SEB ImmoPortfolio Target Return Fund · 2014-06-30 · SEB ImmoPortfolio Target Return Fund at a...
Transcript of 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).
Semi-annual Report as of 30 June 2006 3
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.
4 SEB ImmoPortfolio Target Return Fund
Duisburg, Königsberger Allee 28
Semi-annual Report as of 30 June 2006 5
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
6 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 7
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.
8 SEB ImmoPortfolio Target Return Fund
“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.
Semi-annual Report as of 30 June 2006 9
10 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 11
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
12 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 13
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.
14 SEB ImmoPortfolio Target Return Fund
2 properties / 3.9%EUR 0 to 10 million
8 properties / 61.2%EUR 25 to 50 million
Allocation of Fund properties by value class
10 properties / 34.9%EUR 10 to 25 million
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.
Semi-annual Report as of 30 June 2006 15
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)
16 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 17
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.
18 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 19
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.
20 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 21
Outlook
22 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 23
Information on changes in value (at the reporting date in EUR thousand)
Germany France Rest of Total direct Equity interests Totalworld (NL, PL) investments (N, USA)
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)
Germany France Rest of Total direct Equity interests Totalworld (NL, PL) investments (N, USA)
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.
24 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 2525
26 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 27
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.
28 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 29
30 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 31
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
4,203 7,707 0 Office medium Non-central office centre 1 130 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
9,928 12,276 0 Office medium Non-central office centre 12 186 0.0
5,667 19,393 0 Office high Non-central office centre 11 351 0.0
Property Record as of 30 June 2006
32 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 33
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
34 SEB ImmoPortfolio Target Return Fund
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.
Semi-annual Report as of 30 June 2006 35
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
36 SEB ImmoPortfolio Target Return Fund
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
Semi-annual Report as of 30 June 2006 37
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
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