24 July 2014

First-half 2014: EPRA earnings up 32.5%

• An upgraded recurring EPS growth target (up 20%)

After outperforming its targets in the first-half, Cegereal has raised its full-year recurring earnings per share target from 15% to over 20%.

• Robust growth in operating income (up 11.1%)

First-half 2014 operating income rose 11.1% to €13.8 million from €12.3 million for the year-earlier period. This robust performance was due to the combined effect of higher rental income (up 4.3%) and a 25-bps reduction in the cost of debt to 3.15% following the increase in the portfolio occupancy rate to over 90% (91.5% at June 30, 2014).

• Launch of the project to develop the first Garden Tower in La Défense

A unique project in the heart of the La Défense business district, the Garden Tower will offer users of the Europlaza building an exceptional outdoor space as from early next year. Only the third building in France to obtain both HQE Exploitation and BREEAM In-Use International Very Good environmental certification, Europlaza will give tenants and their visitors the opportunity to enjoy a more than 3,000-sq.m. private garden, as well as two internal gardens, all designed by architect Juan Trindade. A dozen major international groups already benefit from the many amenities and low occupancy costs of this building located just a short walk away from the Grande Arche and alongside the new walkway linking the Coupole and Charras shopping centers.

• Improved rental income in a challenging market environment (up 4.3%)

Rental income calculated in accordance with IFRS – which includes rental expenses rebilled to tenants – amounted to €29.2 million in first-half 2014, an increase of 8.1% on the year-earlier period. Excluding rebilled expenses, rental income was 4.3% higher at €22.6 million, primarily reflecting the start of new leases signed in 2013 and the effect of lease renewals signed in the first half of 2014.

During the period, Cegereal kept up its marketing momentum, signing or renewing leases on over 10,000 sq.m.: 

- A total of 2,319 sq.m. were let to new tenants, and
- Lease renewals or extensions were signed concerning a further 7,825 sq.m.

At June 30, 2014, the portfolio occupancy rate stood at 91.5%. 


The Europlaza occupancy rate stood at 93% at that date, versus 89% at December 31, 2013.

During the period, two tenants renewed and extended their leases and a new tenant moved in: 

- Galderma’s lease on 4,002 sq.m. was renewed with effect from January 1, 2014 and a further 825  sq.m. were leased during the second quarter.
- The lease with Crédit Agricole/BforBank on 1,703 sq.m. was also renewed, with a further 1,295 sq.m. leased in the second quarter.
- 887 sq.m. were leased to Gas Natural, effective from May. 

A total of 3,100 sq.m. of office space is currently available for rent. Negotiations are at an advanced stage with prospective tenants for units representing some 1,800 sq.m.


The Arcs de Seine occupancy rate rose to 84% at June 30, 2014 from 81% at December 31, 2013. 

During the period, Cegereal kept up its marketing strategy for Arcs de Seine, the standout property in the capital’s Telecommunication Valley. Leases on 1,432 sq.m. were signed with two new tenants, BBC and Sagem, which came into effect during the second quarter. 

Arcs de Seine is the fourth office building in France to earn dual HQE Exploitation and BREEAM In-Use International Very Good environmental certification. Its main tenants include Canal+, Hewlett Packard and Huawei.

As of June 30, 2014, there was only 7,000 sq.m. of office space remaining to be let out of the 40,000 sq.m. put on the market on completion of the refurbishment program.


The 30,000-sq.m. Rives de Bercy property on the banks of the Seine in Charenton is fully let to a single tenant, Crédit Foncier, under a 9-year lease. The property is currently undergoing an environmental audit, with HQE In-Use certification expected to be obtained before the end of the year as part of the Go Green program.

• Key figures


(€ millions)

First-half 2014

First-half 2013 


IFRS turnover




IFRS rental income 

Portfolio occupancy rate: 91.5%




IFRS net income




EPRA earnings




EPRA NNNAV per share excluding transfer costs (in €)




NAV per share including transfer costs (in €)




The portfolio was valued by DTZ Eurexi at €844 million excluding transfer costs (€899 million including transfer costs) as of June 30, 2014, versus €849 million excluding transfer costs as of December 31, 2013.

The three properties’ appraisal values, excluding transfer costs, are as follows: 

-Arcs de Seine: €327m
-Europlaza: €339m
-Rives de Bercy:  €178m

Cegereal has a healthy balance sheet, with LTV stable at 47.4% at June 30, 2014.

EPRA NNNAV excluding transfer costs stood at €33.0 per share at June 30, 2014, compared with €34.1 per share at the 2013 year-end. The decline over the period reflected dividend distributions (negative impact of €0.75 per share), earnings growth (positive impact of €0.9 per share), rent-free periods granted to new tenants (negative impact of €0.45 per share), changes in the properties’ appraisal values (negative impact of €0.4 per share) and changes in the fair value of bank debt (negative impact of €0.4 per share).

The significant improvement in the portfolio’s rental status helped to drive an increase in cash flow to €12.9 million in first-half 2014 from €9.8 million for the year-earlier period.

Note: as cash flow is very similar to EPRA earnings, from now on cash flow will no longer be included in the Company’s key indicators.

• An enhanced dividend-paying capacity

The Company has raised its 2014 earnings per share target to over 20% and is aiming to increase the payout to shareholders by distributing an interim dividend of €0.75 per share to be paid on December 29, 2014, subject to Board approval.





About Cegereal

Listed on Euronext Paris since 2006, in compartment B, Cegereal invests in modern office properties located on the outskirts of Paris that offer very high quality amenities and environmental performance. The portfolio's appraisal value, as estimated by independent valuers DTZ Eurexi as of June 30, 2014, is €844 million (excluding transfer costs). The Company had a market capitalization of €330 million as of July 21, 2014. 


Investor Calendar

Rental income for the third quarter of 2014 will be announced before the start of trading
on November 13.

For more information, contact:

Investor Relations 
Raphaël Tréguier
+33 1 42 25 76 36 

Media Relations
Aliénor Miens
+33 1 53 32 84 77