Earnings Release • Jul 31, 2013
Earnings Release
Open in ViewerOpens in native device viewer
Paris, July 31, 2013, 6:00 pm Press Release
Results in line with targets
Agreement between Altarea Cogedim and Allianz Real Estate to establish a long-term partnership on a portfolio of five shopping centers owned by Altarea
The €395 million injected by Allianz will allow the Group to significantly reduce its debt and build up a strong reinvestment capacity
| Consolidated revenue |
€787.6 million | +8.2% |
|---|---|---|
| FFO (Group share)1 FFO/share after dilution2 |
€69.9 million €6.4/share |
-1.3% -7.4% |
| NAV (Net asset value)3 4 NAV/share after dilution |
€1,524.6 million 137.9€/share |
+0.9% vs. end of 2012 -0.4% vs. end of 20125 |
| Loan To Value6 Published |
47.6% | -170 bps vs. end of 2012 |
The establishment of a partnership with Allianz should reduce the Group's LTV by approximately 800 additional bps (not included in the LTV released on June 30, 2013).
After review by the Supervisory Board, Management has approved the consolidated financial statements for the first half of FY2013, ended June 30, 2013. The certification report was issued by the auditors as of July 30, 2013, without provision.
1 FFO (Funds from Operations) represents the result before changes in fair value, estimated non-cash expenses and transaction costs
2 After dilution due to dividend payout in shares (672,590 additional shares compared to H1 2012)
3Diluted going-concern NAV after financial instruments and non-SIIC taxes
4 After the creation of 145,000 shares associated with the absorption of Areal, which held 15% of Bercy Village, voted at the General Meeting on June 27, 2013 and distribution of the dividend of €10/share
5 +6.6% before distribution of the dividend of €10/share
6 Before the impact of the agreement with Allianz
"In a challenging economic environment, our Group achieved sound operational and financial performance this first half, demonstrating once again the advantages of our positioning. Strong growth in retail rental income and the rebound in the office property segment, along with lower financial costs and controlled general operating expenses have helped us offset the slowdown in the residential property business. The Group share of FFO thus remains at the same level as last year in spite of asset disposals.
To achieve our long-term goals, we are continuing our efforts to adapt in each of our businesses: increasing residential volumes through institutional sales and focusing the retail property business on large assets, as well as launching a multichannel platform for retailers and controlled-risk development for offices.
Our growth strategy involves increasing our volume of activity in all businesses without raising our financial commitments. As such, the agreement with Allianz is particularly representative of the direction in which we intend to go; this long-term partnership with a major institutional player allows us to maintain control over a portfolio of strategic assets while also generating significant financial resources. The €395 million raised through this partnership will profoundly enhance the structure of our balance sheet, reconstituting an extensive investment capacity that will be utilized in the upcoming months on projects that focus on organic or external growth.
The FFO objectives assigned to the Group remain unchanged in 2013, with a slight decrease in FFO forecasted, macroeconomic factors remaining constant."
Alain Taravella, Chairman and Founder of Altarea Cogedim
| In € millions including transfer duties | Operating | Under development |
|---|---|---|
| Controlled assets1 | 3,217 | 1,530 |
| Group share | 2,780 | 958 |
| Share of minority interests | 437 | 572 |
| Minority interests | 59 | - |
| Management for third parties2 | 683 | - |
| Total assets under management | 3,959 | 1,530 |
Over the half year, consolidated net rental income came to €82.6 million (+11.8%), driven in particular by the full consolidation of Cap 3000 since the end of 2012. In France (84% of the portfolio in value terms), operational indicators remained well oriented3 and net rental income rose 3.7% on a same-floor-area basis. The Group recorded a decrease in rental income in its Italian centers.
Today, Altarea Cogedim and Allianz Real Estate signed a memorandum of understanding to establish a long-term partnership (initial term of 10 years renewable every 5 years thereafter) on a portfolio of 5 "core" retail assets held and managed by Altarea Cogedim.
This portfolio includes Bercy Village, Toulouse-Espace Gramont, Les Boutiques Gare de l'Est and Genevilliers-Espace Chanteraines, as well as the Toulon-La Valette development project, representing a total asset value of over €800 million.
Through this strategic partnership, the German insurance companies of the Allianz group will take a 49% minority stake in each of the assets, for a total investment of €395 million. Altarea Cogedim will continue to control and manage the assets, which will remain fully consolidated in the Group's financial statements 4 .
This transaction will enable Altarea Cogedim to greatly reduce its debt on favorable terms and to unlock significant financial resources in pursuit of its development. NAV at June 30, 2013 stood at a level consistent with the operation, which will be effective by the end of 2013.
1 Assets in which Altarea holds shares and over which Altarea exercises operational control
2 Assets held entirely by third parties who entrusted management to Altarea Cogedim
3 Tenant revenue: +1.1% on a same-floor-area basis, bad debt at 1.6%, occupancy cost-ratio of 9.6%
4 Including in the framework set out in IFRS 10
| 6/30/2013 | H1 2012 Change |
|
|---|---|---|
| Visitor numbers1 | 90 million | +3.4% |
| Business volume | €184 million | +3% |
| o/w High-tech | €128 million | +2% |
| o/w Galerie | €56 million | +4% |
| Average Galerie commission rate | 8.8% | Stable |
| (as % of retail sales) |
During the half year, at a time when large French e-commerce websites saw sales increase by 1%, Rue du Commerce generated €184 million in business volume, up 3%. The Galerie continues to pursue a strategy of moving upmarket, with the arrival of new brands from brick-and-mortar distribution and removal of merchants that no longer correspond to the positioning of the marketplace. The Group also highlights that following the public repurchase offer initiated in April, Rue du Commerce shares were delisted from Euronext on May 3, 2013.
| 6/30/2013 | 6/30/2012 | Change | |
|---|---|---|---|
| Reservations | €440 million | €420 million | +5% |
| Sales | €456.1 million | €451.2 million | +1% |
| Operating cash flow | €30.2 million | €45.4 million | -33% |
| Backlog2 (vs 12/31/2012) |
€1,338 million 17 months |
€1,414 million 18 months |
-5% |
| Offering and portfolio3 (vs 12/31/2012) |
€3,930 million | €4,068 million | -3% |
Reservations resumed in the first half (+9% in volume and +5% in value terms). Entry-level and mid-scale programs now represent half of sales. Revenue, which came to €456 million, was stable compared to June 2012. The decrease in operating cash flow4 is due in part to a "basis effect" (the first half of 2012 having benefitted from the contribution of operations with high returns) and in part to commercial efforts made on programs under construction.
Altarea Cogedim Entreprise reported revenue of €82.7 million (+71%) and significantly increased operating profit amounting to €7.2 million (compared to €1.8 million at June 30, 2012). In addition to demonstrated growth, a number of projects are currently in the advanced assembly phase, albeit with some uncertainties regarding their definitive time line.
1 Total number of connections to the site in H1 2013 (source: Médiamétrie//NetRating)
2 The backlog comprises revenues excluding tax from notarized sales to be recognized on a percentage-of-completion basis and individual and block reservations to be notarized
3 Properties for sale include units available for sale (expressed as revenue incl. tax), and the future offering is made up of programs at the development stage (through sales commitments, almost exclusively unilateral in nature) that have yet to be launched (expressed as revenue incl. tax)
4 Refer to the Business review for the definition
| June 30, 2013 | June 30, 2012 | ||||||
|---|---|---|---|---|---|---|---|
| In € millions | Funds from operations (FFO) |
Changes in value, estimated expenses and transaction costs |
TOTAL | Funds from operations (FFO) |
Changes in value, estimated expenses and transaction costs |
TOTAL | |
| Brick-and-mortar retail | 108.6 | 108.6 | 93.3 | 93.3 | |||
| Online retail | 138.3 | 138.3 | 132.3 | 132.3 | |||
| Residential | 456.1 | 456.1 | 451.2 | 451.2 | |||
| Offices | 84.6 | 84.6 | 51.2 | 51.2 | |||
| REVENUE | 787.6 | +8% | 787.6 | 728.0 | 728.0 | ||
| Brick-and-mortar retail | 80.0 | 69.1 | 149.1 | 70.9 | 8.7 | 79.6 | |
| Online retail | (5.9) | (3.8) | (9.7) | (4.2) | (1.8) | (6.0) | |
| Residential | 30.2 | (2.0) | 28.2 | 45.4 | (2.6) | 42.8 | |
| Offices | 7.2 | (0.3) | 6.9 | 1.8 | (0.5) | 1.3 | |
| Other | (0.3) | (1.3) | (1.6) | (0.7) | (0.3) | (1.0) | |
| OPERATING PROFIT | 111.2 | -2% | 61.8 | 173.0 | 113.2 | 3.4 | 116.7 |
| Net borrowing costs | (27.2) | (2.9) | (30.0) | (39.1) | (1.7) | (40.8) | |
| Changes in value and profit / (loss) from disposal of financial instruments |
- | 29.3 | 29.3 | - (34.5) |
(34.5) | ||
| Proceeds from the disposal of investments | - | (0.0) | (0.0) | - 0.7 |
0.7 | ||
| Income tax | (2.0) | (3.7) | (5.7) | - (13.3) |
(13.3) | ||
| NET PROFIT | 82.0 | +11% | 84.5 | 166.5 | 74.1 | (45.4) | 28.7 |
| Income attributable to equity holders of the parent |
69.9 | -1% | 65.4 | 135.4 | 70.9 | (44.7) | 26.2 |
| Average diluted number of shares (in millions) | 10.904 | 10.232 | |||||
| FFO ATTRIBUTABLE TO THE GROUP PER SHARE | €6.41 | -7% | €6.93 |
Consolidated revenue rose sharply to €787.6 million (+8%), with a positive contribution from all businesses. This trend is characterized by strong performances from brick-and-mortar (+16%) and online (+5%) retail, and by a dynamic rebound in the office property business (+65%).
