UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21365
Seligman La Salle International Real Estate Fund, Inc.
(Exact name of Registrant as specified in charter)
100 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Lawrence P. Vogel
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant’s telephone number, including area code: | (212) 850-1864 |
Date of fiscal year end: | 12/31 |
Date of reporting period: 6/30/08
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
![](https://capedge.com/proxy/N-CSRS/0001145443-08-002585/seligman_logo.jpg)
To The Stockholders | 1 | |||||
Performance and Portfolio Overview | 2 | |||||
Portfolio of Investments | 6 | |||||
Statement of Assets and Liabilities | 10 | |||||
Statement of Operations | 11 | |||||
Statements of Changes in Net Assets | 12 | |||||
Notes to Financial Statements | 13 | |||||
Financial Highlights | 19 | |||||
Dividend Investment Plan | 21 | |||||
Board of Directors | 23 | |||||
Executive Officers | 24 | |||||
Additional Fund Information | 26 |
To The Stockholders
![]() William C. Morris Chairman | ![]() Brian T. Zino President |
Manager J. & W. Seligman & Co. Incorporated 100 Park Avenue New York, NY 10017 General Counsel Sullivan & Cromwell LLP | Subadvisers LaSalle Investment Management (Securities), L.P. 100 East Pratt Street Baltimore, MD 21202 LaSalle Investment Management Securities B.V. Herengracht 471 1017 BS Amsterdam, The Netherlands | Stockholder Service Agent American Stock Transfer & Trust Company Mail Inquiries to: 59 Maiden Lane New York, NY 10038 Attn.: Herbert J. Lemmer Important Telephone Numbers (718) 921-8124 Stockholder Services (800) 937-5449 24-Hour Automated Telephone Access Service |
Average Annual | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six Months* | | One Year | | Since Inception 5/30/07 | ||||||||||
Market Price | (14.95 | )% | (42.34 | )% | (39.34 | )%†† | |||||||||
Net Asset Value: | |||||||||||||||
With Sales Charge | n/a | n/a | (32.25 | )† | |||||||||||
Without Sales Charge | (14.72 | ) | (24.87 | ) | (29.33 | )† | |||||||||
BenchmarksØØ | |||||||||||||||
FTSE NAREIT Equity REITs Index | (3.59 | ) | (13.64 | ) | (19.88 | ) | |||||||||
UBS Global Real Estate Investors Index | (9.53 | ) | (19.43 | ) | (24.16 | )** | |||||||||
UBS Global Real Estate Investors Index (excluding US) | (14.50 | ) | (23.72 | ) | (26.99 | )** |
| 6/30/08 | | 12/31/07 | | 6/30/07 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Market Price | $ | 12.98 | $ | 16.15 | $ | 25.00 | ||||||||
Net Asset Value | 14.74 | 18.29 | 21.79 |
Payment Date | | Per Share Amount | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
3/24/08 | $ | 0.4375 | ||||||||
6/23/08 | 0.4375 |
1 | The website reference is an inactive textual reference and information contained in or otherwise accessible through the website does not form a part of this report or the Fund’s prospectus or statement of additional information. | |
* | Returns for periods of less than one year are not annualized. | |
** | From 5/31/07. | |
† | Net asset value total return at inception is from the opening of business on May 30, 2007. The since-inception returns are calculated with and without the effect of the initial 4.50% maximum sales charge. | |
†† | Market price total return at inception is based on the initial offering price on May 25, 2007. | |
Ø | The sources of distributions for tax reporting purposes, which may include return of capital, may be subject to changes based on tax regulations. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” | |
