ICADE (EPA:ICAD) - ICADE – REVENUE UP +8.4% IN Q1 2018
Transparency directive : regulatory news
27/04/2018 07:30
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PRESS RELEASEIssy-les-Moulineaux, April 27, 2018
ICADE - REVENUE UP +8.4% IN Q1 2018
* Commercial Property Investment:
o Rental income up by as much as +5,8%(1) to EUR99.0 million
o Financial occupancy rate at 92.4% (+0.5 pp like-for-like(2))
o Strong leasing activity: 19,700 sq.m in new leases signed (+EUR3.8 million
in rental income)
* Healthcare Property Investment:
o Rental income up by a robust +7.5%(1) to EUR56.7 million
o Preliminary agreement signed for the acquisition of a portfolio of 14
nursing homes for a total of EUR189 million
* Property Development:
o Economic revenue(3) increases by +8.9%(1) to EUR226.9 million
o Housing orders climb by 9.0%(4) for the Residential Property Development
business
o Residential Property Development's backlog at EUR1,053.4 million
(+4.3%(2))
* Significant development contracts won by Icade Promotion: Versailles Pion and
Bercy Charenton
* Completion of the Millénaire 1 building (22,800 sq.m) and the Reims-Bezannes
polyclinic (EUR76.0 million in investments)
* 2018 net current cash flow outlook confirmed: growth of around 5% compared to
2017
1. REVENUE AS OF MARCH 31, 2018
As of March 31, 2018, Icade's consolidated revenue grew by +8.4% compared to
March 31, 2017, driven by all the business lines: Commercial Property
Investment (+5.8%), Healthcare Property Investment (+7.5%) and Property
Development (+13.8%).
(in millions of euros)
03/31/2018 03/31/2017 03/31/2017 Change Like-for-like
RESTATED* REPORTED (%) (%)
Gross rental income
from Commercial
Property Investment 99.0 93.6 93.6 5.8% (0.5)%
Gross rental income
from Healthcare
Property Investment 56.7 52.7 52.7 7.5% 1.2%
Property Development
revenue 207.8 182.6 189.1 13.8% 13.8%
Other revenue (1.3) (1.4) (1.4) (6.1)% (6.1)%
CONSOLIDATED REVENUE 362.1 327.5 333.9 8.4% 8.1%
*IFRS 15 "Revenue from contracts with customers", which became effective on
January 1, 2018, changed the rate at which revenue and profits from Property
Development activities are recognised.
(1) vs. March 2017
(2) vs. December 2017
(3) Economic revenue = IFRS revenue adjusted from IFRS 11
(4) in volume terms vs. March 2017
2. PROPERTY INVESTMENT DIVISION
2.1. Commercial Property Investment Division
Gross rental income:
(in millions of euros)
03/31/2017 Acquisitions Completions Refurbishments Disposals Leasing
activity
and rent
escalation
Offices 42.7 7.7 2.6 0.0 (3.2) (0.2)
Business
parks 48.2 0.0 0.1 (2.6) 0.0 (0.3)
OFFICE AND
BUSINESS PARK
ASSETS 90.9 7.7 2.7 (2.6) (3.2) (0.4)
Other
assets(1) 4.2 1.3 0.0 0.0 (0.2) 0.0
Intra-group
transactions
from Commercial
Property
Investment (1.5) 0.0 (1.0) 1.4 0.0 (0.4)
GROSS RENTAL
INCOME 93.6 9.0 1.8 (1.2) (3.4) (0.8)
03/31/2018 Change (%) Like-for-like change
(%)
49.7 16.4% (0.5)%
45.5 (5.7)% (0.6)%
95.2 4.7% (0.5)%
5.3 27.5% 10.4%
(1.5) 1.2% N/A
99.0 5.8% (0.5)%
(1) Hotels, housing units, warehouses
Gross rental income from Commercial Property Investment stood at EUR99.0
million, a significant increase of +5.8% compared to March 31, 2017 (EUR93.6
million).
On a like-for-like basis, the office and business park segment declined
slightly by -0.5% (including -0.5% for offices and -0.6% for business parks)
due to tenant departures and lease renegotiations in 2017 and Q1 2018.