Operating profit was down slightly (-2% to €111.2 million). The 33% decline in the contribution from the residential segment was offset by strong growth in retail rents and a marked turnaround for offices.
Financial expenses were down due to a reduction in net debt over the period (-€103 million), an increase in financial costs of programs under construction, and a lower average debt rate (with an average cost of debt down to 2.90% from 3.52% in 2012). The net interest cover ratio (IRC) by operating cash flow reached 4.1 compared to 3.2 in 2012.
All together, the Group share of FFO1 was down slightly (-1%) to €69.9 million. On a per-share basis, FFO declined 7%, to €6.4/share after taking account of the 732,624 shares created for the 2012 dividend payout in shares.
Net profit benefitted from a €76.6-million increase in the value of French assets, but saw a decline in the value of international assets of €14.5 million2 . It also enjoyed the positive change in value of interest rate hedging instruments (+€29.3 million) following a rise in long-term rates in the first half.
The proposed 2013 dividend payment in shares was chosen for 52.11% of the dividend, leading to the issue of 536,364 new shares and strengthening equity by €57 million. The new shares were admitted to trading on July 22, 2013.
1 Funds from operations
2 +3% for France and -3% for International
Consolidated equity increased by 3% to €1,404 million1 in spite of the cash dividend (-€109 million). The LTV ratio stood at 47.6% (vs. 49.3% at December 31, 2012) thanks to high cash flow generation, disposals carried out in the first half and increases in the value of assets.
| 6/30/2013 | Change | |
|---|---|---|
| Net debt | €2,083 million | -€103 million |
| LTV | 47.6% | -170 bps |
| ICR | 4.1x | vs. 3.2x |
| Term | 4.1 years | vs. 4.3 years |
| Average cost | 2.90% | vs. 3.52% |
Establishing a partnership with Allianz (which will be effective by the end of 2013) should lead to a reduction in LTV of approximately -800 bps.
At June 30, 2013, Altarea Cogedim's going-concern NAV amounted to €1,524.6 million, up slightly (+0.9%) from December 31, 2012. On a per-share basis, NAV came to €137.9, stable compared to December 31, 2012 (-0.4%) in spite of the €103 dividend detachment.
This press release is accompanied by a PowerPoint presentation available for download on the Financial Information page of Altarea Cogedim's website.
Listed on Compartment A of NYSE Euronext Paris (SRD Long Only), Altarea Cogedim is a leading property group. As both a retail REIT and developer, it operates in all three classes of property assets: retail, residential and offices. It has the required know-how in each sector to design, develop, commercialize and manage made-tomeasure property products. By acquiring Rue du Commerce, a leader in e-commerce in France, Altarea Cogedim became the first multi-channel property company.
Altarea Cogedim had a shopping center portfolio of €3.2 billion, with a market capitalization of approximately €1.4 billion end of June 2013.
1 O/w group share €1,072 million and minority interests share €332 million
2 At June 30, 2013, Group NAV reflected the partnership agreement signed with Allianz
3 Excluding the distribution of a €10 dividend, NAV per share increased by 6.6%
Eric Dumas, Chief Financial Officer [email protected], tel: + 33 1 44 95 51 42
Nathalie Bardin, Communication Director nbardin@altareacogedim, tel: +33 1 56 26 25 36
Agnès Villeret, Analyst and Investor Relations [email protected], tel: + 33 1 53 32 78 95
Nicolas Castex, Press relations [email protected], tel: + 33 1 53 32 78 88
This press release does not constitute an offer to sell or solicitation of an offer to purchase Altarea shares. For more detailed information concerning Altarea, please refer to the documents available on our website: www.altareacogedim.com.
This press release may contain declarations in the nature of forecasts. While the Company believes such declarations are based on reasonable assumptions at the date of publication of this document, they are by nature subject to risks and uncertainties which may lead to differences between real figures and those indicated or inferred from such declarations.
Altarea Cogedim is the first retail REIT to develop a global multi -channel business model. One of the largest shopping center owners and developers in France, managing a €4 -billion asset portfolio, the Group is also a leading French e -retailer thanks to its brand Rue du Commerce, whose online business volume came to €423 million in 2012.
With its unique offering combining traditional and web -based retail, Altarea Cogedim confirms its position as a pioneer in multi -channel retail, establishing itself as the only retail REIT to provide customers and retailers with overall solutions by offering them both brick -and -mortar and online retail space.
Consumer trends are in the midst of a profound transformation as a result of somber economic conditions, as well as the clear generalization of online shopping. The emergence of new mobile devices (smartphones and computer tablets) has intensified this development. As such:
1Source: Le cercle des épargnants. 2 Source: Fevad Review of e-commerce in 2012.
KEY FIGURES AT JUNE 30, 2013
| Operating | Under development | |||||
|---|---|---|---|---|---|---|
| June 30, 2013 | GLA m² | Current gross rental income1 In € millions |
Appraisal value2 In € millions |
GLA m² | Provisional gross rental income In € millions |
Net investments3 In € millions |
| Controlled assets4 | 748,689 | 190.2 | 3,217 | 435,100 | 137.6 | 1,530 |
| Group share | 650,638 | 164.7 | 2,780 | 268,120 | 87.4 | 958 |
| Share of minority interests | 98,051 | 25.6 | 437 | 166,980 | 50.2 | 572 |
| Minority interests | 22,538 | 6.8 | 59 | - | - | - |
| Management for third parties5 | 211,600 | 41.8 | 683 | - | - | - |
| Total assets under management | 982,828 | 238.8 | 3,959 | 435,100 | 137.6 | 1,530 |
Net rental income (IFRS) came to €82.6 at June 30, 2013, up 11.8% compared to 2012. This increase is due in particular to the Group's having taken a controlling interest in Cap 3000.
By source, the growth in net rental income breaks down as follows:
| In € | ||
|---|---|---|
| millions | ||
| Net rental income June 2012 | 73.9 | |
| Centers opened | 2.7 | +3.7% |
| Disposals | (4.4) | -5.9% |
| Acquisitions | - | - |
| Controlling interest in Cap 3000 | 11.3 | +15.2% |
| Redevelopments | (0.8) | -1.1% |
| Like-for-like change France | 2.1 | +2.9% |
| Like-for-like change International | (2.3) | -3.1% |
| Total change in net rental | ||
| income | 8.7 | +11.8% |
| Net rental income June 2013 | 82.6 | |
H1 2013 saw the opening of the Costières Family Village in Nîmes. The center features a surface area of 296,000 ft² (27,500 m²) and hosts retailers such as Décathlon, Boulanger, Kiabi and La Grande Récré.
This new center, along with those delivered in 2012 (particularly the eastern extension of the Gramont regional shopping center in Toulouse), provided additional net rental income of €2.7 million.
One asset was sold in H1 2013 for €118 million:
This disposal, together with those carried out in 2012, resulted in a €4.4 million drop in net rental income in H1 2013.
Following transactions carried out in 2012, resulting in the Group taking control of the center; Cap 3000 is now fully consolidated in the Group's financial statements with an impact on rental income as of January 1, 2013 (+€11.3 million).
The impact of redevelopments primarily concerns three centers:
Massy, whose surfaces are gradually being vacated in preparation for future redevelopment work for which regional authorization has been granted;
Aubergenville, for which the redevelopment plan has been revised to include an outlet shopping center;
Casale Montferrato in Italy, where a project to create mid-sized stores is underway, making it necessary to reorganize the center's operation.
1 Rental values of leases signed at July 1st , 2013.
2 Including transfer costs.
3 Including interest expenses and internal costs.
4 Assets in which Altarea holds shares and for which Altarea exercises operational control.
5 Assets held entirely by third parties who entrusted Altarea with a management mandate for an initial period of three to five years, renewable annually.
| Change | % | |
|---|---|---|
| France (84% of the portfolio in value terms) +€2.1 mil. | +3.7% | |
| International (16% of the portfolio) | -€2.3 mil. | -14.2% |
| Total portfolio | -€0.2 mil. | -0.2% |
In France, rental income rose 3.7% like-for-like, and was characterized by the positive performance of downtown assets.
For the international portfolio2 , a significant portion of the decline in net rental income stemmed from the departure of a defaulting tenant from the Le Due Torri shopping center (-€0.9 million). This departure led to a repositioning of the vacated premises, half of which have since been re-let.
