seb immoportfolio target return fund · 2014-06-30 · seb immoportfolio target return fund at a...

SEB ImmoPortfolio Target Return FundSemi-annual Report as of 30 June 2006

SEB Asset Management

SEB ImmoPortfolio Target Return Fund at a glance as of 30 June 2006

Fund assets EUR 259.7 million

Total property assets (market values) EUR 446.7 millionthereof held directly EUR 334.1 millionthereof held via real estate companies EUR 112.6 million

Total Fund properties 20thereof held via real estate companies 5

Changes during the period under reviewPurchases/additions 8

Letting rate (gross estimated rental) 1) 96.9%

Letting rate (net estimated rental) 96.7%

Net inflow of funds EUR 56.0 million

Distribution on 15 March 2006 EUR 9.072 million

Distribution per unit EUR 5.20income tax-free portion held as private assets EUR 2.5290portion liable to income tax held as private assets EUR 2.6710

Total property return 2) 4.3%

Liquidity return 3) 1.1%

Investment performance 4) for the period 1 January 2006 – 30 June 2006 3.4%

Investment return 4) for the period 1 July 2005 – 30 June 2006 7.3%

Investment performance 4) since Fund launch 50.9%

Unit value/redemption price 5) EUR 116.70

Issuing price EUR 120.20

Total Expense Ratio (TER) 6) 1.20%

1) The gross estimated rental corresponds to the net estimated rental plus incidental expenses2) Based on the Fund’s average directly or indirectly held property assets financed by equity in the period under review, 1 January 2006 to 30 June 20063) Based on the Fund’s average liquid assets in the period under review, 1 January 2006 to 30 June 20064) Calculated according to the BVI method5) The redemption of unit certificates can be subject to a redemption discount of up to 3% of the unit value.6) Total costs as a percentage of average Fund assets within a financial year. Calculated as of 31 December 2005

Note: The figures for the first half of the financial year (1 January 2006 to 30 June 2006) cannot be extrapolated to forecast the results for the year, as transactions affect-ing earnings are not spread out evenly over the year. They are of limited informative value due to the short period under review.

This Semi-annual Report and the Sales Prospectus available separately, along with the Annual Report as of 31 December 2005, are to be handed to investors until thepublication of the next Annual Report on 31 December 2006.

German Securities Code Number: 980 231 ISIN: DE0009802314

Launched as SEB ImmoSpezial I, a special fund according to German investment law, on 15 October 2001; transformed into a mutual fund on 1 October 2004

Hamburg, “Halle E”, Strassenbahnring 6-18

Semi-annual Report as of 30 June 2006 1

2 Editorial

3 Concept and Investment Strategy

5 Opportunities and Risks of Open-ended Real Estate Funds

7 Real Estate Markets – An Overview

10 SEB ImmoPortfolio Target Return Fund in Detail10 Development of the Fund

10 Structure of Fund assets

10 Investment performance

11 Loans, currency hedging and risk provisions

13 Income components

14 Portfolio structure

16 Letting

17 Changes to the Portfolio

21 Outlook

22 Overview: Returns, Valuation and Letting

24 Development of Fund Assets

26 Statement of Assets

29 Regional Distribution of Fund Properties

30 Property Record

34 Hedging Transactions Portfolio

35 Statement of Income and Expenditure

37 Bodies

Semi-annual Report as of 30 June 2006

Graphics14 Geographical distribution of properties

14 Allocation of Fund properties by value class

15 Economic age distribution of Fund properties

15 Types of use of Fund properties

15 Remaining lease terms

16 Tenant structure by sector

Dear investor, We have made steady progress during the first half of this

year in successfully establishing the SEB ImmoPortfolio

Target Return Fund as a highly competitive “core plus”

product. Eight properties were transferred to the Fund,

while a net inflow of funds amounting to approximately

EUR 56 million increased the Fund volume by 26%, to

around EUR 260 million. The Fund achieved an attractive

result of 3.4% for the first six months.

In keeping with its risk/return profile, the Fund both

invested in established commercial real estate markets and

increased the proportion of its portfolio in niche markets

in recent months. We made additional investments in

student residences in the USA to consolidate our sub-

portfolio in this segment. Our goal is to achieve a positive

long-term effect on the Fund’s overall portfolio through

the efficient and active management of these properties.

This subportfolio bolsters the basic diversification and

earnings power of the SEB ImmoPortfolio Target Return

Fund in a variety of ways. Student residences in the USA

are not subject to general economic trends and their lease

structures provide stable, regular income. Since this niche

segment is expected to become an established feature of

institutional investors’ properties, it offers attractive exit

opportunities.

Particularly in times of fierce competition on institutional

real estate markets, niche markets broaden the investment

universe by introducing appealing investment opportuni-

ties that have a positive effect on the risk/return profile of

the overall portfolio. We will continue to leverage these

opportunities in the future to ensure stable and attractive

returns for the SEB ImmoPortfolio Target Return Fund.

We take pleasure in reporting to you in more detail on the

development of the Fund in the first half of 2006 on the

following pages.

2 SEB ImmoPortfolio Target Return Fund

Management:Barbara A. Knoflach, Axel Kraus andChoy-Soon Chua

Editorial

The SEB ImmoPortfolio Target Return Fund is a global

open-ended real estate fund with a “core plus” investment

strategy. The Fund is aimed at investors

who wish to invest relatively large sums for the medium

to long term in an indirect real estate investment and to

exploit the income potential offered by the professional

management of international real estate investment,

and/or

to supplement the fixed-income investment part of their

portfolios with high-return real estate investments of a

similar risk category.

The Fund portfolio is being constructed in line with this

product focus. The aim of the target return concept is to

offer calculable income while providing appropriate port-

folio diversification. Purchases are being used to system-

atically construct a portfolio that is balanced by region

and type of use. The focus of investment is on office and

logistics real estate in Europe, with the portfolio being

rounded off with retail properties and niche products

such as student housing in the USA or properties in Asia.

Active portfolio management ensures constant portfolio

optimisation: purchases and sales in established real estate

markets are selectively combined with investments in

growth markets, so as to achieve a balanced mix of poten-

tial returns and risk diversification. In addition, selective

investments continually safeguard the competitive

strength of portfolio properties.

Target liquidity amounts to between 5% and 10% of the

Fund’s assets, reducing dilution effects on the real estate

return. This makes active liquidity management necessary

in order to synchronise inflows and outflows of funds and

real estate transactions.

Fund marketing therefore performed in line with the

principle of “cash on demand only”. Properties are selected

using a combined top-down/bottom-up investment

process. A top-down approach is used to assess economic

opportunities and risks, as well as those relating to the

locations of potential investments and their market

prospects. In the case of specific investment decisions, the

individual property is analysed in terms of the location and

the immediate environment, the building’s quality, the

tenants and their creditworthiness (bottom-up approach).


Concept and Investment Strategy

Investment style Profile Target return/volatility

Opportunity

Core Plus

Core

High risk, high return. Investment focus onemerging markets, sometimes on distressedassets and on growth potential fromdevelopments. High leverage (>50%).

Medium risk, medium return. Investments inestablished and up-and-coming markets. Assetsinclude those with growth potential, plusdevelopments in some cases. Leverage 50%.

Low risk, low return. Investments in establishedmarkets. Focus on stable cash flows. Low or noleverage.

> 9% / unlimited

6–9% / target is single-digit

5–6% / often less than 1%

Real estate investment styles

One decision criterion when selecting a property is the

stable ongoing cash flow it generates. On the other hand,

properties that offer appreciation potential are also included

in the portfolio. Letting and project development risks are

incurred selectively and consciously in order to realise such

appreciation gains. Equally, we select markets in which

anticyclical investments offer the chance of positive value

development.

The intended average holding period for Fund properties is

five to seven years. Consequently, the assessment of possible

exit strategies is also a decision criterion for individual

properties during the purchasing process. For this reason,

we have set up a provision of 100% for deferred taxes.

A target external financing rate (leverage) of up to 50% at

the Fund level is a strategic parameter in the Fund concept.

Foreign exchange items are hedged in accordance with

statutory requirements and the risk profile of the product.


Duisburg, Königsberger Allee 28


Strategic liquidity management with regard to the

liquidity ratio and degree of external financing of Fund

assets

Property portfolio diversification according to criteria such

as the properties’ size, age, type of use and location, so as

to have marketable properties in every market situation

Establishment of capital gains tax provisions in line

with the strategic holding period for the properties

The stability of open-ended real estate funds is derived

from the real estate they hold. Nevertheless, income from

properties and property values can fluctuate depending

on the economic environment.

Fund returns also depend on trends in property values and

cash flows. Fund returns can increase or decrease as a result

of market developments.

In addition, external factors (such as the closing of funds

managed by other market players) can have a considerable

influence on the Fund’s liquidity situation.

General opportunities and risks associated with real estate investmentsReal estate investments, whether they take the form of

direct investments or equity interests, are subject to risks

that can impact the Fund’s unit value. These primarily

concern the following risks:

Political, fiscal, legal and economic risks, as well as the

transparency and degree of maturity of the individual real

estate market must be considered in investment decisions.

In addition, for investments outside the eurozone, the

volatility of the local currency must be taken into account

when making investment decisions. Currency fluctuations

and the costs of currency hedging impact property returns.

Just like other investments, investments in open-ended

real estate funds offer both opportunities and risks. Real

estate investments are long-term, income-oriented capital

investments. Investment performance depends on a broad

range of legal, economic, fiscal, and property- and product-

specific factors. The most significant opportunities and

risks are presented in the following overview.

Specific opportunities and risks of investing inopen-ended real estate fundsOpen-ended real estate funds invest monies that are callable

in the short term in mid- to long-term real estate properties.

German lawmakers have dealt with the problem of maturity

transformation by issuing the following regulations:

All open-ended real estate funds are required to maintain

a minimum liquidity of 5% of fund assets in short-term

liquidity investments (e.g. bank deposits) at all times.

In order to provide a cushion against high outflows of

funds it is possible to take on debt of up to 50% of the

market values of the properties, plus an additional 10%

of fund assets over the short term. If the borrowing costs

are higher than the return on the properties, this reduces

the Fund’s return (negative leverage effect); if borrowing

costs are lower than the return on the properties, the

fund’s return increases (positive leverage effect).

Finally, unit certificate redemption can be suspended

for a period of no longer than two years.

In addition, the Fund management has established product-

specific and target group-oriented risk management

procedures to deal with liquidity squeezes. Chief among

these are:

Target group-specific marketing information

(Pro)active marketing and investor management

Opportunities and Risks of Open-ended Real Estate Funds

A change in the quality of the location can directly affect

lettability and the current letting situation. If the attrac-

tiveness of a location increases, leases can be concluded

at higher prices. If its attractiveness declines, however,

this can lead to long-term vacancies in the worst case.

