H1 2016 Results: A rewarding strategy 21 July 2016
CONTENTS > 1. STRATEGIC POSITIONING > 2. REAL ESTATE ACTIVITY > 3. FINANCIAL RESULTS > 4. OUTLOOK > APPENDIX FONCIÈRE DES RÉGIONS 2
1 Strategic positioning EDO, Greater Paris 3
STRATEGY A UNIQUE EUROPEAN PLAYER A unique business model A € 18.3 billion portfolio at end-June 2016 managed by 700 people in 3 countries ( € 11.7 billion Group Share) German Residential 1 France Offices 1 Berlin We offer (44%) (20%) resilient cash-flows We are diversified and also and strong value creation Paris we are specialists drivers Milan Hotel in Europe 1 Italy Offices 1 (18%) (14%) An integrated operator in the largest continental European markets FONCIÈRE DES RÉGIONS H1 2016 RESULTS 4 1 Group Share
STRATEGY H1 2016 ACHIEVEMENTS: STRATEGIC MILESTONES Letting successes in our pipeline Value creation partnerships Strengthening in our strategic cities 34,000 m² pre-let New agreements with Orange, € 1.8 bn of investments secured; in France and Italy EDF, Cisco & Thales € 1.1 bn Group Share 80% in Paris, Berlin & Milan FONCIÈRE DES RÉGIONS H1 2016 RESULTS 5
STRATEGY H1 2016 RESULTS: SUCCESS OF THE STRATEGY Growth in financial results Good operating performances • No inflation • Offices: slowly improving markets Rents > • German Residential: strong growth Environment • Hotels: impacts of the terrorist attacks Values : yield compressions Recurring > EPRA NAV Net Income € 82.4/share € 2.64/share +8.7% 2 +1.0% > Asset management driving the performance € 5,652 m € 176.6 m Operating +11.4% 2 > Value creation developments successes +4.2% > Increased exposure in growing markets Increased Record lease Stable rents Growth in value occupancy rate maturity 1 like-for-like like-for-like 7.5 96.7% 0.0% +3.2% years +0.4 pt +0.2 year FONCIÈRE DES RÉGIONS H1 2016 RESULTS 6 1 Firm lease expirations as % of annualised rental income; commercial portfolio (76% of total rents GS); 2 vs June-2015
2 Real Estate activity > France Offices > Italy Offices > German Residential > Hotel Real Estate Campus Eiffage – Greater Paris 7
France Offices Steel, Paris 8
FRANCE OFFICES Portfolio H1 2016 ACHIEVEMENTS: SOUND OPERATING INDICATORS € 6.0 billion (100%) € 5.2 billion (GS) High occupancy rate 95.8% (stable) Resistance in rents Long-term leases -0.3% Operating 5.9-year like-for-like performance Firm lease maturity (+0.5 year) Strong growth in value +4.4% like-for-like +20% like-for-like for the Thaïs, Levallois-Perret - Greater Paris committed pipeline FONCIÈRE DES RÉGIONS H1 2016 RESULTS 9
FRANCE OFFICES Portfolio H1 2016 ACHIEVEMENTS: ACTIVE LETTING ACTIVITY € 6.0 billion (100%) € 5.2 billion (GS) Secure the rents > Lease renewals: € 61 million ( € 54 million Group Share); 20% of France Offices rents > 430,812 m² > +0.9% vs passing rents Strengthen the occupancy > € 3.6 million Group Share of new lettings vs € 1.1 million of departures > 8.1 years average firm lease maturity for the new lettings Success of the development pipeline Atlantis - Greater Paris (11,300 m²) > 15,000 m² pre-let; € 6.0 million of rents ( € 5.9 million Group Share) Lease extension with Cisco > +5-year to 6-year firm 8.6 years average firm lease maturity Optimize value creation through anticipation and monitoring FONCIÈRE DES RÉGIONS H1 2016 RESULTS 10
FRANCE OFFICES Portfolio H1 2016 ACHIEVEMENTS: 2 NEW AGREEMENTS WITH OUR PARTNERS € 6.0 billion (100%) € 5.2 billion (GS) Lease renegotiations (72%) Secure the rents +4.1 years in lease maturities; 14 5.2-year maturity for EDF portfolio (+3.5 years) Flat rents; € 16 million of capex Create value assets 17 € 17 million of rents Turnkey projects (28%) 6% of France Offices 3 Avignon, Nancy, Reims Improve liquidity for non core assets € 46 million investment 7% yield on cost; 11-year leases Lease extensions (76%) 55 +5 years to 9 years; Incentives: 0.5 month/year Secure the rents 5.9-year maturity for Orange portfolio (+0.8 year) 69 assets Flexibility (13%) Create value 22% of Orange rents 6 -1 year to 2.5 years € 20 million of rents 7% of France Offices Reduce non core assets 8 Buybacks by Orange (11%) +5.6% in like-for-like value in H1 2016 on average FONCIÈRE DES RÉGIONS H1 2016 RESULTS 11
