Vastned sees lower direct result due to new tax rules in Spain

Retail property firm Vastned saw its direct result fall by 7% to EUR 15.6 mln in the first quarter of 2012, largely as a result of higher financing expenses and higher taxes stemming from new fiscal measures in Spain.

The figure compares to a year-earlier result of EUR 16.8 mln.

'The adverse economic climate in Spain is also affecting Vastned,' commented CEO Taco de Groot. 'Our Spanish property portfolio is well let, in particular the high street stores in the centre of major cities, but the value of the total property portfolio is under pressure. Furthermore, at the end of March a new tax law was enacted in Spain which means that our Spanish interest expenses are no longer fully tax-deductible.'

Vastned is maintaining its previous outlook for 2012, but conceded that the situation in Spain will affect results this year. 'The worsened conditions in the Spanish market and the effects of the amended tax legislation must emphatically be taken into account,' the company said. CEO De Groot added that the company is 'currently examining how to limit the impact of this measure.'

Positive developments in the first quarter included a slight increase in the portfolio occupancy rate and positive revaluations of 1.3% in Vastned's high-street assets compared to a negative 2.9% for the other investments.

Progress was also made on the company's financing structure, in line with plans to increase the share of alternative financing. Vastned has refinanced all the loans that were due to expire in 2012. 'We aim to increase the share of alternative financing, such as private placements, to 25% of the loan portfolio from 13% at present,' De Groot noted.