ØØ | The FTSE NAREIT Equity REITs Index measures the performance of all publicly-traded US real estate trusts that are equity REITs, as determined by the National Association of Real Estate Investment Trusts. The UBS Global Real Estate Investors Index measures the performance of real estate securities within the S&P/Citigroup World Property Index that derive 70% or more of income from rent. The UBS Global Real Estate Investors Index (excluding US) measures the performance of real estate securities within the S&P/Citigroup World Property Index that derive 70% or more of income from rent. This benchmark may invest in real estate securities in over 21 countries, excluding the United States. The FTSE NAREIT Equity REITs Index, the UBS Global Real Estate Investors Index and the UBS Global Real Estate Investors Index (excluding US) are unmanaged benchmarks that assume investment of distributions. The performance of the indices excludes the effect of taxes, fees, and sales charges. Investors cannot invest directly in an index. |
| Fund | | UBS Global Real Estate Investors Index | |||||||
---|---|---|---|---|---|---|---|---|---|---|
United States | 18.4 | % | 49.7 | % | ||||||
Australia | 22.7 | 13.0 | ||||||||
Continental Europe | 21.1 | 14.6 | ||||||||
Austria | 0.8 | 2.4 | ||||||||
Belgium | 0.6 | 0.8 | ||||||||
Finland | 1.4 | 0.4 | ||||||||
France | 9.4 | 6.3 | ||||||||
Italy | 0.6 | 0.3 | ||||||||
Luxembourg | 1.0 | — | ||||||||
Netherlands | 3.8 | 2.4 | ||||||||
Norway | 0.5 | 0.2 | ||||||||
Sweden | 2.1 | 1.0 | ||||||||
Switzerland | 0.9 | 0.8 | ||||||||
United Kingdom | 14.5 | 8.7 | ||||||||
Pacific | 9.7 | 5.4 | ||||||||
Hong Kong | 5.0 | 3.3 | ||||||||
New Zealand | — | 0.2 | ||||||||
Singapore | 4.7 | 1.9 | ||||||||
Japan | 8.3 | 5.7 | ||||||||
Canada | 3.3 | 2.9 | ||||||||
Other Assets Less Liabilities | 2.0 | — | ||||||||
Total | 100.0 | % | 100.0 | % |
![](https://capedge.com/proxy/N-CSRS/0001145443-08-002585/d23555_largestindbar.jpg)
Security | | Value | | Percent of Net Assets | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Westfield Group | $ | 12,745,444 | 9.4 | |||||||
Unibail-Rodamco | 10,016,408 | 7.4 | ||||||||
Land Securities Group | 5,834,834 | 4.3 | ||||||||
GPT Group | 5,008,072 | 3.7 | ||||||||
Goodman Group | 4,894,603 | 3.6 | ||||||||
British Land | 4,081,532 | 3.0 | ||||||||
Hammerson | 3,895,995 | 2.9 | ||||||||
CapitaLand | 3,410,527 | 2.5 | ||||||||
Canadian Real Estate Investment Trust | 3,177,591 | 2.3 | ||||||||
The Link Real Estate Investment Trust | 3,060,481 | 2.3 |
† | Excludes short-term holdings. |
Largest Purchases | | |||||
---|---|---|---|---|---|---|
Macquarie CountryWide Trust* | ||||||
Macquarie Office Trust* | ||||||
CapitaLand | ||||||
GPT Group | ||||||
AMB Property* | ||||||
BRE Properties* | ||||||
Host Hotels & Resorts* | ||||||
Valad Property Group* | ||||||
Goodman Group | ||||||
Wereldhave* |
Largest Sales | | ||||||
---|---|---|---|---|---|---|---|
CapitaMall Trust** | |||||||
Equity Residential** | |||||||
Immofinanz Immobilien Anlagen** | |||||||
IVG Immobilien** | |||||||
Apartment Investment & Management (Class A)** | |||||||
Mitsui Fudosan | |||||||
DCT Industrial Trust** | |||||||
Suntec** | |||||||
FelCor Lodging Trust** | |||||||
Klepierre |
* | Position added during the period. |
** | Position eliminated during the period. |
June 30, 2008
Shares | Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Common Stocks and Rights 98.0% | ||||||||||
Australia 22.7% | ||||||||||
Abacus Property Group (Diversified) | 973,487 | $ | 1,060,557 | |||||||
Goodman Group (Industrial) | 1,648,248 | 4,894,603 | ||||||||
GPT Group (Diversified) | 2,347,551 | 5,008,072 | ||||||||
Macquarie CountryWide Trust (Retail) | 3,398,263 | 2,925,864 | ||||||||
Macquarie Office Trust (Office) | 3,776,811 | 2,797,997 | ||||||||
Trinity Group (Diversified) | 187,468 | 179,548 | ||||||||
Valad Property Group (Diversified) | 1,821,328 | 1,166,932 | ||||||||
Westfield Group (Retail) | 818,061 | 12,745,444 | ||||||||
30,779,017 | ||||||||||
Austria 0.8% | ||||||||||
