9 months 2015: acceleration of the strategy · investment in a €348 million (€221 million gs)...
TRANSCRIPT
9 months 2015:
Acceleration of the strategy
5 November 2015
CONTENTS
FONCIÈRE DES RÉGIONS 2
>KEY EVENTS OF THE PERIOD
>OPERATING PERFORMANCE
>KEY TAKEAWAYS
>APPENDICES
3
Key events of the period
Sofitel - Lyon
FONCIÈRE DES RÉGIONS 9 M 2015 4
KEY EVENTS OF THE PERIOD
Q3 2015 ACHIEVEMENTS: WELL ON TRACK FOR OUR OBJECTIVES
New agreements
with our partners
A stronger
Real Estate portfolio
Strong lease activity YTD: 17% of the total rents
> 12 years average firm lease term
Successful renewal of the partnership with AccorHotels in Hotel Real Estate
Average firm lease term: 7 years ; Occupancy rate: 96%
Acceleration of the strategy
€1.9 billion (€1.3 billion GS) of investments YTD
€1.1 billion (€0.6 billion GS) of disposals YTD
Accelerated value
creation
Offices France: 4 new deliveries in Q3 totalling 65,800 m²
Offices Italy : 2 new acquisitions in Milan CBD in July
German Residential: new investment in central Berlin in October
Office, Rome
Office, Lille
FONCIÈRE DES RÉGIONS 5
KEY EVENTS OF THE PERIOD
FRANCE OFFICES: A SUCCESSFUL INVESTMENT STRATEGY
Historic delivery activity in 2015: 9 projects for 104,810 m²
> 84% let vs 71% at end-2014; average lease maturity close to 10 years
> Increase in portfolio quality: strategic locations in Grand Paris and Major Regional cities, green buildings, strong tenant base
> Attractive risk-return profile: €309 million GS of investments; 7% yield on cost; more than 20% average value creation at end-June 2015
9 M 2015
Eiffage Campus - Vélizy-Villacoublay (Grand Paris)
23,200 m²
Steel - Paris3,700 m²
Green Corner – Saint-Denis (Grand Paris)
20,400 m²
Reinforce portfolio and cash-flow quality
Strong value creation driver
Cœur d’Orly (Grand Paris)
18,450 m²
4 new deliveries in Q3 totalling 65,800 m²
FONCIÈRE DES RÉGIONS 9 M 2015 6
KEY EVENTS OF THE PERIOD
OFFICES ITALY: STRATEGIC ACQUISITION IN THE CITY CENTER OF MILAN
A new stage of development in an improving environment
Prime locations and value creation potential
> Acquisition from Cassa Depositi e Prestiti of 2 office buildings totalling 22,445 m² in Milan CBD
> Redevelopment potential within 3-5 years
> €105.6 million (€51 million GS) investments (4,700€/m²) including €25 million of capex
> Yield on cost of 6.2% on average
Corso Italia, MilanVia Principe Amedeo, Milan
FONCIÈRE DES RÉGIONS 9 M 2015 7
KEY EVENTS OF THE PERIOD
OFFICES ITALY: A NEW STEP AND STEADFAST AMBITION
Make the local platform a key player in the Italian real estate market’s recovery
A leader in Italy
> Foncière des Régions in Italy: a leader with a €4.0 billion portfolio (€1.9 billion GS) held through Beni Stabili
> 48% located in Milan; 42% of Telecom Italia assets
> 92.6% occupancy rate; 10 years average firm lease maturities
Accelerate the improvement of quality to help grow rental income and values
Change of management to drive new momentum
Tour Garibaldi, Milan
Symbiosis, Milan
Focus on offices in
Milan
Accelerate the
development pipeline
Reduce Telecom Italia
exposure
FONCIÈRE DES RÉGIONS
Property management potential: +45%
> Rents: €16 million and 6.7€/m²
> Benefit from a +43% reversionary potential
> Reduce the 4.2% vacancy rate
Asset management potential: +50%
> Possible creation of 100 new apartments
> Privatization potential: 50% margin; 30% of the portfolio to be sold progressively from 2017
Berlin
Mitte19%
Neukölln15%
Charlottenburg-Wilmersdorf
