts necessary or useful for achieving the corporateaims of Befimmo SCA: to form and manage the Befimmo SCA management team, to draw upthe half-yearly report and draft annual reports and prospectuses for Befimmo SCA, to appointreal estate experts, to propose changes to the list of experts, to propose a change of depositary,to inform the depositary of each transaction made by Befimmo SCA involving real estate assets,to grant special powers to its authorized representatives, to determine their remuneration, toincrease company capital within the limits of the authorized capital and to carry out all opera-tions intended to benefit Befimmo SCA; be it via a merger or some other transaction.

B E F I M M O S A I S M A N A G E D B Y A B O A R D O F D I R E C T O R S

The Board of Directors of Befimmo SA, the Managing Agent of the Sicafi Befimmo SCA, acts inthe sole interest of all shareholders, ruling on strategic decisions, long-term financing, invest-ments and disposals.

It closes the annual and half-yearly accounts of the Sicafi Befimmo; it draws up the managementreport for the General Meeting of Shareholders; it approves merger reports; it rules on the use ofthe authorized capital and convenes Ordinary and Extraordinary General Meetings of Shareholders.

Furthermore, the Board ensures the rigor, accuracy and transparency of communications toshareholders, financial analysts and the general public, such as prospectuses, annual and half-yearly reports, and press releases.

It delegates day-to-day management to a Managing Director who regularly reports back on hismanagement activities.

It supervises the quality of the work done by the Managing Director via two specially appoint-ed directors operating on a collegial basis.

The Board of Directors meets at least four times a year, and every time a specific or exception-al operation requires the Board to meet.

32

It is made up of eleven directors, proposed by Bernheim, the Promoter of the Sicafi Befimmo,with the approval of the Banking and Finance Commission. Most of these directors have no tieswhatsoever with the Bernheim group. At the current time:

two directors are representatives of the Promoter of the Sicafi;

two directors are appointed major shareholders of the Sicafi;

one director is a representative of the banks promoting of the Sicafi;

six directors, including the Managing Director, are independent.

Directorships run for three years and are renewable.

The Board met 11 times in 2001/2002.

In the event of a vote, Board decisions are taken by an absolute majority of all directors pres-ent or represented, or, in the event of one or several abstentions, by an absolute majority of allother directors. In the event of a split vote, the chairman of the meeting shall have the castingvote. Without prejudice to the terms of Articles 523 and 524 of the Belgian Companies Code,when a potential conflict of interests arises, either with the Promoter or a director, theManaging Director must call a meeting of the Board to resolve the particular issue. The Boardwill then rule in the absence of those of its members concerned by the potential conflict ofinterest.

The Board of Directors consists of:

M A N A G I N G D I R E C T O R

Benoît De Blieck

D I R E C T O R S L I N K E D T O T H E P R O M O T E R

Alain Devos, Managing Director of Bernheim-Comofi SA.(from 8 October 2002)

Benoît Godts, Managing Director of Bernheim Asset Management SA.

D I R E C T O R L I N K E D T O T H E B A N K S P R O M O T I N G T H E S I C A F I

Luc Vandewalle, Chairman of Banque Bruxelles Lambert.

D I R E C T O R S , M A J O R S H A R E H O L D E R S O F T H E S I C A F I

Alain De Pauw, Joint Chairman and Managing Director of Compagnie De Promotion SA.

Patrick De Pauw, Joint Chairman and Managing Director of Compagnie De Promotion SA.



I N D E P E N D E N T D I R E C T O R S

Marc Blanpain, President of the Banque Belgolaise.

Gustaaf Buelens, Managing Director of NV Buelens.

Jozef Colruyt, Chairman of the Board of Directors of Colruyt SA/NV.

Gaëtan Piret, Director of Compagnie Immobilière de Belgique SA.

Daniel Schuermans, Chairman of Copropriété du World Trade Center.

Directors’ attendance fees (with the exception of the Managing Director) are paid by BefimmoSCA. They amount to EUR 372 per Board meeting and EUR 248 per Audit Committee meeting.

The terms of Messrs Blanpain and Piret expire at the end of 31 December 2002. The other man-dates expire at the end of General Meeting of Befimmo SA in March 2005, and March 2004 forMr Jozef Colruyt.

B E F I M M O S A O R G A N I Z E S T H E D AY - T O - D AY M A N A G E M E N T O F T H E S I C A F I :

I N D E P E N D E N T M A N A G E M E N T I N T H E S O L E I N T E R E S T O F T H E S H A R E H O L D E R S

As the Sicafi has grown, Befimmo has continued to expand its own operational team whilekeeping costs at a competitive level compared with its rivals. This team is separate and inde-pendent from the Promoter. It works exclusively in the interests of Befimmo SCA.

The team reports directly to the Managing Director, who manages it in accordance with thedecisions of the Board of Directors of Befimmo SA.

Two directors, Jean-François van Hecke (until 28 August 2002) and Benoît Godts, superviseday-to-day management on a collegial basis, in accordance with the provisions of the RoyalDecree of 10 April 1995.

The management and technical maintenance of buildings is entrusted to external suppli-ers, as are all specialist accounting, tax and legal activities.

Contracts for subcontractors or external service providers are awarded on a competitivebasis taking full account of value-for-money criteria and subject to normal market condi-tions. Befimmo SCA’s policy in this regard is to avoid using third-party service providersif these could, in the course of their duties, obtain access to information that could poten-tially be used in such a way that is detrimental to the sole interest of the shareholders ofBefimmo SCA.

34


T H E I N T E R E S T S O F B E F I M M O S A C O I N C I D E C O M P L E T E L Y

W I T H T H O S E O F A L L S I C A F I S H A R E H O L D E R S

The remuneration paid to Befimmo SA, as statutory Managing Agent, is determined accordingto the provisions set out below in accordance with Article 19 of the Royal Decree of 10 April1995.

In addition to the reimbursement of any costs directly relating to its mission, Befimmo SA isentitled to a payment in proportion to the net result for the current fiscal year.