Immoeast (Office) | 116,987 | 1,031,392 | ||||||||
Belgium 0.6% | ||||||||||
Cofinimmo (Office) | 4,686 | 850,445 | ||||||||
Canada 3.3% | ||||||||||
Canadian Real Estate Investment Trust (Diversified) | 110,700 | 3,177,591 | ||||||||
Morguard Real Estate Investment Trust (Retail) | 47,700 | 626,831 | ||||||||
RioCan Real Estate Investment Trust (Retail) | 37,600 | 732,310 | ||||||||
4,536,732 | ||||||||||
Finland 1.4% | ||||||||||
Citycon (Retail) | 152,870 | 771,732 | ||||||||
Sponda (Office) | 74,063 | 644,115 | ||||||||
Technopolis (Office) | 66,824 | 543,724 | ||||||||
1,959,571 | ||||||||||
France 9.4% | ||||||||||
Klepierre (Retail) | 55,078 | 2,758,958 | ||||||||
Unibail-Rodamco (Diversified) | 43,386 | 10,016,408 | ||||||||
12,775,366 | ||||||||||
Hong Kong 5.0% | ||||||||||
FE Consort International (Hotels) | 2,972,018 | 780,449 | ||||||||
Hang Lung Properties (Retail) | 285,000 | 911,575 | ||||||||
Hysan Development (Diversified) | 413,020 | 1,134,988 | ||||||||
The Link Real Estate Investment Trust (Retail) | 1,345,265 | 3,060,481 | ||||||||
Sun Hung Kai Properties (Residential) | 65,000 | 879,991 | ||||||||
6,767,484 |
June 30, 2008
Shares or Rights | Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Italy 0.6% | ||||||||||
Immobiliare Grande Distribuzione (Retail) | 209,721 | shs. | $ | 620,415 | ||||||
Risanamento (Diversified) | 155,712 | 207,718 | ||||||||
828,133 | ||||||||||
Japan 8.3% | ||||||||||
DA Office Investment (Office) | 194 | 793,838 | ||||||||
Hankyu (Diversified) | 89 | 492,896 | ||||||||
Japan Excellent (Office) | 155 | 753,876 | ||||||||
Japan Logistics Fund (Industrial) | 87 | 566,292 | ||||||||
Kenedix Realty Investment (Diversified) | 323 | 1,918,961 | ||||||||
Mitsui Fudosan (Diversified) | 111,000 | 2,366,228 | ||||||||
Nippon Building Fund (Office) | 186 | 2,183,742 | ||||||||
Nippon Commercial Investment (Office) | 313 | 878,767 | ||||||||
NTT Urban Development (Office) | 991 | 1,294,330 | ||||||||
11,248,930 | ||||||||||
Luxembourg 1.0% | ||||||||||
ProLogis European Properties (Industrial) | 91,351 | 1,300,620 | ||||||||
Netherlands 3.8% | ||||||||||
Corio (Retail) | 29,300 | 2,275,486 | ||||||||
Eurocommercial Properties* (Retail) | 30,876 | 1,463,744 | ||||||||
Wereldhave (Office) | 12,786 | 1,346,254 | ||||||||
5,085,484 | ||||||||||
Norway 0.5% | ||||||||||
Norwegian Property (Office) | 156,808 | 729,711 | ||||||||
Norwegian Property (Rights)* (Office) | 154,863 | rts. | 2,432 | |||||||
732,143 | ||||||||||
Singapore 4.7% | ||||||||||
CapitaCommercial Trust (Office) | 1,604,000 | shs. | 2,244,684 | |||||||
CapitaLand (Residential) | 812,000 | 3,410,527 | ||||||||
Fortune (Retail) | 301,000 | 175,094 | ||||||||
Guocoland (Residential) | 354,356 | 564,617 | ||||||||
6,394,922 | ||||||||||
Sweden 2.1% | ||||||||||
Castellum (Diversified) | 159,146 | 1,515,857 | ||||||||
Fabege (Diversified) | 199,846 | 1,327,829 | ||||||||
2,843,686 | ||||||||||
Switzerland 0.9% | ||||||||||
PSP Swiss Property (Office) | 21,632 | 1,280,703 |
June 30, 2008
Shares | Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
United Kingdom 14.5% | ||||||||||
Big Yellow Group (Industrial) | 150,420 | $ | 857,872 | |||||||
British Land (Diversified) | 291,157 | 4,081,532 | ||||||||
Brixton (Industrial) | 220,286 | 1,053,114 | ||||||||
Capital & Regional (Retail) | 33,109 | 125,130 | ||||||||
Derwent London (Office) | 117,694 | 2,359,088 | ||||||||
Development Securities (Office) | 89,126 | 514,609 | ||||||||
Hammerson (Retail) | 220,407 | 3,895,995 | ||||||||
Land Securities Group (Diversified) | 239,275 | 5,834,834 | ||||||||
Quintain Estates & Development (Diversified) | 105,323 | 394,358 | ||||||||
Unite Group (Residential) | 125,365 | 580,096 | ||||||||
19,696,628 | ||||||||||
United States 18.4% | ||||||||||
AMB Property (Industrial) | 41,200 | 2,075,656 | ||||||||