The quality and state of repair of buildings also have a

direct effect on their income-generating ability. The

condition of a building can make maintenance expendi-

tures in excess of budgeted costs necessary. Additional

necessary investment costs can depress returns over the

short term, but may be necessary for positive long-term

development.

Risks of damage caused by natural forces (earthquakes,

tornadoes, etc.) as well as by fire and storms are covered

internationally by taking out insurance, to the extent that

this is economically justifiable and objectively advisable.

While vacancies and expiring leases can be a source of

earnings potential, they also pose a risk. Vacant properties


can be deliberately purchased as an anticyclical invest-

ment in order to subsequently realise appreciation gains.

In this case, it is important to monitor the markets in

which the Fund is invested regularly and to act accord-

ingly in order to react to market movements in a timely

manner. At the same time, vacancies lead to loss of in-

come on the one hand and increased costs to increase

the rental attractiveness of the property on the other.

Tenant creditworthiness is also a significant risk com-

ponent. Poor creditworthiness can lead to high lease

arrears and insolvencies can result in a complete loss of

income. One of the goals of portfolio management is to

reduce dependency on individual tenants or sectors.

The list of above-mentioned risks is not exhaustive. For a

more detailed risk description, please refer to the Sales

Prospectus.

Warsaw, University Business Centre I, Szturmowa 2a


International real estate markets – favourableeconomic conditionsThe global economy remained robust in the first half of

2006, although higher energy prices and interest rates

depressed the economy to some extent. At just under 5%,

global economic growth in 2006 will trail the previous

year only slightly.

The emerging markets experienced sustained high mo-

mentum, led by China, although here, too, monetary policy

is more restrictive. Japan and South Korea will continue to

benefit from this. Within the industrialised countries, the

economic divide between the USA and Europe narrowed.

While sustained high growth has been forecast for the

eurozone, the US economy is expected to cool off somewhat.

In this context, the global real estate markets also continued

their positive development. On the investor side, in addi-

tion to the returns aspect, a “growth story” is playing an

increasingly central role. As a result, the trend towards a

recovery on the user side is firming in many regions and

submarkets.

We continue to anticipate very high demand among

investors, although the sharp decline in initial returns

experienced in 2005 is unlikely to be repeated to the same

extent in the current year. Overall performance will be

driven to a greater extent by the evolution of rental prices

and active property asset management.

Germany – market has bottomed outAfter seeing its macroeconomic development lag behind

the European average in 2005, Germany is fast catching up

in 2006, thanks to the improvement in domestic demand.

A recovery on the user markets is also taking shape as a

result of the more upbeat economic data. The German

office markets have thus now bottomed out, with

Hamburg and Munich setting the pace of recovery.

Due to its position in the real estate cycle and the more

positive fundamentals, the German market is continuing

to attract attention from international investors. These

include players who are investing in the German market

for the first time since, in the face of falling initial returns

worldwide, the German market, with its historically low

returns, is becoming more attractive.

France – positive trend continuesFrance’s office and logistics property markets are experi-

encing a growth phase, with low and falling vacancy rates

respectively and climbing rents. This positive development

will continue, particularly in Paris, but also in the regional

centres. In Paris, this trend is being reinforced by the fact

that properties are being taken off the market temporarily

for maintenance and renovation work.

The investment markets continue to be fuelled by high

liquidity – mostly from abroad. Following the significant

drop in initial returns in 2005, this trend is likely to

continue at a somewhat more moderate pace.

The Netherlands – attractive investmentopportunitiesThe Dutch market for logistics properties is benefiting

from increased trade in the eurozone, due to the country’s

central location and its role as an export hub.

The market recovery provides attractive investment

opportunities in a professional and transparent market.

In addition to Amsterdam, Rotterdam and regional centres

also offer attractive investment opportunities in the office

markets.

Poland – market stabilisesEastern European real estate markets also continue to attract

international investors. On the user side, positive take-up

was observed in Warsaw in 2005. Prime rents and incentives

granted for new leases stabilised at the end of the year.

Real Estate Markets – An Overview

Speculative office developments continue to depress rental

price trends. We do not anticipate a significant increase in

rents, as demand for office space continues to rise.

Norway and Finland – above-average rate ofgrowthThe above-average rate of growth in the Nordic countries

as compared to the rest of Europe is also frequently reflected

in the regional real estate markets. As a result, the trend

on the user markets remains positive. Given the central

importance of foreign trade, demand for modern logistics

properties in good locations is continuing to rise.

Finland is continuing to develop its competitive advantage

as a location for international companies. The country

benefits from its proximity to the growth regions along the

Baltic coast and in Russia. In addition, there is still a back-

log in demand for state-of-the-art, efficient office space.

These are good conditions for successful commercial real

estate investments.

Norway’s commercial real estate markets have been

characterised to date by keen investor demand. Domestic

investors continue to benefit from the country’s high crude

oil revenues. In addition, the trend towards internationali-

sation is on the rise.

USA – diverse investment opportunitiesAlthough economic momentum in the USA has dwindled

slightly over the course of the year, growth remains rela-

tively strong. The rise in employment will thus remain one

of the main drivers on the commercial real estate market.

Vacancy rates have declined overall, despite regional

differences. Continued rent increases can be expected, pri-

marily in attractive cities and in commercial and transport

hubs. In contrast, retail space has already cooled down

somewhat as a result of the emerging decline in consumer

spending.

Demand from the investor side is also extremely robust in

the USA, although last year’s record transaction volumes

are hardly likely to be exceeded. Initial returns will deteri-

orate more slowly in 2006 than before. Regional locations

and niche segments, among other things, continue to offer

a variety of investment opportunities. Investors are in-

creasingly becoming interested in non-traditional sectors

such as student residences, medical facilities, or the self-

storage facilities common in the USA.


“Hamburger Welle”, Lübecker Strasse 128 / Landwehr 2

Asia – continued positive growthAsia’s real estate markets are benefiting from robust eco-

nomic development and the vast increase in world trade.

This particularly concerns office and logistics properties in

the region’s commercial hubs.

Growing market transparency is also reducing risk and en-

couraging the inflow of foreign investments. The growth

prospects for Asian countries, particularly China, Japan and

South Korea, remain positive. In China, greater liberalisa-

tion and the increased integration of Hong Kong are stimu-

lating growth. Increased development activities are damp-

ening price and rental trends in a few regions only. The

diversity of the real estate markets offers a wide range of

different investment options.



SEB ImmoPortfolio Target Return Fund in Detail

Development of the FundReporting date Reporting date Reporting date Reporting date30 Sept. 2004 1) 31 Dec. 2004 2) 31 Dec. 2005 30 June 2006EUR thousand EUR thousand EUR thousand EUR thousand

Properties 18,870 74,800 271,755 334,095

Equity interests in real estate companies 0 0 11,012 42,622

Liquidity portfolio 3,073 3,941 12,448 22,205

Other assets 75 94 6,315 13,970

Less: Liabilities and provisions – 5,703 – 41,924 – 95,959 – 153,209

Fund assets 16,315 36,911 205,571 259,683

Number of units in circulation 145,795 323,497 1,744,703 2,225,030

Unit value (EUR) 111.90 114.09 117.82 116.70

Interim distribution per unit (EUR) – – 4.24 3) –

Date of interim distribution – – 17 May 2005 4) –

Distribution per unit (EUR) 7.56 – 5.20 –

Date of distribution 30 Sept. 2004 – 15 Mar. 2006 –

1) At the end of the financial year for the SEB ImmoSpezial I special fund2) Short financial year from 1 October 2004 to 31 December 20043) Based on the number of units in circulation on 30 April 20054) Interim distribution of the surplus for the period from 1 January 2005 to 30 April 2005, and of the retained surplus as of 31 December 2004

Structure of Fund assetsFund assets amounted to EUR 259.7 million at 30 June 2006,

an increase in volume of EUR 54.1 million since 1 January

2006. The number of units outstanding rose from 1,744,703

on 1 January 2006 to 2,225,030 on 30 June 2006. The net

inflow of funds amounted to EUR 56.0 million. Property

assets (basis: market values) rose from EUR 307.0 million to

EUR 446.7 million due to the addition of eight properties.

The gross liquidity ratio was 8.6% on the reporting date;

100% of liquid assets were held as demand deposits at the

end of the reporting period. The average liquidity ratio

during the last six months amounted to 9.5% of Fund assets.

Investment performanceThe Fund’s investment performance is composed of the

income and return generated by the properties, and the

Fund’s liquidity. The effects of individual components on

the overall return are explained in detail on page 13 of this

report.

Unit value as of 30 June 2006 EUR 116.70

Plus distribution on 15 March 2006 EUR 5.20

Minus unit value on 1 January 2006 EUR – 117.82

Investment performance EUR 4.08


Loans, currency hedging and risk provisionsLoans are used primarily for tax optimisation and currency

hedging. At the same time, external financing must be

carefully aligned with the cash flows of the individual

properties and the Fund’s financial structure in order to

achieve positive long-term leverage effects. Fixed interest

rate periods and loan maturities are aligned with the

income structure and planned holding period of the

properties, expected interest rate developments and the

Fund’s performance.

The currency risk associated with property investments in

foreign currencies is reduced by taking out loans in foreign

currencies and through forward exchange transactions.

According to statutory requirements, a maximum of 30%

of Fund assets can be subject to currency risks. Our only

investments outside the eurozone to date are in Poland, the

USA and Norway. The currency risk for the two properties

in Warsaw has been minimised by denominating the leases

and purchase agreements in euros. No additional currency

hedging is therefore performed.

Return Returnin % in % p. a.

Current year 3.4

1 year 7.3 7.3

2 years 14.9 7.2

3 years 32.9 9.9

Since launch 50.9 9.2

Calculated according to the BVI method (without front-end load, distributionsreinvested immediately). Historical performance data are no indication of futureperformance. The Fund changed its investment policy on 1 October 2004.

Development of returns

The Fund again achieved an excellent competitive position

in the period under review. During the six-month period

under review, the Fund generated a return of 3.4%, or

EUR 4.08 per unit. Since its launch, the Fund has generated

a 50.9% cumulative return.

