• Debt amounted to 31% of assets worth 6.342 billion euro.
• The rental business represents 53% of the company's value.

REALIA obtained 140.4 million euro in attributable net income in 2007, compared with 142.6 million euro in 2006, in recurring terms. During 2006, REALIA obtained 18.3 million euro in extraordinary gains as a result of releasing a provision for a building, which increased net income to 160.9 million euro. Accordingly, in like-for-like terms, REALIA's net income declined slightly, by 1.5%, in 2007.

EBITDA increased by 24.4% to 366.2 million euro. The improvement in profitability was particularly notable when compared with the 1.1% increase in total revenues: 813 million euro in 2007.

The strategy of diversifying in terms of businesses and markets that REALIA has implemented in recent years, including a focus on the rental business and internationalisation, enable it to weather the deceleration in the domestic market with confidence. In fact, gross income increased by 25.9% to 404.9 million euro, vs. 321.7 million euro in 2006.

The improvement is underpinned by rising gains on land sales (up 171.9%) and higher rental revenues (up 35.5%), which offset the decline in home development and sales.

The rental area made a particularly notable contribution to revenues. Rent revenues increased by 34.8% to 154.8 million euro as a result of REALIA's strategy to reduce its exposure to the property development business. As a result, REALIA is a balanced property company, and rent revenues cover practically all of its financial costs and fixed structural costs, meaning it is not dependent on the home-building business.

The group has 1.969 billion euro in net debt, i.e. 31% of its GAV. Of the total debt, 57% matures in over five years and 41% has interest rate hedges for the next seven years.

The market value of REALIA's assets was 6.342 billion euro at year-end, according to an appraisal by CB Richard Ellis.

REALIA's objective is to offer shareholders an attractive return. For this reason, it distributed 28 euro cent gross per share in 2007 and will pay a supplementary dividend out of 2007 income, in line with the commitment made during the IPO to distribute at least 50% of net income in the form of dividends.

Rental area expands

REALIA's strategic objective is to continue focusing on the Rental business. It invested 210 million euro in this area in 2007: 118 million euro to buy a new building in Paris and 92 million euro in construction in progress. REALIA, controlled by Fomento de Construcciones y Contratas (FCC) and Cajamadrid, increased the gross asset value of its Rental division from 48% of the total at 2006 year-end to 53% at 2007 year-end. REALIA currently has over 493,000 square metres of gross lettable area, and a 96% occupancy rate due to the asset's high quality and exceptional location. Once projects currently under construction are completed, the gross lettable area will be 751,000 square metres, including 287,000 square metres of shopping centre.

Meanwhile, the Development and Land division has declined from 52% to 47% of the company's gross asset value. Nevertheless, REALIA has land on which to build over three million square meters, of which 63% is in Madrid and Seville and 94% is for first homes. And REALIA invested 93 million euro in buying land in 2007.

Internationalisation

REALIA maintains internationalisation as one of it key lines of strategy in the Rental area. A major component of this division is the business in France conducted through listed company SIIC de Paris, which has 139,803 square metres of rented property in the central business districts of Paris. This investment increased in market value by 14.7% in 2007 to 1,356.9 million euro.

Apart from France, REALIA also operates in the home-building business in Portugal, Poland and Romania.

The company

REALIA is controlled 51% by RB Business Holding, a 50:50 joint venture of FCC and Cajamadrid. The latter two companies also own 2.15% of REALIA directly.

REALIA debuted on the stock market on 6 June 2007. Since then, it has proved to be the soundest stock in its sector and, despite market fluctuations, major groups have chosen REALIA as a means of retaining exposure to the real estate business. Since the IPO, leading investors have acquired a stake: Sánchez-Ramade (5%), Prasa (5%), Lualca (5.02%) and Interprovincial, the Cosmen family vehicle (5%). And El Corte Inglés has been a shareholder since REALIA was founded; it currently owns 1.26%.

This expansion of the shareholder base represents clear support for the company's strategy of sound finances, balanced exposure to businesses, and internationalisation, and is an expression of confidence in its future performance.