This remuneration shall amount to 2/100ths of a benchmark profit (if a profit was made) cor-responding to 100/98ths of the pre-tax profit after this remuneration has been booked to thefiscal year concerned. In this way, once the remuneration has been entered in Befimmo SCA’saccounts, the remuneration for the year will represent 2.04% of the pre-tax profit specified inthe accounts approved by the General Meeting of Befimmo SCA.

This remuneration is due as of 30 September of the fiscal year concerned, but is only payableafter approval of the annual accounts.

The calculation of the remuneration is controlled by the company’s statutory auditor.

The fact that the remuneration of the statutory Managing Agent of the Sicafi, Befimmo SA, islinked in this way to the Sicafi’s results means that its interests coincide with those of theshareholders as a whole.

Control

A U D I T C O M M I T T E E

The Audit Committee assists the Board of Directors with internal control procedures, drawingup the financial statements and other financial information, appointing the official companyauditors and in relation with them. It meets prior to each Board meeting with one or more ofthese issues on the agenda.

The Audit Committee comprises one director representing the Promoter of the Sicafi, MrBenoît Godts, and one director, major shareholder, Mr Alain De Pauw.

The audit committee met four times during this fiscal year.

S T A T U T O R Y A U D I T O R S

Deloitte & Touche, company auditors, represented by Mr Joseph Vlaminckx.


R E A L E S T A T E E X P E R T S

In accordance with the Royal Decree of 10 April 1995, Befimmo calls on external experts for theregular valuation of its assets and whenever it issues shares, registers or buys shares on astock exchange other than the one on which it buys and sells its real estate assets. This expertvaluation is required to determine the book value, draw up the annual accounts, and justify theprice of new issues or acquisitions.

These missions are currently assigned to:

Winssinger & Associés, a member of the DTZ Debenham-Winssinger group, valuing the follow-ing buildings: La Plaine, chaussée de La Hulpe, Woluwe Garden D, Woluwe Garden B, IkarosBusiness Park, boulevard Industriel, rue Bollinckx, Wiertz, Brederode 1, Brederode 2, Empereur,Impératrice, Extension Justice, Borschette, Guimard, Schuman 2, View Building, Triomphe I,Triomphe II, Triomphe III, Jean Dubrucq, Ocean House, Eagle Building and Waterloo Office Park.

In addition, Winssinger & Associés has been entrusted with coordinating all valuationactivities.

Cushman & Wakefield Healey & Baker valuing the buildings acquired from the merger withPrifast, namely: Goemaere, Fountain Plaza, Green Hill and the building located in rue dela Montagne in Charleroi.

CB Richard Ellis valuing the buildings acquired from the mergers of 23 December 1998:World Trade Center, Noord Building, rue Devroye, rue du Jonquois, digue du Peuplier andrond point Schuman.

Deloitte & Touche Real Estate - Catella Codemer valuing the Shell building.

D E P O S I T O R Y B A N K

Banque Dexia has been assigned as the depository bank of Befimmo SCA within the meaningof Article 12 et seq. of the Royal Decree of 10 April 1995 regarding real estate Sicafs.

As the depository of Befimmo SCA, Banque Dexia must fulfil the obligations and duties pre-scribed by the law of 4 December 1990 and its implementing decree of 10 April 1995.

It is therefore entrusted with:

ensuring that Befimmo SCA immediately receives the corresponding income when assetsare sold. To this end, the managers or people concerned with the day-to-day managementof Befimmo SCA will immediately inform Banque Dexia of each transaction concerningreal estate assets;

keeping authentic copies and engrossed versions of notarized deeds concerning thebuildings owned by Befimmo SCA, as well as the documents concerning the mortgage sit-uation of these properties. The depository bank shall also keep the equivalent documentsfor any buildings located outside of Belgium.

36


Befimmo SCA must entrust Banque Dexia with all transferable securities and cash. The bankmust then in turn:

retain them and fulfil all the usual tasks with regard to cash deposits and the open depositof transferable securities;

implement, at the request of Befimmo SCA, all decisions taken by the latter concerningthese assets, and in particular deliver the disposed assets, pay for acquired assets, receivethe dividends and interest generated by these assets, and exercise all of the subscriptionand appropriation rights attached to them;

ensure that, for operations concerning the assets of Befimmo SCA, the consideration isreceived within the normal deadlines.

37

fiscal year 2002

summaryBalance sheet 38

Income statement 40

Summary of the valuation rules 42

Notes to the accounts 44

Details about the accounts 49

Cash flow statement 50

Debts, guarantees and rating 51

Report of the statutory auditor 53

Obligatory information 54

F I N A N C I A L R E P O R T

38

B A L A N C E S H E E T (as of 30 September - in thousands of EUR)

ASSETS 2000 2001 2002

FIXED ASSETS 553 513 610 382 1 074 439

I. ESTABLISHMENT COSTS 3 360 2 573 –

III. TANGIBLE ASSETS 543 057 595 414 1 065 033

C. Furniture and vehicles 21 25 215

E. Other tangible assets 543 036 595 389 1 064 818

IV. FINANCIAL ASSETS 7 097 12 395 9 406

A. Connected companies –

1. Stakes 4 735 –

C. Other financial assets

1. Shares 6 813 7 646 9 384

2. Receivablesand cash guarantees 284 14 22

CURRENT ASSETS 19 104 88 785 9 961

V. RECEIVABLES AFTER MORE THAN ONE YEAR 228 515

A. Trade accounts receivable 228 515

VII. RECEIVABLES WITHIN ONE YEAR 16 283 30 716 7 286

A. Trade accounts receivable 12 344 8 196 6 562

B. Other receivables 3 939 22 520 724

VIII. SHORT-TERM DEPOSITS 1 000 55 500 –

B. Other deposits 1 000 55 500 –

IX. CASH 416 287 1 377

X. DEFERRED CHARGES AND ACCRUED INCOME 1 406 2 054 783

TOTAL ASSETS 572 617 699 167 1 084 400

(in thousands of EUR)

