18 February 2016
Cegereal - 2015 Annual Results
|Paris, February 18, 2016 – 8:00 a.m. |
Cegereal - Annual Results
2015: A decisive year with NAV up 12.6% and the entrance of Northwood Investors
"2015 was a decisive year for Cegereal. Our operating performance, combined with our ongoing commitment to environmental responsibility, positions us as one of the most attractive, forward-looking players in the French office property market. In addition, we are pleased to welcome a new shareholder, Northwood Investors, who wants to support our Company in its growth projects and make Cegereal a benchmark office property company in France," déclare Raphaël Tréguier, Directeur Général de Cegereal
- Northwood Investors' successful tender offer
In the fourth quarter of 2015, Northwood Investors acquired Commerz Real's 59.78% interest in Cegereal. Following this transaction, Jérôme Anselme was appointed Deputy Chief Executive Officer of Cegereal and five new members were chosen to serve on the Board of Directors. Their appointments will be submitted to shareholders for ratification at the General Shareholders' Meeting on February 18, 2016. Marie-Flore Bachelier, former CFO of Mercialys, also joined as independent Director, alongside Richard Wrigley and Alec Emmott, and was appointed Chairman of the Audit Committee.
In accordance with applicable rules and regulations, Northwood filed a tender offer for the remaining Cegereal shares, which closed on January 25, 2016. As a result, Northwood now holds 98.44% of Cegereal's share capital. Northwood has announced its intention to allocate significant resources to Cegereal to support its growth strategy while maintaining its REIT status. The company's shares will not be delisted.
- Portfolio value up 8.15%
As expected, the return of institutional investors to the high-quality office segment in greater Paris continued and led to a drop in the capitalization rate for real estate assets in the inner suburbs.
This trend helped lift the appraisal value of Cegereal's real estate portfolio by a net 8.15% year-on-year to €942 million excluding transfer costs (more than €1 billion including transfer costs, also known as “replacement value”) as of December 31, 2015. This compares with €871 million excluding transfer costs at the previous year-end and €902 million excluding transfer costs as of June 30, 2015.
EPRA NNNAV came to €39.2 per share, up 12.6% from the year before. This increase primarily reflects the rise in the fair value of properties (positive impact of €5.3 per share), dividend distributions (impact of €1.65 per share), consolidated earnings growth (positive impact of €0.7 per share), rent-free periods granted to new tenants (positive impact of €0.1 per share) and changes in the fair value of bank debt (negative impact of €0.2 per share).
As of December 31, 2015, the three properties' appraisal values excluding transfer costs were as follows:
|- Europlaza :||€361 million (up 8.4%)|
|- Arcs de Seine :||€379 million (up 9.2%)|
|- Rives de Bercy :||€202 million (up 5.8%)|
- Key indicators
|In millions of euros||2015||2014||Variation|
|IFRS rental income||43.3||44.7||-1.0%|
|IFRS net income||81.0||42.4||+90.9%|
|Net cash-flows from operations||22.5||18.3||+22.5%|
|EPRA NNNAV per share excluding transfer costs (in €)||39.2||34.8||+12.6%|
|Replacement NAV per share including transfer costs (in €)||44.0||39.3||+12.1%|
|Portfolio value (excluding transfer costs)||942||871||+8.2%|
|Dividend (in € per share)||2.0||1.65||+21.2%|
The net cash-flows from operations deducted all IFRS adjustments from the EPRA earnings, such as tenant incentives linearization granted over the last years.
2015 EPRA earnings were €18.2 million (versus €23.7 million in 2014) with net cash-flows from operation increasing by 22.5% to €22.5 million, mainly due to the reduction of the tenant incentives granted over the last years.
The IFRS net income almost doubled largely as a result of the compression in the valuation yields assumed in the appraisal values which led to a change of up to €62.7 million (versus €18.7 million in 2014).
Cegereal refinanced all of its debt in 2012 at a reduced rate of 3.15% and does not have any repayment obligations until August 2017. Its loan to value stood at 43.0% as of December 31, 2015.
- Strong rental activity
While the rental market for large properties was sluggish in 2015, Cegereal made the most of its ability to provide flexible solutions for tenants and continued to turn in a strong letting performance for the Arcs de Seine and Europlaza buildings. During the year, eight new leases were signed for a total of 10,400 sq.m.
Arcs de Seine: 100% occupancy rate
This standout property in Paris's Telecommunication Valley on the banks of the Seine has been fully let since April 2015 (the occupancy rate stood at 97% as of December 31, 2014). Arcs de Seine is the fourth office complex in France to hold both HQE Exploitation and BREEAM In-Use "Very Good" certification. The property was entirely renovated in 2012.
In January 2015, Cegereal signed two new six-year leases, the first with Amgen on 2,800 sq.m. and the second with Exclusive Networks on 1,400 sq.m. In April, Boursorama, an Arcs de Seine tenant since 2012, leased an additional 1,400 sq.m., raising the occupancy rate to 100%.
Europlaza: "Garden Tower" a success
The private gardens at the base of the tower were inaugurated in the spring of 2015. The new renovated "garden floors" were completed in September and have been very actively marketed since then.
In 2015, five leases were signed on a total of 4,800 sq.m., including two renewals (Gartner and Software on 1,300 sq.m. each) and one extension (Gas Natural on 700 sq.m.). The La Défense tower's two new tenants, KPMG (900 sq.m.) and Robert Half (600 sq.m.), have raised the occupancy rate to 82% from 77% as of end- 2014.
Rives de Bercy: the final property in the portfolio to obtain dual certification (HQE and BREEAM "Very Good")
The new nine-year lease signed as part of the Go Green program in January 2013 with Crédit Foncier, the building's long-standing sole tenant, includes stringent mutual undertakings by the owner and the tenant to meet environmental targets.
In January 2015, Rives de Bercy (32,000 sq.m.) officially obtained BREEAM In-Use International "Very Good" certification alongside its HQE Exploitation certification delivered by independent organization Certivéa in December 2014.
- Continued commitment to CSR/Upgreen Your Business
Cegereal demonstrated its active commitment to corporate social responsibility (CSR) in early 2015 by inviting all of its stakeholders to take part in the Upgreen Your Business collaborative program. The successful completion of the Go Green project made Cegereal France's first fully "green" REIT in 2014.
In 2015, the international GRESB index ranked Cegereal third among listed office property companies for responsible management and sustainable development thanks to a 28% improvement in its overall performance.
- Amount to be distributed in dividends in 2016: €2.0 per share
Cegereal proposera à la prochaine assemblée générale des actionnaires, en mai 2016, une distribution de 2,0 euros par action en 2016. Le paiement interviendra le 20 juillet 2016.
Cegereal's Board of Directors met on February 17, 2016 to approve the audited consolidated financial statements for the year ended December 31, 2015.
The annual results presentation and video can be viewed on the Company's website:
|- April 15, 2016||First-quarter 2016 revenue|
|- May 2016||Annual Shareholders' Meeting|
|- July 20, 2016||Payment of the 2015 dividend|
|- July 22, 2016||First-half 2016 results|
|- October 2016||Third-quarter 2016 revenue|
Pour plus d’informations, merci de contacter :
|Media Relations||Investor Relations|
|Aliénor Miens / 01 53 32 84 77||Raphaël Tréguier / 01 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 by independent valuers DTZ Eurexi at €1 billion as of December 31, 2015 (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 benefits from the Green Star rating 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 €476 million on December 31, 2015.