H1 2019 RESULTS INCREASING PIPELINE, STRONGER BALANCE SHEET AND GROWING OPERATING & FINANCIAL RESULTS 23 JULY 2019
FIRST HALF 2019 / KEY MILESTONES ACHIEVED ACCELERATION OF DISCIPLINED OPERATING DEVELOPMENTS FINANCIAL PROFILE PERFORMANCE €660 M +3.3% LTV 39.2% €526 MILLION GROUP SHARE NEW COMMITTED PROJECTS TARGET <40% ALREADY REACHED LIKE-FOR-LIKE REVENUE RATING UPGRADE TO LIKE-FOR-LIKE VALUE +2.8% +100,000 m² BBB+ 2 H1 2019 RESULTS
CONTENTS I. COVIVIO’S STRATEGY 4 II. KEY MILESTONES ACHIEVED 7 II-A. Acceleration of the development pipeline 7 II-B. Qualitative asset rotation 17 II-C. A strategy supporting ESG performance 23 III. CONTINUED DYNAMISM IN REVENUE GROWTH 25 IV. FINANCIAL RESULTS 35 APPENDIX 42 3 H1 2019 RESULTS
I. COVIVIO’S STRATEGY
COVIVIO BUSINESS MODEL / A DIVERSIFIED SPECIALIST… ONE OF THE LEADERS IN EACH OF OUR MARKETS WITH EXPERIENCED & HIGH-PERFORMING LOCAL TEAMS GERMAN RESIDENTIAL 36 % ONE OF THE LEADERS 26 % WITH THE BEST QUALITY PORTFOLIO €16 Bn OFFICES Group share ONE OF THE LEADERS IN FRANCE & THE LEADER IN MILAN €23 Bn at 100% 21 % HOTELS IN EUROPE 15 % THE LEADER WITH A UNIQUE PLATFORM <2 % Non strategic 1 1 Proforma of the disposal of the French residential portfolio, under disposal agreement 5 H1 2019 RESULTS
…REWARDED BY A SOLID STOCK PERFORMANCE …REWARDED BY A SOLID & RESILIENT COVIVIO’S DIVERSIFICATION IS A STRENGTH… STOCK PERFORMANCE Stock annualised total return performance at end-June 2019 1 DIVERSIFICATION IN 4 DYNAMIC MARKETS Covivio +13% WITH GROWING DEMAND & LACK OF SUPPLY +10% +8% +9% +10% RESILIENT PERFORMANCE +8% EPRA Europe 2 WITH SECURED CASH-FLOWS THANKS TO EFFICIENT ASSET MANAGEMENT 0% -1% SIGNIFICANT GROWTH POTENTIAL WITH A €6 BN DEVELOPMENT PIPELINE TO FUEL FUTURE GROWTH 20-year annualised 10-y 5-y 3-y 1-y total return 1 Source: EPRA Reporting at 30/06/2019 6 H1 2019 RESULTS 2 EPRA Europe developed index
II. KEY MILESTONES ACHIEVED A. Acceleration of the development pipeline B. Qualitative asset rotation C. A strategy supporting ESG progress
DEVELOPMENT PIPELINE / A STRATEGIC PILLAR FOR OUR FUTURE GROWTH TOTAL PIPELINE OF €6 BN (€4.4 BN GROUP SHARE) OF WHICH €2.1 BN C OMMITTED +30% IN COMMITTED PIPELINE AT END-JUNE 2019 +€660 MILLION OF NEW PROJECTS (+€526 m in Group share) €2.1 bn +100,000 m² mainly on €1.7 BILLION GROUP SHARE PARIS SO POP / 31,000 m² €1.6 bn 51 % PRE-LET €1.3 BILLION GROUP SHARE LEVALLOIS ALIS / 20,500 m² 6.0 % YIELD ON COST >30 % VALUE CREATION TARGET MILAN SYMBIOSIS / 28,600 m² ~€90 M ADDITIONAL RENTAL INCOME 1 GROUP SHARE BERLIN RESIDENTIAL / 15,000 m² End-2018 H1 2019 1 Vs annualised revenue at end-June 2019, excluding Jean Goujon See appendix p.47-52 for more details 8 H1 2019 RESULTS