The remainder of the drop was due to a rise in the financial vacancy rate resulting from a more diligent selection of financially sound operators, as well as a 34% increase in the Italian land tax (IMU)3 that entered into force in 2012.
Merchant sales and footfall
| Data at 100% | Sales (incl. tax)4 |
Footfall5 |
|---|---|---|
| Total shopping centers | +1.1% | +0.8% |
| CNCC index | -1.5% | -2.4% |
Occupancy cost ratio6 , bad debt ratio7 and financial vacancy rate8
| H1 2013 | 2012 | 2011 | |
|---|---|---|---|
| Occupancy cost ratio | 9.6% | 10.1% | 9.6% |
| Bad debts ratio | 1.6% | 1.5% | 1.6% |
| Financial vacancy rate | 3.9% | 2.8% | 3.9% |
The positive trend in operational indicators reflects the enhanced quality of the Group's portfolio, made up primarily of large shopping centers with a dominant position in their catchment area.
| Number of leases |
New rent | Old rent | Change | |
|---|---|---|---|---|
| Letting | 40 | €4.2 mil. | - | n/a |
| Lease renewals / Re-lettings |
38 | €4.4 mil. | €4.2 mil. | +5% |
| H1 2013 Total | 78 | €8.5 mil. | €4.2 mil. | n/a |
| In € millions at 100% |
By lease expiry date |
% of total |
By three-year termination option |
% of total |
|---|---|---|---|---|
| Past | 11.7 | 5.9% | 15.4 | 7.8% |
| years | ||||
| 2013 | 4.2 | 2.1% | 5.3 | 2.7% |
| 2014 | 15.1 | 7.7% | 53.7 | 27.2% |
| 2015 | 7.6 | 3.9% | 35.3 | 17.9% |
| 2016 | 8.4 | 4.3% | 42.3 | 21.5% |
| 2017 | 21.6 | 11.0% | 11.0 | 5.6% |
| 2018 | 27.7 | 14.1% | 12.7 | 6.5% |
| 2019 | 17.3 | 8.8% | 4.0 | 2.1% |
| 2020 | 29.0 | 14.7% | 4.8 | 2.4% |
| 2021 | 21.5 | 10.9% | 9.8 | 5.0% |
| 2022 | 20.4 | 10.4% | 0.4 | 0.2% |
| 2023 | 6.0 | 3.1% | 0.8 | 0.4% |
| > 2023 | 6.4 | 3.2% | 1.5 | 0.8% |
| Total | 197.0 | 100% | 197.0 | 100% |
Over the past few years, the Group has significantly developed its management business for third parties. This management concerns both:
| In € millions | H1 2013 | H1 2012 | H1 2011 |
|---|---|---|---|
| External services | 9.5 | 9.0 | 6.1 |
| Change (%) | +5% | +48% | - |
Compared to 2012, the full consolidation of Cap 3000 has led to restating 100% of the €2.5 million management fees in the H1 2013 audited accounts. These fees were previously partially restated, based on proportional consolidation.
1Excluding impact of openings, acquisitions, disposals and redevelopments.
2Six Italian assets, mostly located in Northern Italy, and one Spanish asset located in Barcelona.
3 Imposta Municipale Unica (Municipal property tax)
4Change in total revenue for shopping center tenants on a "same-floor area basis" over the first five months of the year. 5Shopping centers equipped with the Quantaflow system.
6Calculated as rent and expenses charged to tenants (incl. taxes) over the past 12 months (including rent reductions), in proportion to sales over the same period (incl. taxes) at 100% in France.
7Net amount of allocations to and reversals of provisions for bad debt plus any write-offs during the period as a percentage of total rent and expenses charged to tenants, at 100% in France.
8Estimated rental value (ERV) of vacant lots as a percentage of total estimated rental value, excluding property being redeveloped.
9 Perimeter at 100%
| Asset format (in € millions) |
H1 2013 | 2012 | Change | |
|---|---|---|---|---|
| Aver. value | €77 million | €79 million | -2% | |
| France | # of assets | 35 | 34 | +3% |
| Internati | Aver. value | €75 million | €77 million | -3% |
| onal | # of assets | 7 | 7 | − |
| Asset format (in € millions) |
H1 2013 | 2012 | Change | ||
|---|---|---|---|---|---|
| Regional shopping centers |
1,678 | 52% | 1,742 | 54% | -2 pts |
| Large Retail Parks (Family V.) |
767 | 24% | 697 | 22% | +2 pts |
| Nearby / downtown | 772 | 24% | 777 | 24% | − |
| TOTAL | 3,217 | 100% | 3,216 100% |
| Geographical distribution (in € millions) |
H1 2013 | 2012 | ||||
|---|---|---|---|---|---|---|
| Paris Region | 940 | 29% | 1,039 | 32% | -3 pts | |
| PACA / Rhône Alpes / South |
1,338 | 42% | 1,221 | 38% | + 4 pts | |
| Other French regions |
417 | 13% | 418 | 13% | − | |
| International | 522 | 16% | 538 | 17% | -1pt | |
| TOTAL | 3,217 | 100% | 3,216 100% |
Over the half year, Altarea acquired the 15% stake held by the minority shareholder in SCI Bercy Village. The acquisition was carried out by way of absorption of Areal (the company holding the 15% stake) in return for issuance of 145,000 Altarea shares2 .
At June 30, 2013, the value of Group-controlled assets stood at €3.217 billion, stable compared to the level at December 13, 2012, with disposals offset by openings and changes in value like-for-like.
| In € millions | Gross rental income |
Value |
|---|---|---|
| TOTAL at Dec. 31, 2012 | 197.9 | 3,216 |
| Centers opened Acquisitions |
4.0 - |
64 - |
| Disposals Like-for-like change |
(7.9) (3.7) |
(118) 55 |
| Sub-total | (7.6) | (1) |
| TOTAL at June 30, 2013 | 190.2 | 3,217 |
| o/w Group share | 164.7 | 2,780 |
| o/w share of minority interests |
25.6 | 437 |
1 Assets controlled by the Group, in value terms including transfer duties.
| Like-for-like change | In € millions | % |
|---|---|---|
| France | 71 | +2.8% |
| International | (16) | -3.0% |
| TOTAL | 55 | +1.8% |
The average capitalization rate declined from 6.20% to 6.09% (-11 basis points).
| Average net capitalization rate at 100% |
H1 2013 | 2012 |
|---|---|---|
| France | 5.97% | 6.10% |
| International | 6.72% | 6.70% |
| TOTAL portfolio | 6.09% | 6.20% |
Asset valuation for Altarea Cogedim group is entrusted to DTZ and CBRE. These appraisers use two methods:
Rental income takes into account:
The normative vacancy rate,
The impact of future rental gains resulting from the letting of vacant premises,
These valuations are conducted in accordance with the criteria set out in the Red Book – Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors in May 2003. The surveyors' assignments were all carried out in
2 June 27, 2013 General Meeting (Areal owned no asset aside from its stake in Bercy Village).
3 The capitalization rate is the net rental yield relative to the appraisal value excluding transfer duties.
accordance with the recommendations of the COB/CNC "Barthes de Ruyter working group" and comply fully with the instructions of the Appraisal Charter of Real Estate Valuation (Charte de l'Expertise en Evaluation Immobilière) updated in 2012. Surveyors are paid lump-sum compensation determined in advance and based on the size and complexity of the appraised properties. Compensation is therefore totally independent of the results of the valuation assessment.
The value of the portfolio by appraiser breaks down as follows:
| Expert | Assets | % of value incl. transfer duties |
|---|---|---|
| CBRE | France | 31% |
| DTZ | France & International | 69% |
At June 30, 2013, the volume of projects under development by Altarea Cogedim represented a forecast net investment1 of approximately €958 million on a Group share basis, for potential rental income of €87.4 million, i.e., a forecast gross return on investment of 9.1%.
| June 30, 2013 | GLA m² | Forecast GRI, in € millions |
Invest ment, in € millions |
Forecast return |
|---|---|---|---|---|
| At 100% | ||||
| Retail Parks & Family V. | 84,800 | 12.5 | 144 | 8.7% |
| Shopping centers | 350,300 | 125.1 | 1,386 | 9.0% |
| Total | 435,100 | 137.6 | 1,530 | 9.0% |
| o/w redevelopments/ extensions |
58,500 | 40.0 | 393 | 10.2% |
| o/w creations | 376,600 | 97.6 | 1,137 | 8.6% |
| Group share | ||||
| Retail Parks & Family V. | 55,600 | 8.8 | 100 | 8.7% |
| Shopping centers | 212,520 | 78.6 | 858 | 9.2% |
| Total | 268,120 | 87.4 | 958 | 9.1% |
| o/w redevelopments/ extensions |
44,620 | 28.3 | 290 | 9.8% |
| o/w creations | 223,500 | 59.1 | 668 | 8.8% |
Altarea Cogedim only reports on projects that are underway or at the development stage.2 This pipeline does not include identified projects on which development teams are currently in talks or carrying out advanced studies.