12%Friedrichshain-
Kreuzberg12%
Tempelhof-Schöneberg
14%
Steglitz-Zehlendorf
7%
Pankow8%
Spandau4%
Reinickendorf4%
Others5%
9 M 2015 8
KEY EVENTS OF THE PERIOD
GERMAN RESIDENTIAL: A NEW MAJOR INVESTMENT IN CENTRAL BERLIN
Investment in 2,735 units
Investment in a €348 million (€221 million GS) portfolio1
> Voluntary public tender offer on Berlin IV, real estate company listed in Copenhagen
A prime portfolio
> Prime buildings: 70% of Altbau buildings (built before 1918)
> Central location: 80% in the best central districts of Berlin
Rely on a well-experienced local team
A portfolio
management to galvanize
Berlin
Portfolio split by district (in value)
1 Pending successful completion of the offer. The offer is made on customary terms and conditions, including that FdR following the offer holds 50% of the voting right of Berlin IV
FONCIÈRE DES RÉGIONS
> 50% in small French regional cities
Better growth potential
Better portfolio qualityTargeted locationsBest performing hotels
New development capacities
> 12 years firm
> Same conditions
> At appraisal value
> Average yield: 6.2%
Hotels; €1.3 bn (100%)123
Hotels (€1.0 bn): lease renewals80
Hotels (€281 m): disposals before H1 201643 i
i
i
9 M 2015 9
KEY EVENTS OF THE PERIOD
HOTELS IN EUROPE: RENEWAL OF THE PARTNERSHIP WITH ACCORHOTELS
AccorHotels portfolio: one of the best in its market
> AccorHotels: 6% of the rents GS; 34% of Foncière des Régions lease maturities for 2017 and 2018
> 1st sale and leaseback of AccorHotels in 2005-2006; 91% in France and 9% in Belgium
> Lease structure: rents variable with the hotel’s revenues
Strengthen the partnership with AccorHotels
Increase hotel operators’ and Geographic's diversifications
> Weaker hotels performances
10
Operating performance
Steel – Paris
FONCIÈRE DES RÉGIONS 11
A GOOD LETTING ACTIVITY
Oméga (Levallois-Perret) – 11,488 m²
Renewal with Lagardère / 6 years
Steel (Paris – Trocadero) – 3,700 m²
New letting to Group OnePoint / 9 years
9 M 2015
OPERATING PERFORMANCE
* New lettings, renegotiations and renewals
Garibaldi Tower (Milan)
Reletting of 6,176 m² / 5 years
Telecom Italia (Italy)
Extension of the leases / 15 years
6.9% reduction in rent
Disposals and capex program
Rely on the quality of the portfolio and the partnership strategy
€97 million GS in lease agreements* YTD
> Secures 17% of total annualised rents
> Average maturity: 12 years firm
Like-for-like rents on renewals: -3.3% and stable excluding Telecom Italia
> Offices France: 45,855 m² of renewals close to passing rents (-2%)
> Offices Italy: 38,951 m² of renewals excluding Telecom Italia agreement with a +2% increase in rents
FONCIÈRE DES RÉGIONS 12
OPERATING PERFORMANCE
9 MONTHS 2015 REVENUES: GROWTH OF 5.4%
Growth supported by a strong investment activity
Steel letting to take effect in early 2016
+4 years of maturity
-0.3% excluding Telecom Italia
+3,2% in Berlin, Dresden and Leipzig
+1.4 year vs 2014 with Telecom Italia and AccorHotelsagreements
Indexation: 0.4%
Occupancy rate: 0.0%
Renewals: -0,2%
+3 years of maturity
9 M 2015
Group ShareRental income
(€m)Change
Change onlike-for-like
basis
Occupancyrate
Residual firm terms of leases
Offices - France 180.1 + 0.9% + 0.7% 95.5%1 5.4 years
Offices - Italy 79.2 - 9.6% - 2.6% 92.7% 9.8 years
Offices 259.2 - 2.6% - 0.4% 94.2% 6.6 years
Residential Germany 85.5 + 11.7% + 2.1% 97.5% n.a.
Hotels/Service Sector 60.1 + 58.7% + 0.4% 100% 9.7 years2
Other (French Resi.) 10.4 n.a. n.a. n.a. n.a.