DEVELOPMENT PIPELINE / DELIVERIES MAINLY IN 2020 & 2021 Delivery schedule on committed projects €200 m delivered PRINCIPE AMEDEO – 6,500 m² MEININGER PARIS – 249 rooms VIA DANTE – 4,700 m² + €60 M / 100 % pre-let €47 M / 100 % pre-let €57 M / 100 % pre-let €150 M 2019 Committed 91 % let or pre-let € 100 M Group share €749 M 2020 € 617 M Group share 2/3 pre-let MONTROUGE FLOW – 23,500 m² CHATILLON IRO – 25,600 m² LYON SILEX II – 30,900 m² €115 M / 100 % pre-let €139 M / 0 % pre-let €166 shared at 50 % / 50 % pre-let €925 M 50 % pre-let € 694 M Group share 2021 GOBELINS – 4,400 m² JEAN GOUJON – 8,460 m² BERLIN RESIDENTIAL – 45,270 m² 3 % pre-let €257 M €50 M / 100 % pre-let €182 M / 100 % pre-let €171 M 2022 € 257 M Group share €2.1 billion committed pipeline 9 H1 2019 RESULTS
PARIS SO POP / IN A GROWING AND ATTRACTIVE BUSINESS DISTRICT THE BUSINESS DISTRICT PARIS 17 TH NORTH / CLICHY / ST-OUEN IS UNDER FULL URBAN REGENERATION AROUND THE LINE 14 OF THE GRAND PARIS N2 project 15,900 m² mixed-use Committed with delivery in 2021 New Paris courthouse Office Stock 1.2 million m² Annual take-up 156,000 m² 69% ON NEW SPACE New space available under construction until 2021 50,000 m² per year 1 Average 2017-2018 10 Source: Crane Survey
PARIS SO POP / 60% VALUE CREATION TARGET INCREASING RENT & EXTRACTING VALUE CREATION THROUGH REDEVELOPMENT € 113 M TOTAL COST GROUP SHARE 2012 / ACQUISITION OF CITROËN HEADQUARTERS AT 8.1% YIELD 6.1% YIELD ON COST 2018 / DEPARTURE OF CITROËN 2019 / BUILDING PERMIT WITH A 70% EXTENSION FROM 18,500 m² TO 31,000 m² +145% TARGET RENT INCREASE VS PREVIOUS TENANT 2019 / SYNDICATION OF 49.9% +70% FROM EXTENSION WITH CREDIT AGRICOLE ASSURANCES +75% FROM INCREASED RENT IN €/ m² ON THE EXTENDED SURFACE ~60% TARGET VALUE CREATION 11 H1 2019 RESULTS INCLUDING MARGIN ON THE SYNDICATION
LEVALLOIS ALIS / A HISTORIC BUSINESS DISTRICT WITH SCARCITY OF NEW SPACE Office Stock ~950,000 m² Yearly take-up 1 93,000 m² 35% on new space New space available under construction until 2021 13,000 m² per year 1 Average 2017-2018 12 H1 2019 RESULTS Source: Crane Survey
LEVALLOIS ALIS / 40% VALUE CREATION TARGET 2000 2015 JANUARY 2019 2019 2022 € 215 m Obtain of the construction permit Acquisition of blocks A&C Acquisition of block B Departure of Lagardère Expected delivery to build 20,500 m² at a 6.4% yield total cost 1 13,000 m² of offices 4,700 m² +15% extension 5.0% yield on cost +60% TARGET RENT INCREASE VS PREVIOUS TENANT Omega A & C +15% FROM EXTENSION +45% FROM INCREASED RENT IN €/ m² ON THE EXTENDED SURFACE AREA Omega B ~40% TARGET VALUE CREATION Former building Future building 1 Including land value of €125 million 13 H1 2019 RESULTS
MILAN / TWO NEW COMMITTED PROJECTS IN THE GROWING DISTRICT OF SYMBIOSIS SYMBIOSIS D REINVENTING CITIES The Symbiosis area – 120,000 m² development potential Building F Building G Building H Building E Buildings A+B Building D Delivery 2022 Delivery 2021 10,000 m² 18,600 m² €84 m €42 m offices & of offices total cost total cost mixed-use spaces Symbiosis D 6.9% 6.6% 35% 18% yield on cost yield on cost pre-let pre-let Already delivered 14 Committed H1 2019 RESULTS