AvalonBay Communities (Residential) | 14,500 | 1,292,820 | ||||||||
Brandywine Realty Trust (Office) | 128,000 | 2,017,280 | ||||||||
BRE Properties (Residential) | 50,000 | 2,164,000 | ||||||||
Camden Property Trust (Residential) | 19,600 | 867,496 | ||||||||
CBL & Associates Properties (Retail) | 114,000 | 2,603,760 | ||||||||
Glimcher Realty (Retail) | 150,000 | 1,677,000 | ||||||||
Host Hotels & Resorts (Hotels) | 123,200 | 1,681,680 | ||||||||
Kimco Realty (Retail) | 71,000 | 2,450,920 | ||||||||
Liberty Property Trust (Office) | 91,700 | 3,039,855 | ||||||||
Senior Housing Properties Trust (Residential) | 72,550 | �� | 1,416,901 | |||||||
Sovran Self Storage (Diversified) | 33,000 | 1,371,480 | ||||||||
Ventas (Diversified) | 25,000 | 1,064,250 | ||||||||
Vornado Realty Trust (Office) | 14,500 | 1,276,000 | ||||||||
24,999,098 | ||||||||||
Total Common Stocks and Rights (Cost $178,266,156) | 133,110,354 |
June 30, 2008
Principal Amount | Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Repurchase Agreement 0.2% | ||||||||||
Fixed Income Clearing Corporation 1.75%, dated 6/30/2008, maturing 7/1/2008, in the amount of $253,012, collateralized by: $270,000 Freddie Mac 5.625%, 11/23/2035 with a fair market value of $265,275 (Cost $253,000) | $ | 253,000 | $ | 253,000 | ||||||
Total Investments (Cost $178,519,156) 98.2% | 133,363,354 | |||||||||
Other Assets Less Liabilities 1.8% | 2,435,149 | |||||||||
Net Assets 100.0% | $ | 135,798,503 |
June 30, 2008
Assets: | ||||||
Investments, at value: | ||||||
Common stocks and rights (cost $178,266,156) | $ | 133,110,354 | ||||
Repurchase agreement (cost $253,000) | 253,000 | |||||
Total investments (cost $178,519,156) | 133,363,354 | |||||
Cash denominated in foreign currencies (cost $1,372,433) | 1,379,467 | |||||
Cash denominated in US dollars | 591 | |||||
Receivable for securities sold | 3,649,630 | |||||
Receivable for dividends and interest | 1,159,974 | |||||
Unrealized appreciation on foreign currency contracts | 186 | |||||
Other | 14,145 | |||||
Total Assets | 139,567,347 | |||||
Liabilities: | ||||||
Payable for securities purchased | 3,580,915 | |||||
Management fee payable | 118,005 | |||||
Unrealized depreciation on foreign currency contracts | 51 | |||||
Accrued expenses and other | 69,873 | |||||
Total Liabilities | 3,768,844 | |||||
Net Assets | $ | 135,798,503 | ||||
Composition of Net Assets: | ||||||
Common Stock, at $0.01 par value; (100,000,000 shares authorized; 9,214,703 shares outstanding) | 92,147 | |||||
Additional paid-in capital | 216,989,222 | |||||
Dividends in excess of net investment income | (7,888,220 | ) | ||||
Accumulated net realized loss on investments and foreign currency transactions | (28,247,996 | ) | ||||
Net unrealized depreciation of investments and foreign currency transactions | (45,146,650 | ) | ||||
Net Assets | $ | 135,798,503 | ||||
Net Asset Value Per Share | $14.74 | |||||
Market Price Per Share | $12.98 |
For the Six Months Ended June 30, 2008
Investment Income: | |||||||
Dividends (net of foreign taxes withheld of $604,013) | $ | 5,151,370 | |||||
Interest | 8,562 | ||||||
Total Investment Income | 5,159,932 | ||||||
Expenses: | |||||||
Management fee | 764,576 | ||||||
Custody and related services | 93,286 | ||||||
Stockholder account and registrar fees | 32,750 | ||||||
Stockholder reports and communications | 28,419 | ||||||
Auditing and legal fees | 23,868 | ||||||
Directors’ fees and expenses | 8,096 | ||||||
Miscellaneous | 14,097 | ||||||
Total Expenses | 965,092 | ||||||
Net Investment Income | 4,194,840 | ||||||
Net Realized and Unrealized Loss on Investments and Foreign Currency Transactions: | |||||||
Net realized loss on investments and foreign currency transactions | (11,286,172 | ) | |||||
