Asset Management is paying off Annual results 2015 18 February 2016
CONTENTS > 1. STRATEGIC POSITIONING > 2. REAL ESTATE ACTIVITY > 3. FINANCIAL RESULTS > 4. OUTLOOK > APPENDICES FONCIÈRE DES RÉGIONS 2
1. Strategic positioning Green Corner - Greater Paris 3
STRATEGY A GROWING AND BETTER QUALITY PORTFOLIO € 11.0 billion portfolio Group share ( € 17.7 billion at 100%) + € 1.2 billion Group share in 2015 (+13%) 45% 17% France Offices Italy Offices > Sound fundamentals; market depth > Leadership position; prime assets > Attractive yield; value-creating pipeline > Record cash flow visibility 5% 20% -4 pts in 2015 +3 pts in 2015 Non-strategic 1 German Residential > including France Residential (3%) 13% > Sound economy; buoyant market +4 pts in 2015 > Significant reversion potential; development Hotel real estate potential through acquisitions > Leadership position; impressive track record > Strong relationship with operators; high operating margin An integrated operator with highly skilled local teams FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 4 1 Post disposal of € 100 million of Logistics assets in early 2016
STRATEGY OUR POSITIONNING: QUALITY AND ASSET MANAGEMENT VALUE CREATION Partnership Development strategy pipeline strategy Value Secured creation cash-flows track-record Asset Diversification management expertise Office – Greater Paris Residential – Berlin Strong and secure profitability Total return of 7.6% 1 per year since 2010 FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 5 1 IPD Index methodology: rental and capital yield (change in value net of capex)
STRATEGY 2015: AN OUTSTANDING YEAR Successful partnership agreements € 2.1 billion investments ( € 1.4 billion Group Share) Major lease Increased exposure Successful agreements in German development Residential and pipeline Qualitative A better Hotels real estate 15 deliveries asset portfolio rotation Source of new deals High occupancy rate Long lease firm maturity € 1.4 billion disposals 96% 7-year ( € 0.9 billion Group Share) Improvement in the S&P rating: BBB vs BBB- A better Success of the capital increase ( € 255 million) debt profile Record level of debt financings and refinancings ( € 4.2 billion and € 2.5 billion GS) > Cost of debt: 2.8%; maturity: 5 years Lower risk profile Higher potential FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 6
2. Real Estate activity Eiffage Campus – Greater Paris 7
France Offices Astrolabe - Marseille 8
FRANCE OFFICES Portfolio A SOLID SUSTAINABLE POSITIONING € 5.7 billion (100%) € 4.8 billion (GS) Long-term leases Historically high occupancy rates (firm maturity in years) 5.4 95.8% 96.8% 5.7 5.7 96.0% 95.7% Quality 95.8% 5.4 5.7 5.3 94.3% 94.7% cash-flows 4.8 2015 2015 2009 2009 Grade A buildings (% of green France Offices) Inner suburbs 100% (41%) Paris +11 pts (35%) 2020 61% > 2/3 Strategic Quality locations 50% assets 2017 41% 2015 2014 24% 2013 7% 2012 Non-core (11%) 2009 Major Regional Cities (12%) Asset Partnership Value Development management strategy creation pipeline drivers 52% of our portfolio Long-term leases bought or developed € 1.2 billion Value creation since end-2009 1 reserve FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 9 1 Acquisitions and development pipeline since 2009
FRANCE OFFICES Portfolio 2015: ASSET MANAGEMENT OVERPERFORMANCE € 5.7 billion (100%) € 4.8 billion (GS) Good letting > Success of the development pipeline (92,990 m² let; € 25 million in rents) activity in an > Renewals close to passing rents (96,077 m²; € 20 million in rents; -1.7%) improving market 9 projects delivered for 105,000 m² and € 444 million cost ( € 309 million GS) > Asset rotation: > Opportunistic acquisitions in a very competitive market ( € 46 million GS) quality and Offices in Levallois-Perret; land bank in Montrouge (Greater Paris) return Disposals: € 120 million of non-core assets; 16% average margin > > Rents like-for-like: +0.8% Strong > Values like-for-like: +7.2% Eiffage Campus – Greater Paris operating performance • Strong performance in Paris (+12%) and Inner suburbs (+8%) • Success of the development pipeline and asset management: 40% of the like-for-like growth Strengthen portfolio quality Create value through dynamic asset rotation FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 10