Hamburg, “Halle E”, Strassenbahnring 6-18


Currency Loan volume in % of Duration Loan volume in % of Duration Loan volume in % of(direct) property (equity interests) property (total) propertyin EUR assets in EUR assets in EUR assets

EUR loans (Germany) 55,160,000 12.4 2.6 years – – – 55,160,000 12.4

EUR loans (abroad) 67,533,885 15.1 1.7 years – – – 67,533,885 15.1

USD loans – – – 62,240,482 13.9 7.7 years 62,240,482 13.9

NOK loans – – – 8,381,040 1.9 – 8,381,040 1.9

Total 122,693,885 27.5 2.1 years 70,621,522 15.8 6.8 years 193,315,407 43.3

Overview of loans as of 30 June 2006

Fixed interest rate term Loan volume in % ofin EUR property

assets

under 1 year EUR/ NOK loans 44,934,925 10.1

1–2 years EUR loans 38,400,000 8.6

2–5 years EUR loans 32,500,000 7.3

5–10 years EUR/ USD loans 77,480,482 17.3

Total 193,315,407 43.3

Breakdown of loan volumes by fixed interest rate periods as of 30 June 2006

Overview of exchange rate risks as of 30 June 2006Currency Open currency items in % of the Fund in % of Fund

as of reporting date volume (incl. loans) volume perper currency zone currency zone

USD (USA) USD 2,903,927 (EUR 2,284,398) 6.2 6.2

NOK (Norway) NOK 10,823,937 (EUR 1,365,175) 17.6 17.6

PLN (Poland) PLN 2,008,183 (EUR 495,905) 0.7 1.5

Active currency hedging is performed for the American

properties. As of the reporting date of 30 June 2006, 93.8%

of Fund assets held in US dollars and 82.4% of assets held

in Norwegian kroner were hedged. The Fund employs

derivatives to reduce exchange rate and interest rate risks;

these are used exclusively for hedging purposes.

When properties outside Germany are sold, gains on

disposal may be subject to tax (capital gains tax). Our

investment strategy foresees an average holding period

of five to seven years for Fund properties. We therefore

consider it appropriate to establish provisions of 100% for

deferred taxes. Further information on the liquidity port-

folio, loans and provisions for deferred taxes on capital

gains (risk provisions) can be found in the disclosures on

the statement of assets on page 27 onwards.

Income componentsFund income comprises the return on the properties and

the liquidity portfolio. The portfolio properties generated a

gross return of 4.4% during the period under review, based

on average property assets during the reporting period.

After deducting -0.7% in management costs, the resulting

net return amounts to 3.7%. In total, the portfolio achieved

a positive change in value of 0.2%, based on the average

property assets.

The changes in value item is composed of changes in value

determined in the course of appraisals by experts and other

changes in value. The other changes in value item includes

changes the carrying amounts of properties arising, for

example, from the establishment of provisions for planned

construction and modernisation costs. Positive changes in

value result mainly from other changes in value.

Foreign income taxes reduced the Fund’s return by -0.3%

during the reporting period. These were taxes on realised

income. Provisions for deferred taxes were set up for the

properties in France and the companies in the USA. These

reduced Fund income by -0.1%. In Poland and the Nether-

lands, potential disposal costs would completely offset

current income, making it unnecessary to set up provisions

for capital gains taxes at present.

The targeted use of external finance and a strategic financ-

ing ratio made it possible to generate positive leverage

effects, which led to a 4.4% increase in the income after

borrowing costs. The average external finance ratios varied

here from 22.2% to 69.1% at the country level, depending

on the income from and corporate structure of the real

estate investments.

Negative changes in exchange rates were reduced by

gains from forward exchange transactions during the

period under review. These transactions were concluded

in order to hedge the value of the equity interest of the

investments in the USA and the company in Norway.


Income components of Fund return from 1 January 2006 to 30 June 2006Germany Total abroad Total

in % in % in %

I. PropertiesGross income 1) 3.4 5.3 4.4

Management costs 1) – 0.1 – 1.3 – 0.7

Net income 1) 3.3 4.0 3.7

Changes in value 1) 0.7 – 0.3 0.2

Foreign income taxes 1) 0.0 – 0.6 – 0.3

Foreign deferred taxes 1) 0.0 – 0.1 – 0.1

Income before borrowing costs 1) 4.0 3.0 3.5

Income after borrowing costs 2) 4.7 4.1 4.4

Exchange rate differences 2) 3) 0.0 – 0.4 – 0.1

Total income in Fund currency 2) 4) 4.7 3.7 4.3

II. Liquidity 5) 6) 1.1

III. Total Fund income before Fund costs 7) 4.0

Total Fund income after Fund costs (BVI method) 3.4

1) Based on the Fund’s average property assets in the period under review2) Based on the Fund’s average property assets financed by equity in the period under review3) “Exchange rate differences” include both changes in exchange rates and currency hedging costs in the period under review.4) Total income in Fund currency was generated with an average share of Fund assets invested in property and financed by equity for the period of 90.49%.5) Based on the Fund’s average liquid assets during the period under review6) The average share of Fund assets invested in the liquidity portfolio for the period was 9.51%.7) Based on the average Fund assets in the period under review

Note: The figures for the first half of the financial year (1 January 2006 to 30 June 2006) cannot be extrapolated to forecast the results for the year, as transactionsaffecting earnings are not spread out evenly over the year. They are of limited informative value due to the short period under review.


2 properties / 3.9%EUR 0 to 10 million


Allocation of Fund properties by value class


26.8% (4)

7.0% (2)

11.6% (2)

21.6% (4)

17.2% (2)

9.1% (4)

6.7% (2)

Hamburg

Rhine-Ruhr

Rest of Germany

USA

Poland

France

Rest of world (NL, N)

Basis: market values (incl. properties held via equity interests)

In total, the Fund once again generated above-average

results over the six-month period, with a total property

return of 4.3%.

During the reporting period, the Fund achieved a 1.1%

average return on the liquidity portfolio. Due to the low

level of liquid Fund assets, the total return was generated

mainly by the properties, resulting in income before Fund

costs of 4.0%.

Portfolio structureAt 30 June 2006, the portfolio comprised five equity in-

vestments and 15 directly held properties. The properties

are located in six countries. Property assets increased from

EUR 307.0 million to EUR 446.7 million as a result of the

eight additions during the reporting period.

The Fund’s Property assets were divided almost equally

between Germany (45.4%) and abroad (54.6%) at the report-

ing date. The regional focus of the portfolio is currently in

Hamburg, where 26.8% of the property assets are located

(basis: market values). This German submarket experienced

a clear recovery trend in the past year. As a result, attractive

investment opportunities have arisen, which will benefit

from rising rents.

The portfolio is currently divided into three value classes:

61.2% of the portfolio, or eight properties, have a market

value of between EUR 25 million and EUR 50 million. 34.9%,

or ten properties, are worth between EUR 10 million and

EUR 25 million, and 3.9%, or two properties, have a market

value of below EUR 10 million. This breakdown will

continue to change as the portfolio is expanded through

further acquisitions.

The Warsaw property (Szturmowa 2a) accounts for the

largest share of total assets. The Hamburg property,

Lübecker Strasse 128/Landwehr 2, accounts for the second-

largest share of the portfolio, followed by the Ottobrunn

property, Robert-Koch-Strasse 100. The two student resi-

dences in Gainesville (2330 SW Williston Road and 3700 SW

27th Street) are the portfolio’s fourth- and fifth-largest

properties.

Geographical distribution of properties

Number of properties shown in bracketsBasis: market values (incl. properties held via equity interests)

Top 5 properties Top 5 tenants

Warsaw, Szturmowa 2a Bosch Sicherheitssysteme GmbH

Hamburg, Lübecker Strasse 128/Landwehr 2 Hewlett-Packard Polska Sp.z.o.o.

Ottobrunn, Robert-Koch-Strasse 100 Gesetzliche Unfallversicherung VBG,Körperschaft des öffentlichen Rechts

Gainesville, 2330 SW Williston Road Ahlsell Norge AS

Gainesville, 3700 SW 27th Street Lutéce B.V.


7 properties / 33.8%up to 5 Jahre

4 properties / 24.7%10 to 20 years

Economic age distribution of Fund properties

9 properties / 41.5%5 to 10 years

Basis: market values (incl. properties held via equity interests)

With regard to age structure, 33.8% of the property assets

are invested in properties with an economic age of no more

than five years. 41.5% of the portfolio is invested in proper-

ties that are five to ten years old, and 24.7% of the properties

are more than ten years old, with the student residences in

this age group in particular offering optimisation potential.

The main types of use of the Fund properties are currently

office premises (44.8%) and residential (student housing –

32.5%) real estate. In order to round off this subportfolio

and to leverage the positive market development in this

niche segment, three additional student residences in

Florida were acquired during the reporting period. In

addition to the stable cash flow returns, it is above all the

diversification effects that make structural extension of

the investment horizon into niche market segments so

interesting. The inclusion of expanded market sectors,

such as student housing, in a stable environment is an

attractive addition to a portfolio of classic commercial

properties such as offices and retail and logistics facilities.

The tenant structure shows relatively broad diversification

by industry. 41.0% of the total estimated rental is attributable

to other sectors, primarily student housing, with a large

number of individual rental agreements. Tenants from the

consumer goods and retail industries make up 20.2% of

rentals, and the technology and software sector accounts

for 9.3%.

The Fund‘s broad risk diversification can also be seen from

an examination of the three largest tenants, who together

account for 17.5% of the total estimated rental. The largest

tenant is Bosch Sicherheitssysteme GmbH (Ottobrunn/

Munich property, Robert-Koch-Strasse 100), followed by

Hewlett-Packard Polska in the two Warsaw properties

and Gesetzliche Unfallversicherung VBG, Körperschaft

des öffentlichen Rechts (Hamburg, Friesenstrasse 22/

Grüner Deich 21).

0.6%

2.3%

0.1%

11.5%

18.4%

9.9%

3.3%

2.1%

4.4%

7.6%

8.1%

31.7%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

from 2016 onwards

Indefinite

Remaining lease terms

Basis: estimated net rental for the year (incl. properties held via equity interests)

34.9%44.8%

35.1%

32.5%

25.8%14.4%

2.2%3.8%

0.0%2.6%

0.4%0.5%

1.6%1.4%

Office

Residential

Industrial(warehouses, halls)

Retail / catering

Car park

Leisure

Other

Types of use of Fund properties

By rental spaceBy total estimated rental (incl. properties held viaequity interests)


LettingThe letting rate for the SEB ImmoPortfolio Target Return

Fund at the reporting date was 96.7% of the estimated net

rental, or 96.9% of the estimated gross rental. The average

letting rate during the period under review was 97.8% of

the estimated net rental and 98.0% of the estimated gross

rental. The increase in the vacancy rate to 3.3% of the esti-

mated net rental is a result of the newly acquired student

residences in Gainesville and Tallahassee, USA. Due to the

positive development in demand in these locations, this

vacancy rate offers potential for further increasing rental

income from these properties.