MILAN THE SIGN / FULLY PRE-LET 18 MONTHS AHEAD OF DELIVERY BUILDINGS B & C 16,900 m² BUILDING D 11,400 m² DELIVERY H2 2020 Land bank acquired Full pre-let to a leading global IT in 2018 and digital engineering services provider for 12 years To be committed by M2 end-2019 / early 2020 €106 MILLION TOTAL COST FOR 26,200 m² BUILDING A Duomo AON HQ ON BUILDINGS A, B & C Milan CBD 9,300 m² 7.3% YIELD ON COST Metro line 2 Fully pre-let to AON Porta in 2018 Ticinese Bocconi >25 % Delivery H1 2020 THE SIGN University Suburban train S9 TARGET VALUE CREATION Navigli business district 15 H1 2019 RESULTS
DELIVERIES 2019 / STRENGTHENING OUR TRACK RECORD 4 OFFICES (45,600 m²) / 5 HOTELS (790 rooms) Cité du Numérique Quai 8.2 Helios BORDEAUX BORDEAUX LILLE 19,200 m² / OFFICES 10,900 m² / OFFICES 9,000 m² / OFFICES € 350 M TOTAL COST €211 M Group share 6.2 % YIELD ON COST Amedeo B&B HOTELS MEININGER HOTELS MILAN 2 HOTELS / 192 ROOMS 3 HOTELS / 600 ROOMS 6,500 m² / OFFICES 90 % DELIVERED IN JULY 1 DELIVERED 1 DELIVERED ~30 % OCCUPANCY value creation Projects delivered in H1 2019 16 H1 2019 RESULTS
II. KEY MILESTONES ACHIEVED A. Acceleration of the development pipeline B. Qualitative asset rotation C. A strategy supporting ESG progress
INVESTMENTS / €622 MILLION IN H1 2019 (€338 MILLION GROUP SHARE) FOCUS ON DEVELOPMENT PIPELINE NEW ACQUISITIONS MAINLY IN HOTELS IN OFFICES & RESIDENTIAL €307 M CAPEX €315 M €192 M GROUP SHARE €146 M GROUP SHARE 6.0% YIELD ON COST 5.2% YIELD 1 Montrouge Flow – 100% pre-let Novotel – Lyon Gerland INCLUDING €176 MILLION FOR A 32% STAKE IN A 57% IN PARIS, LYON, BORDEAUX PORTFOLIO OF 32 ACCOR HOTELS Quality locations in Paris & major cities in France & Belgium 25% IN MILAN Attractive price of €88k / room, 23% below our comparable 18% IN BERLIN current Accor portfolio link to dedicated press release Berlin Residential See appendix p.60 for more details 1 Potential yield on acquisitions in German residential and Hotels. Immediate yield of 4.9% 18 H1 2019 RESULTS
THE DISPOSAL PLAN IS WELL ON TRACK €732 million of disposals secured YTD (€602 million Group Share) with a 6.4% margin ACCELERATION OF MATURE ASSET DISPOSALS WITH A 9.3% 2019 Margin vs Gross AVERAGE MARGIN 100%, in €M Activity 2018 value yield 70 % of the disposals 257 4.1% 4.5% French Offices 267 1.0% 5.4% Italy Offices 30 74.9% 1.9% German Resi 162 11.6% 6.0% Hotels PURSUIT OF THE PORTFOLIO QUALITY ENHANCEMENT 16 8.7% 5.8% Non-strategic WITH DISPOSAL OF NON-CORE BUILDINGS 732 6.4% 5.1% Total 100% 30 % of the disposals 602 4.7% 5.0% Total Group Share 19 See appendix p.61 for more details H1 2019 RESULTS
FRENCH OFFICES DISPOSALS / TWO MATURE ASSETS IN GREATER PARIS €221 MILLION DISPOSALS SECURED 6% MARGIN 4.4% NET YIELD COUPOLE – CHARENTON GREEN CORNER – SAINT-DENIS 11,500 m² 20,800 m² Development project delivered in 2015 with a 7% yield on cost Acquired in 2014 at a 6.5% yield €167 MILLION €54 MILLION 20 H1 2019 RESULTS
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