39

LIABILITIES AND SHAREHOLDERS’ 2000 2001 2002EQUITY

SHAREHOLDERS’ EQUITY 431 777 477 856 605 597

I. CAPITAL 111 309 114 883 142 295

A. Subscribed capital 111 309 114 883 142 295

II. ISSUE PREMIUMS 76 372 76 372 161 261

III. REVALUATION OF CAPITAL GAINS 185 070 209 513 214 879

IV. RESERVES 17 367 17 367 21 113

A. Legal reserve 1 293 1 293 1 295

B. Unavailable reserves 1 293 1 293 3 633

D. Available reserves 16 074 16 074 16 185

V. PROFIT CARRIED FORWARD 41 658 59 721 66 049

PROVISIONS AND LIABILITIES 140 841 221 311 478 803

PROVISIONS FOR LIABILITIES AND CHARGES 2 351

VIII. AMOUNTS PAYABLE AFTER MORE

THAN ONE YEAR (Long-term debt) 61 394 52 978 161 203

A. Financial debts 61 186 52 806 160 336

D. Other debts 208 172 867

IX. AMOUNTS PAYABLE WITHIN

ONE YEAR (Short-term debt) 61 602 150 135 308 249

A. Long-term debt maturingwithin the year 8 380 8 380 43 562

B. Financial debts 10 062 100 382 181 044

C. Commercial debt 6 534 4 066 39 675

E. Tax, salary and social security debts 2 192 2 544 205

1. Taxes 2 138 2 426 37

2. Remuneration and social security 54 118 168

F. Other debts 34 434 34 764 43 763

X. DEFERRED INCOME AND ACCRUED

CHARGES 17 845 18 197 7 000

TOTAL LIABILITIES ANDSHAREHOLDERS’ EQUITY 572 617 699 167 1 084 400

40

I N C O M ES T A T E M E N T (as of 30 September - in thousands of EUR)

COSTS 2000 2001 2002

I. COST OF SALES AND SERVICES 16 004 14 448 25 951

B. Services and other goods 8 092 8 543 12 623

C. Remuneration, social securityand pensions 333 431 810

D. Depreciation and write-downsof establishment costs andtangible and intangibleassets 826 836 1 998

E. Write-downs of stocks,orders, trade receivables (write-downs +,write-backs -) 147 - 38 72

G. Other operating costs 6 606 4 676 10 448

V. FINANCIAL EXPENSES 4 485 7 813 17 849

A. Interest charges 4 470 7 761 17 559

C. Other financial expenses 15 52 290

VIII. EXTRAORDINARY EXPENSE 80 1 312 7 548

A. Extraordinary depreciation and write-down of establishment costs, tangible and intangible assets 80 0

E. Other extraordinary expenses 1 312 7 548

X. A. TAXES 26 6 197

XI. PROFITS FOR THE FISCAL YEAR 37 381 53 752 48 270

TOTAL COSTS 57 976 77 331 99 815

XIII. PROFIT FOR THE YEAR

TO BE ALLOCATED 37 381 53 752 48 270

41


INCOME 2000 2001 2002

I. SALES AND SERVICES 51 517 54 825 91 978

A. Turnover 41 146 46 619 76 312

D. Other operating income 10 371 8 206 15 666

IV. FINANCIAL INCOME 1 372 2 301 2 068

A. Income from financial assets 448 494 693

B. Income from current assets 114 1 520 1 250

C. Other financial income 810 287 125

VII. EXTRAORDINARY INCOME 5 043 20 201 5 507

A. Write-back of write-downs on tangible assets 501 3 –

D. Capital gains on disposal of fixed assets 4 533 20 198 –

E. Other extraordinary income 9 5 507

X. B. TAX ADJUSTMENTS

AND WRITE-BACK

OF TAX PROVISIONS 43 4 262

TOTAL INCOME 57 976 77 331 99 815

ALLOCATIONS AND WITHDRAWALS 2000 2001 2002

A. PROFIT TO BE ALLOCATED 75 139 92 300 107 991

1. Profit to be allocated for the fiscal year 37 381 53 752 48 270

2. Profit carried forward from the previous year 37 758 38 548 59 721

C. ALLOCATION TO RESERVES - 3 285 – –

D. PROFIT CARRIED FORWARD - 41 658 - 59 721 - 66 049

F. PROFIT FOR DISTRIBUTION - 30 196 - 32 579 - 41 942

42

S U M M A R Y O F T H E V A L U A T I O N R U L E S

The valuation rules comply with the provisions of the Royal Decree of 10 April 1995 concerning real estate investmentfunds.

ASSETS

I. Establishment costs (change in the valuation rules)

The establishment costs are directly covered in the profit and loss accounts.

III. Tangible assets

At the time of their application, tangible assets are posted to the accounts at their acquisition value or at the cost priceincluding incidental costs and non-deductible VAT.Buildings under construction are posted to the accounts at the cost price, including incidental costs and non-deductibleVAT as work progresses.For buildings acquired through a merger, division or addition of a branch of activity, the taxes due on the potentialcapital gains on the companies absorbed are posted under assets and form part of the cost price.Without prejudice to the obligation under Article 7 of the law of 17 July 1975 concerning company accounting and annualaccounts to establish an inventory at least once a year, Befimmo draws up an inventory every time it issues or buys backshares other than on the stock market.

At the end of each fiscal year, an independent surveyor values the following real estate assets in detail:- buildings and real rights to buildings held by Befimmo or by a real estate company that it controls;- options on buildings held by Befimmo or by a property company that it controls, as well as buildings covered by such

rights.

These valuations are binding on Befimmo when establishing its annual accounts.Tangible assets are therefore posted to the accounts at the value determined by the surveyor, after all costs, registrationduties and fees have been paid.Moreover, at the end of each of the first three quarters of the fiscal year, the surveyor updates the overall valuation ofreal estate held by Befimmo in line with developments in the market and the specific characteristics of the real estateconcerned.Capital gains realized are directly entered under heading III of liabilities “Revaluation of capital gains”.By way of derogation from Articles 28(2) and 30 of the Royal Decree of 8 October 1976 on company annual accounts,Befimmo does not depreciate buildings, real rights to buildings or real estate on lease to Befimmo.Maintenance and major repair costs are charged during the fiscal year .Tangible assets other than real estate with a limited useful life are depreciated using the straight-line method starting inthe year when they are first posted to the accounts which is considered a full year.

