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Covivio — Earnings Release 2011
May 12, 2011
1222_10-q_2011-05-12_27f4173e-b529-4b70-ba69-ec89f7abbe1d.pdf
Earnings Release
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Press release
Paris, 12 May 2011
Foncière des Régions: a dynamic first quarter 2011
- Consolidated turnover at the end of March 2011 was up 3.3% to €209.4 million, while turnover Group share was €131.8 million, up 2% (see attached tables).
- Foncière des Régions' leasing business for the period kept occupancy rates high at 95% and generated a 1% rise in like‐for‐like rental revenues, which hit €122.5 million.
- In the first quarter of 2011, the Group also continued its policy of investing in offices by acquiring the Degrémont headquarter in Rueil‐Malmaison for €43 million, while at the same time disposing of €76 million in non‐strategic assets.
- To fulfil its objective of simplifying its structures and streamlining the assets in its portfolio, Foncière des Régions increased its holding in FEL to 82% by acquiring 14.6% held by a Morgan Stanley fund for €47 million. This transaction is the 1st step towards holding 100% of this Logistics and Light Industrials portfolio. Following a strategic review of this portfolio, the goal is to accelerate its valuation with:
- o disposal of some logistics platforms
- o redevelopment of sites in the Paris region
"The achievements of this 1st quarter 2011 have allowed us to reaffirm our financial objective to maintain stable net recurring income in 2011. We will continue our policy of investing in offices and simplifying our organisation," said Christophe Kullmann, CEO of Foncière des Régions.
* * *
Rental revenues strong: €123 million + 1% on a like‐for‐like basis as at Q1 2011
Rental revenues Group share for the first quarter hit €122.5 million (compared with €134.2 million) cumulatively:
- on the positive side: from growth in like‐for‐like rental revenues (+ 1%) and acquisitions at the end of 2009 and beginning of 2010
- on the negative side: disposals and the change in the holding of Beni Stabili.
Occupancy rate stable at 95%
In fact, nearly 23,000sq.m in available space of the Office ‐ France assets were leased over the period, while 48,000sq.m of existing leases were renewed at 3.5% over the leases in place. All of these lease deals together represent more than €17 million in leasing income. In Italy, leases and renewed leases accounted for close to 15,000sq.m, or more than €3 million in leasing income.
Despite a real‐estate market that still shows few strong signs of recovery, this leasing activity allowed Foncière des Régions to post strong real‐estate indicators at the end of March 2011. In fact, on a like‐for‐like basis, office leasing revenues are up 1.3% in France and 1.1% in Italy, while occupancy rates remain high at 94.2% and 96.4%, respectively
| Occupancy rate | ||||||
|---|---|---|---|---|---|---|
| Group share | % of leasing revenues |
Q1 2011 (€ million) |
Diff (%) on like-for like basis |
End March 2011 |
End 2010 | Residual lease term end 2010 |
| Office - France | 55% | 67.8 | + 1.3% | 94.2% | 94.3% | 5.7 |
| Office - Italy | 23% | 28.3 | + 1.1% | 96.4% | 97.1% | 7.7 |
| Office - Total | 78% | 96.1 | + 1.2% | 94.7% | 95.1% | 6.3 |
| Service Sector | 10% | 12.1 | + 3.1% | 100.0% | 100.0% | 8.7 |
| Logistics and Light Industrials | 12% | 14.3 | - 2.8% | 88.5% | 88.1% | 2.4 |
| Total | 100% | 122.5 | + 0.9% | 94.5% | 94.8% | 6.1 |
Partnership with Suez Environnement continued by acquiring the Degrémont headquarter in Rueil‐Malmaison for €43 million
Foncière des Régions agreed to buy a 13,800sq.m property for €40.5 million, excluding transfer duties (€43 million including transfer duties) in Rueil Malmaison, in Paris Western Crescent.
Headquarter for Degrémont, a Suez Environnement subsidiary, this property is 100% leased for 12 years fixed and will immediately yield 8% net excluding transfer duties, (7.5% including transfer duties) with a lease of €235/sq.m/year.