Net change in unrealized depreciation of investments and foreign currency transactions | (17,239,254 | ) | |||||
Net Loss on Investments and Foreign Currency Transactions | (28,525,426 | ) | |||||
Decrease in Net Assets from Operations | $ | (24,330,586 | ) |
Six Months Ended 6/30/08 | | 5/30/07* to 12/31/07 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Operations: | | | ||||||||
Net investment income | $ | 4,194,840 | $ | 3,104,083 | ||||||
Net realized loss on investments and foreign currency transactions | (11,286,172 | ) | (17,389,602 | ) | ||||||
Captial gain distributions from investments | — | 889,185 | ||||||||
Net change in unrealized depreciation of investments and foreign currency transactions | (17,239,254 | ) | (27,907,396 | ) | ||||||
Decrease in Net Asset from Operations | (24,330,586 | ) | (41,303,730 | ) | ||||||
Distributions to Stockholders: | ||||||||||
Net investment income | (4,194,840 | ) | (3,104,083 | ) | ||||||
Dividends in excess of net investment income | (3,729,293 | ) | (4,710,415 | ) | ||||||
Decrease in Net Assets from Distributions | (7,924,133 | ) | (7,814,498 | ) | ||||||
Captial Share Transactions: | ||||||||||
Net proceeds from sales of shares** — 8,900,000 shares | — | 212,042,500 | ||||||||
Value of shares issued for distributions — 233,346 and 252,551 shares | 3,557,932 | 4,551,040 | ||||||||
Cost of shares purchased in open market — 91,254 and 84,140 shares | (1,448,285 | ) | (1,632,012 | ) | ||||||
Increase in Net Assets from Capital Share Transactions | 2,109,647 | 214,961,528 | ||||||||
Increase (Decrease) in Net Assets | (30,145,072 | ) | 165,843,300 | |||||||
Net Assets: | ||||||||||
Beginning of period | 165,943,575 | 100,275 | ||||||||
End of Period (net of dividends in excess of net investment income of $7,888,220 and $4,368,340, respectively) | $ | 135,798,503 | $ | 165,943,575 |
* | Commencement of operations. |
** | Offering costs of $445,000, incurred in connection with the initial offering, have been charged against the proceeds from issuance of shares. |
1. | Organization — Seligman LaSalle International Real Estate Fund, Inc. (the “Fund”) is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end non-diversified management investment company. The Fund was incorporated under the laws of the state of Maryland on March 9, 2007, and commenced operations on May 30, 2007. The Fund had no operations prior to commencement of operations other than those relating to organizational matters and on May 17, 2007, the sale and issuance to J. & W. Seligman & Co. Incorporated (the “Manager”) of 4,200 shares of Common Stock at a cost of $100,275. |
2. | Significant Accounting Policies — The financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“US”), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. These unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal recurring nature. The following summarizes the significant accounting policies of the Fund: |
a. | Security Valuation and Risk — Net asset value per share is calculated as of the close of business of the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time. Securities traded on an exchange are valued at the last sales price on the primary exchange or market on which they are traded. Securities not listed on an exchange or security market, or securities for which there is no last sales price, are valued at the mean of the most recent bid and asked prices or are valued by the Manager based on quotations provided by primary market makers in such securities. Notwithstanding these valuation methods, the Fund may adjust the value of securities as described below in order to reflect the fair value of such securities. |
60 days are valued at current market quotations until the 60th day prior to maturity and are then valued as described above for securities maturing in 60 days or less.