The stability of property values and cash flows depends

on the lease structure. At present, 67.1% of the leases have

a term of more than five years. A diversified lease term

structure is a risk management component at the portfolio

level. This means that, when making decisions on new

investments, the contributions that individual properties

make to lease structures are explicitly taken into consider-

ation. At the same time, expiring leases also offer the

potential to increase rents on the back of positive market

developments. Opportunities for this are particularly

good in Germany.

For further information on the portfolio structure, please

refer to the section entitled Overview: Returns, Valuation

and Letting on pages 22 and 23 of this report.

Tenant structure by sector

19.6% (45)

10.5% (7)

7.5% (5)

4.3% (6)

3.3% (5)

3.0% (7)

1.8% (6)

1.4% (7)

0.6% (8)

0.3% (2)

0.2% (3)

47.5% (2,300)

20.2% (45)

9.3% (5)8.2% (7)

6.7% (6)

4.5% (5)

3.6% (7)

2.8% (6)

2.4% (7)

0.7% (8)

0.4% (2)

0.2% (3)

41.0% (2,300)

by rental space *

Consumer goods industry and retail

Automotive and transport

Technology and software

Construction companies

Public authorities/associations/educ. institutions

Utilities and telecommunications companies

Media and entertainment

Banks and financial service providers

Management consulting, legal and tax advisory

Insurance companies

Hotels and catering

Other sectors

By total estimated net rental *

Consumer goods industry and retail

Technology and software

Automotive and transport

Construction companies

Public authorities/associations/educ. institutions

Utilities and telecommunications companies

Media and entertainment

Banks and financial service providers

Management consulting, legal and tax advisory

Insurance companies

Hotels and catering

Other sectors

* incl. properties held via equity interestsNumber of tenants in brackets

In the past six months, a total of eight properties were

acquired for the Fund. These properties have already been

added to the Fund.

Additions and purchases – in GermanyGermany, Stuttgart, Ingersheimer Strasse 10

In March 2006, an office building in Stuttgart Weilimdorf,

which has been fully let to Vodafone, was acquired for the

Fund. The purchase price, including incidental acquisition

costs, amounted to around EUR 16.0 million. The property,

which was constructed in 1997, has approximately 7,700 m2

of rental space and 130 parking spaces. The lease with

Vodafone D2 GmbH runs until November 2012 and

includes a renewal option for another five years. The

building was sold by a pension plan represented by IVG

Management GmbH.

Stuttgart Weilimdorf has been an established submarket

of Baden Württemberg’s state capital since the early

1990s. The location, which offers around 280,000 m2 of

office space, benefits from its proximity to the motorway

and extremely good transport links to the centre of

Stuttgart, around 13 kilometres away. High-profile major

tenants such as Bosch, Ernst & Young and Siemens have

offices in the vicinity of the Vodafone building, which is

located directly next to the Weilimdorf suburban rail sta-

tion. In comparison to other office centres such as Frank-

furt, Munich, or Berlin, Stuttgart has proven to be a highly

stable office market in the past. Moderate fluctuations in

vacancy rates and rental prices can be attributed to a

strong regional economy and a diverse user structure, as

well as to the extremely low number of speculative builds

and stable tenant demand.

Germany, Hamburg, Langenhorner Markt 1–18

The “Langenhorner Markt” convenience shopping centre,

located in the North of Hamburg, was acquired from the

Hamburg-based real estate developer, Robert Vogel at the end

of June. The total investment volume was EUR 25.7 million.

The investment consists of several freestanding buildings

that form an open shopping mall as well as incorporating

Langenhorn’s weekly market. Two distinctive office towers

form the main entrance to the shopping centre. The total

floor space comprises approximately 12,300 m2 of primarily

retail, storage, and office space, as well as 383 parking

spaces. 25% of the complex is let to anchor tenants such as

Plus, Schlecker and Tchibo; there are a total of 92 leases

with tenants with a wide range of lease terms ranging up

until 2019. The shopping centre is currently fully let, with

the exception of two office spaces.

The addition of the “Langenhorner Markt”, the Fund’s

first retail property, to the portfolio marked another step

in the mutual fund’s risk diversification strategy.

Additions and purchases abroadNorway, Langhus (SKI), Regnbueveien 9 KS

In January 2006, SEB Immobilien-Investment GmbH made

its first investment in Norway, a dynamic growth region.

For the equivalent of approximately EUR 16 million, a


Stuttgart, Ingersheimer Strasse 10

Changes to the Portfolio

10,062 m2 logistics property with 58 parking spaces was

acquired in the established Regnbuen Naeringspark logis-

tics centre near Oslo. The sellers were a group of private

Norwegian investors, and the property was acquired via a

company acquisition.

The building, erected in the late 1990s, has been fully leased

until December 2009 – with the option of an extension for

another five years – to Ahlsell AB, an international distrib-

utor of heating, sanitary, electrical and refrigeration tech-

nology products to the wholesale and retail trades.

At approximately 160,000 m2, the Regnbuen Naeringspark

location is one of the largest new growth regions for logis-

tics in the area surrounding the Norwegian capital and –

thanks to its excellent transport links – also one of the most

popular. Given the major importance of foreign trade, we

expect the demand for modern logistics properties in good

locations to increase.

France, Aix en Provence, 320 Avenue Archimède

As already explained in the Annual Report as of December

31, 2005, the purchase agreement for the “Les Pleiades III”

office complex in Parc de la Duranne, between Aix en

Provence and Marseilles, was signed at the beginning of

November 2005. The entire EUR 9.8 million project was

transferred to the Fund on June 20, 2006.

The project’s letting rate, including preletting, is currently

approximately 71%. The seller, the Strasbourg-based Lazard

Group, provided a two-year rental guarantee starting from

the transfer of the project to the Fund. However, due to

rental demand, we anticipate that the project will be fully

let in the coming months.

France, Labège/Toulouse, Avenue de l’Occitane

At the same time as our acquisition of the “Les Pleiades III”

project, the Fund also acquired another project from the

Lazard Group – the first construction phase of the “Regent

Park” office complex in the Labège-Innopole commercial

park, south-east of Toulouse.

The Fund began letting out the “Regent Park” project at

the beginning of 2006. 23% of the two buildings, which

have a total of 6,126 m2 of office space and 260 parking

spaces, has been let to date. Negotiations with potential

tenants for the remaining space are currently underway.

A two-year rental guarantee for this project has also been

agreed with the seller.

The project was transferred to the Fund upon completion.

The total investment volume totalled EUR 10.2 million.

An option to buy two further construction phases was

agreed with the seller, covering around 10,800 m2 of office

space. Assuming positive tenant demand, these are due to

be completed by mid-2009.

USA, Gainesville/Florida, 3700 SW 27th Street

With the acquisition of a second student residence in Florida,

the Fund continued its strategic partnership with Paradigm,

a company that has been active for more than 20 years in

the area of asset management, development and the man-

agement of student housing. In January 2006, we acquired

a 95% stake in Lexington Gainesville Associates, LLC in a

joint venture for the equivalent of approximately EUR 32

million.


Norway, Regnbueveien 9, Langhus (SKI)

Paradigm holds the remaining shares. The seller was a

company located in Georgia, USA.

The “Lexington Crossing” student housing complex,

completed in 1996, is located in direct proximity to the

University of Florida in Gainesville and comprises 300

apartments for 1,020 students. The range of leisure

activities typical to American student residence facilities

includes two clubhouses, a computer lab and various

sports facilities (a pool, fitness centre, and tennis,

volleyball and basketball courts).

The University of Florida is the fifth-largest university

in America. 41,000 of the total of approximately 48,000

students live in off-campus housing.

The complex was 91% let as of the end of June 2006. Lease

terms for student residences run for twelve months. The

leases begin with the start of the semester of each year.

The practically permanent “replacement demand”

ensures regular and stable rental income for the Fund.

USA, Tallahassee, 235 Ocala Road South

Two additional majority interests were acquired in the

USA in April 2006 from an American private investor as

part of the third joint venture with Paradigm. This joint

venture covered a 90% equity interest in the Tuscany Village

complex in the state capital, Tallahassee, located in north-

western Florida. The total investment cost for this equity

interest amounted to approximately EUR 12 million.

“Tuscany Village” consists of ten buildings with 96 hous-

ing units for approximately 400 students. At the end of

June 2006, the complex was 97.9% let.

Tallahassee is home to three of the most important uni-

versities in Florida, with approximately 65,000 enrolled

students at present. In the past 15 years, the number of

students has risen by an average of 2.5% each year. Florida

State University, located around one mile from “Tuscany

Village”, is Florida’s fourth-largest, and oldest, university.

USA, Tallahassee, 2700 West Pensacola Street

At the same time that we acquired “Tuscany Village” we

acquired the “Villa del Lago” complex, also located in Talla-

hassee, from the same seller in cooperation with Paradigm.

The Fund acquired a 90% equity interest at a total investment

cost of around EUR 22 million.

“Villa del Lago” was built in 1988 and completely renovated

in 2004. The complex, located about two miles from the

University of Florida, comprises 30 buildings for up to 700


Ottobrunn, Robert-Koch-Strasse 100

students. Both complexes are equipped with a clubhouse

and various sports facilities. At the end of June 2006, the

occupancy rate for the complex was 99.0%.

Purchases abroad not yet added to the FundportfolioFinland, Vantaa, Äyritie 8b

In December 2005, a purchase contract was signed for the

“Plaza Allegro” office building in greater Helsinki, which

is currently under construction; the purchase is in the

form of a company acquisition. The property comprises

around 4,600 m2 of rental space and 114 parking spaces.

With the building’s shell completed, the technical work is

nearing completion. Interior finishing is in progress.

The addition of the building, which cost around EUR 15

million, to the Fund is subject to a minimum letting rate of

80%. The project is currently 18% let; negotiations with

additional prospects are underway. An additional three-

year rental guarantee provided by the vendor NCC (one

of northern Europe’s leading project developers) for the

unlet portion offers the Fund the best possible safeguard

against rental risk.