FRANCE OFFICES Portfolio ACCELERATION OF THE DEVELOPMENT PIPELINE STRATEGY € 5.7 billion (100%) € 4.8 billion (GS) Quality locations and buildings Low risk, high return 9 deliveries in 2015 > 90% occupancy rate vs 71% in early 2015 ; 10 years average firm lease maturity > 7.1% average yield on cost 1 ; 28% total average value creation Green Corner Eiffage Campus (Saint-Denis – Greater Paris) (Vélizy – Greater Paris) 20,817 m² 23,242 m² 86% let (HAS; Systra) 100% let (Eiffage) Strategy: use of a land bank in a key Strategy: turnkey business district of Greater Paris development with a partner Respiro Astrolabe (Marseille) (Nanterre – Greater Paris) 14,446 m² 11,100 m² 98% let (multi-tenants) 100% let (Vinci) Strategy: development of a new Strategy: turnkey area in the center of Marseille development with a partner FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 11 1 Headline gross yield
FRANCE OFFICES EXAMPLE OF OUR ASSET MANAGEMENT EXPERTISE: OMEGA OMEGA A & C: secure cash-flows OMEGA A & C: 11,490 m² of offices in Levallois-Perret (Greater Paris) > Fully let to Lagardère : renewal of the lease for 6 years firm > Rents: -2%; value creation: +14% > Acquisition of OMEGA B: value creation opportunity Strategic acquisition of the 3 rd building (OMEGA B) of the office block already > Pont de Levallois owned by Foncière des Régions (OMEGA A & C) - Bécon Quality location in the center of Levallois-Perret (Greater Paris) > > 4,698 m² of offices let at 67% for 2.9 years with Lagardère as main tenant (31%) Cost : € 25 million (5,300 € /m²) > Strategy : > • Short term: reduce vacancy rate Yield potential of 6.4% • Medium term: merge the 3 buildings to create an asset of 17,700 m²; use rights to increase the size by c. 3,500 m² Value creation potential Potential of 20,000 m² of new offices in a strategic location FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 12
FRANCE OFFICES EXTRACT THE VALUE OF THE ORANGE PORTFOLIO Sèvres-Babylone Paris-Littré Paris-Steel > > 3,560 m² of offices in Paris 6 th 3,690 m² of offices in Paris 16 th Paris 16 th district Paris Littré 1 st step: refurbishment > > 2012-2015: departure of Orange and full Rennes Boissière Paris 6 th district 2 nd step: departure of Orange and re- > restructuring > letting to Kering (9-year firm; no Sept. 2015: 100% let to Groupe OnePoint Steel vacancy period) (9-year firm) Rents: +33%; value creation >30% Yield on cost: 6%; value creation >30% > > Trocadéro In line with our strategy In line with our strategy > > Partnership strategy Real estate quality > > Secured cash-flows Real estate quality > > Secured cash-flows Value creation > Value creation More to come: 60% of the Orange portfolio is located in Paris ( € 0.8 billion GS) FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 13
FRANCE OFFICES Portfolio AMBITIONS 2016: CONTINUE THE DEVELOPMENT PIPELINE DYNAMIC € 5.7 billion (100%) € 4.8 billion (GS) O’rigin Euromed Center Nancy Riverside (Hermione & Floréal) New development Toulouse Marseille € 20 million EDO New € 526 Committed New developments € 506 development Issy-les-Moulineaux pipeline million € 32 million million € 32 million (Greater Paris) 9 Redevelopment- Traversière Deliveries extension Paris € 309 million € 83 million Redevelopment € 122 million End 2014 End 2015 (Group share) (Group share) € 700 million GS Managed > Projects controlled by Foncière des Régions pipeline > Mix of new constructions and redevelopments > Launch of the construction work after pre-let (for significant projects) or building permit Record level of deliveries expected in 2017 Riverside – Toulouse FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 14
FRANCE OFFICES RENEWAL OF THE PIPELINE: TRAVERSIÈRE Acquisition in 2009 > 13,500 m² office building built in 1930; yield of 7.3% > Strategic location in Paris: Quai de la Rapée Traversière • 200 m from Gare de Lyon, well connected • Lack of new buildings in the area: < 4% vacancy rate, below Paris average Gare de Lyon Strategy: refurbishment Departure of SNCF in December 2015 => opportunity to create a new building > Gare d’Austerlitz fitted to the evolution of the demand > € 122 million cost including € 28 million of capex; c. 5.5% target yield on cost > Delivery in Q4 2017 AFTER BEFORE FONCIÈRE DES RÉGIONS ANNUAL RESULTS 2015 15
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