If the fiscal year is shorter or longer than 12 months, depreciation is calculated pro rata.

The following annual rates are applied:

Installations and machinery: 20% except:- vehicle: 25 %- leased equipment: duration of the contract- building finishing costs and hired equipment: depreciation covers the stated legal duration of the lease and, where

there is no lease, ten annual installments.Acquisitions for a unit price lower than EUR 2,479 before VAT are posted to the year when the acquisition wasmade.

Tangible assets other than real estate without a limitation on their useful life are written down where they depreciateover a long period. They may be revalued.

43

IV. Financial assets

Financial assets are posted to the accounts at the time they are acquired and at their acquisition value, excludingincidental costs shown in the annual accounts.The Managing Agent is allowed to post incidental costs for major acquisitions on the asset side.Securities held in the portfolio for which there is a liquid market are valued at their market price.Fixed-yield securities held in the portfolio for which there is no liquid market are valued on the basis of the market pricethat applies to similar securities with a comparable residual life.Article 34, sub-paragraph 3 of the Royal Decree of 8 October 1976 concerning company annual accounts does not apply.Articles 10, 14 (1) and (5), 15, sub-paragraph 1, 16(1) sub-paragraph 1, (2) sub-paragraph 1 of the Royal Decree of8 March 1994 on the accounting and annual accounts of certain open-ended joint investment organizations apply toBefimmo.Capital gains are directly posted under heading III, “Revaluation of capital gains”, on the liabilities side.

V. Receivables after more than one year

Receivables are posted at their nominal value or at their acquisition price. Write-downs are posted when there is apersistent fall in value.

VII. Receivables within one year

These receivables follow the same rules as for receivables after more than one year.Write-downs are posted when there is a fall in value.

VIII. Short-term deposits

All deposits are posted to the accounts at their acquisition value, excluding incidental costs shown in the profit and lossaccounts. Shares quoted on a stock exchange are valued at the prevailing stock-market price.

LIABILITIES

VII. Provisions for risks and costs

Each year the Managing Agent conducts a full examination of provisions previously established, or to be established tocover risks and charges to which the company is subject, and makes the necessary adjustments.

COMMITMENTS AND CLAIMS

The Managing Agent evaluates commitments and claims at the nominal value of the legal undertaking mentioned in thecontract; where there is no nominal valuation or in borderline cases, they are mentioned for information only.

SUPPLEMENTARY PENSION SCHEME

Members of staff benefit from a retirement and survivors’ pension scheme guaranteeing a pre-defined level of resourcesthat varies in line with their seniority and last salary. The supplementary pension is established partly by a groupinsurance scheme and partly through a legally distinct pension fund. The annual subscription is included under staffcosts and the amount is calculated by a pension fund actuary.

44

N O T E S T OT H E A C C O U N T S (as of 30 September - in thousands of EUR)

I. ESTABLISHMENT COSTS SITUATION 2002

NET BOOK VALUE AT END OF PREVIOUS PERIOD 2 573

TRANSFERS DURING THE FISCAL YEAR

• Depreciations (2 573)

NET BOOK VALUE AT THE END OF THE FISCAL YEAR 0

III. TANGIBLE ASSET SITUATION

FURNITURE OTHERAND TANGIBLE

VEHICLES ASSETS

A. ACQUISITION VALUE

NET BOOK VALUE

AT END OF PREVIOUS PERIOD 56 453 707


• Acquisitions(including real estate development) 261 468 795

AT THE END OF THE FISCAL YEAR 317 922 502

B. CAPITAL GAINS

NET BOOK VALUE

AT END OF PREVIOUS PERIOD 211 608


• Carried out 10 963

• Canceled (8 457)

AT THE END OF THE FISCAL YEAR 214 114

C. DEPRECIATION &

WRITE-DOWNS (–)

NET BOOK VALUE

AT END OF PREVIOUS PERIOD 31 69 925


• Carried out 71 1 928

• Written back as surplus (55)

AT THE END OF THE FISCAL YEAR 102 71 798

D. NET BOOK VALUE AT THE END OF THE FISCAL YEAR 215 1 064 818

45


IV. FINANCIAL ASSET SITUATION 2002

1. SHARES AND SHAREHOLDINGS

A. ACQUISITION VALUE

NET BOOK VALUE



• Acquisitions 2 799

• Disposals (5 337)


B. CAPITAL GAINS

NET BOOK VALUE



• Carried out 325

• Canceled pursuant to realization (784)


NET BOOK VALUE AT THE END OF THE FISCAL YEAR 9 384

2. RECEIVABLES AND CASH GUARANTEES

NET BOOK VALUE

AT END OF PREVIOUS PERIOD 14

TRANSFERS DURING THE FISCAL YEAR 8

NET BOOK VALUE AT THE END OF THE FISCAL YEAR 22

VII. DEFERRED CHARGES AND ACCRUED INCOME

VARIOUS COSTS PAID IN ADVANCE 781

ACQUIRED INCOME 2

46

N O T E S T OT H E A C C O U N T S (as of 30 September)