Property purchase record for the statement of assets as of June 30, 2006

PURCHASES

I. DIRECTLY HELD PROPERTIES IN COUNTRIES IN THE EUROZONE

Properties Transfer of risks Total investment and rewards as of costs in EUR million 1)

Germany

70499 Stuttgart Ingersheimer Str. 10 April 2006 15.9

22415 Hamburg Langenhorner Markt 1–18 June 2006 25.7

France

13090 Aix en Provence 320 Avenue Archimède June 2006 9.8

33120 Labège / Toulouse Avenue de l‘Occitane June 2006 10.2

II. EQUITY INTERESTS IN REAL ESTATE COMPANIES IN COUNTRIES WITH OTHER CURRENCIES

Domicile Name Equity interest held Transfer of risks Total investmentand rewards as of costs in EUR million 2)

Norway

7034 Trondheim Regnbueveien 9 KS 100% January 2006 16.4 3)

USA

32601 Gainesville Lexington Gainesville Associates, LLC 95% January 2006 32.4 3)

32601 Gainesville VDL Tallahassee Associates, LLC 90% April 2006 22.2 3)

32601 Gainesville Ocala Road Tallahassee Associates, LLC 90% April 2006 12.2 3)

1) Total investment volume at the time of acquisition2) Total investment volume at the time of acquisition, at company level3) Including loans assumed in the course of the acquisition of the equity interest

SEB ImmoPortfolio Target Return Fund continued its suc-

cessful development in the past six months. With a total

Fund volume of around EUR 260 million, the Fund was

able to build a diversified portfolio of 20 properties in six

countries, which will be steadily expanded in the second

half of the year.

For investments in new markets to be successful in the long

term, not only must attractive investment opportunities

be identified, but market entry must then also be carefully

prepared. In addition to a thorough analysis of market

structures and mechanisms, and the accumulation of the

knowledge necessary to acquire and manage properties, it

is vital to build up a network of relevant players in the

submarket concerned.

Partnerships allow the necessary networks to be cemented

and local expertise to be integrated, while at the same time

reducing risk thanks to the partner’s financial participation.

A successful partnership is based on an equitable balance

of interests.

For example, in the case of our investments in student

housing in the USA, we were able to establish partnerships

both with a successful manager of these complexes with

decades of experience and with an independent asset

manager for this submarket. These partnerships comple-

ment our internal processes and structures and make a

substantial contribution to quality assurance and hence to

the reduction of the investment risk.

Investor confidence in this approach can be seen from

the fact that around EUR 500 million in funds has been

committed. In line with our strategy, we will consider

both established markets and investments in new real

estate submarkets when investing these funds, so as to

leverage growth and diversification potential for the

Fund in these locations. We have laid the necessary

groundwork for this with our professional organisation,

our clearly defined product positioning, and our many

years of expertise. Our goal is to achieve this together

with you.

SEB Immobilien-Investment GmbH

Management

Knoflach Kraus Chua

Frankfurt am Main, August 2006


Outlook


Overview: Returns, Valuation and Letting

Key return figures (in % of average Fund asset components)

The reference parameters for the figures are the corresponding proportion of Fund assets. The average figures for the financial year are calculated using 13 month-end figures (31 December 2005 to 31 December 2006), and for the Semi-annual Report using seven month-endfigures (31 December 2005 to 30 June 2006).

Germany France Rest of Total direct Equity interests Totalworld (NL, PL) investment (N, USA)

I. Properties

Gross income 1) 3.4 2.3 4.1 3.5 7.3 4.4

Management costs 1) – 0.1 – 0.1 – 0.3 – 0.2 – 2.5 – 0.7

Net income 1) 3.3 2.2 3.8 3.3 4.8 3.7

Changes in value 1) 0.7 0.0 – 0.6 0.3 – 0.2 0.2

Foreign income taxes 1) 0.0 – 0.1 – 0.4 – 0.1 – 0.9 – 0.3

Foreign deferred taxes 1) 0.0 – 0.2 0.0 0.0 – 0.3 – 0.1

Income before borrowing costs 1) 4.0 1.9 2.8 3.5 3.4 3.5

Income after borrowing costs 2) 4.7 1.9 4.1 4.4 4.8 4.4

Exchange rate differences 2) 3) 0.0 0.0 – 0.1 0.0 – 1.0 – 0.1

Total income in Fund currency 2) 4) 4.7 1.9 4.0 4.4 3.8 4.3

II. Liquidity 5) 6) 1.1

III. Total Fund income beforeFund costs 7) 4.0

Total Fund income after Fund costs (BVI method) 3.4

1) Based on the Fund's average property assets in the period under review2) Based on the Fund's average property assets financed by equity in the period under review3) Changes in exchange rates and currency hedging costs for the period under review are presented under exchange rate differences.4) The total income in Fund currency was generated with an average equity-financed property interest for the period of 90.49%.5) Based on the Fund's average liquid assets in the period under review6) The average liquidity portion invested in the period was 9.51% of Fund assets.7) Based on average Fund assets in the period under review

Note: The figures for the first half of the financial year (1 January 2006 to 30 June 2006) cannot be extrapolated to forecast the results for the year, as transactionsaffecting earnings are not spread out evenly over the year. They are of limited informative value due to the short period under review.

Net asset information (weighted average figures in EUR)

The average figures for the financial year are calculated using 13 month-end figures (31 December 2005 to 31 December 2006), and for the Semi-annual Report using seven month-end figures (31 December 2005 to 30 June 2006).

Germany France Rest of Total direct Equity interests Totalworld (NL, PL) investments (N, USA)

Directly held properties 167,089,086 22,769,331 88,102,560 277,960,977 277,960,977

Properties held via equity interests 83,880,992 83,880,992

Total properties 167,089,086 22,769,331 88,102,560 277,960,977 83,880,992 361,841,969

of which equity-financed property assets 130,034,848 9,127,001 42,799,843 181,961,692 27,137,491 209,099,183

Loan volume – 37,054,238 – 13,642,330 – 45,302,717 – 95,999,285 – 56,743,501 – 152,742,786

Liquidity 18,120,859 348,526 920,249 19,389,634 2,584,735 21,974,369

Fund volume 148,155,707 9,475,527 43,720,092 201,351,326 29,722,226 231,073,552


Information on changes in value (at the reporting date in EUR thousand)


Portfolio market values (expert opinions) 202,840 40,850 90,405 334,095 112,597 446,692

Portfolio rental valuations (expert opinions) p. a. 8) 13,141 3,097 6,885 23,123 12,772 35,895

Positive changes in value according to expert opinions 9) 0 0 800 800 0 800

Other positive changes in value 10) 1,407 10 17 1,434 476 1,910

Negative changes in value according to expert opinions 9) – 210 0 – 1,320 – 1,530 0 – 1,530

Other negative changes in value 10) 0 – 6 0 – 6 – 628 – 634

Total changes in value according to expert opinions 9) – 210 0 – 520 – 730 0 – 730

Other total changes in value 10) 1,407 4 17 1,428 – 152 1,276

Addition – capital gains tax 0 – 56 0 – 56 – 229 – 285

Total changes in value 11) 1,197 – 52 – 503 642 – 381 261

8) Portfolio rental valuations (expert opinions) are defined as the gross profit from rental determined by experts. Gross profit in this case equates to the sustainable netbasic rent estimated by the experts.

9) Total changes in market value established by the experts.10) Other changes in value comprise changes in carrying amounts such as purchase costs and purchase price settlements subsequently included in the carrying amounts.11) The difference between the overall change in value and the amounts recognised in the statement of changes in Fund assets is due to the net income from the US equity interest.

Letting information (in % of estimated net rental for the year)Germany France Rest of Total direct Equity interests Total

world (NL, PL) investments (N, USA)

Office 26.2 3.4 14.8 44.4 0.4 44.8

Industrial (warehouses, halls) 5.0 3.5 2.9 11.4 3.0 14.4

Residential 0.0 0.0 0.0 0.0 32.5 32.5

Car park 1.7 0.0 0.9 2.6 0.0 2.6

Retail/catering 3.7 0.0 0.1 3.8 0.0 3.8

Leisure 0.5 0.0 0.0 0.5 0.0 0.5

Other 1.0 0.0 0.4 1.4 0.0 1.4

Total 38.1 6.9 19.1 64.1 35.9 100.0

Letting rate (at the reporting date)in % of estimated net rental for the year 12) 98.6 100.0 100.0 99.2 92.3 96.7

Letting rate (at the reporting date)in % of estimated gross rental for the year 13) 98.4 100.0 100.0 99.1 92.3 96.9

Remaining lease terms (in % of estimated net rental for the year)


2006 0.1 0.0 0.5 0.6 0.0 0.6

2007 0.3 1.6 0.4 2.3 0.0 2.3

2008 0.1 0.0 0.0 0.1 0.0 0.1

2009 2.3 0.0 5.7 8.0 3.5 11.5

2010 14.4 0.0 4.0 18.4 0.0 18.4

2011 3.9 0.0 6.0 9.9 0.0 9.9

2012 2.7 0.0 0.6 3.3 0.0 3.3

2013 0.1 2.0 0.0 2.1 0.0 2.1

2014 1.6 2.8 0.0 4.4 0.0 4.4

2015 4.3 0.8 2.5 7.6 0.0 7.6

from 2016 onwards 8.1 0.0 0.0 8.1 0.0 8.1

indefinite 0.9 0.0 0.0 0.9 30.8 31.7

Total 38.8 7.2 19.7 65.7 34.3 100.0

12) Based on the ratio of the estimated net rental for the year of the directly or indirectly held properties to the total estimated net rental for the Fund. In the case of theequity investments, the estimated rental is included in proportion to the equity interest held.

13) In addition to the net rental (“basic rent”), the estimated gross rental includes incidental expenses to be paid by the tenant such as heating, power, cleaning and insurance,which are represented by the advance incidental expenses payments.


EUR EUR EUR

Fund assets at start of the first six months of the financial year 205,570,794.92

Distribution for the previous year – 9,072,455.60

Adjustment item for units issued/redeemedup to the distribution date – 1,038,278.80

Inflow of funds from sale of units 64,961,873.77Outflow of funds from redemption of units – 9,007,813.03Net inflow of funds 55,954,060.74

Equalisation paid – 820,744.61

Ordinary net income 7,778,718.11

Changes in value of unrealised profits 2,177,341.83on propertiesof which in foreign currency 0.00on equity interests in real estate companies 1,347,978.07 3,525,319.90of which in foreign currency 1,347,978.07

Changes in value of unrealised losses

on properties – 1,536,730.00of which in foreign currency 0.00on equity interests in real estate companies – 368,264.91 – 1,904,994.91of which in foreign currency – 368,264.91

Changes in exchange rates – 309,395.77

Fund assets at end of the first six months of the financial year 259,683,023.98

Development of Fund Assets

The development of the Fund assets shows which trans-

actions concluded during the period under review are

responsible for the assets newly disclosed in the Fund’s

statement of assets. It thus presents a breakdown of the

difference between the assets at the beginning and the end

of the financial year.

The distribution for the previous year is the distribution

amount reported in the Annual Report for the previous year.