Given the Group's cautious criteria, the decision to commence work is only made once a sufficient level of pre-letting has been reached. The majority
of pipeline projects are slated for delivery between 2014 and 2016.
At June 30, 2013, the level of commitments for these projects came to 28% (€264 million) on a Group-share basis.
| In € millions (net) | At 100% | Group share |
|---|---|---|
| Paid out | 328 | 218 |
| Committed, not yet paid out | 84 | 47 |
| Total commitments | 412 | 265 |
Over the first six months, Altarea Cogedim invested3 €63 million on a Group share basis in its project portfolio.
These investments mainly concern the shopping center under development in Villeneuve-la-Garenne and the Nîmes Costières Family Village, which was delivered during the first half, as well as properties undergoing redevelopment and/or extension (Toulouse, Cap 3000, Bercy and Massy).
The Group has received definitive authorization from the département of Alpes-Maritimes to proceed with its refurbishment and extension project for the Cap 3000 shopping center. This project will add 376,750 ft² (35,000 m²) GLA to the center.
Altarea Cogedim has signed an agreement with Caisse des Dépôts to create a 350,000 ft² (32,500 m²) retail hub on Boulevard Macdonald in Paris. This 50 / 50 program is part of a vast initiative to transform Entrepôt Macdonald, located in the heart of the Major Urban Renewal Project for North-East Paris.
For other projects under development, authorizations are moving ahead as forecast in operational time lines.
1 Including interest expenses and internal costs.
2 Projects underway: properties under construction.
Projects under development: projects either fully or partly authorized, where the land has been acquired or for which contracts have been exchanged, but on which construction has not yet begun.
3 Change in non-current assets net of changes in amounts payable to suppliers of non-current assets.
| In € millions | June 30, 2013 |
June 30, 2012 |
|
|---|---|---|---|
| Rental income | 90.9 | 80.3 | |
| Net rental income | 82.6 +12% | 73.9 | |
| % of rental revenues | 90.8% | 92.0% | |
| External services | 9.5 | +5% | 9.0 |
| Production capitalized and held in inventory |
8.9 | 8.0 | |
| Operating expenses | (26.2) | +6% | (24.7) |
| Net overhead expenses | (7.8) | (7.6) | |
| Share of affiliates1 | 5.3 | 4.6 | |
| Operating cash flow | 80.0 +13% | 70.9 | |
| % of rental revenues | 88.1% | 88.3% |
Operating cash flow is up substantially compared to June 30, 2012, particularly thanks to the controlling interest taken in Cap 3000.
1Companies consolidated using the equity method (Gare du Nord, SEMMARIS-Rungis).
| o/w Altarea share | Third-party share | ||||||
|---|---|---|---|---|---|---|---|
| Surface | GRI (in € | Value | Value | Value | |||
| Center | area (m²) |
millions)1 | (in € millions)2 |
Share | (in € millions)2 |
Share | (in € millions)2 |
| Toulouse Occitania | 56,200 | 100% | - | ||||
| Paris - Bercy Village | 22,824 | 100% | - | ||||
| Gare de l'Est | 5,500 | 100% | - | ||||
| CAP 3000 | 64,500 | 62% | 38% | ||||
| Thiais Village | 22,324 | 100% | - | ||||
| Carré de Soie | 60,800 | 50% | 50% | ||||
| Massy | 18,200 | 100% | - | ||||
| Lille - Les Tanneurs & Grand' Place | 25,480 | 100% | - | ||||
| Aix en Provence | 3,729 | 100% | - | ||||
| Nantes - Espace Océan | 11,200 | 100% | - | ||||
| Mulhouse - Porte Jeune | 14,769 | 65% | 35% | ||||
| Strasbourg - L'Aubette & Aub. Tourisme | 8,400 | 65% | 35% | ||||
| Strasbourg-La Vigie | 16,232 | 59% | 41% | ||||
| Flins | 9,700 | 100% | - | ||||
| Toulon - Grand' Var | 6,336 | 100% | - | ||||
| Chalon Sur Saone | 4,001 | 100% | - | ||||
| Montgeron - Valdoly | 5,600 | 100% | - | ||||
| Toulon - Ollioules | 3,185 | 100% | - | ||||
| Tourcoing - Espace Saint Christophe | 13,000 | 65% | 35% | ||||
| Okabé | 15,077 | 65% | 35% | ||||
| Villeparisis | 18,623 | 100% | - | ||||
| Herblay - XIV Avenue | 14,200 | 100% | - | ||||
| Pierrelaye (RP) | 9,750 | 100% | - | ||||
| Gennevilliers (RP) | 18,863 | 100% | - | ||||
| Family Village Le Mans Ruaudin (RP) | 23,800 | 100% | - | ||||
| Family Village Aubergenville (RP) | 38,620 | 100% | - | ||||
| Brest - Guipavas (RP) | 28,000 | 100% | - | ||||
| Limoges (RP) | 28,000 | 75% | 25% | ||||
| Nimes (RP) | 27,500 | 100% | - | ||||
| Various shopping centers (6 assets) | 34,170 | n/a | n/a | ||||
| Sub-total France | 628,582 | 155.2 | 2,694 | 2,258 | 437 | ||
| Barcelona - San Cugat | 20,488 | 100% | - | ||||
| Bellinzago | 21,069 | 100% | - | ||||
| Le Due Torri | 33,691 | 100% | - | ||||
| Pinerolo | 8,106 | 100% | - | ||||
| Rome-Casetta Mattei | 15,301 | 100% | - | ||||
| Ragusa | 13,060 | 100% | - | ||||
| Casale Montferrato | 8,392 | 100% | - | ||||
| Sub-total International | 120107 | 35.1 | 522 | 522 | - | ||
| Controlled assets | 748,689 | 190.2 | 3,217 | 2,780 | 437 | ||
| Paris – Les Boutiques Gare du Nord | 3,750 | 40% | 60% | ||||
| Roubaix - Espace Grand' Rue | 13,538 | 33% | 67% | ||||
| Châlons - Hôtel de Ville | 5,250 | 40% | 60% | ||||
| Minority interests | 22,538 | 6.8 | 59 | 22 | 37 | ||
| Ville du Bois | 43,000 | - | 100% | ||||
| Pau Quartier Libre | 33,000 | - | 100% | ||||
| Brest Jean Jaurès | 12,800 | - | 100% | ||||
| Brest - Coatar Gueven | 13,000 | - | 100% | ||||
| Thionville | 8,600 | - | 100% | ||||
| Bordeaux - Grand' Tour | 11,200 | - | 100% | ||||
| Vichy | 13,794 | - | 100% | ||||
| Reims - Espace d'Erlon | 12,000 | - | 100% | ||||
| Toulouse Saint Georges | 14,500 | - | 100% | ||||
| Chambourcy (RP) | 33,500 | - | 100% | ||||
| Bordeaux – St. Eulalie (RP) | 13,400 | - | 100% | ||||
| Toulon Grand Ciel (RP) | 2,800 | - | 100% | ||||
| Assets managed for third parties | 211,600 | 41.8 | 683 | - | 683 | ||
| Total assets under management | 982,828 | 238.8 | 3,959 | 2,802 | 1,157 | ||
| (RP) Retail park |
1 Rental value on signed leases at July 1, 2013.
2 Including transfer duties.
BREAKDOWN OF SHOPPING CENTERS UNDER DEVELOPMENT AT JUNE 30, 2013
| At 100% |
Group share |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| Center | Creation/ Redev./ Extension |
GLA created (m²) |
GRI (in € millions) |
Net invest. 1 (in € millions) |
Return | GLA created (m²) |
GRI (in € millions) |
Net invest.1 (in € millions) |
Return |
| Family Village Le Mans 2 | Creation | 16,200 | 16,200 | ||||||
| Family Village Aubergenville 2 | Extension | 10,200 | 10,200 | ||||||
| Family Village Roncq | Creation | 58,400 | 29,200 | ||||||
| Retail Parks | 84,800 | 12.5 | 144 | 8.7% | 55,600 | 8.8 | 100 | 8.7% | |
| Villeneuve-la-Garenne | Creation | 63,300 | 31,650 | ||||||
| La Valette du Var | Creation | 38,300 | 38,300 | ||||||
| Massy -X% | Redev./Extensions | 7,400 | 7,400 | ||||||
| Coeur d'Orly | Creation | 123,000 | 30,750 | ||||||
| Cap 3000 | Redev./Extensions | 29,900 | 18,470 | ||||||
| Aix extension | Extension | 4,900 | 2,450 | ||||||
| Chartres | Creation | 40,500 | 40,500 | ||||||
| Shopping centers France | 307,300 | 109.0 | 1,218 | 8.9% 169,520 | 62.4 | 690 | 9.1% | ||
| Ponte Parodi (Genoa) | Creation | 36,900 | 36,900 | ||||||
| Le Due Torri (Lombardy) | Extension | 6,100 | 6,100 | ||||||
| Shopping centers International | 43,000 | 16.2 | 168 | 9.6% | 43,000 | 16.2 | 168 | 9.6% | |
| Total at June 30, 2013 | 435,100 | 137.6 | 1,530 | 9.0% 268,120 | 87.4 | 958 | 9.1% | ||
| o/w Redev./Extensions | 58,500 | 44,620 | |||||||
| o/w Assets creation | 376,600 | 223,500 |
1 Including interest expenses and internal costs.
In H1 2013, e-commerce in France continued to record growth of 14%1 , driven mainly by new site creation. General merchandise websites reported a +1% like-for-like increase in sales2 .