FRANCE OFFICES Portfolio H1 2016: INVESTMENT IN STRATEGIC LOCATIONS AND VALUE CREATION € 6.0 billion (100%) € 5.2 billion (GS) A € 129 million acquisition in Rueil-Malmaison, a dynamic office districts of Greater Paris > > € 10 million rents > 3 buildings 100% let Value Nearby public Will reload the development 38,000 m² to Vinci creation > transports (7.8% yield) pipeline in 4 years Development pipeline: major milestones 13 deliveries in 2016 and 2017 for 116,860 m² and € 583 million ( € 474 million Group Share); 50% prelet (92% for 2016) > Deliveries Letting success Letting success Silex 1 - Lyon Euromed - Marseille EDO - Greater Paris Calypso & Hotel Golden Tulip 26% prelet to BNP Paribas 100% prelet to a large corporate 9,600 m² of offices; 30% let Issy-les-Moulineaux; 10,760 m² Lyon-CBD; 10,600 m² 4* hotel of 210 rooms let to Louvre Hotel Group Delivery in Q1 2017 Delivery in Q2 2017 FONCIÈRE DES RÉGIONS H1 2016 RESULTS 12
Italy Offices Office – Milan 13
ITALY OFFICES Portfolio A LEADING PROPERTY PLAYER IN ITALY € 4.0 billion (100%) € 2.1 billion (GS) A € 4.0 billion portfolio ( € 2.1 billion Group Share) Strategic > Through Beni Stabili, subsidiary at 52.2% of Foncière des Régions vs 48.5% at end-2015 guidelines Acquisition of 85.2 million shares > € 52 million investment, 27% discount on 2015 EPRA NAV > New General Manager: Alexei Dal Pastro Accelerate Real Estate > Ex-Head of Fund & Asset Management and member of the management committee of Prelios SGR (c. € 4 bn asset strategy under management) Increase profitability Operating performance: first results of the new strategy Strengthen the team Value Rents Firm lease Occupancy Offices ex-TI Offices ex-TI maturity rate +3.1% +2.6% 9.5-year 95.1% Like-for-like Like-for-like Total Total vs. vs. portfolio: portfolio 9.7-year 92.8% -0.8% +1.5% 2015 2015 FONCIÈRE DES RÉGIONS H1 2016 RESULTS 14
ITALY OFFICES Portfolio H1 2016 RENTAL ACTIVITY: A SITUATION TURNAROUND € 4.0 billion (100%) € 2.1 billion (GS) 23 new contracts signed for 19,348 m² € 5.1 million of new rents ( € 2.7 million Group Share) > 14 re-lettings for 17,196 m² € 5.9 million of rents ( € 3.1 million Group Share) > Improved occupancy rate 93.5% 87.4% 0.7pt 1 +1.6pt +3.2pts 1.3pt 1 95.1% 90.6% 92.8% 86.1% Via Messina, Milan 6,530 m² let to Widiba Total portfolio Portfolio ex-TI End-2015 June-2016 End-2015 June-2016 FONCIÈRE DES RÉGIONS H1 2016 RESULTS 15 1 Via Colonna & Monte Titano are as of June 2016 in development
ITALY OFFICES Portfolio H1 2016 ACHIEVEMENTS: MEANINGFUL PROGRESSES € 4.0 billion (100%) € 2.1 billion (GS) 2-year vacant asset plan: strong successes € 4.6 million € 72 million 1 ( € 37 million Group Share) capex > of rents € 19 million expected extra cash-flows ( € 10 million Group Share) > already secured Development pipeline: first pre-letting in Symbiosis > A Milestone for a new innovative office district in Milan New 16,000 m² Fastweb € 86 m Pre-let headquarter Investment 10.5-year firm Symbiosis, Milan 19,000 m² of offices to be delivered in October 2018 > > 6.8% yield on cost + option for the remaining 3,000 m² FONCIÈRE DES RÉGIONS H1 2016 RESULTS 16 1 € 60 million initial capex plan announced in 2015 with, in addition, Cernaia project, in Milan
ITALY OFFICES Portfolio H2 2016: € 85 MILLION OF ACQUISITIONS SECURED IN MILAN € 4.0 billion (100%) € 2.1 billion (GS) > Acquisition of 2 towers for 11,800 m² TOWER A > FdR now owns the whole 25,000 m² complex NEW ACQUISITION Via Messina > Good location in front of subway station Cernisio towers A & C > 1 B&B hotel (19-year lease); 6,539 m² of offices (61% let) TOWER B > € 26.8 million investment ( € 14 million Group Share) > 6.8% potential yield TOWER C NEW ACQUISITION TOWER D Via Messina Good office location, 4’ walk to the subway station Affori Centro > Via Scarsellini > 21,637 m² of offices built in 2010 Via > 82% let for 6.5 years, mainly to Aviva + 2-year guarantee on vacant space Scarsellini € 58 million investment ( € 29 million Group Share) > > 6.4% yield Via Messina Porta Nuova Target 80% of portfolio in Milan in 2020 vs 51% in June-2016 CBD FONCIÈRE DES RÉGIONS H1 2016 RESULTS 17
German Residential Residential – Berlin 18
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