Portugal's Sonae 1Q09 earnings hit by portfolio yield rises

Portuguese shopping centre developer Sonae Sierra posted first quarter consolidated net loss of e87.5m against profit of e21.8m in 1Q08, with the primary driver being the continuing rise in yields across Europe which led to further portfolio depreciations. The company's policy was to have properties independently re-valued twice a year, but it moved to quarterly valuations last September as a result of commitments agreed with investors in the Sierra Portugal Fund. SPF is a e300m equity fund closed last July, with e175m in anchor investments by two clients of Aberdeen Property Investors - Finnish Local Government Pensions Institution, and mutual pension insurance group Ilmarinen - plus two funds of funds managed by Schroder. Sonae said the 1Q09 showed direct net profit of e17.5m, up from e15.6m in 1Q08, with operating income unaltered. However, it booked a valuation loss of e105m. (Full story to be published in Property Finance Europe 121 on Monday 18 May