VIII. CAPITAL SITUATION AMOUNT EUR NO. OF SHARES

A. NOMINAL CAPITAL

1. SUBSCRIBED CAPITAL

AT THE END OF THE PREVIOUS PERIOD 114 883 000 7 907 420

CHANGES DURING THE FISCAL YEAR 27 412 000 1 886 807

AT THE END OF THE FISCAL YEAR 142 295 000 9 794 227

2. BREAKDOWN OF THE CAPITAL

2.1. Categories of ordinary shares

• Ordinary shares 9 794 227

2.2. Registered or bearer shares

• Registered 1 301 808

• Bearer 8 492 419

E. AUTHORIZED CAPITAL NOT SUBSCRIBED (EUR) 88 246 381

G. COMPANY SHAREHOLDING STRUCTURE

ON THE CLOSING DATE FOR THE ACCOUNTS

DECLARANT DATE OF TOTAL TOTAL NUMBER %DECLARATION NUMBER OF OF DECLARED

ISSUED SHARES VOTING RIGHTS

Bernheim group companies 11/10/01 791 998 8.09

Mr Alain De Pauw 08/02/00 721 152 7.36

Mr Patrick De Pauw 08/02/00 712 382 7.27

Denominator 9 794 227

47


X. DEBT SITUATION 2002

A. BREAKDOWN OF AMOUNTS PAYABLE AFTER MORE

THAN ONE YEAR BY RESIDUAL PERIOD

FINANCIAL DEBTS 160 336

LONG-TERM DEBT MATURING WITHIN THE YEAR 43 562

OTHER DEBTS 867

B. AMOUNTS PAYABLE WITHIN ONE YEAR

FINANCIAL AND COMMERCIAL DEBTS 220 719

OTHER DEBTS 43 763

C. TAX, SALARY AND SOCIAL SECURITY DEBTS

1. TAXES 37

2. REMUNERATIONS AND SOCIAL SECURITY COSTS 168

XI. DEFERRED INCOME AND ACCRUED CHARGES

ACCRUED LIABILITIES 4 630

INCOME TO BE CARRIED FORWARD 2 370

XII. OPERATING RESULTS 2000 2001 2002

A. NET TURNOVER 51 517 54 825 91 978

a) Turnover 41 146 46 619 76 312

b) Other operating income 10 371 8 206 15 666

C1. EMPLOYEES

a) Total number at the year end 6 8 11

b) Average number of employees calculatedon a full-time basis 5.4 7.1 10.1

c) Effective number of hours worked 7 219 10 039 14 661

C2. STAFF COSTS

a) Remuneration 201 277 485

b) Employers’ contributions 60 81 134

c) Employers’ premiums 37 36 74

d) Other staff costs 35 37 117

F. OTHER OPERATING COSTS

• Taxes 5 758 4 207 10 085

• Other 848 469 363

48

N O T E S T O T H EA C C O U N T S (as of 30 September - in thousands of EUR)

XIV. EXTRAORDINARY RESULTS 2002

A. EXTRAORDINARY CHARGES

WRITE-DOWN ON START-UP COSTS 2 573

COST OF SYNDICATED LOAN 1 200

CIBIX ACQUISITION COSTS 4 017

WRITE-BACK ON PREVIOUS PROVISIONS (242)

B. EXTRAORDINARY INCOME

CAPITAL GAIN ON ACQUISITION OF CIBIX 5 268

CAPITAL GAIN ON REAL ESTATE CERTIFICATES 239

XVI. OTHER TAXES TO BE PAIDBY THIRD PARTIES 2000 2001 2002

A. VAT POSTED:

1. To the company (deductible) 894 665 1 503

2. By the company 2 027 1 898 3 318

B. AMOUNTS WITHHELD TO BE PAID BY THIRD PARTIES FOR:

1. Income tax 98 105 159

2. Withholding tax 4 273 4 415 6 291

XVII. OFF-BALANCE SHEET CLAIMS AND COMMITMENTS

MAJOR DISPUTES AND OTHER MAJOR COMMITMENTS

• Guarantees received 9 695 7 203 10 524

XIX. FINANCIAL RELATIONS

A. THE DIRECTORS AND MANAGERS

Direct and indirect remuneration and pension payments charged to the profit and loss accounts, provided that this item does not relate exclusively or principally to the situation of a single identifiable person:

- statutory managing agent 780 1 103 984

49

D E T A I L S A B O U TT H E A C C O U N T S (in thousands of EUR)

DETAILS 2002

Other debts

Coupons payable 42 606

Managing agent’s remuneration 984

Other third party debts 173

Other operating income

Advance levies on income derived from real estate recovered 7 920

Office tax, insurance recovered 1 306

Other general expenses recovered 6 284

Other operating costs

Property tax 9 112

Regional and municipal taxes 976

Miscellaneous tax 360

50

CASH FLOWSTATEMENT (as of 30 September - in thousands of EUR)

1999-2000 2000-2001 2001-2002

Profit for the fiscal year 37 381 53 752 48 270

Depreciation and write-downs on costs 552 833 4 446

CASH FLOW 37 933 54 585 52 716

CHANGE IN WORKING CAPITAL 20 215 - 16 781 56 181

OPERATIONAL CASH FLOW 58 148 37 804 108 897

Dividends - 30 196 - 32 579 - 41 492

AVAILABLE CASH FLOW 27 952 5 225 66 955

Acquisitions of intangible assets – 36 –

Acquisitions of tangible assets 13 497 52 367 471 402

Acquisitions of financial assets 518 5 298 - 3 183

INVESTMENT OPERATIONS 14 015 - 57 701 468 219

EQUITY INCREASE 11 104 24 907 123 480

FINANCING NEEDS 53 071 - 27 569 - 277 784

Cash investments - 1 000 - 54 500 55 500

Cash and liquid assets 4 280 129 - 1 090

Financial debts over one year - 8 380 - 8 380 142 711

Financial debts < 1 year - 47 971 90 320 80 662

SOURCE OF FINANCING - 53 071 27 569 277 784

51

D E B T S , G U A R A N T E E SA N D R A T I N G (in thousands of EUR)

DETAILS OF DEBTS AND OTHER MORTGAGES GRANTED AS WELL AS GUARANTEES AND COLLATERAL OBTAINED OR GRANTED

DEBTS OVER ONE YEAR WITH CREDIT INSTITUTIONS

SYNDICATED LOAN

In June 2002 Befimmo signed a contract for a syndicated loan awarded by Société Générale (France), worth EUR 200million, paid out in two installments of EUR 100 million each:

• The first installment of EUR 100 million, which will be written off over four years, was used to reimburse part ofBefimmo's short-term debt (first and foremost unconfirmed straight loans);

• The second installment of EUR 100 million, a revolving four-year loan in line with the stipulations of our rating, isserving as a reserve and a back-up line for the commercial paper program. As of 30 September 2002, it had notbeen used.