b. | Foreign Securities — Investments in foreign securities will be traded primarily in foreign currencies, and the Fund may temporarily hold funds in foreign currencies. The books and records of the Fund are maintained in US dollars. Foreign currency amounts are translated into US dollars on the following basis: |
(i) | market value of investment securities, other assets, and liabilities, at the daily rate of exchange as reported by a pricing service; |
(ii) | purchases and sales of investment securities, income, and expenses, at the rate of exchange prevailing on the respective dates of such transactions. |
c. | Repurchase Agreements — The Fund may enter into repurchase agreements. Generally, securities received as collateral subject to repurchase agreements are deposited with the Fund’s custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price, plus accrued interest, at all times. On a daily basis, the market value of securities held as collateral for repurchase agreements is monitored to ensure the existence of the proper level of collateral. |
d. | Forward Currency Contracts — The Fund may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, or other amounts receivable or payable in foreign currency. A forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Certain risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. The contracts are valued daily at current or forward exchange rates and any unrealized gain or loss is included in net unrealized appreciation or depreciation of investments and foreign currency transactions. The gain or loss, if any, arising from the difference between the settlement value of the forward contract and the closing of such contract, is included in net realized gain or loss on investments and foreign currency transactions. |
e. | Offering and Organizational Costs — The Manager paid the Fund’s offering expenses (other than sales load but inclusive of reimbursement of underwriter expenses of $0.005 per share) that exceeded $0.05 per share of Common Stock. The Manager also has borne all organizational costs of the Fund, in the amount of $71,260. The Fund’s share of offering costs was recorded within paid-in capital as a reduction of the proceeds from the issuance of shares of Common Stock upon the commencement of Fund operations. |
f. | Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial statement and federal income tax purposes. Interest income is recorded on an accrual basis. Dividends receivable are recorded on ex-dividend dates, except that certain dividends from foreign securities where the ex-dividend dates may have passed are recorded as soon as the Fund is informed of the dividend. Distributions received from the Fund’s investments are initially recorded as dividend income as reported by the issuers. Portions of these distributions will be appropriately recharacterized as capital gains or returns of capital based on reporting from the issuers received after the end of the year. The annual financial statements will reflect any such recharacterizations. |
g. | Distributions to Stockholders — Dividends and other distributions to stockholders are recorded on ex-dividend dates. |
h. | Taxes — There is no provision for federal income tax. The Fund intends to elect to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net gain realized. Withholding taxes on foreign dividends and interest and taxes on the sale of foreign securities have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. |
3. | Dividend Investment Plan — The Fund, in connection with its Dividend Investment Plan (the “Plan”), acquires and issues shares of its own Common Stock, as needed, to satisfy Plan requirements. For the six months ended June 30, 2008, 91,254 shares were purchased in the open market at an aggregate cost of $1,448,285, which represented a weighted average discount of 8.98% from the net asset value of those acquired shares. Shares of Common Stock repurchased to satisfy Plan requirements or in the open market are retired and no longer outstanding. A total of 233,346 shares were issued to Plan participants during the period for proceeds of $3,557,932, a weighted average discount of 8.13% from the net asset value of those shares. |
4. | Fair Value Measurements — A summary of the value of the Fund’s investments and other financial instruments as of June 30, 2008, based on the level of inputs used in accordance with SFAS 157 (Note 2a), is as follows: |
Valuation Inputs | | Investments | | Other Financial Instruments* | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Level 1 — Quoted Prices | $ | 29,538,262 | $ | 135 | ||||||
Level 2 — Other Significant Observable Inputs | 103,825,092 | — | ||||||||
Level 3 — Significant Unobservable Inputs | — | — | ||||||||
Total | $ | 133,363,354 | $ | 135 |
* | Represents foreign currency contracts, which are not reflected in the Portfolio of Investments and which are valued at the net unrealized appreciation (depreciation) on each contract (Note 8). |
5. | Management Fee and Other Transactions — The Manager manages the affairs of the Fund and provides the necessary personnel and facilities. Compensation of all officers of the Fund, all directors of the Fund who are employees of the Manager, and all personnel of the Fund and the Manager, is paid by the Manager. In respect of the Fund, the Manager receives a fee, calculated daily and payable monthly, equal to 0.98% per annum of the Fund’s average daily net assets. LaSalle Investment Management (Securities), L.P. and LaSalle Investment Management Securities B.V. (the “Subadvisers”) subadvise the Fund and are responsible for furnishing investment advice, research, and assistance with respect to the Fund’s investments. Under the subadvisory agreement, the Manager pays the Subadvisers 0.49% per annum of the Fund’s average daily net assets. (Note 11) |
6. | Purchases and Sales of Securities — Purchases and sales of portfolio securities, excluding short-term investments, for the six months ended June 30, 2008, amounted to $184,972,320 and $187,338,038, respectively. |
7. | Federal Tax Information — Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of the Fund. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the year from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. Further, the cost of investments also can differ for federal income tax purposes. |
not determined the tax basis components of net assets as of June 30, 2008 and the tax character of distributions paid during the six months ended June 30, 2008.