Total 415.2 + 5.4% + 0.2% 96.0%1 7.2 years2
Change in rental income at like-for-like scope
1 Including Steel ; 2 post AccorHotels agreement
FONCIÈRE DES RÉGIONS
9 MONTHS 2015 INVESTMENTS: €1.9 BILLION COMMITTED
139M 2015
OPERATING PERFORMANCE
Record investment activity with attractive risk-return profile
€m; 9 months 2015Investments
including duties(100%)
Investments(Group Share)
Yield (Group Share)
Offices – France 231 231 7.0%
Offices - Italy 81 39 6.2%
Offices 312 270 6.8%
Residential Germany 867* 543* 5.0%*
Hotels/Service Sector 763 532 6.3%
Total 1,942 1,345 5.9%
Capex on the development pipeline
Yield on cost on offices post redevelopment
A dynamic investment activity financed by disposals and the €255 million capital increase in early 2015
* Pending successful completion of the offer Berlin IV (€348 million and €221 million GS)
FONCIÈRE DES RÉGIONS
9 MONTHS 2015 INVESTMENTS: QUALITY AND GROWTH
149M 2015
OPERATING PERFORMANCE
German Residential: buoyant acquisitions activity in good conditions
> €867 million (€543million GS) of acquisitions YTD vs €500 million objective for 2015
> Focus in dynamic cities (96% in Berlin and Hamburg) with growth potential (35% average reversionary potential)
> Transformation underway: 55% of the €3.3 billion portfolio is in Berlin, Hamburg, Dresden and Leipzig vs 24% in 2013
Hotels in Europe: strengthen our leadership position
> €763 million (€532 million GS) of investments YTD
> Diversity in the investment modes to fit hotel operators needs: acquisitions, developments and conversions, management contracts
> Transformation underway: diversification of operators (50% AccorHotels vs 62% in 2013); geographic diversification (30% outside France vs 20% in 2013)
Residential, BerlinMotel One, Frankfurt A dynamic and qualitative asset rotation
FONCIÈRE DES RÉGIONS
WELL ON TRACK ON THE DISPOSAL PROGRAM
159M 2015
OPERATING PERFORMANCE
(€m, 9 months 2015)Disposals and
agreements(100%)
Disposals and agreements(Group Share)
Margin vs.Last appraisal
values Yield
France Offices 75 75 +19% 2.7%
Italy Offices 252 122 +1.0% 6.6%
Germany Residential 149 91 +9.8% 6.9%
Hotels & Service Sector 309 133 +0.8% 6.1%
Non-strategic 327 198 + 3.6% 2.7%
Total asset disposals 1,113 620 +5.3% 4.8%
Take advantage of a buoyant investment market
Reduction of non-strategic activities
Improvement of portfolio quality
Disposal of vacant assets with strong margin
Including €126 million of Telecom Italia assets
Mature assets in NRW
Including €281 million of AccorHotels
Including €200 million in French Residential
16
Key takeaways
Symbiosis– Milan
FONCIÈRE DES RÉGIONS
KEY TAKEAWAYS
17
KEY TAKEAWAYS
Successes of the development pipeline strategy
Hotel - Paris
Residential - Berlin
Office - Grand Paris
Office - Milan
Strengthened cash-flow profile
Improved portfolio quality
Accelerated growth potential9 M 2015
France Offices
ItalyOffices
German Residential
Hotel Real Estate
A new ambition in term of developments and qualitative asset rotation
Dynamic investment activity with high organic growth prospect
Portfolio focused on better performing assets and new investment capacities
FONCIÈRE DES RÉGIONS 18
FINANCIAL AGENDA
AGENDA
Full year 2015 results: 18 February 2016
9M 2015
19
Appendix
Eiffage Campus – Vélizy-Villacoublay (Grand Paris)
FONCIÈRE DES RÉGIONS
A LEADING OPERATOR IN ITS MARKETS
20
APPENDIX
An integrated operator with strong local teams
€10.8 billion portfolio Group share (€17.5 billion at 100%)
18%
19%
43%
13%
7%
France Offices> Sound fundamentals; market depth
> Attractive yield; value-creating pipeline
Germany Residential> Sound economy; buoyant market
> Significant reversion potential; development potential through acquisitions
Non-strategic
> including France Residential (4%)
Hotel real estate> Leadership position; impressive track record
> Strong relationship with operators; high operating margin
Italy Offices > Leadership position; prime assets> Record cash flow visibility
9M 2015
FONCIÈRE DES RÉGIONS
9 MONTHS 2015 REVENUES
21
(€ million)
100% Group Share
9M 2014 9M 2015Change
(%)9M 2014 9M 2015
Change (%)
Change (%)LFL
% of rent
Offices France 187.9 194.7 3.6% 178.5 180.1 0.9% 0.7% 43%
Offices Italy 172.2 163.3 -5.2% 87.6 79.2 -9.6% -2.6% 19%
Total Offices 360.0 358.0 -0.6% 266.1 259.2 -2.6% -0.4% 62%
Hotels and Service sector 146.5 152.7 4.2% 37.8 60.1 58.7% 0.4% 14%
Residential Germany 126.6 140.8 11.2% 76.6 85.5 11.7% 2.1% 21%
Total Strategic activities 633.1 651.4 2.9% 380.5 404.8 6.4% 0.2% 97%
Other 22.2 17.0 -23.5% 13.6 10.4 -23.4% na 3%
Total rents 655.4 668.4 2.0% 349.1 415.2 5.4% 0.2% 100%
Total rent does not take into account rental income from Logistics (€13.4 million), reclassified in 2014 as Discontinued Operations
9M 2015
APPENDIX
FONCIÈRE DES RÉGIONS
ORGANISATION CHART
22
APPENDIX
Foncière des Régions
France Offices Italy Offices(Beni Stabili)
Germany Residential
(Immeo)
Management contracts
(FDM Management)
Hotels & Service Sector
(Foncière des Murs)
48.5% 61.0% 43.1%
40.8%
Consolidated subsidiaries
Equity affiliates
A development by financial partners in order to further the real estate strategy
9M 2015
FONCIÈRE DES RÉGIONS
Paris30, avenue Kléber75116 ParisTel.: +33 1 58 97 50 00
ContactPaul ArkwrightTel.: +33 1 58 97 51 85Mobile: +33 6 77 33 93 [email protected]