Company announcement no. 3/2011

Aalborg, Denmark, 2011-04-28 08:56 CEST (GLOBE NEWSWIRE) --  Summary

  -- TK Development recorded a profit of DKK 73.6 million after tax, compared to
     DKK 25.4 million the year before. This performance meets expectations.
  -- In light of the prevailing market situation, Management considers the
     profit for the year satisfactory.
  -- Consolidated equity totalled DKK 1,866.0 million at 31 January 2011,
     corresponding to a solvency ratio of 40.4 %.
  -- The Group's 10,900 m² retail park in Uppsala, Sweden, was completed and
     opened fully let in March 2010. The retail park was sold, based on forward
     funding, and handed over to the investor, an institutional fund of German
     IVG Funds, in April 2010.
  -- The first phase of the Group's retail park in Danderyd, Sweden, with a
     total floor space of 12,700 m² was completed and opened fully let in
     October 2010. The retail park was sold on the basis of forward funding and
     handed over to the investor, the German investment fund Commerz Real, in
     January 2011.
  -- In addition, the Group has sold several plots of land, including the sale
     to a private investor of residential development rights for about 8,000 m²
     of the Group's land at Østre Havn, Aalborg, Denmark.
  -- The Group handed over total projects of about 42,500 m² in the 2010/11
     financial year.
  -- The Group's Sillebroen shopping centre in Frederikssund, Denmark, opened as
     planned on 25 March 2010. The shopping centre has a current occupancy rate
     of 93 %, and negotiations with tenants for the remaining premises are
     ongoing. The shopping centre is performing satisfactorily, with a
     satisfactory influx of customers that meets expectations.
  -- The Group's total project portfolio amounted to DKK 3,425 million at 31
     January 2011, of which DKK 2,107 million is attributable to projects that
     have been completed and thus generate cash flow. The annual net rent from
     the current leases amounts to DKK 146 million, equal to a return on cost of
     about 7 %. Negotiations for the sale of several of these projects are
     ongoing.
  -- In August 2010, the Group took over the development of a 5,400 m² property
     project at Trøjborgvej in Århus, Denmark. Construction, which started on
     the fully financed project at the end of 2010, is being carried out in
     cooperation with Nordica Real Estate A/S via a jointly owned project
     company in which the Group has a 20 % stake.
  -- In conjunction with the takeover of the Trøjborgvej project in Århus,
     Denmark, the Group sold two completed retail parks to the jointly owned
     project company.
  -- Based on satisfactory pre-construction letting, TK Development began
     building the second phase of the Fashion Arena Outlet Center, Prague, the
     Czech Republic, of about 7,000 m² in April 2010. Construction progressed as
     planned, and the second phase opened on schedule in October 2010.
  -- Construction started on a 10,000 m² extension to the Group's Czech
     investment property, the Futurum Hradec Králové shopping centre, in January
     2011, with the opening scheduled for spring 2012. The current occupancy
     rate is 84 %.
  -- At 31 January 2011, the Group's project portfolio comprised 933,000 m² (31
     January 2010: 957,000 m²).
  -- Since the beginning of 2010, the market situation has developed favourably.
     The general investment climate is marked by cautious optimism and a higher
     propensity to invest. There is increasing demand for real property from
     investors who continue to attach crucial importance to quality and
     location.
  -- Management believes that land prices, construction costs, rental rates and
     property prices have stabilized at a new level. The new price levels
     underpin the profitability of future property development, and new projects
     in the portfolio are expected to generate a normal profit.
  -- An Extraordinary General Meeting was held on 1 July 2010, at which the
     General Meeting resolved to carry out a capital increase in the form of a
     rights issue with total gross proceeds of DKK 210.3 million. The capital
     increase was implemented in August 2010.
  -- The capital increase has placed TK Development in a stronger position to
     seize the project opportunities in the present market.
  -- For the 2011/12 financial year, the Group still expects to generate a
     profit after tax of about DKK 100 million.
  -- The Group has a strong project portfolio that underpins expectations for
     another and higher earnings level in the following years.
  -- The Supervisory Board has adopted a dividend policy with the long-term aim
     of distributing a portion of the year's profit as dividends or
     alternatively via a share repurchase programme. This will always be done
     with due regard for the Group's capital structure, solvency, cash resources
     and investment plans.

Further information is available from Frede Clausen, President and CEO, on tel.
+45 8896 1010. 

The expectations for future developments presented in this announcement,
including earnings expectations, are naturally subject to risks and
uncertainties and may be affected by various factors, such as global economic
conditions and other significant issues, including credit-market, interest-rate
and foreign-exchange developments. Reference is also made to the section "Risk
issues" in this preliminary announcement of financial statements. 

The full announcement is attached.