€76.3 million in non‐strategic asset disposals, above 2010 valuation appraisals
Continuing its regular policy of disposing of non‐strategic assets and properties with limited value‐creation potential, Foncière des Régions sold €76.3 million in the first three months of 2011 at an average of 3% above valuation appraisals at the end of 2010.
| (€ million) | Disposals agreements |
Disposals | Total | |
|---|---|---|---|---|
| Office - France | 100 % | 93.6 | 67.2 | 160.8 |
| Office - Italy | 100 % | 17.9 | 3.6 | 21.4 |
| GS | 9.1 | 1.8 | 10.9 | |
| Office - Total | 100 % | 111.5 | 70.7 | 182.2 |
| GS | 102.7 | 69.0 | 171.7 | |
| Service Sector | 100 % | 114.0 | 6.0 | 120.0 |
| GS | 28.6 | 1.5 | 30.1 | |
| Logistics | 100 % | 9.5 | 8.7 | 18.2 |
| GS | 6.4 | 5.9 | 12.2 | |
| Total | 100 % | 235.0 | 85.4 | 320.4 |
| GS | 137.7 | 76.3 | 214.0 |
FEL capital up 82% by acquiring 14.6%1 held by a Morgan Stanley2 fund for €47 million
Foncière des Régions increased its holdings in FEL to 82% on 11 May 2011 by acquiring 14.6% held by a Morgan Stanley fund for €47 million (i.e., €2.8 per share).
This transaction is the 1st step towards holding 100% of this Logistics and Light Industrials portfolio and comes as a result of a strategic review of this asset.
The goal over the medium term is to speed up the valuation of various portfolio asset classes (Logistics Platforms in France and Germany, Urban Logistics in the Paris region, Light Industrials in central Paris) by:
- disposal of some logistics platforms
- redeveloping sites in the Paris region
This acquisition will have an immediate positive impact on NAV and Recurring Net Income.
A conference call for analysts and investors will take place at 6:00 PM (Paris time)
The presentation for the conference call will be available on the Foncière des Régions site: www.foncieredesregions.fr/finance
Financial calendar:
2011 Half‐year results: 27 July 2011
Investor and media relations
Philippe Le Trung Tel.: + 33 (0)1 58 97 52 04 [email protected]
Sébastien Bonneton Tel.: + 33 (0)1 58 97 52 44 [email protected]
1 14.59 % of the capital, i.e., 16,773,406 Foncière Europe Logistique shares
2 MSRESS III Investment Management SARL
Shareholder Relations Department
About Foncière des Régions
Foncière des Régions, foncière partenaire
As a major office real estate company with €8.6 billion in assets and 74% Offices in sound markets, Foncière des Régions deploys a strategy focused on:
- Partnerships with large companies ensuring long-term revenues
- A continuous asset enhancement strategy through asset rotation and real estate developments that meet the needs of the market
As a listed real estate investment company (SIIC), Foncière des Régions successfully operates its business model as a real estate partner in various business sectors (logistics, service sector, etc).
Foncière des Régions is listed on Euronext Paris Compartment A (FR0000064578 - FDR) and admitted to the DSS. Foncière des Régions shares are a component of the MSCI, SBF 120 and Euronext IEIF "SIIC France" indices, the CAC Mid100 and other European real estate indices including EPRA and the GPR 250, as well as the ethical index "FTSE4 Good".
Key figures at the end of 2010
- €8.6bn assets (Group share)
- Over 300 employees in France
To find out more: www.foncieredesregions.fr
Annexes
Consolidated turnover
| (€ million) | Q1 2010 | Q1 2011 | Var. (%) |
|---|---|---|---|
| Office - France | 68.1 M€ | €69.2 mln | + 1.6% |
| Office - Italy | 53.4 M€ | €55.6 mln | + 4.0% |
| Office - Total | 121.6 M€ | €124.8 mln | + 2.6% |
| Service Sector | 47.8 M€ | €48.3 mln | + 0.9% |
| Logistics and light industrial | 21.8 M€ | €21.3 mln | - 2.7% |
| Total leasing revenues | 191.2 M€ | €194.3 mln | + 1.6% |
| Services and other | 11.6 M€ | €15.1 mln | + 30.8% |
| Turnover | 202.7 M€ | €209.4 mln | + 3.3% |
Turnover, Group share
| (€ million) | Q1 2010 | Q1 2011 | Var (%) |
|---|---|---|---|
| Office - France | 68.1 M€ | €67.8 mln | - 0.3% |
| Office - Italy | 39.1 M€ | €28.3 mln | - 27.6% |
| Office - Total | 107.1 M€ | €96.1 mln | - 10.3% |
| Service Sector | 12.0 M€ | €12.1 mln | + 0.9% |
| Logistics and light industrial | 14.7 M€ | €14.3 mln | - 2.7% |
| Total leasing revenues | 133.8 M€ | €122.5 mln | - 8.5% |
| Var. (constant holding in Beni Stabili) | + 0.5% | ||
| Services and other | 8.3 M€ | €9.4 mln | + 13.4% |
| Turnover | 142.0 M€ | €131.8 mln | - 7.2% |
| Var. (constant holding in Beni Stabili) | + 2.0% |