This revolving loan, the biggest ever taken out by Befimmo, will boost the resources at the company's disposal forfinancing the development of its activities. It will provide Befimmo with a flexible and effective tool for financing itsdevelopment, and is an indication of the confidence in Befimmo on the part of its banking partners.

As of 30 September 2002, Befimmo's coverage position was as follows:

• EUR 140 million are subject of a collar contract with a floor of 3% and a cap of 5% on Euribor at 3 months for theperiod of June 2002 to June 2004.

OTHERS

Amount: 103 897

Type of credit: Long-term loan agreements

Repayment: 2007 58 403 to Dexia Bank2007 7 318 to KBC Bank2009 38 176 to Fortis Bank

COMMERCIAL PAPER PROGRAM

Befimmo has set up a commercial paper program with investors.

The amount of the program is EUR 200 million. It was developed in conjunction with Dexia (lead bank) and Fortis,along with EUR 100 million from KBC. The program enables Befimmo to cover its short-term cash needs flexibly and atless cost.

As at the end of the fiscal year, 30 September 2002, the outstanding amount was EUR 131 million.

RATING OF CORPORATE DEBT

Since 11 March 2002, Befimmo's corporate debts have been rated by Standard & Poor’s as BBB for the long term andA-2 for the short term. This assessment enables Befimmo to envisage the use of new types of financing with a view toguaranteeing growth.

52

OBTAINED GUARANTEES

Amount: 2 981

Form: Guarantee received from Bernheim-Comofi covering a dispute with the tax authorities.Befimmo has a claim in the same amount on the tax authorities (off balance sheet).

GRANTED GUARANTEES

- In connection with the acquisition of the Ikaros buildings, Befimmo has granted Payment guarantees to Codic coveringthe buildings of which it has taken delivery but not yet paid.

- 905 in favor of the Belgian State: Property dealer.

REGULARITY OF THE INFORMATION PASSED ON TO THE MARKET

Befimmo passes on information to the market in annual and half-yearly reports, in press releases and via its website(www.befimmo.be). So-called 'road shows' have also been organized in Brussels and other main European cities:London, Paris, Amsterdam, Frankfurt, Geneva, Zurich and Luxembourg.

53

Report of the statutory auditor for the year ended September 30, 2002to the Shareholders’ Meeting of the company C.V.A./S.C.A. Befimmo

DELOITTE & TOUCHEReviseurs d’EntreprisesLange Lozanastraat B-2018 AntwerpenBELGIUM

To the shareholders,

In accordance with the legal and statutory requirements, we report on our audit assignment which you have entrustedto us.

We have examined the annual accounts for the year ended September 30, 2002, which have been prepared under theresponsibility of the Board of Directors and which show a balance sheet total of EUR 1.084.400(000) and an incomestatement resulting in a profit for the year of EUR 48.270(000).In addition, as required by law, we have performed specific additional audit procedures.

UNQUALIFIED AUDIT OPINION ON THE FINANCIAL STATEMENTS

Our examination has been conducted in accordance with the auditing standards of the “Institut des Reviseursd’Entreprises/ Instituut der Bedrijfsrevisoren”. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the annual accounts are free of material misstatement and are in compliance withthe Belgian legal and regulatory requirements.

In accordance with these standards we have taken into account the administrative and accounting organization of yourcompany as well as the procedures of internal control. The responsible officers of the company have clearly replied to allour requests for information and explanations. We have examined, on a test basis, the evidence supporting theamounts included in the financial statements. We have assessed the accounting policies used, the significant estimatesmade by the company and the overall presentation of the annual accounts. We believe that our audit provides areasonable basis for our opinion.

In our opinion, taking into account the legal and regulatory requirements that govern them, the annual accountspresent fairly the financial position of the company as of September 30, 2002, and the results of its operations for theyear then ended and the supplementary information given in the notes is adequate.

ADDITIONAL CERTIFICATIONS

We supplement our report with the following certifications which do not impact on our audit opinion on the financialstatements:

- The directors’ report includes the information required by the law and is in accordance with the financial statements.

- Without prejudice to certain formal aspects of minor importance, the accounting records are kept in accordance withthe applicable Belgian legal and regulatory requirements.

- In the course of our examination, no transaction or decision in violaton with the articles of Association of the Companyor the Company Law came to our attention. The appropriation of the results proposed to the General Meeting is inaccordance with legal and statutory requirements.

Antwerpen, November 25, 2002.

The Statutory Auditor

DELOITTE & TOUCHEBedrijfsrevisoren BV o.v.v.e. CVBA

Represented by Jos VLAMINCKX

R E P O R T O F T H E S T A T U T O R Y A U D I T O R

BERNHEIM-COMOFI SUPPORT MISSIONS

In accordance with Article 524 of the Companies Code, Befimmo concluded a non-exclusive framework agreement withSogepro, a subsidiary of the Bernheim group, for the management of its real estate assets. This agreement coversvirtually the entire Befimmo portfolio and concerns owner management, tenant management and the organization oftechnical maintenance.

Each building is the subject of a specific amendment with an initial duration of three years reflecting these specificcharacteristics. These amendments may then be terminated on an annual basis by either party, Sogepro or Befimmo.

For the fiscal year to 30 September 2002, this cost Befimmo EUR 239,295 net.

In its day-to-day management, and with a view to achieving economies of scale, Befimmo also has access to certainservices provided by the Bernheim group: legal, fiscal, social, IT and the sharing of infrastructures such as premises,reception, telephones, etc.

All of these services are subject to invoicing at market conditions. For the fiscal year to 30 September 2001, Befimmowas invoiced an amount of EUR 661,771 for these services.

In the context of extraordinary transactions, such as growth operations, Befimmo can call on the resources of theBernheim group to help it develop these special projects. The services provided by the Bernheim group can beremunerated either by a "success fee" or on an hourly basis. In this case, there is an hourly rate of EUR 300 (excl. VAT),comparable to the rates charged by lawyers or auditors. For the fiscal year to 30 September 2002, Befimmo had paid outa total of EUR 743,253.