The inflow of funds from the sale of units and the out-

flow of funds from the redemption of units are calculat-

ed as the respective redemption price multiplied by the

number of units sold or redeemed. The redemption price

includes the income per unit; this is referred to as the

equalisation paid. The equalisation paid is deducted from

the inflow and outflow of funds, which consequently only

indicate the change in assets.

Disclosures on the development of Fund assets

The composition of ordinary net income can be seen from

the statement of income and expenditure (see page 35).

The changes in value of unrealised profits on properties

and on equity interests in real estate companies items are

the result of remeasurement gains and losses and changes

in carrying amounts during the financial year.

With regard to the location of properties and equity

interests in real estate companies, a distinction is made

between countries that have adopted the euro as their

currency and countries with other currencies, unless the

corresponding assets are held in euros. The purchase and

loan agreements for the two properties in Poland are

denominated in euros. As the leases are denominated in

euros, the properties are included in the Fund assets at

the market value calculated in euros.

The changes in value of unrealised losses on properties

and on equity interests in real estate companies items are

the result of remeasurement gains and losses and changes

in carrying amounts during the financial year.

Changes in exchange rates show the difference in the

measurement of foreign currency assets at the respective

exchange rates at the beginning of the period under review

and – not including the result of remeasurement gains and

losses – the end of the period under review. The net

remeasurement gains and losses – which are measured at

the prevailing rate at the end of the reporting period – are

reported in the net change in unrealised gains/losses on

properties and real estate companies. In the case of assets

acquired in the year under review, the difference between

the measurement at the exchange rate when the assets are

recognised and at the exchange rate at the end of the period

under review is disclosed. The changes in exchange rates

of EUR -0.3 million comprise the balance of exchange rate

losses of EUR 1.6 million and net gains of EUR 1.3 million

from forward exchange transactions used for currency

hedging. The net income from forward exchange trans-

actions contains realised changes in value of EUR 0.9 million

and unrealised changes in value of EUR 0.4 million.



Statement of Assets as of 30 June 2006

% of Fund

EUR EUR EUR assets

I. Properties

1. Commercial properties 334,095,000.00 128.66of which in foreign currency 0.00

II. Equity interests in real estate companies1. Majority interests 42,622,382.74 16.41

Total in foreign currency 42,622,382.74

III. Liquidity portfolio1. Bank deposits 22,204,838.24 8.55

of which in foreign currency 2,083,335.75

IV. Other assets1. Receivables from real

estate management 1,682,036.58of which in foreign currency 686,018.41

2. Receivables from real estate companies 2,364,351.00of which in foreign currency 2,364,351.00

3. Interest claims 80,718.38of which in foreign currency 50,899.22

4. Miscellaneous 9,842,311.77of which in foreign currency 1,050,576.78

Total other assets 13,969,417.73 5.38Total in foreign currency 4,151,845.41

Total 412,891,638.71 159.00of which in foreign currency 48,857,563.90

V. Liabilities from1. Loans (of which collateralised 122,693,884.60

[section 82(3) InvG] EUR 87,200,000.00)Total in foreign currency 0.00

2. Land purchases and construction projects 24,288,182.18of which in foreign currency 1,603,539.82

3. Real estate management 2,927,907.53of which in foreign currency 1,561,706.52

4. Miscellaneous 1,808,878.55of which in foreign currency 885,006.96

Total liabilities 151,718,852.86 58.43Total in foreign currency 4,050,253.30

VI. Provisions 1,489,761.87 0.57of which in foreign currency 89,855.49

Total 153,208,614.73 59.00of which in foreign currency 4,140,108.79

Fund assets 259,683,023.98 100.00of which in foreign currency 44,717,455.11

Unit value (EUR) 116.70

Number of units in circulation 2,225,030

Exchange rates as of 30 June 2006:US dollar 1.27120 = EUR 1Polish zloty 4.04953 = EUR 1Norwegian kroner 7.92861 = EUR 1

Fund assets increased by EUR 54.1 million to EUR 259.7

million in the six months of the financial year from

1 January to 30 June 2006.

I. Properties

Two properties in Germany and two properties in

France were added to the Fund in the reporting period

(cf. “Property purchase record for the statement of assets”

on page 20).

The commercial properties were included in the Fund assets

at the market values calculated by the experts in each

case. Property assets increased by EUR 62.3 million to

EUR 334.1 million in the period under review, and com-

prised fifteen directly held properties as of the reporting

date, 30 June 2006.

II. Equity interests in real estate companies

The real estate company Regnbueveien 9 KS, with a prop-

erty in Langhus, Norway, was acquired in the period under

review, as were the following real estate companies in

Florida, USA: Lexington Gainesville Associates LLC with

a property in Gainesville and VDL Tallahassee Associates,

LLC and Ocala Road Tallahassee Associates, LLC, each

with a property in Tallahassee.

Equity interests in real estate companies now comprise five

companies with five properties with an aggregate market

value of EUR 112.6 million. After adjustment for the com-

panies’ other assets and liabilities (EUR 3.0 million) and

external financing (EUR 70.6 million) and shareholder loans

(EUR 2.4 million), the value of the equity investments is

EUR 42.6 million.

EUR 62.2 million of the external financing liabilities relates

to loans in US dollars and EUR 8.4 million to a loan in

Norwegian kroner. The duration of the companies’ external

financing is 6.8 years.

III. Liquidity portfolio

The bank deposits reported under the liquidity portfolio

item serve to meet ongoing payment obligations arising

in connection with the management of the properties, as

well as purchase price payments for acquired properties.

EUR 13.0 million is held as the minimum liquidity

prescribed by law.

IV. Other assets

Receivables from real estate management comprise rent

receivables totalling EUR 0.5 million and expenditures

relating to incidental expenses allocable to tenants in the

amount of EUR 1.2 million. These are matched by appro-

priate prepayments by tenants of allocable costs in the

amount of EUR 2.7 million, which are included in the

liabilities from real estate management item.

The receivables from real estate companies item contains

a shareholder loan in Norwegian kroner.

Interest claims of EUR 29.8 thousand result from deferred

interest income from a time deposit investment. In addition,

EUR 50.9 thousand in interest rate receivables from the

shareholder loan to the Norwegian real estate companies

is reported under this item.

The other assets disclosed under the miscellaneous item

primarily represent sales tax receivables from domestic and

foreign fiscal authorities of EUR 7.5 million. Receivables

from advance payments for operating costs due from

property managers abroad amount to EUR 1.4 million.

Where real estate companies are acquired in foreign cur-

rencies, part of the exchange rate risk is hedged by taking

out loans in the relevant local currency. The internal

portion of the financing is hedged against changes in

exchange rates using forward exchange transactions.


Disclosures on the statement of assets

An overview of open currency items is given in the table

entitled “Hedging Transactions Portfolio as of 30 June 2006”.

Forty-one forward exchange transactions with an aggregate

volume of USD 165.3 million and 16 forward exchange

transactions with an aggregate volume of NOK 202.9 million

were entered into in the period under review to hedge

exchange rate risks. Receivables from counterparties to

forward exchange transactions denominated in US dollars

amount to EUR 0.6 million. Liabilities to counterparties to

open forward exchange transactions denominated in

Norwegian kroner amount to EUR 0.2 million. These are

reported under the “Miscellaneous” liabilities item.

V. Liabilities

Liabilities from loans refer to loans taken out to acquire

properties. Please see the tables on page 12 for a break-

down of the loan portfolio by currency and the duration

in each case, as well as the breakdown of loan volumes by

fixed interest rate period.

Liabilities from land purchases and construction projects

are the result of outstanding payment obligations relating

to the acquisition of properties and real estate companies.

Liabilities from real estate management primarily consist

of EUR 2.7 million for prepaid allocable costs and EUR 0.2

million in cash security bonds.

The miscellaneous liabilities item includes loan interest

liabilities of EUR 0.4 million, accounts payable of EUR 1.0

million, liabilities from management and custodian bank

fees of EUR 0.2 million, and liabilities to counterparties

under forward exchange transactions in Norwegian

kroner of EUR 0.2 million.

VI. Provisions

Provisions relate primarily to maintenance measures

(EUR 0.4 million) and taxes (EUR 1.0 million). EUR 0.7

million of this figure comprises provisions for deferred

taxes on potential foreign capital gains and EUR 0.3 million

ongoing taxes on income abroad.

Capital gains tax

Taxes on foreign capital gains are only incurred if a prop-

erty is disposed of and actually generates a book profit.

The timing and amount of such taxes is uncertain, as both

market conditions and the basis for tax assessment can

change constantly. Deferred tax liabilities were recognised

in full (100%) and classified as provisions to ensure that,

as far as possible, all investors are treated equally, regard-

less of the time they join or leave the fund; the five- to

seven-year holding period for the properties was taken

into consideration in the process.

The difference between the current market values and the

carrying amounts for tax purposes of the properties was

taken as the basis for assessment in calculating the amount

of the provisions for deferred taxes on foreign capital gains,

using locally applicably tax rates; generally accepted sell-

ing costs were taken into account during this process. The

provision was charged to Fund capital as it is not classified

as a distributable reserve; EUR 0.3 million was added in

the six months under review.

US real estate companies taking the legal form of partner-

ships were also included in the calculation. These are treated

for tax purposes in the same way as a direct acquisition,

which means that gains on the disposal of shares in the

companies are subject to capital gains tax. Capital gains tax

was calculated as described above, with the market value

of the property being replaced by the going concern value.