RueduCommerce.com visitor numbers are still on the rise, with 90 million visits3 over the half year and an increase of 3.4%, exceeding that of the Top 10 pure-play general merchandise sites (+2.2%4 ).
Among RueduCommerce.com visitors, the proportion of mobile users exhibited consistent growth, reaching 10% of overall traffic in 2013.
Rue du Commerce further maintained its position as a leading site, ranking among the Top 10 general e-retailer sites in France5 and moving up one position since December 31, 2012.
| General retailer sites | Average UV per month in H1 2013 (in thousands) |
|
|---|---|---|
| 1 | Amazon | 14,458 |
| 2 | Cdiscount | 10,352 |
| 3 | Fnac | 8,827 |
| 4 | PriceMinister | 7,368 |
| 5 | La Redoute | 7,351 |
| 6 | Carrefour | 6,397 |
| 7 | RueduCommerce.com | 5,627 |
| 8 | Vente-privée.com | 5,416 |
| 9 | Darty | 4,153 |
| 10 | 3 Suisses | 3,832 |
In the first half of 2013, the site recorded €184 million in business volume (70% for distribution of own products and 30% for the Galerie Marchande). The number of orders came to 1.1 million, for an average basket of approximately €195.
| In € millions | H1 2013 | H1 2012 Change | |
|---|---|---|---|
| Own-brand distribution | 128.0 | 125.9 | +2% |
| Galerie merchants' sales6 "3x" products |
55.9 4.7 |
53.4 1.7 |
+4% |
| Business volume | 183.8 | 179.3 | +3% |
| Galerie Marchande | 4.5 | 4.6 | -1% |
| Commissions | |||
| Commission rate | 8.8% | 8.9% |
| In € millions | June 30, 2013 |
June 30, 2012 |
|
|---|---|---|---|
| Distribution revenues Purchases consumed and other |
133.8 +5% (123.7) |
127.7 (118.1) |
|
| Gross margin | 10.0 +4% | 9.6 | |
| % of revenues | 7.5% | 7.5% | |
| Galerie Marchande commissions |
4.5 -1% | 4.6 | |
| Net overhead expenses | (20.5) | (18.4) | |
| Operating cash flow | (5.9) | (4.2) | |
| % of revenues | -4.4% | 3.3% |
A number of investments – technical (site, mobile application, etc.), marketing and human (recruitment of experts) – were carried out for Rue du Commerce in H1 2013 to speed its development, particularly through growth of the Galerie Marchande.
These investments had a negative short-term impact on operating cash flow in the first half 2013.
1 Journal du Net, January-May 2013 average.
2 FEVAD iCE 100 survey (like-for-like growth of leading sites).
3 Total number of connections to the site, Xiti data.
4 Médiamétrie//NetRating data, January-May 2013 average. 5Médiamétrie//NetRating ranking according to the number of unique visitors per month (i.e., internet users having visited the site at least once over a one-month period) from January to May 2013.
6 Including business volume for products paid in three installments ("3x") (later recorded as Distribution revenue).
2. Residential
The beginning of 2013 recorded a slight 2.6% drop in new residential property sales1 compared to the same period in 2012. This change primarily reflects a decline in sales to private investors due to the elimination of the Scellier tax benefit as of early 2013 and the tepid start of the Duflot scheme.
As a result of this downward trend, observed since 2011, the volume of new housing construction came to 300,0002 homes over the past 12 months, far from the proactive goal of 500,000 new homes per year.
To close this gap and reverse the trend, the government has implemented several structural measures aiming to reduce procedural time lines, simplify technical standards, facilitate construction in high-need areas through exemptions from urban planning regulations, etc.
Furthermore, the government should soon lay the groundwork for a major project intended to attract institutional investors back to new residential property. Investors would have incentives to finance intermediate housing, which is the most suitable category for households, and especially for the middle class. These incentives would take the form of a reduction in VAT to 10%.
Otherwise, fundamentals remain solid: there is a shortage of nearly 1 million new homes compared to demand, interest rates have been maintained at attractive levels and real estate is the most soughtafter savings product in France.
Altarea Cogedim provides solutions tailored to the market. It is resolutely oriented towards entry-level and midscale products, while always remaining true to its principle of quality.
The high-end range is defined by its upscale positioning in terms of architecture, quality and location. This range offers housing priced at over €5,000/m² in the Paris Region and over €3,600/m² outside of Paris, and includes truly exceptional programs.
The midscale and entry-level ranges offer housing that upholds Cogedim's quality standards. The programs in these ranges are specifically designed to:
Altarea Cogedim is also developing a broad range of serviced residences with numerous benefits: advantageous Censi-Bouvard and LMNP tax benefits, high profitability and little exposure to economic cycles.
Group reservations in H1 2013 amounted to €440 million (incl. tax), up 5% compared to H1 2012.
| H1 2013 | H1 2012 | Change | |
|---|---|---|---|
| Individual reservations | €342 mil. | €328 mil. | +4% |
| Block reservations | €98 mil. | €92 mil. | +7% |
| TOTAL IN VALUE | |||
| TERMS | €440 mil. | €420 mil. | +5% |
| Individual reservations | 1,152 lots | 976 lots | +18% |
| Block reservations | 351 lots | 408 lots | -14% |
| TOTAL IN NUMBER | |||
| OF LOTS | 1,503 lots | 1,384 lots | +9% |
| Individual reservations (in € millions incl. tax) |
Entry-level and Midscale |
High end |
Serviced residenc es |
Total | % by region |
|---|---|---|---|---|---|
| Paris Region | 100 | 83 | 16 | 199 | 58% |
| Other French regions |
67 | 52 | 24 | 143 | 42% |
| TOTAL | 167 | 135 | 40 | 342 | 100% |
| % by range | 49% | 39% | 12% | ||
| H1 2012 | 134 | 161 | 33 | 328 | +4% |
| % by range | 41% | 49% | 10% |
In terms of number of lots, Group reservations in H1 2013 amounted to 1,503 lots4 , a 9% increase compared to H1 2012.
1 Source: May 2013 figures and statistics – French Commission for Sustainable Development.
2 Source: May 2013 figures and statistics – French Commission for Sustainable Development.
3 Reservations net of cancellations.
4Consolidated share.
Sales notarized during H1 2013 amounted to €363 million (incl. tax), compared to €372 million in H1 2012.
| In € millions (incl. tax) |
Entry-level and Midscale |
High end |
Serviced residenc es |
Total | % by region |
|---|---|---|---|---|---|
| Paris Region | 126 | 62 | 6 | 194 | 53% |
| Other French regions |
76 | 71 | 22 | 169 | 47% |
| TOTAL | 202 | 133 | 28 | 363 | 100% |
| % by range | 56% | 37% | 8% | ||
| H1 2012 | 372 | ||||
| Change | -3% |
More than 60% of stock of non-notarized reservations concerns developments for which land has not yet been acquired. This reflects the cautious criteria implemented by the Group, which only acquires land once sales are guaranteed.
H1 2013 sales came to €456 million, stable compared to H1 2012.
| In € millions (incl. tax) |
Entry-level and Midscale |
High end |
Serviced residenc es |
Total | % by region |
|---|---|---|---|---|---|
| Paris Region | 79 | 184 | 7 | 270 | 59% |
| Other French regions |
94 | 81 | 10 | 186 | 41% |
| TOTAL | 173 | 265 | 17 | 456 | 100% |
| % by range | 38% | 58% | 4% | ||
| H1 2012 | 451 | ||||
| Change | +1% |
| In € millions | June 30, 2013 |
June 30, 2012 |
|
|---|---|---|---|
| Sales | 455.9 | +1% | 450.9 |
| Cost of sales | (404.4) | (391.8) | |
| Net property income | 51.5 | -13% | 59.1 |
| % of revenues | 11.3% | 13.1% | |
| External fees | 0.2 | 0.3 | |
| Production held in | |||
| inventory | 23.7 | 26.3 | |
| Net overhead expenses | (45.2) | (40.2) | |
| Other | 0.1 | (0.1) | |
| Operating cash flow | 30.2 | -33% | 45.4 |
| % of revenues | 6.6% | 10.1% |
1 Revenues recognized according to the percentage-ofcompletion method in accordance with IFRS standards. The percentage of completion is calculated according to the stage of construction not including land.
H1 2013 net property income came to 11.3% vs. 13.1% in H1 2012. This change primarily reflects high-income programs completed in 2012, as well as efforts made in H1 2013 to reduce sales prices and increase advertising budgets.