DELOITTE & TOUCHE FEES

Deloitte & Touche, represented by Mr Jos Vlaminckx, is the auditor. Its fees, set by the General Meeting of Shareholderson 11 December 2001, are EUR 37,250 (excl. VAT). Its duties will end on 30 Septembre 2004.

In addition, Befimmo SCA entrusted Deloitte & Touche with specific missions in the context of the due diligenceperformed at the time of major growth operations. For these missions, the total remuneration of the auditor was EUR61,807 (including VAT).

Deloitte & Touche Brussels carried out a number of fiscal support duties (totaling EUR 151,186) following the Cibixmerger.

Via the absorption of Arthur Andersen, Deloitte & Touche Real Estate has become the Sicafi's real estate expert - alongwith Catella Codemer. In this capacity, its fees totaled EUR 9,916.

RESEARCH & DEVELOPMENT

Befimmo is not active in research and development.

O B L I G A T O R Y I N F O R M A T I O N

54

55

summaryIdentification 56

Registered capital 57

The founder of Befimmo SCA 58

«Société en commandite par actions» 58

Name and qualifications of the experts 58

Real estate Sicaf 59

fiscal year 2002G E N E R A L I N F O R M A T I O N

56

G E N E R A L I N F O R M A T I O NO N B E F I M M O S . C . A . A N D I T S C A P I T A L

1. IDENTIFICATION

1.1. COMPANY NAME

BEFIMMO SCA a Sicaf incorporated under Belgian law

1.2. REGISTERED OFFICE

Chaussée de la Hulpe 166 – 1170 BRUSSELS.This can be transferred by simple decision of the managing agent to anywhere in Belgium.

1.3. LEGAL FORM

Société en commandite par actions under Belgian law.

1.4. FORMATION

BEFIMMO SCA was founded on Wednesday 30 August 1995 by a deed executed before Gilberte RAUCQ, notary publicin Brussels, and published in the Annexes to the Official Journal of 13 September 1995 under the number 950913-24.

The coordinated articles of association have last been modified on 11 December 2001.

1.5. DURATION

BEFIMMO SCA has been established for an indefinite period.

1.6. TRADE REGISTER

BEFIMMO SCA is registered in the Trade Register in Brussels under the number 594.182.

1.7. COMPANY’S OBJECT (ARTICLE 5 OF THE ARTICLES OF ASSOCIATION)

The principal aim of BEFIMMO SCA is the investment of capital collected from the public in “real estate” assets, asdefined in Article 122(1) indent 1 – 5 of the law of 4 December 1990 on financial operations and the financialmarkets.

Real estate assets are understood to mean:

- buildings as defined in Article 517 et seq. of the civil code and the rights in rem on buildings;

- shares with voting rights issued by affiliated real estate companies;

- option rights on buildings;

- shares in other undertakings investing in real estate, in accordance with Article 120(1) indent 2 or Article 137 of thesaid law of 4 December 1990;

- real estate certificates covered by Article 106 of the said law;

- the rights of BEFIMMO SCA on one or more assets under real estate leasing contracts;

- as well as other assets, shares or rights which fall within the definition of real estate assets under the royal decreesexecuting the law of 4 December 1990 on financial operations and the financial markets.

BEFIMMO SCA may, however, on an ancillary or temporary basis, invest in securities other than those defined inthe preceding indent, in accordance with the terms and conditions set out in Article 6.2. of its articles ofassociation, and hold liquid assets. These investments and the holding of liquid assets must be the result of aspecial decision by the managing agent, justifying their ancillary or temporary nature. The holding of securitiesmust be compatible with the implementation in the short or medium-term of the investment policy describedabove. The said securities must in addition be listed on a regulated, recognized stock exchange that is open to thepublic. Liquid assets may be held in whatever currency by way of sight or term deposits or any money marketinstruments with a high degree of liquidity.

- BEFIMMO SCA can acquire personal property and real estate necessary to the accomplishment of its object.

BEFIMMO SCA can take any measures and carry out all operations, in particular those covered in Article 6 of its bylaws, that it considers useful for the accomplishment and development of its object, subject to the fact that legalprovisions governing it are respected.

BEFIMMO SCA cannot change its company’s object by application of Article 70a of the coordinated laws on tradingcompanies; that provision does not apply to closed-end mutual funds, in accordance with Article 119(4) of the lawof 4 December 1990 on financial operations and the financial markets.

57

1.8. PLACES WHERE PUBLICLY ACCESSIBLE DOCUMENTS CAN BE CONSULTED

• The articles of association of BEFIMMO SCA and of Befimmo SA can be consulted at the Clerk’s Office of theBrussels Commercial Court and at the registered office.

• The corporate financial statements will be deposited at the Banque Nationale de Belgique and may be consultedat the Clerk’s Office of the Brussels Commercial Court.

• The annual accounts as well as the relative reports of BEFIMMO SCA are sent every year to registeredshareholders as well as to any other person requesting a copy.

• The decisions concerning the appointment and dismissal of the members of the governing bodies of Befimmo SAare published in the Annexes to the Belgian Official Journal.

• Financial notices concerning BEFIMMO SCA are published in the financial press and may be consulted on thewebsite www.befimmo.be.

The other documents accessible to the public and referred to in the prospectus can be consulted at the registeredoffice of BEFIMMO SCA

2. REGISTERED CAPITAL

2.1. ISSUED CAPITAL

As of 30 September 2002, the company capital totaled EUR 142,295,000. It was represented by 9,794,227 fully paid-up no par value shares.

2.2. AUTHORIZED CAPITAL

The managing agent is authorized to increase the capital in one or more operations to EUR 88,246,381. This capitalincrease may be performed as a cash contribution, a contribution in kind or by the incorporation of the reserves.

Authorization was given on 11 December 2001 for a period of five years. This period may be renewed one or moretimes by the General Meeting of Shareholders, ruling in the conditions laid down by law.