Disclosures on the statement of assets

Aix en Provence Labège/Toulouse

Saint-Ouen L´Aumône

Warsaw

Prague

Bratislava

Budapest

Ljubljana

BelgradeZagreb

Paris

Bern

Madrid

Lisbon

Lon

Copenhagen

OsloStockholm

Rome

Barcelona

Seville

Oporto

Liverpool

Marseille

Bordeaux

Palermo

Tirana

Sarajevo

Vienna

Brussels

Berlin

Munich

Hamburg

Langhus

Frankfurt

Capital with investment

CapitalTown/city

Town/city with investment

Amsterdam

USA

New York

Washington, D.C. San Francisco

Tallahassee Gainesville Duisburg Venlo

Stuttgart Herblay

Ottobrunn

Langenfeld

Regional Distribution of Fund Properties

Europe: 16 properties, of which 8 properties in Germany

USA: 4 properties



Property Record as of 30 June 2006

Location of property Type of use (as a % of rental space)

Post

code

City

Stre

et

Type

of

prop

erty

Off

ice

Ret

ail/

cate

ring

Indu

stri

al(w

areh

ouse

s, h

alls

)

Hot

el

Res

iden

tial

Leis

ure

Oth

er

Acqu

isiti

on d

ate

Year

bui

lt/re

nova

ted

1)

DIRECTLY HELD PROPERTIES IN EUROZONE COUNTRIES

Germany

47058 Duisburg Königsberger Allee 28 C 100 0 0 0 0 0 0 02/2002 2003

20097 Hamburg Friesenstr. 22 / Grüner Deich 21 C 100 0 0 0 0 0 0 05/2005 2000

20251 Hamburg Strassenbahnring 6–18 C 85 15 0 0 0 0 0 10/2005 1900/2004

22415 Hamburg Langenhorner Markt 1–18 C 16 43 14 0 0 11 16 06/2006 1964/1995

22087 Hamburg Lübecker Str. 128 / Landwehr 2 C 98 0 2 0 0 0 0 12/2005 2004

40764 Langenfeld Poensgenstr. 25 C 13 0 87 0 0 0 0 12/2004 1990/2002

70499 Stuttgart Ingersheimer Str. 10 C 100 0 0 0 0 0 0 04/2006 1997

85521 Ottobrunn Robert-Koch-Str. 100 C 77 0 22 0 0 0 1 12/2004 2002

France

13090 Aix en Provence 320 Avenue Archimède C 100 0 0 0 0 0 0 06/2006 2006

95220 Herblay 41 Avenue du Gros Chêne C 6 0 91 0 0 0 3 12/2005 2005

95310 Saint-Ouen L´Aumône 97 Avenue du Château C 2 0 92 0 0 0 6 10/2001 2001

33120 Labège/Toulouse Avenue de l‘ Occitane C 100 0 0 0 0 0 0 06/2006 2006

Netherlands

5928 PR Venlo Celsiusweg 66 C 7 0 93 0 0 0 0 07/2005 1994/2004

DIRECTLY HELD PROPERTIES IN COUNTRIES WITH OTHER CURRENCIES

Poland

2678 Warsaw Szturmowa 2 C / H 88 3 0 0 0 0 9 06/2005 1997

2678 Warsaw Szturmowa 2a C / H 94 0 2 0 0 0 4 06/2005 2000

Type of property:C = Commercial propertyH = Heritable building rightR = Site for construction of residential property

1) The last year in which major conversions, extensions, or modernisations took place2) The usable area corresponds to the leased area on the reporting date.3) Five companies are tenants of both Polish properties.


Area 2) in m2 Features Property data

Area

of l

and

in m

2

Com

mer

cial

Res

iden

tial

Dis

tric

t hea

ting

Air

cond

ition

ing/

auxi

liary

coo

ling

Goo

ds li

ft

Pass

enge

r lif

t

Spri

nkle

r sy

stem

Hot

wat

er (c

entr

al/

dece

ntra

lised

)

Cen

tral

hea

ting

Prop

erty

cat

egor

y

Prop

erty

qua

lity

Loca

tion

cate

gory

Num

ber

of te

nant

s

Num

ber

of c

arpa

rkin

g sp

aces

Prop

erty

vac

ancy

rate

in %

of

estim

ated

net

ren

tal

1,537 4,680 0 Office medium Other city centre locations 1 59 0.0

2,162 9,816 0 Office medium Non-central office centre 1 57 0.0

7,528 8,499 0 Office high Other city centre locations 11 176 0.0

17,966 12,285 0 Retail medium District centre 92 383 9.8

5,727 16,425 0 Office high Other city centre locations 13 122 0.0

37,772 23,752 0 Logistics medium Established logistics location 2 147 0.0


18,048 20,493 0 Office high Commercial estate 1 218 0.0

16,408 8,110 0 Office high Non-central office centre 12 373 n.a.

34,397 17,499 0 Logistics high Established logistics location 2 163 n.a.

20,647 11,309 0 Logistics high Established logistics location 1 124 0.0

11,103 6,126 0 Office high Non-central office centre 3 260 n.a.

34,607 22,160 0 Logistics high Established logistics location 2 42 0.0


5,667 19,393 0 Office high Non-central office centre 11 351 0.0

Property Record as of 30 June 2006


Location of property Type of use (as a % of rental space)

Com

pany

/leg

al fo

rm

Loca

tion

of p

rope

rty

Reg

iste

red

offic

eof

com

pany

Type

of

prop

erty

Off

ice

Ret

ail/

cate

ring

Indu

stri

al(w

areh

ouse

s, h

alls

)

Hot

el

Res

iden

tial

Leis

ure

Oth

er

Acqu

isiti

on d

ate

PROPERTIES HELD VIA REAL ESTATE COMPANIES IN COUNTRIES WITH OTHER CURRENCIES

Norway

Regnbueveien 9 KS

Capital: EUR 1,891,882.69 1405 Langhus (SKI), Norway, 7034 Trondheim, C 9 0 91 0 0 0 0 01/2006Shareholder loans: EUR 2,364,351.00 Regnbueveien 9 Innherredveien 7Equity interest held: 100.00000%

USA

Kings Gainesville Apartments, LLC

Capital: EUR 8,981,748.31 32608 Gainesville, USA, 32601 Gainesville, R 0 0 0 0 100 0 0 11/2005Shareholder loans: EUR 0.00 2330 SW Williston Road 220 North Main StreetEquity interest held: 90.00000%

Lexington Gainesville Associates, LLC

Capital: EUR 10,031,776.07 32608 Gainesville, USA, 32601 Gainesville, R 0 0 0 0 100 0 0 01/2006Shareholder loans: EUR 0.00 3700 SW 27th Street 220 North Main StreetEquity interest held: 95.00000%

VDL Tallahassee Associates, LLC

Capital: EUR 4,160,378.10 32304 Tallahassee, USA, 32601 Gainesville, R 0 0 0 0 100 0 0 04/2006Shareholder loans: EUR 0.00 2700 West Pensacola Street 220 North Main StreetEquity interest held: 90.00000%

Ocala Road Tallahassee Associates, LLC

Capital: EUR 8,857,669.72 32304 Tallahassee, USA, 32601 Gainesville, R 0 0 0 0 100 0 0 04/2006Shareholder loans: EUR 0.00 235 Ocala Road South 220 North Main StreetEquity interest held: 90.00000%

Type of property:C = Commercial property H = Heritable building right R = Residential property for letting

Type of use Part of Skeleton/framed / Solid construction Windows Roofs Sanitary installationsbuilding framework structure

Office simple Simple walls, wooden and Brickwork with plaster or Wood, single glazing Corrugated fibre cement/ Small number of basic sheet metal lining, combined bedding and sheet metal roofing, toilet facilities, fibre cement siding pointing and paint bitumen/plastic film seal surface-mounted fittings

medium Lightweight concrete walls with Thermal insulation plaster/composite Wood, plastic, Concrete roof tiles, medium Adequate number of thermal insulation, concrete system, exposed brickwork with insulation glazing thermal insulation standard toilet facilities, sandwich elements, 12-25 cm combined bedding and pointing and wetrooms: tiles,infill, surface-mounted fittings paint, medium thermal insulation standard flush-mounted fittings

high High-density concrete Faced brickwork, metal siding, Aluminium, shutters, Clay roof tiles, slate/metal Good quality plates, faced brickwork, curtain wall, high thermal standard solar shading system, covering, high thermal toilet fittingsclinker, up to 30 cm infill thermal protection insulation standard

glazingvery high Glass siding, Natural stone Floor-to-ceiling glazing, Large number of skylights, Generous toilet

over 30 cm infill large sliding panels, elaborate elaborate roof facilities with electric shutters, extensions and roof heighten- sanitary facilities, sound-proof glazing ing, glass roof cut-outs high standard

Retail simple Simple walls, wooden and Brickwork with plaster or combined Wood, single glazing Corrugated fibre cement/ Small number of basicsheet metal lining, bedding and pointing and paint sheet metal roofing, toilet facilities, fibre cement siding bitumen/plastic film seal surface-mounted fittings

medium Lightweight concrete walls Thermal insulation plaster/composite Wood, plastic, Concrete roof tiles, medium Adequate number of with thermal insulation, system, exposed brickwork with insulation glazing thermal insulation standard toilet facilities,concrete sandwich elements, combined bedding and pointing and flush-mounted fittings12-25 cm infill paint, medium thermal insulation standard

high High-density concrete plates, Faced brickwork, metal siding, Aluminium, shutters, solar Clay roof tiles, slate/metal Good quality faced brickwork, clinker, curtain wall, high thermal standard shading system, thermal covering, high thermal toilet fittingsup to 30 cm infill protection glazing insulation standard

Logistics simple Glass siding, Brickwork with plaster or combined Wood, single glazing Corrugated fibre cement/ Basic toilet facilities, small over 30 cm infill bedding and pointing and paint sheet metal roofing, number of showers,

bitumen/plastic film seal surface-mounted fittingsmedium Simple walls, wooden and Thermal insulation plaster/composite Wood, plastic, Concrete roof tiles, medium Adequate toilet

sheet metal lining, system, exposed brickwork with insulation glazing thermal insulation standard facilities, several fibre cement siding combined bedding and pointing and showers, some surface-

paint, medium thermal insulation standard mounted fittings

Property quality – standard of appointments according to standardised construction costs 2000

1) The last year in which major conversions, extensions, or modernisation took place2) The usable area corresponds to the leased area on the reporting date.


