17 February 2017
2016 Annual Results
|Paris, February 17, 2017 – 8:00 a.m. |
EPRA EARNINGS UP 54.8%
" A number of important milestones were put in place this year, with the restructuring of the balance sheet, the major new acquisition and the renewal of the shareholder base, " said Cegereal's Chief Executive Officer Raphaël Tréguier. "In 2017, we are looking at growth opportunities in the office real estate sector."
- KEY INDICATORS
|In millions of euros||2016||2015||Change|
|IFRS rental income||47.2||44.3||+ 6.5%|
|IFRS net income||41.3||81.0||- 49.0%|
|EPRA earnings||28.2||18.2||+ 54.8%|
|Net cash flows from operations||34.8||22.5||+ 19.3%|
|Portfolio value (excluding transfer costs) like-for-like||972||942||+ 3.2%|
|EPRA NNNAV per share excluding transfer costs (in €)||40.8||39.2||+ 4.1%|
|Replacement NAV per share including transfer costs (in €)||47.1||44.0||+ 11.6%|
|Dividend (in € per share)||2.1||2.0||+ 5.0%|
|Total Share Return over the last 12 months||9.2%||17.3%|
Attesting to the value created during the year, the Total Share Return over the last 12 months came to 9.2%, with NAV growth of 4.1% for the period and a distribution ratio of 5.1%.
EPRA NNNAV stood at €40.8 per share, reflecting the rise in fair value of properties (positive impact of €2.3 per share), dividend distributions (negative impact of €2.0 per share), consolidated earnings growth (positive impact of €0.8 per share), rent-free periods granted to new tenants (positive impact of €0.24 per share) and changes in the fair value of bank debt (positive impact of €0.2 per share).
Replacement NAV was higher, with half of the increase resulting from the rise in transfer duties (from 6.5% to 7.5%) in valuations and half from the addition of the Hanami property to the portfolio.
EPRA earnings for the year amounted to €28.2 million, compared with €18.2 million in 2015, with net cash flows from operations climbing 54.9% to represent €34.8 million.
Given that the Hanami property was added to the portfolio on December 15, its impact on annual results was very limited. For example, its contribution to 2016 IFRS rental income was €0.4 million (corresponding to theoretical annualized rental income of €9.3 million).
IFRS net income amounted to €41.3 million for the year ended December 31, 2016. The value of the real estate portfolio like-for-like continued to rise (up 3.2%), but to a lesser extent than in 2015 (up 8.2%), leading to a 49.0% relative decline in IFRS net income.
- A RENEWED SHAREHOLDER BASE
After Northwood, which held 98.44% of Cegereal's share capital following the tender offer that closed in late January 2016, new leading investors have become shareholders of the Company, enabling it to continue qualifying for the preferential tax treatment granted to REIT-style French listed real estate investment companies (SIICs).
Only 55% of Cegereal's capital is now held in concert by the Northwood entities alongside GIC, which has become the Company's second leading reference shareholder with close to 25% of the capital.
- AN OPTIMIZED FINANCIAL STRUCTURE
Cegereal took advantage of favorable market conditions last summer to refinance a €405 million loan via a €525 million credit agreement, at the very competitive interest rate of 1.35%. The transaction, providing for a five-year loan with a two-year extension option, helped Cegereal reduce its finance costs by 45%.
In order to refinance the tax transparent holding company of the Rueil Malmaison acquisition, Cegereal entered into a credit agreement for €100 million on December 15, 2016. The loan carries interest at an average rate of about 1.50%.
Following these two transactions, Cegereal's debt ratio stood at 52.1%.
- A MAJOR NEW ACQUISITION
Cegereal has added an exceptional asset to its portfolio with the acquisition of the Hanami campus in Rueil Malmaison, the green city in the Western Crescent of Greater Paris. The 30,000 sq.m complex is made up of eight buildings spread across 3.3 hectares on a landscaped site on the banks of the Seine. Leased to first class tenants, the campus has an occupancy rate of 96%.
With this fourth property in the portfolio, the estimated value of Cegereal's real estate assets surged 19.3% over the year to represent €1,124 million excluding transfer costs (€1,209 million including transfer costs or at "replacement value") at December 31, 2016, compared with €942 million a year earlier.
The portfolio's overall occupancy rate was 87% at December 31, 2016. Given that discussions regarding both the Arcs de Seine and Europlaza properties have reached an advanced stage, the occupancy rate should rise above 90 % in the very near future.
- OPERATING EXCELLENCE RECOGNIZED AT THE INTERNATIONAL LEVEL
In recognition of the commitment it has made in recent years to corporate social responsibility, as currently expressed through its collaborative Upgreen Your Business program, Cegereal was ranked number one in the 2016 Global Real Estate Sustainability Benchmark (GRESB) in the "listed office property companies in Europe" category.
In addition, Cegereal obtained ISO 14001:2004 certification for its environmental management system.
Lastly, Cegereal won two awards at the European Public Real Estate Association (EPRA) conference, thereby positioning itself among Europe's leaders in financial and extra-financial reporting.
- AMOUNT TO BE DISTRIBUTED IN DIVIDENDS IN 2017: €2.1 PER SHARE
At the Annual Shareholders' Meeting in April 2017, Cegereal intends to recommend paying a total of €2.1 in dividends per share in 2017. The dividend will be paid on July 13, 2017, subject to shareholders' approval.
Cegereal's Board of Directors met on February 16, 2017 to approve the audited consolidated financial statements for the year ended December 31, 2016.
The annual results presentation can be viewed on the Company's website:
|- April 21, 2017||First-quarter 2017 revenue|
|- April 2017||Annual Shareholders' Meeting|
|- July 13, 2017||Payment of the 2016 dividend|
|- July 21, 2017||First-half 2017 results|
|- October 26, 2017||Third-quarter 2017 revenue|
For more information, please contact:
|Media Relations||Investor Relations|
|Aliénor Miens / +33 1 53 32 84 77||Raphaël Tréguier / +33 1 42 25 76 36|
Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated at €1,209 million as of December 31, 2016 (replacement value).
To date, Cegereal is the first French property company with a fully certified portfolio from an environmental point of view (HQE and BREEAM "Very Good") and ranks as “Sector Leader” in the international benchmark GRESB.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €495 million on February 13, 2017.