At the end of June 2013, the residential backlog3 amounted to €1.338 billion, equal to 17 months of business. This level provides excellent visibility as to the Group's future results.
| In € millions (incl. tax) |
Notarized revenues not recognized |
Sales reserved but not notarized |
Total | % by region |
Number of months |
|---|---|---|---|---|---|
| Paris Region |
492 | 363 | 855 | 64% | |
| Other French regions |
293 | 189 | 483 | 36% | |
| TOTAL | 785 | 552 | 1,338 | 100% | 17 |
| Repartition | 59% | 41% | |||
| 2012 Change |
928 | 486 | 1,414 -5% |
18 |
BREAKDOWN OF PROPERTIES FOR SALE4 AT JUNE 30, 2013 (€796 MILLION INCL. TAX) BY STAGE OF COMPLETION
| - | + | |||
|---|---|---|---|---|
| Operating phases | Preparation (land not acquired) |
Land acquired/ project not yet started |
Land acquired/ project in progress |
Stock of completed residential properties |
| Expenses incurred (in € millions excl. tax) |
35 | 14 | ||
| Cost price of properties for sale In € millions (excl. tax) |
238 | 2 | ||
| Property for sale (€796 million incl. tax) |
462 | 21 | 309 | 3 |
| % | 58% | 3% | 39% | ns |
| O/w delivered |
in 2013 in 2014 in 2015 |
€32 mil. €106 mil. €107 mil. |
Properties for sale at June 30, 2013 break down as follows:
2 Net property income is calculated after interest, after marketing and advertising fees and expenses.
3 The backlog comprises revenues excluding tax from notarized sales to be recognized on a percentage-of-completion basis and individual and block reservations to be notarized.
4 Properties for sale include lots available for sale and are expressed as revenue including tax.
committed correspond primarily to research and advertising costs and land order fees (or guarantees) paid upon the signature of preliminary land sales agreements with the possibility of retraction (mainly unilateral agreements).
This breakdown of developments by stage of completion reflects the cautious criteria implemented by the Group:
In the current economic climate, particular attention is paid to the launch of new programs, which is carried out according to the level and rhythm at which properties for sale are absorbed. This policy guarantees prudent management of the Group's commitments.
| In € millions (incl. tax) |
< 1 year |
> 1 year |
H1 2013 Total |
Number of months |
2012 |
|---|---|---|---|---|---|
| Property for | 796 | 796 | 11 | 611 | |
| sale Future offering |
1,793 1,342 | 3,134 | 43 | 3,457 | |
| TOTAL Pipeline |
2,589 1,342 | 3,930 | 54 | 4,068 | |
| 2012 Change |
0% | 2,578 1,490 -10% |
4,068 -3% |
57 |
The residential pipeline (properties for sale + property portfolio) comprises the following:
1 The future offering is made up of programs at the development stage (through sales commitments, almost exclusively unilateral in nature) that have yet to be launched. It is expressed as revenue including tax.
3. Office property
In an economic context that has changed little over the past several months, investors continue to exhibit considerable caution, focusing exclusively on new or refurbished "core" assets.
Take-up in H1 2013 came to 8,965,250 ft² (832,900 m²). Companies' choice to move remains motivated essentially by floor-space optimization policies and a search for lower rent.
The immediate supply in the Paris Region rose 3% over the quarter, coming to 39,826,500 ft² (3.7 million m²). New / refurbished properties account for 20% of stock.
For commercial property, the Group works with institutional investors, offering the following three following services:
1. As a property developer, signing off-plan sale agreements (Vente en Etat Futur d'Achèvement or VEFA) or property development contracts (Contrat de Promotion Immobilière or CPI) for which it guarantees the cost and time line of the construction.
2. As a consultant and service provider (Delegated project manager, etc.), providing development services for the owner of a property in return for fees.
3. As an investor, fund and asset manager through AltaFund (in which the Group holds a stake limited to approximately 17%).
Marseille – Hôtel-Dieu: The Hôtel-Dieu Hospital, listed in the French Supplementary Historic Monument Registry, has been transformed into a 5-star hotel. This redevelopment is a key initiative for the Mediterranean metropolis. The hotel, which opened to the public on April 25, features 174 rooms, 22 suites, a spa and 85 adjoining homes.
At June 30, 2013, the Group had 20 projects under development, covering a total net floor area of 5,575,700 ft² (518,000 m²) and including two hotels.
Montpellier - Mutuelle des Motards: As the winner of a development competition, the Group was selected to build the new head office of the Mutuelle des Motards insurance company in the urban development zone (zone d'aménagement concerté or ZAC) around the Montpellier Airport. The planned property complex will develop 99,000 ft² (9,000 m²).
Orly - Cœur d'Orly: With Cœur d'Orly, the Group is creating the first combined eco-business district and living space in the southeastern Greater Paris area, in connection with Orly Airport.
Massy - Place du Grand Ouest: Atlantis Place du Grand Ouest in Massy is a mixed-use project that will develop the new downtown center of Massy's Atlantis neighborhood with some 1,075,000 ft² (100,000 m²) of leasable surface area. It will include 237,000 ft² (20,000 m²) of shops, more than 700 homes, a hotel and a convention center.
Paris – Avenue Pierre Mendès France: Investment fund AltaFund came out on top in the competition launched by the Parisian Development, Project Ownership and Studies Company (SEMAPA) for building rights on lot A9A1. Located in the 13th arrondissement, between the Seine, the tracks leading to Gare d'Austerlitz and the Boulevard Périphérique, this lot is expected to host a property complex of some 161,500 ft² (15,000 m²).
| In € millions | June 2013 |
June 2012 |
|
|---|---|---|---|
| Revenue | 82.7 | +71% | 48.5 |
| Net property income | 11.1 +340% | 2.5 | |
| % of revenues | 13.4% | 5.2% | |
| Services to third parties | 1.9 | -31% | 2.7 |
| Production held in | |||
| inventory | 1.3 | 3.2 | |
| Net overhead expenses | (6.6) | (6.3) | |
| Other | (0.4) | (0.4) | |
| Operating cash flow | 7.2 +300% | 1.8 | |
| % of revenues | 8.7% | 3.7% |
This €82.7 million revenue for H1 2013 exhibits a significant comparative increase due to a considerable volume of developments underway.
The off-plan and property development contract backlog amounted to €96 million at June 30, 2013. The Group also has a stable delegated project management backlog of €4.6 million.
1 Revenues excluding tax on notarized sales to be recognized according to the percentage-of-completion method, take-ups not yet subject to a notarized deed and fees owed by third parties on contracts signed.
| June 30, 2012 | June 30, 2013 | ||||||
|---|---|---|---|---|---|---|---|
| In € millions | Funds from operations (FFO) |
Changes in value, estimated expenses and transaction costs43 |
TOTAL | Funds from operations (FFO) |
Changes in value, estimated expenses and transaction costs |
TOTAL | |
| Brick-and-mortar retail | 108.6 | +16% | 108.6 | 93.3 | 93.3 | ||
| Online retail | 138.3 | +5% | 138.3 | 132.3 | 132.3 | ||
| Residential | 456.1 | +1% | 456.1 | 451.2 | 451.2 | ||
| Offices | 84.6 | +65% | 84.6 | 51.2 | 51.2 | ||
| REVENUE | 787.6 | +8% | 787.6 | 728.0 | 728.0 | ||
| Brick-and-mortar retail | 80.0 | +13% | 69.1 | 149.1 | 70.9 | 8.7 | 79.6 |
| Online retail | (5.9) | -41% | (3.8) | (9.7) | (4.2) | (1.8) | (6.0) |
| Residential | 30.2 | -33% | (2.0) | 28.2 | 45.4 | (2.6) | 42.8 |
| Offices | 7.2 +302% | (0.3) | 6.9 | 1.8 | (0.5) | 1.3 | |
| Other | (0.3) | (1.3) | (1.6) | (0.7) | (0.3) | (1.0) | |
| OPERATING PROFIT | 111.2 | -2% | 61.8 | 173.0 | 113.2 | 3.4 | 116.7 |
| Net borrowing costs | (27.2) | -31% | (2.9) | (30.0) | (39.1) | (1.7) | (40.8) |
| Changes in value and profit / (loss) from disposal of financial instruments |
- | 29.3 | 29.3 | - (34.5) |
(34.5) | ||
| Proceeds from the disposal of investments | - | (0.0) | (0.0) | - 0.7 |
0.7 | ||
| Income tax | (2.0) | (3.7) | (5.7) | - (13.3) |
(13.3) | ||
| NET PROFIT | 82.0 +11% | 84.5 | 166.5 | 74.1 | (45.4) | 28.7 | |
| Income attributable to equity holders of the parent |
69.9 | -1% | 65.4 | 135.4 | 70.9 | (44.7) | 26.2 |
| Average diluted number of shares (in millions) |
10.904 | 10.232 | |||||
| FFO ATTRIBUTABLE TO THE GROUP PER SHARE |
€6.41 | -7% | €6.93 |
Revenue from brick-and-mortar retail included rental income of €90.9 million3 (+13.2%), a strong increase following the controlling interest taken in Cap 3000, and €9.5 million from services provided to third parties (+5.5%). This also includes €8.2 million relating to sales in connection with the property development program.