Area 2) in m2 Features Property data

Year

bui

lt/re

nova

ted

1)

Area

of l

and

in m

2

Com

mer

cial

Res

iden

tial

Dis

tric

t hea

ting

Air

cond

ition

ing/

auxi

liary

coo

ling

Goo

ds li

ft

Pass

enge

r lif

t

Spri

nkle

r sy

stem

Hot

wat

er (c

entr

al/

dece

ntra

lised

)C

entr

al h

eatin

g

Prop

erty

cat

egor

y

Prop

erty

qua

lity

Loca

tion

cate

gory

Num

ber

of te

nant

s

Num

ber

of c

arpa

rkin

g sp

aces

Prop

erty

vac

ancy

rate

in %

of

estim

ated

net

ren

tal

1999 26,801 10.062 0 Logistics medium Established logistics location 1 58 0.0

1989/1994 143,346 0 41,204 Other simple Other locations 455 1,053 12.4

1996 107,084 0 33,860 Other simple Other locations 835 1,070 9.0

1988/2004 76,149 0 26,501 Other simple Other locations 615 563 1.0

1996/2003 30,022 0 12,284 Other simple Other locations 337 292 2.1

Interior wall covering Floor coverings Interior doors Heating Electrical fittings Installations and of wetrooms other fittingsOil-based paintwork Wooden floorboards, Panel framed doors, Individual stoves, One lighting outlet and 1-2 n.a.

needle felt, linoleum, PVC, painted leaves and frames electric storage heating, surfaced-mounted sockets wetrooms: PVC boilers for hot water per room

Part-tiled walls (1.50 m) carpet, PVC, tiles, linoleum, Plastic/wooden leaves, Central heating 1-2 lighting outlets and 2-3 n.a.wetrooms: tiles steel frames with radiators surfaced-mounted sockets

(gravity hot water system) per room; IT facilities

Floor-to-ceiling tiles Large tiles, parquet, Leaves with high- Central heating/pumped Several lighting outlets n.a.cast stone, quality wood veneer, heating system and sockets per room, wetrooms: large tiles, glass doors, with flat radiators, sill trunking with IT cablingspecial coated tiles wooden frames central water heating

Natural stone, Natural stone, elaborately Solid construction, Under floor heating, Elaborate fittings, n.a.elaborately laid laid, wetrooms: intruderprotection, suitable air conditioning and security facilities

natural stone for use by the disabled, other HVAC systemsautomatic doors

Oil-based paintwork Wooden floorboards, n.a. Individual stoves, electric Basic surface-mounted n.a.linoleum, PVC, storage heating, boilers fittingswetrooms: PVC for hot water

Part-tiled walls (1.50 m) Coated screed, n.a. Warm air heating units, warm Adequate flush-mounted n.a.mastic asphalt, air heating units connected fittingswetrooms: tiles to central boiler system,

district heatingFloor-to-ceiling tiles Tiles, wood block flooring, n.a. Central heating/pumped Elaborate fittings, n.a.

cast stone, heating system with flat security facilitieswetrooms: large tiles radiators, central water heating

Oil-based paintwork Rough concrete, paint n.a. Warm air heating with n.a. Surface-mounted powera direct-fired system and water outlets,

cooking facilities, sinkPart-tiled walls (1.50 m) Screed, mastic asphalt, n.a. Central heating n.a. Surface-mounted power

block paving without bedding and water outlets,kitchenette


Hedging transactions Purchases Sales Sales volume

EUR thou. equiv. EUR thou. equiv. nominal currency

from 1 Jan. 2006 from 1 Jan. 2006 from 1 Jan. 2006

to 30 June 2006 to 30 June 2006 to 30 June 2006

a) Purchases and sales of financial instrumentsentered into during the period underreview and no longer appearingin the statement of assets

USD 38,525 37,327 46,080NOK 4,163 4,213 33,000

Total 42,688 41,540

Market value Market value Preliminary Sales

sales reporting date * result nominal

EUR thou. EUR thou. EUR thou. currencies

b) Open items

USD 34,833 34,440 393 44,100NOK 6,305 6,411 – 106 50,800

Total 41,138 40,851 287

Market value Market value Preliminary Sales

sales purchases result nominal

EUR thou. EUR thou. EUR thou. currencies

c) Transactions closed outbut not yet due

USD 15,818 15,636 182 19,330NOK 4,058 4,196 – 138 33,036

Total 19,876 19,832 44

* Forward exchange transactions were valued at their forward rate on 30 June 2006.

Hedging Transactions Portfolio as of 30 June 2006

Income

Income from properties comprises the rental income from

the Fund’s German and foreign properties. Of the total

figure, EUR 1.1 million is attributable to properties in the

eurozone and EUR 3.0 million to properties located out-

side this area.

Income from equity interests in real estate companies

consists of the distribution by a US real estate company

that was received in the reporting period.

Income from the liquidity portfolio comprises interest

income from time and demand deposits.


for the period from 1 January 2006 to 30 June 2006 EUR EUR EUR

I. Income

1. Income from properties 9,733,422.85of which in foreign currency 2,997,953.61

2. Income from equity interests in real estate companies 371,329.71of which in foreign currency 371,329.71

3. Income from liquidity portfolio3.1 Income from bank deposits 240,995.53

of which in foreign currency 12,447.52

4. Other income 120,879.12of which in foreign currency 58,435.49

Total income 10,466,627.21

II. Expenditure

1. Management costs1.1 Operating costs 143,377.61

of which in foreign currency 28,605.721.2 Maintenance costs 143,958.47

of which in foreign currency 64,889.201.3 Property management costs 58,670.68

of which in foreign currency 50,723.51

2. Ground rents, life annuities and term annuities 13,398.35of which in foreign currency 0.00

3. Interest expenses 1,570,103.73of which in foreign currency 188.31

4. Foreign taxes 369,107.34

5. Fund management costs5.1 Remuneration of Fund management 1,059,731.065.2 Custodian bank fee 24,355.015.3 Remuneration of experts 14,951.405.4 Other expenditure (in acc. with section 12 BVB) 111,000.06

Total expenditure 3,508,653.71

III. Equalisation paid + 820,744.61

Ordinary net income 7,778,718.11

Statement of Income and Expenditure

Disclosures on the statement of income and expenditure


The other income item primarily consists of the partial re-

versal of a provision for maintenance of EUR 60 thousand,

plus interest income from the shareholder loan to the

Norwegian real estate company of EUR 50.9 thousand.

Expenditure

Management costs comprise operating costs of EUR 143.4

thousand, maintenance costs of EUR 144.0 thousand, and

property management costs that cannot be charged to

tenants of EUR 58.7 thousand.

The amount reported under ground rents, life annuities

and term annuities relates to the property in Lübecker

Strasse, Hamburg.

Interest expenses result primarily from the external

financing of property acquisitions.

The Fund recognised expenses/set up provisions amount-

ing to EUR 369.1 thousand for the payment of foreign

income taxes. The tax expense relates to Poland

(EUR 237.5 thousand), the Netherlands (EUR 111.6 thou-

sand) and France (EUR 20.0 thousand).

As provisions for taxes on capital gains are not based on

concrete intentions to make disposals, they are taken

directly from Fund assets.

The Fund management costs item includes remuneration

of Fund management, the custodian bank fee, the remu-

neration of experts and other expenditure in accordance

with section 12 of the BVB (Special Fund Rules).

The remuneration of Fund management item amounted

to EUR 1.1 million or 0.9% p a. of average Fund assets;

under the Fund Rules, remuneration of up to 1.5% p. a. of

average Fund assets is possible. The investment company

pays regular (usually annual) brokerage fees (trail com-

mission) to brokers such as credit institutes from the man-

agement fee paid to it.

In accordance with section 12(4) of the BVB, the custodian

bank receives a custodian bank fee of 0.005% of Fund assets

at the end of each calendar quarter.

The members of the Expert Committee receive remuneration

for the statutory annual reappraisals. The costs of the initial

expert opinions are reported as acquisition costs, and are

therefore not recognised in the statement of income and

expenditure.

Other expenditure in accordance with section 12(5) of the

BVB comprises paid and deferred costs for the Annual

Report, the audit of the Fund, as well as consultancy costs

and bank fees. In addition, the company received con-

struction and purchase fees of EUR 1.2 million in accord-

ance with section 12(2) BVB; these are not reported in the

statement of income and expenditure, but as property

acquisition costs.

Equalisation paid

The equalisation paid item is the balance of expenditure

and income paid by the unit buyer as part of the issuing

price in order to compensate for accrued income, or rec-

ompensed by the Fund as part of the redemption price

when units are redeemed. EUR 0.5 million of this amount

relates to domestic income, and EUR 0.3 million to foreign

income.

Investment Company

SEB Immobilien-Investment GmbHRotfeder-Ring 7, 60327 Frankfurt am MainP.O. Box, 60283 Frankfurt am Main, GermanyPhone: +49 (0) 69 2 72 99-10 00Fax: +49 (0) 69 2 72 99-0 90

Subscribed and paid-up capital EUR 5.113 millionLiable capital EUR 4.404 Mio.(as of 30 June 2006)

Frankfurt am Main Commercial Register, HRB 29859Established: 30 September 1988

Management

Barbara A. KnoflachAxel KrausChoy-Soon Chua

Supervisory Board

Fredrik BohemanChairman of the Board of Directors of SEB AG, Frankfurt am Main– Chairman –

Peter BuschbeckMember of the Board of Directors of SEB AG,Frankfurt am Main– Deputy Chairman –

Harry KlagsbrunSEB Asset Management SwedenCEO

Thomas EricssonSEB Asset Management SwedenGlobal Head of Operations

Petteri KarttunenGyllenberg Asset ManagementManaging Director

William PausHead of SEB Merchant Banking

Auditors

PricewaterhouseCoopers AktiengesellschaftWirtschaftsprüfungsgesellschaft, Frankfurt am Main

Shareholder

SEB AG, Frankfurt am Main (since 10 May 2006: 6%)SEB Asset Management AG, Frankfurt am Main (since 10 May 2006: 94%)

Custodian Bank

SEB AG, Ulmenstrasse 30, 60325 Frankfurt am Main

Subscribed and paid-up capital EUR 0.775 billionLiable capital EUR 2.291 billion(as of 30 June 2006)

Expert Committee

Klaus Peter Keunecke, Dr.-Ing.Publicly certified and sworn expert for the valuation ofrents and developed and undeveloped properties, Berlin– Chairman –

Hans-Joachim Ackermann, Architect / Dipl.-Ing.Publicly certified and sworn expert for constructioncosting and property valuation, Dortmund– Deputy Chairman –

Albrecht Novak, Dipl.-Ing. / Freelance architectPublicly certified and sworn expert for general constructionand the valuation of developed and undeveloped propertiesand rents, Stuttgart

Ulrich Renner, Dipl.-Kfm.Publicly certified and sworn expert for the valuation ofdeveloped and undeveloped properties, Wuppertal

Günter Schäffler, Dr.-Ing.Publicly certified and sworn expert for the planning andcontrol of construction costs, the valuation of developedand undeveloped properties, rents for properties andbuildings, Stuttgart

Prof. Michael Sohni, Dr.-Ing.Publicly certified and sworn expert for the valuation ofdeveloped and undeveloped properties, Darmstadt

Bodies


Investment Company:SEB Immobilien-Investment GmbHRotfeder-Ring 760327 Frankfurt am Main, GermanyP.O. Box60283 Frankfurt am Main, GermanyService-Hotline: +49 (0) 18 01 777 999Internet: www.SEBAssetManagement.dePhone: +49 (0) 69 2 72 99-10 00Fax: +49 (0) 69 2 72 99-0 90

Sales:SEB Asset Management AGRotfeder-Ring 760327 Frankfurt am Main, Germany

IMM

OPO

HJBE

V 06

06

seb immoportfolio target return fund · 2014-06-30 · seb immoportfolio target return fund at a...

Documents