2.3. CHANGES TO THE CAPITAL SINCE 30 SEPTEMBER 2001 (IN EUR)

AMOUNT NUMBEROF SHARES

As of 30 September 2001 EUR 114 882 798 7 907 420

Deed of 11/10/2001 - Contribution CIB/SITQ/François family EUR 15 468 320 1 064 688

As of 12/11/2001 - Share swap (1st phase) EUR 7 228 480 497 538

As of 05/12/2001 - Share swap (2nd phase) EUR 427 792 29 445

Deeds of 11/12/2001

Cibix merger EUR 3 142 863 216 324

Immobilière du Triomphe merger EUR 538 847 37 089

Bastionen Parc Leopold merger EUR 606 172 41 723

As of 30 September 2002 EUR 142 295 272 9 794 227

2.4. STRUCTURE OF THE SHAREHOLDING (AS OF 30 SEPTEMBER 2002)

DECLARANTS DATE NUMBER OF %VOTING RIGHTS

DECLARED

Bernheim group companies 11/10/2001 791 998 8.09

Mr Alain De Pauw 08/02/2000 721 152 7.36

Mr Patrick De Pauw 08/02/2000 712 382 7.27

58

3. THE FOUNDER OF BEFIMMO SCA

BEFIMMO SCA was set up on the initiative of Bernheim-Comofi SA

Bernheim-Comofi SA is a public limited company under Belgian law and has its registered office at chausée de laHulpe 166, 1170 Brussels.

CAPITAL AND SHAREHOLDERS:

As of 31 December 2001, the capital of Bernheim-Comofi SA was EUR 164,320,000 and was represented by5,284,354 shares. As of 31 December 2001 the total consolidated equity was EUR 283,468,000.

Bernheim-Comofi SA has been a subsidiary of Fortis AG since July 2002.

4. SOCIÉTÉ EN COMMANDITE PAR ACTIONS

BEFIMMO SCA’s legal structure is of “Société en commandite par actions”. It is similar to but different from apartnership limited by shares.

An SCA is made up of two categories of partners.- the acting partner whose designation appears in the business name and who has unlimited liability for the

company’s commitments;

- the partners or shareholders who are liable only for the amount of their contribution and are not jointly and severally liable.

Moreover, the management of an SCA is carried out by one or more managers.

In the case of BEFIMMO SCA, the acting partner is Befimmo SA which also has sole management responsibility inaccordance with the articles of association of the Sicafi.

Befimmo SA is wholly owned by the BERNHEIM Group.

5. NAME AND QUALIFICATIONS OF THE REAL ESTATE EXPERTS USED BY BEFIMMO SCA

BEFIMMO SCA uses several real estate experts, namely Deloitte & Touche Real Estate-Catella Codemer, CB RichardEllis, Cushman Wakefield Healey & Baker et Winssinger & Associés.

These are real estate experts companies with specialized knowledge of the market and which enjoy a first-classreputation worldwide.

= Shareholders

BEFIMMO SCA

Partners

Befimmo SA = SicafiActing

PartnerManager =

The Sicafi system was created in 1995 to promote collective real estate investment. This concept of closed-end realestate investment companies is similar to the Real Estate Investment Trusts (USA) or the Beleggingsinstellingen(Netherlands).

The aim of the legislature was for the Sicafi to ensure a form of real estate investment of unparalleled transparency,making it possible to distribute cash flow to the greatest possible extent while benefiting from numerous advantages.

Sicafis are controlled by the Banking and Finance Commission and are subject to a specific set of regulations, amongother things requiring that they:

• take the form of a public limited company or a “Société en commandite par actions”.

• Be quoted on the stock exchange.

• Have a debt limited to 50% of the total asset value at market value.

• Strict rules governing internal conflicts.

• have a portfolio that is recorded in the accounts at its true market value with no depreciation;

• proceed with a quarterly valuation of assets performed by independent experts;

• diversify their risk: no more than 20% of all assets in a single real estate complex;

• distribute at least 80% of profits, whereupon they are exempted from corporate income tax;

• deduct a 15% withholding tax when the dividend is paid.

All these rules are intended to help reduce risk exposure.

Any company merging with a Sicafi will see all unrealized capital gains and tax-exempt reserves taxed at 20.085% (19.5%plus 3% crisis supplement).

R E A L E S T A T E S I C A F

59

60

Design and Production : CHRIS COMMUNICATIONS S.A.Photography : J.-M. Byl, Tony Stone, Image Bank.

Photoengraving and photosetting : SNEL GRAFICS.Printer : SNEL GRAFICS.



BEFIMMO SCA Partnership limited by shares

Registered Office166 Chaussée de La Hulpe, 1170 BrusselsBrussels Company Register n° 594182Tel. +32 2 679 38 60 - Fax +32 2 679 38 66e-mail : [email protected]

PAYMENT OF THE 2002 DIVIDEND AT THECOUNTERS OF THE BANKS DEXIA, BBL AND FORTIS UPON PRESENTATIONOF COUPON N° 8

PUBLICATION OFTHE BOOK VALUEAS OF 31 DECEMBER 2002

PUBLICATION OF THE FIRST-HALF RESULTS AND BOOK VALUEAS OF 31 MARCH 2003

PUBLICATION OF THE BOOK VALUEAS OF 30 JUNE 2003

PUBLICATION OF THE FULL YEAR RESULTS AND THE BOOK VALUES AS OF30 SEPTEMBER 2003

ORDINARY GENERAL MEETING 2003

PAYMENT OF THE 2003 DIVIDEND AT THECOUNTERS OF THE BANKS DEXIA, BBL AND FORTIS UPON PRESENTATION OF COUPON N° 9

from17 December 2002

11 March 2003

08 May 2003

21 August 2003

18 November 2003

9 December 2003

from16 December 2003

key dates for shareholders



BEFIMMO SCA

Chaussée de La Hulpe, 166 - 1170 BrusselsTel.: +32 2 679 38 60 - Fax: +32 2 679 38 [email protected] - www.befimmo.be

CREA TING V A L UE IN REAL EST A TECCREA TING V A L UE IN ...€¦ · As of 30 September 2002, the...

Documents

Transcript of CREA TING V A L UE IN REAL EST A TECCREA TING V A L UE IN ...€¦ · As of 30 September 2002, the...