TK Development A/S
TK Development announces new cooperation with AP Pension concerning a residential development project and comments on other projects expected to have a significant impact on profits

TK Development A/S 

26.01.2015 11:48

Dissemination of a Adhoc News, transmitted by DGAP - a service of EQS Group
AG.
The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

Company announcement no. 2/2015

Aalborg, Denmark, 2015-01-26 11:48 CET (GLOBE NEWSWIRE) -- 

Summary:

  -- TK Development has entered into a cooperation agreement with AP Pension
     concerning a residential development project of about 12,500 m2 at Amerika
     Plads in Copenhagen.
  -- TK Development has handed over the Barkarby project in Sweden to the
     investor.
  -- Based on a reassessment of the concept and potential for the Sillebroen
     shopping centre in Denmark, a writedown for impairment of DKK 44.5 million
     has been made.
  -- TK Development maintains its profit estimate for the 2014/15 financial
     year.



Residential project to be developed together with AP Pension

Since 2002 TK Development has developed sites and projects at Amerika Plads in
Copenhagen in a 50/50 partnership with Udviklingsselskabet By & Havn I/S,
through the jointly owned company P/S Danlink Udvikling. The partnership has
also successively built an integrated underground car park in the area.
Following the announced sale of lot A to A.P. Møller - Mærsk A/S, see company
announcement no. 23/2014, only one unbuilt lot with building rights for about
12,500 m2 remains to be developed at Amerika Plads. 

P/S Danlink Udvikling has now entered into cooperation with AP Pension about
developing the remaining area of about 12,500 m2, of which about 12,000 m2 is
earmarked for residential construction and about 500 m2 for ground-floor
business premises targeting the general public. The partnership executing the
project will be owned 50/50 by AP Pension and P/S Danlink Udvikling. The aim is
to build about 120 high-quality apartments to be sold to private buyers. The
project, designed by Vilhelm Lauritzen Architects, is now in progress. Thus,
the partnership has applied for and obtained an approval in principle from the
public authorities, with construction scheduled to start in mid-2015. The sale
of the lot to the jointly owned company will generate a minor profit, and the
additional profits anticipated on the development, construction and sale of the
project will be recognized upon handover of the apartments to the respective
buyers, expected to take place from the first quarter of 2017 and onwards. 

P/S Danlink Udvikling still owns the integrated underground car park at Amerika
Plads. The development of the entire Amerika Plads area will improve the
occupancy - and thus optimize the operation - of the underground car park. 



Sale of Barkarby project, Sweden, executed

In company announcement no. 15/2013, Management announced the sale of a retail
park of about 20,000 m2 in Barkarby, Sweden, to a fund managed by Cordea
Savills. The sale was based on forward funding, and the retail park was
scheduled to open in autumn 2014. 

Although the construction of the retail park was slightly delayed, the opening
took place in 2014, and the project has now been handed over to Cordea Savills.
Thus, the profit on the project has been realized in the 2014/15 financial
year. 



DKK 44.5 million impairment of the Sillebroen shopping centre in Denmark

The 25,000 m2 Sillebroen shopping centre in Frederikssund, Denmark, opened in
spring 2010. Due to the financial and economic crisis, the running-in and
maturing phase took longer than expected, and as announced on several
occasions, a number of tenants are recording difficulties, particularly local
tenants. Despite an increasing footfall that slightly exceeded 3.0 million in
2014, the shopping centre has recorded unchanged revenue, with about 10%
vacancies since the opening. 

Management finds it relevant to increase the customer flow, and thus the
shopping centre revenue, in order to improve the prospects of attracting new
tenants that can establish viable business units. As part of these efforts, TK
Development has entered into an agreement with Nordisk Film Biografer about the
establishment of a cinema of about 1,400 m2 in the Sillebroen shopping centre,
an initiative that Management considers an important step towards increasing
the footfall and boosting revenue in the rest of the centre. The establishment
of a cinema involves constructing an extension of the shopping centre, expected
to be built over the next 15 months. 

Apart from the cinema, Management will establish rental units based on
alternative concepts that will help increase the occupancy rate and contribute
to creating an integrated and viable centre. 

At a board meeting, the Group's Board of Directors has decided - in addition to
introducing the changed letting concept described above - to write down the
value of the Sillebroen shopping centre by DKK 44.5 million as Management
expects the net rent potential to be lower than previously estimated, partly as
a result of the changed letting concept for the centre. 



Profit estimate

The Group maintains its profit estimate of about DKK 40 million before tax for
the continuing activities for the 2014/15 financial year. 

The Group expects to announce its profit estimate for 2015/16 at the same time
as publishing its preliminary announcement of financial statements for 2014/15. 



The expectations mentioned in this announcement, including earnings
expectations, are naturally subject to risks and uncertainties, which may
result in deviations from the expected results. Expectations may be affected by
various factors, as mentioned in the section 'Risk issues' in the Group's
2013/14 Annual Report. 



Contact information:

TK Development A/S, Frede Clausen, President and CEO, tel. +45 8896 1010
News Source: NASDAQ OMX



26.01.2015 The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---------------------------------------------------------------------------
 
Language:     English
Company:      TK Development A/S
              
               
              Denmark
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         DK0010258995
WKN:          
 
End of Announcement                             DGAP News-Service
 
---------------------------------------------------------------------------