Revenue originated mainly from the distribution of own products (€133.8 million or +5%). Commissions generated from the marketplace remained stable at €4.5 million.
Property development revenue is recognized according to the percentage-of-completion method4 in proportion to the percentage of actual completion (costs incurred / total budgeted costs excluding land) and the pre-letting rate (actual sales relative to the total for budgeted sales) of programs.
Revenue exhibited strong growth (+65%) thanks to high reservation levels in 2012.
1 Creation of 732,624 shares.
2 Allowances for depreciation and non-current provisions, stock grants, pension provisions, staggering of debt issuance costs.
3 Recognized in accordance with IAS 17 "Leases."
4 According to IAS 18 "Revenue" and IFRIC 15 "Agreements for the Construction of Real Estate."
Funds from operations represent operating cash flow after net interest and corporate income tax expenses.
In H1 2013, operating cash flow dropped 2% to €111.2 million. The significant decline in residential income was offset by strong performances in brickand-mortar retail and the office property business, which began once again making a significant positive contribution. Operating cash flow for Rue du Commerce dropped 41% due to major investments. In terms of accounting treatment, investments for this activity were fully expensed.
Net borrowing costs were down due to both a reduction in net consolidated debt (-€103 million over the half-year) and an increase in financial expenses activated on projects under construction (mainly Villeneuve la Garenne). Net borrowing costs also benefited from a lower average debt rate, which dropped from 3.52% in 2012 to 2.90% in the first half of 2013.
This represents a tax paid by entities not having adopted the SIIC tax status, including in particular property development operations and Rue du Commerce.
| In € mil. | |
|---|---|
| Change in value - Investment properties (France) | 76.6 |
| Change in value – Invest. properties (International) | (14.5) |
| Change in value - financial instruments | +29.3 |
| Asset disposals | +10.2 |
| Deferred tax | (3.7) |
| Estimated expenses3 | (13.4) |
| TOTAL | +84.5 |
The capital gain recorded resulted primarily from appreciation of assets held in the French portfolio, as well as changes in the value of financial instruments
following the rise in long-term rates over the half year.
Average number of shares after dilution
The average number of shares after dilution is the average of number of shares in issue plus shares under stock option and bonus share plans granted at June 30, 2013.
This number increased by 672,590 due to shares created in June 2012 following the partial sharebased dividend payout.
1 Funds From Operations.
2 Or consolidated EBITDA.
3 Allowances for depreciation and non-current provisions, stock grants, pension provisions, staggering of debt issuance costs, transaction fees.
At June 30, 2013, Altarea Cogedim's going-concern NAV came to €1,524.6 million, a slight increase (+0.9%) compared to December 31, 2012 in spite of the dividend detachment.
On a per-share basis, NAV came to €137.9/share, down slightly compared to December 31, 2012 (-0.4%).
| GROUP NAV | June 30, 2013 In € millions Per share |
December 31, 2012 In € millions Per share |
|||
|---|---|---|---|---|---|
| Consolidated equity, Group share | 1,071.7 | 97.0 | 1,023.7 | 97.1 | |
| Impact of securities convertible into shares Other unrealized capital gains or losses Restatement of financial instruments Deferred tax on the balance sheet for non-SIIC assets (international assets) |
- 362.5 93.8 25.2 |
- 381.9 177.1 38.0 |
|||
| EPRA NAV | 1,553.1 | 140.5 | -5.4% | 1,620.7 | 148.6 |
| Market value of the financial instruments Effective tax for unrealized capital gains on non-SIIC assets Optimization of transfer duties Partners' share** |
(93.8) (37.0) 43.4 (15.7) |
(177.1) (50.3) 48.3 (15.7) |
|||
| Liquidation NAV (or EPRA NNNAV) | 1,450.0 | 131.2 | +0.4% | 1,425.9 | 130.7 |
| Estimated transfer duties and selling fees Partners' share** |
75.4 (0.8) |
86.2 (0.9) |
|||
| DILUTED GOING CONCERN NAV | 1,524.6 | 137.9 -0.4% | 1,511.2 | 138.5 | |
| * Varies according to the type of disposal, i.e. sale of asset or sale of shares ** Maximum dilution of 120,000 shares |
Number of diluted shares 11,053,572 10,909,159
This relates to the impact of in-the-money stock options exercised and the purchase of shares to cover bonus share plans not covered by shares held in treasury (excluding the liquidity agreement).
At June 30, 2012, all plan grants were covered by shares held in treasury.
These arise from updated estimates of the value of the following assets:
These assets are appraised at the end of each financial year by external experts (CBRE for the hotel business franchises and Accuracy for Altarea France and Cogedim). Both the CBRE and Accuracy use the discounted cash flow method (DCF) in conjunction with a terminal value based on normalized cash flow. CBRE provides a single appraisal value, while Accuracy provides a range of values calculated using different scenarios. In addition to its DCF valuation, Accuracy also provides a valuation based on listed peer group comparables.
The value of Cogedim shares has remained unchanged in relation to December 31, 2012 and corresponds to the mid-range of Accuracy's valuation. In consequence, the unrealized gain of Cogedim shares mechanically decreases by the amount of its contribution to the Group's consolidated income for H1 2013.
In June 2013, Group NAV reflected the partnership agreement signed with Allianz on the five "core" assets (see press release dated July 31, 2013).
Under the SIIC regime, most of the Group's property portfolio is exempt from taxes on capital gains. The exceptions are a limited number of assets that are not SIIC-eligible due to their ownership method, and assets owned outside France. For these assets, capital gains tax on disposals is deducted directly from the consolidated financial statements at the standard tax rate in the host country, based on the difference between the open market value and the tax value of the property assets.
Altarea Cogedim took into account the ownership methods of non-SIIC assets to determine goingconcern NAV after tax, since the tax reflects the tax that would effectively be paid if the shares of the company were sold or if the assets were sold building by building.
Investment properties have been recognized in the IFRS consolidated financial statements at appraisal value, excluding transfer duties. To calculate goingconcern NAV, however, the transfer duties were added back in the same amount.
For example, when calculating Altarea's liquidation NAV (or EPRA NNNAV), excluding transfer duties, transfer duties were deducted on the basis of a sale of shares of the company or a sale on a building by building basis.
The partners' share is the maximum dilution prescribed by the Articles of Association in case of liquidation of the partnership (the general partner would receive 120,000 shares).
The Group created 145,000 new shares over the half year to finance acquisition of the 15% stake held by the minority shareholder in SCI Bercy Village. This transaction had a slight accretive effect on NAV/share.
| €/share | |
|---|---|
| Going-concern NAV at December 31, 2012 | 138.5 |
| 2013 dividend | (10.0) |
| Funds from operations | +6.4 |
| Change in value of assets - France | +7.0 |
| Change in value of assets - International | (1.3) |
| Change in capital gains on Cogedim | (1.7) |
| Change in fair value of financial instruments | +2.7 |
| Non-controlling interests | (1.7) |
| Other | (2.1) |
| Going-concern NAV at June 30, 2013 | 137.9 |
Altarea Cogedim Group has a solid financial position:
This strong position results primarily from a diversified business model (brick-and-mortar and online retail, residential and office properties) that generates substantial cash flow at the top of the cycle and is highly resilient at the bottom.
Available cash and cash equivalents comprise:
Altarea Cogedim's net debt stood at €2.083 billion at June 30, 2013 compared with €2.186 billion at December 31, 2012 (-€103 million).
| In € millions | June 2013 | Dec. 2012 |
|---|---|---|
| Corporate debt | 755 | 776 |
| Mortgage debt | 1,245 | 1,302 |
| Debt relating to acquisitions 1 | 273 | 288 |
| Property development debt | 118 | 142 |
| Total gross debt | 2,391 | 2,508 |
| Cash and cash equivalents | (308) | (322) |
| Total net debt | 2,083 | 2,186 |
ICR > 2), and covenants specific to Cogedim (EBITDA leverage and ICR).
| Covenant | June 2013 | Dec. 2012 | Delta | |
|---|---|---|---|---|
| LTV2 | ≤ 60% | 47.6% | 49.3% | - 170 bps |
| ICR3 | ≥ 2.0 x | 4.1 x | 3.2 x | +0.9 x |
The reduction of LTV is due to H1 2013 asset sales, as well as strong cash flow generation.
At June 30, 2013, the Group was in compliance with all covenants.
