Earnings Release • May 11, 2021
Earnings Release
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Unaudited data as of 31 March 2021
1 Or €53.9 million received out of €79.5 million in rents and charges billed (including VAT).
2 Consolidated net bank and bond debt.
3 Shareholders will be free to choose between a full payment in cash or a payment 50% in shares and 50% in cash.
In the first-quarter of 2021, Altarea recorded a 4% increase in new orders (by volume), compared with a particularly buoyant first-quarter 2020 until mid-March, with a radically different Individuals/Block sales mix. New orders from institutional investors remain strong.There has been a significant recovery in demand among Individuals, particularly since early March. For 2021, the Group expects sales to represent over 50% of sales (compared with 40% in 2020).
| New orders (incl. tax) | 31/03/2021 | 31/03/2020 | Change | ||
|---|---|---|---|---|---|
| Individuals - Residential buyers | 415 units | 20% | 668 units | 33% | -38% |
| Individuals - Investment | 729 units | 34% | 873 units | 43% | -16% |
| Block sales | 977 units | 46% | 496 units | 24% | +97% |
| Total in units | 2,121 units | 2,037 units | +4% | ||
| Individuals - Residential buyers | €141m | 24% | €252m | 40% | -44% |
| Individuals - Investment | €202m | 34% | €241m | 38% | -16% |
| Block sales | €245m | 42% | €143m | 22% | +71% |
| Total in value | €587m | €637m | -8% |
In a market characterised by a shortage of supply, the level of new orders is now hinged directly on the capacity to bring projects to the market, as administrative authorisations are taking longer to obtain.
In the first quarter of 2021, the sharp increase in revenue by percentage of completion reflects both the rampup of Altarea's model, a good level of technical progress (two weeks' more work than in Q1 2020) and a persistently sustained notarial sale campaign among Individuals (1,712 units regularised for both type of customers, up 48% versus end-March 2020).
The Residential backlog at 31 March 2021 amounted to €3,802 million (-4%), with a strong component of "notarised sales, not yet recognised", which gives considerable visibility on 2021 revenue. The Residential pipeline is stable at €12.6 billion (48,486 units), or more than three years' activity.
| 31/03/2021 | 31/12/2020 | Change | |
|---|---|---|---|
| Backlog (excl. tax) | €3,802m | €3,962m | -4% |
| Number of months of revenue4 | 18 months | 20 months | |
| o/w Notorised revenue not yet recognised | €2,131m | €2,252m | |
| Pipeline (incl.tax)5 | €12,626m | €12,798m | -1% |
| Number of units | 48,486 | 49,515 | -2% |
| o/w properties for sale | €1,460m | €1,563m | -6.6% |
| o/w future offering | €11,175m | €11,235m | +0% |
4 Trailing revenue per completion over twelve months.
5 Potential revenue in €m including VAT (future offering and properties for sale).
In the first-quarter of 2021, Altarea continued to make progress on ongoing projects and extended its development pipeline:
Development momentum remains strong in both offices and logistics, matching the needs of users and investors. Altarea has little exposure to the market's current hesitations and has its future exposure under tight control.
In the first quarter of 2021, Measures restricting operations remained strong (curfews, closures depending on the size of the shopping centre, geographical area and type of business). In France, restrictions affected 32% of the rental base (Group share) from mid-January, 66% from 25 March, with the closure of non-essential businesses in "red" areas, and 77% from 3 April following the imposition of nationwide lockdown. The financial vacancy rate was 4.5% at the end of March. Following the latest government announcements, all sites are scheduled to reopen on 19 May.
To date, the status of rent monitoring indicators and negotiations with tenants is as follows:
6 Bridge has five restaurants, an auditorium and 162 meeting rooms on eight levels. It also boasts 3,500 m² of vegetated terraces and 1,000 m² of interior terraces.
7 Or €53.9 million received out of €79.5 million in rents and charges billed (including VAT). Sums yet to be collected mainly concern business sectors subject to restrictions since November 2020, such as restaurants and leisure activities.
8 Rate of renegotiation relative to reductions granted in 2020 in consideration for contractual changes to leases (83% concluded and 14% in advanced negotiations).
