PEPR portfolio drops 13% in value in first half

Prologis European Properties (PEPR), Europe’s largest owner of modern distribution facilities, on Thursday reported a 13% devaluation of its portfolio over the first six months of 2009 to nearly EUR 3 bn from EUR 3.4 bn at year end 2008. Excluding disposals and foreign exchange adjustments, the drop in value amounted to 9.3%.

Net asset value per unit came to EUR 6.74 at end-June, down 17.6% on the EUR 8.18 per unit booked at end-March, largely reflecting portfolio devaluations.

PEPR said it booked a loss of EUR 1.40 per unit in the second quarter, up from a loss of EUR 0.28 per unit in the year-earlier period, largely due to portfolio devaluations. The first-half figure came to a negative EUR 1.24 per unit, against EUR 0.10 per unit a year earlier.

Management maintained its earnings guidance for 2009, with EPRA earnings expected to be between EUR 0.55 and EUR 0.60 per unit for the year and distributable cash flow also anticipated to be between EUR 0.55 and EUR 0.60 per unit. IFRS losses are now expected to be in the range of EUR 1.50 to EUR 1.70 per unit as a result of higher portfolio devaluations and losses on portfolio sales.

Commenting on the results, PEPR CEO Peter Cassells said: ‘Our operational performance remains resilient and our financial performance is in line with guidance in spite of the challenging market conditions. We have made good headway on a number of activities in accordance with the deleveraging initiatives that we announced in December 2008. This includes further progress to finalise EUR 226 mln of secured bank loans and some EUR 190 mln of asset sales.’

PEPR also announced the appointment, with immediate effect, of David Doyle as chief financial officer. Doyle was previously CFO at Colliers CRE.