Gross unrealized appreciation of portfolio securities* | $ | 11,750 | ||||
Gross unrealized depreciation of portfolio securities* | (49,056,786 | ) | ||||
Net unrealized depreciation of portfolio securities* | (49,045,036 | ) | ||||
Capital loss carryforward | (6,138,672 | ) | ||||
Current period net realized loss** | (21,157,210 | ) | ||||
Total accumulated losses | $ | (76,340,918 | ) |
* | Includes the effect of foreign currency translations. |
** | Includes post-October losses of $7,846,867, from prior year. |
For the period ended December 31, 2007, all distributions to stockholders were ordinary income for tax purposes. The difference between the reporting of distributions for financial reporting purposes compared to federal income tax purposes is primarily due to the recognition of unrealized gains on passive foreign investment companies as ordinary income for tax purposes offset, in part, by the recharacterization of distributions reported to the Fund by the underlying REITs investments after the end of the year. |
8. | Outstanding Foreign Currency Contracts — At June 30, 2008, the Fund had outstanding foreign currency contracts to buy or sell foreign currencies as follows: |
Contract | | Swiss Francs | | Value US$ | | In Exchange for Euros | | Value US$ | | Settlement Date | | Unrealized Depreciation | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Bought | 38,209 | 37,453 | 23,788 | 37,402 | 7/1/08 | $ | (51 | ) | ||||||||||||||||||
Contract | | Hong Kong Dollars | | Value US$ | | In Exchange for Japanese Yen | | Value US$ | | Settlement Date | | Unrealized Appreciation | ||||||||||||||
Bought | 2,379,265 | 304,956 | 32,381,802 | 305,142 | 7/2/08 | $ | 186 |
9. | Other Matters — In late 2003, the Manager conducted an extensive internal review concerning mutual fund trading practices. The Manager’s review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by the Manager (the “Seligman Funds”); this arrangement was in the process of being closed down by the Manager before September 2003. The Manager identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, the Manager, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. The Manager also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (“NYAG”). |
10. | Recently Issued Accounting Pronouncement — In March 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 161 (“SFAS 161”), “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial position, performance and cash flows. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Fund is currently evaluating the impact of the adoption of SFAS 161 on the Fund’s financial statements and related disclosures. |
11. | Subsequent Events — On July 7, 2008, Ameriprise Financial, Inc. (“Ameriprise”) announced an agreement to acquire the Manager in a transaction that is likely to close in the fourth quarter of 2008. Under the 1940 Act, consummation of Ameriprise’s acquisition of the Manager will result in the Manager becoming a wholly-owned subsidiary of RiverSource Investments, LLC (“RiverSource”), a subsidiary of Ameriprise, and a change of control of the Manager and an assignment and automatic termination of the Fund’s management agreement with the Manager, as well as the sub-advisory agreement between the Manager and LaSalle Investment Management (Securities), L.P. On July 29, 2008, the Fund’s Board approved a new advisory agreement with RiverSource, a new administration agreement with Ameriprise, a new sub-advisory agreement with LaSalle Investment Management (Securities), L.P., and a new delegation agreement between LaSalle Investment Management (Securities), L.P. and LaSalle Investment Management Securities B.V. The new advisory, sub-advisory, and delegation agreements will be presented to the stockholders of the Fund for their approval. |
| Six Months Ended June 30, 2008 | | May 30, 2007* to December 31, 2007 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Per Share Operating Performance: | |||||||||||
Net Asset Value, Beginning of Period | $ | 18.29 | $23.88 | ** | |||||||
Income (Loss) from Investment Operations: | |||||||||||