Portfolio profile of hedging instruments:
| Nominal amount (€mil.) and amount hedged | |||||
|---|---|---|---|---|---|
| Maturity | Swap | Cap/ | Total | Average | Av. cap/ |
| Collar | hedging | swap rate | collar rate | ||
| June-13 | 1,799 | 502 | 2,301 | 1.15% | 3.09% |
| Dec.-13 | 1,613 | 448 | 2,060 | 1.31% | 2.97% |
| Dec.-14 | 1,635 | 231 | 1,866 | 1.79% | 2.08% |
| Dec.-15 | 1,438 | 128 | 1,566 | 3.15% | 2.96% |
| Dec.-16 | 1,278 | 93 | 1,371 | 3.08% | 4.53% |
| Dec.-17 | 987 | 37 | 1,024 | 2.76% | 3.75% |
| Dec.-18 | 841 | 841 | 2.62% | ||
| Dec.-19 | 550 | 550 | 2.43% | ||
| Dec.-20 | 550 | 550 | 2.43% | ||
| Dec.-21 |
The Altarea Cogedim group average financing cost including the credit spread was 2.90% at June 30, 2013, compared with 3.52% at the end of 2012. This rate is a result of the financing signed in 2012 and the hedging in place that was brought in line with market conditions in 2012.
The average debt maturity was 4.1 years at June 30, 2013, compared with 4.3 years at December 31, 2012.
1 Cogedim and Rue du Commerce.
2 LTV (Loan to Value) = Net debt / Restated value of assets including transfer duties.
3 ICR = operating profit / net debt costs ("Funds from operations" column).
| Changes in Changes in Funds from value, estimated Funds from value, estimated operations expenses and Total operations expenses and Total (FFO) transaction (FFO) transaction costs costs In € millions Rental income 90.9 – 90.9 80.3 – 80.3 Other expenses (8.3) – (8.3) (6.4) – (6.4) Net rental income 82.6 – 82.6 73.9 – 73.9 External services 9.5 – 9.5 9.0 – 9.0 Capitalized production and change in inventories 8.9 – 8.9 8.0 – 8.0 Operating expenses (26.2) (0.6) (26.8) (24.7) (1.0) (25.7) Net overhead expenses (7.8) (0.6) (8.4) (7.6) (1.0) (8.7) Share of affiliates 5.3 (1.3) 4.0 4.6 (5.2) (0.6) Net allowances for depreciation, amortization and reserves – (0.0) (0.0) – (0.9) (0.9) Net proceeds from the disposal of assets – 10.2 10.2 – (1.9) (1.9) Gains/(losses) in value and impairment of investment property – 62.1 62.1 – 17.8 17.8 Transaction costs – (1.2) (1.2) – (0.0) (0.0) NET RETAIL PROPERTY INCOME (B&M FORMATS) 80.0 69.1 149.1 70.9 8.7 79.6 Retail revenue 133.8 – 133.8 127.7 – 127.7 Purchases consumed (122.9) – (122.9) (117.1) – (117.1) Net charge to provisions for risks and contingencies (0.9) – (0.9) (1.0) – (1.0) Retail margin 10.0 − 10.0 9.6 − 9.6 Galerie Marchande commissions 4.5 – 4.5 4.6 – 4.6 Operating expenses (20.5) (0.1) (20.6) (18.4) (0.1) (18.5) Net overhead expenses (20.5) (0.1) (20.6) (18.4) (0.1) (18.5) Net allowances for depreciation, amortization and reserves – (3.2) (3.2) – (0.5) (0.5) Transaction costs – (0.5) (0.5) – (1.2) (1.2) NET RETAIL PROPERTY INCOME (ONLINE FORMATS) (5.9) (3.8) (9.7) (4.2) (1.8) (6.0) Revenue 455.9 – 455.9 450.9 – 450.9 Cost of sales and other expenses (404.4) – (404.4) (391.8) – (391.8) Net property income 51.5 – 51.5 59.1 – 59.1 External services 0.2 – 0.2 0.3 – 0.3 Change in finished goods and in-progress inventory 23.7 – 23.7 26.3 – 26.3 Operating expenses (45.2) (0.4) (45.7) (40.2) (1.4) (41.6) Net overhead expenses (21.4) (0.4) (21.8) (13.6) (1.4) (15.0) Share of affiliates 0.1 – 0.1 (0.1) – (0.1) Net allowances for depreciation, amortization and reserves – (1.5) (1.5) – (1.2) (1.2) Transaction costs – – – – – – NET RESIDENTIAL PROPERTY INCOME 30.2 (2.0) 28.2 45.4 (2.6) 42.8 Revenue 82.7 – 82.7 48.5 – 48.5 Cost of sales and other expenses (71.6) – (71.6) (46.0) – (46.0) Net property income 11.1 – 11.1 2.5 – 2.5 External services 1.9 – 1.9 2.7 – 2.7 Change in finished goods and in-progress inventory 1.3 – 1.3 3.2 – 3.2 Operating expenses (6.6) (0.2) (6.8) (6.3) (0.4) (6.7) Net overhead expenses (3.4) (0.2) (3.6) (0.3) (0.4) (0.7) Share of affiliates (0.4) – (0.4) (0.4) – (0.4) Net allowances for depreciation, amortization and reserves – (0.2) (0.2) – (0.1) (0.1) Transaction costs – – – – – – NET OFFICE PROPERTY INCOME 7.2 (0.3) 6.9 1.8 (0.5) 1.3 Other (Corporate) (0.3) (1.3) (1.6) (0.7) (0.3) (1.0) OPERATING PROFIT 111.2 61.8 173.0 113.2 3.4 116.7 Net borrowing costs (27.2) (2.9) (30.0) (39.1) (1.7) (40.8) Debt and receivables discounting – (0.0) (0.0) – (0.0) (0.0) Changes in value and income from disposal of financial instruments – 29.3 29.3 – (34.5) (34.5) Proceeds from the disposal of investments – (0.0) (0.0) – 0.7 0.7 PROFIT BEFORE TAX 84.0 88.2 172.2 74.1 (32.1) 42.0 Income tax (2.0) (3.7) (5.7) 0.0 (13.3) (13.3) NET PROFIT 82.0 84.5 166.5 74.1 (45.4) 28.7 Non-controlling interests (12.1) (19.1) (31.1) (3.2) 0.7 (2.5) NET PROFIT, ATTRIBUTABLE TO GROUP SHAREHOLDERS 69.9 65.4 135.4 70.9 (44.7) 26.2 Average number of shares after dilution 10,904 260 10,904 260 10,904 260 10,231,670 10,231,670 10,231,670 DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO GROUP 6.41 6.00 12.41 6.93 (4.37) 2.56 |
H1 2013 | H1 2012 | |||
|---|---|---|---|---|---|
| SHAREHOLDERS (€) |
| In € millions | 6/30/2013 | 12/31/2012 |
|---|---|---|
| NON-CURRENT ASSETS | 3,583.0 | 3,617.5 |
| Intangible assets o/w Goodwill o/w Brands o/w Other intangible assets Property, plant and equipment Investment properties o/w Investment properties measured at fair value o/w Investment properties measured at cost Investments in affiliates and other non-consolidated investments Receivables and other non-current financial assets Deferred tax assets |
275.3 166.6 96.8 11.9 10.7 3,182.1 3,001.2 180.8 88.8 18.6 7.5 |
276.7 166.6 98.6 11.5 11.4 3,200.3 3,037.3 163.0 84.7 18.3 26.0 |
| CURRENT ASSETS | 1,379.6 | 1,504.3 |
| Non-current assets held for sale Net inventories and work in progress Trade and other receivables Income tax receivables Receivables and other current financial assets Derivative financial instruments Cash and cash equivalents |
23.0 599.6 427.1 1.8 18.4 1.3 308.3 |
4.8 702.6 456.7 1.8 16.3 0.3 321.8 |
| TOTAL ASSETS | 4,962.6 | 5,121.8 |
| EQUITY | 1,403.6 | 1,362.0 |
| Equity attributable to Altarea SCA shareholders | 1,071.7 | 1,023.7 |
| Share capital Other paid-in capital Reserves Income associated with Altarea SCA shareholders |
133.9 390.2 412.2 135.4 |
131.7 481.6 354.6 55.9 |
| Equity attributable to non-controlling interests of subsidiaries | 332.0 | 338.2 |
| Reserves associated with non-controlling interests of subsidiaries Income associated with non-controlling interests of subsidiaries |
300.8 31.1 |
333.9 4.3 |
| NON-CURRENT LIABILITIES | 2,310.2 | 2,371.8 |
| Non-current borrowings and financial liabilities o/w Participating loans and shareholders' advances under option o/w Non-current bond issues o/w Borrowings from lending establishments o/w Other borrowings and financial liabilities Other non-current provisions Deposits and guarantees received Deferred tax liabilities |
2,241.1 13.6 250.0 1,969.3 8.3 25.6 28.7 14.7 |
2,254.2 14.8 250.0 1,972.7 16.7 25.7 29.1 62.9 |
| CURRENT LIABILITIES | 1,248.8 | 1,388.0 |
| Current borrowings and financial liabilities o/w Commercial paper and accrued interest o/w Borrowings from lending establishments (excluding overdrafts) o/w Bank overdrafts o/w Other borrowings and financial liabilities Derivative financial instruments Accounts payable and other operating liabilities Tax payables Amounts due to shareholders |
204.6 17.0 130.9 24.2 32.5 100.1 797.4 37.3 109.3 |
311.1 − 282.3 2.7 26.1 181.2 892.9 2.8 0.0 |
| TOTAL EQUITY AND LIABILITIES | 4,962.6 | 5,121.8 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.