Consolidated rental income amounted to €47.5 million for the first three months of the year, a decline of 7.6% broken down as follows:
Leasing activity has been dynamic since the beginning of the year, an early sign of a recovery in investment by retailers (including restaurants and leisure activities). Over a hundred leases have been signed, representing guaranteed minimum rents of €13.3 million, on both existing sites and projects under development (Cap3000, mixed-use projects, travel retail), with a further €10.0 million under negotiation.
The Group expects shops in the final tranche of the Paris-Montparnasse railway station to open gradually from mid-May and Corso Mall at Cap3000 to be unveiled in the summer of 2021.
Altarea is extending its offer in urban logistics through the signing of a partnership with Corsalis Logistics Real Estate for the development of a first 4,500 m² last-mile logistics site located in the Reuilly district of Paris, for which the premises have now been purchased.
Work on the Quartier Guillaumet project began in April and is scheduled for completion in 2025. This 101,000 m² urban redevelopment project located on a former military wasteland in the very heart of Toulouse will ultimately offer 1,200 residential units, 8,500 m² of offices, shops and 9,000 m² of facilities open to the public (eco-responsible third-party premises, indoor and outdoor sports facilities) built around a central public garden. Now bearing the ÉcoQuartier label, it also aiming for HQE Aménagement and BiodiverCity® certifications (nature will constitute more than 40% of the project's total surface area).
Altarea has completed the first part of the work on this project, launched in the summer of 2020, by demolishing the former Bobigny 2 shopping centre to develop a 104,000 m² renovated town centre with new pedestrian streets, residential units convenient shops ("proximité") and public green spaces. Altarea is committed to making Coeur de Ville a blueprint for progress on the energy transition and climate change.
9 Q1 2021 rents do not reflect the impact of new restrictions in force since early February.
10 The ÉcoQuartier label reflects the government's role in encouraging local authorities to undertake exemplary sustainable development projects in regional centres, and more specifically ecodistricts in cities with significant residential development programmes.
Consolidated revenue for the first quarter of 2021 amounted to €655.1m, up 15.7%, driven by the strong momentum of the Residential business (+39%).
| In €m (excl. tax) | Q1 2021 | Q1 2020 | Change |
|---|---|---|---|
| Revenue by % of completion | 535.5 | 384.2 | |
| External services | 2.4 | 2.7 | |
| Residential | 537.8 | 386.9 | +39.0% |
| Revenue by % of completion | 59.5 | 116.7 | |
| External services | 3.9 | 1.1 | |
| Business property | 63.5 | 117.8 | -46.1% |
| Rental income | 47.5 | 51.4 | -7.6% |
| External services | 4.7 | 4.2 | |
| Revenue by % of completion | 1.6 | 6.0 | |
| Retail | 53.8 | 61.6 | -12.7% |
| Revenue | 655.1 | 566.2 | +15.7% |
Net debt11 was €2,316 million, down €310 million over 12 months. Cash and cash equivalents amounted to approximately €3.0 billion and Altarea has a BBB- Outlook stable rating from S&P Global.
The General Shareholders' Meeting of 29 June 2021 will be held behind closed doors, without shareholders being able to attend in person. It will be streamed live from 15:00 p.m. Paris time on altarea.com.
A dividend of €9.50/share will be proposed to the General Shareholders' Meeting of [30] June 2021, for the financial year 2020, up 5.6% compared to 2019. Shareholders will also be offered the option to take partpayment in shares. They will be free to choose between:
The main shareholders of the Group as well as the senior executives of Altarea, together representing nearly 80% of the share capital, have already announced their intention to subscribe to this second option.
Altarea confirms that consolidated annual FFO is expected to resume growth in 2021, if the health situation does not significantly worsen:
11 Bank and bond debt.
Press release – 3-month 2021 Revenue and Business activity ALTAREA 5
Altarea is the leading property developer in France. As both a developer and an investor, the Group operates in the three main property markets (Retail, Residential and Business property), leading major mixed-use urban renewal projects in France. The Group has the required expertise in each sector to design, develop, market and manage made-to-measure property products. In Retail, Altarea managed assets of €5.0 billion (€2.0 billion in Group share) as of 31 December 2020. Listed in Compartment A of Euronext Paris.
Eric Dumas, Chief Financial Officer [email protected], tel: + 33 1 44 95 51 42
Pierre Perrodin, Deputy CFO [email protected], tel: + 33 6 43 34 57 13
Agnès Villeret - KOMODO [email protected], tel: +33 6 83 28 04 15
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 altarea.com. This press release may contain forward-looking statements. 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.
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