Net investment income | 0.46 | 0.35 | |||||||||
Net realized and unrealized loss on investments and foreign currency transactions | (3.11 | ) | (4.95 | ) | |||||||
Total from Investment Operations | (2.65 | ) | (4.60 | ) | |||||||
Offering Costs | — | (0.05 | ) | ||||||||
Less Distributions: | |||||||||||
Distributions from net investment income | (0.46 | ) | (0.35 | ) | |||||||
Distributions in excess of net investment income | (0.42 | ) | (0.53 | ) | |||||||
Total Distributions | (0.88 | ) | (0.88 | ) | |||||||
Issuance of Common Stock in Distributions | (0.02 | ) | (0.06 | ) | |||||||
Net Asset Value, End of Period | $ | 14.74 | $18.29 | ||||||||
Market Value, End of Period | $ | 12.98 | $16.15 | ||||||||
Total Investment Return: | |||||||||||
Based on market price | (14.95 | )% | (32.20 | )%Ø | |||||||
Based on net asset value | (14.72 | )% | (19.61 | )% | |||||||
(continued on page 20.) |
| Six Months Ended June 30, 2008 | | May 30, 2007* to December 31, 2007 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Ratios/Supplemental Data: | ||||||||||
Net assets, end of period (000s omitted) | $ | 135,799 | $165,944 | |||||||
Ratio of expenses to average net assets | 1.24 | %† | 1.18 | %† | ||||||
Ratio of net investment income to average net assets | 5.38 | %† | 2.82 | %† | ||||||
Portfolio turnover rate | 119.33 | % | 133.75 | % |
* | Commencement of operations. |
** | Net asset value, beginning of period, of $23.875 reflects a deduction of $1.125 per share sales charge from the initial offering price of $25.00 per share. |
Ø | Based upon initial offering price of $25.00 per share on May 25, 2007. |
† | Annualized. |
![](https://capedge.com/proxy/N-CSRS/0001145443-08-002585/d23555-directors1.jpg)
![](https://capedge.com/proxy/N-CSRS/0001145443-08-002585/d23555-directors2.jpg)
1 | These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Fund’s prospectus or statement of additional information. |
END OF MID-YEAR REPORT
ITEM 2. | CODE OF ETHICS. |
| Not applicable. |
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
| Not applicable. |
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
| Not applicable. |
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
| Not applicable. |
ITEM 6. | INVESTMENTS. |
| (a) | Schedule I – Investments in securities of unaffiliated issuers. |
Included in Item 1 above.
| (b) | Not applicable. |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| Not applicable. |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| Not applicable. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(1) |
1-01-08 to 1-31-08 | 52,254 | 15.52 | 52,254 |
|
2-01-08 to 2-29-08 |
|
|
|
|
3-01-08 to 3-31-08 |
|
|
|
|
4-01-08 to 4-30-08 | 39,000 | 16.34 | 39,000 |
|
5-01-08 to 5-31-08 |
|
|
|
|
6-01-08 to 6-30-08 |
|
|
|
|
(1) | As stated in the registrant’s initial registration statement dated May 24, 2007, the registrant may purchase its shares in the open market, when the registrant is trading at a discount to net asset value, in an amount approximately sufficient to offset the growth in the number of shares of its Common Stock attributable to the reinvestment of the portion of its distributions to stockholders that relate to net investment income. |
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
| Not applicable. |
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.
(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. | EXHIBITS. |
| (a)(1) | Not applicable. |
| (a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| (a)(3) | Not applicable. |
| (b) | Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND, INC.
By: | /S/ BRIAN T. ZINO |
| Brian T. Zino |
Date: September 2, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /S/ BRIAN T. ZINO |
| Brian T. Zino |
Date: September 2, 2008
By: | /S/ LAWRENCE P. VOGEL |
| Lawrence P. Vogel |
Date: September 2, 2008
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND, INC.
EXHIBIT INDEX
| (a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| (b) | Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940. |