During the period, rental income was impacted by strong changes in scope of
consolidation, which breaks down as follows:
- +EUR9.0 million of positive impacts from acquisitions made in 2017,
especially ANF Immobilier (+EUR8.0 million)
- +EUR1.8 million of positive impacts from completions in 2017, including the
first phase of the Go Spring off-plan project (+EUR0.9 million) and Défense
456 (+EUR0.8 million)
- -EUR1.2 million due to the rental income shortfall from assets made available
for refurbishment, including Millénaire 1 (-EUR0.8 million, at the
consolidated level of the Commercial Property Investment Division(1))
- -EUR3.4 million of impacts from disposals, especially the three office assets
located in Villejuif which were sold in 2017 (-EUR3.2 million).
Analysis of the leasing activity:
New leases starting during the period totalled 34,783 sq.m while tenant
departures represented 29,751 sq.m, resulting in a net positive balance of
+5,032 sq.m.
During the first quarter, 18 leases were renewed for a combined floor area of
72,730 sq.m and an annualised headline rental income of EUR16.1 million, with
a weighted average unexpired lease term of 7.2 years.
As of March 31, 2018, the financial occupancy rate stood at 92.4%, a +0.5 pp
like-for-like increase compared to December 31, 2017.
The financial occupancy rate of business parks improved by +0.8 pp to 90.1%
(+0.9 pp like-for-like), while that of offices dropped 1.0 pp (+0.1 pp
like-for-like), primarily due to the completion of newly refurbished space
which is currently being offered for lease (Crystal Park).
(1) no impact from Millénaire 1 at the consolidated Group level
Financial occupancy rate Weighted average unexpired
(in %) lease term
(in years)
Like-for-like
Asset class 03/31/2018 12/31/2017 change* 03/31/2018 12/31/2017
Offices 94.3% 95.3% +0.1 pp 5.7 5.7
Business parks 90.1% 89.3% +0.9 pp 3.8 3.7
OFFICE AND
BUSINESS PARK
ASSETS 92.3% 92.4% +0.5 pp 4.8 4.7
Hotels 100.0% 100.0% +0.0 pp 8.1 8.4
Warehouses 100.0% 100.0% +0.0 pp 2.5 2.2
COMMERCIAL
PROPERTY
INVESTMENT 92.4% 92.5% +0.5 pp 4.8 4.8
* Excluding completions, acquisitions and disposals for the period
New leases signed since the beginning of the year totalled 19,720 sq.m,
equivalent to EUR3.8 million in annualised headline rental income.
Cumulative investments since January 1, 2018:
(in millions of euros) Off-plan Projects under Other Other Total
acquisitions development capex
Offices 44.8 8.5 10.4 4.7 68.3
Business parks - 19.0 7.2 0.5 26.7
OFFICES & BUSINESS PARKS 44.8 27.4 17.6 5.2 95.0
Other assets 0.6 - 0.1 0.0 0.8
COMMERCIAL PROPERTY
INVESTMENT 45.5 27.4 17.7 5.2 95.8
Investments for the period amounted to EUR95.8 million (vs. EUR47.2 million as
of March 31, 2017), including:
* In Q1 2018, investments in off-plan developments totalled EUR45.5 million
(including the Gambetta building in Paris (EUR27.4 million) and the Orianz
project from ANF Immobilier (EUR13.4 million))
* Investments in the development pipeline (EUR27.4 million), including the
Origine (EUR3.8 million) and Pulse projects (EUR11.7 million)
In addition, Icade completed the renovation of Millénaire 1 building for BNP
Paribas (12-year lease for 22,800 sq.m) at the beginning of April, after 8
months of works, in line with the agreed schedule; the lease started on the
date on which the building was handed over to the tenant.
Asset disposals:
Asset disposals related to non-strategic assets (mostly housing units) and
represented a total sale price of EUR12.7 million during the quarter.
2.2. Healthcare Property Investment Division1
Gross rental income:
(in millions of euros)
03/31/2017 Acquisitions New builds/ Disposals Leasing 03/31/2018
Refurbishments activity and
rent escalation
HEALTHCARE
PROPERTY
INVESTMENT 52.7 3.3 0.4 (0.2) 0.5 56.7
Change (%) Like-for-like change (%)
7.5% 1.2%
In Q1 2018, gross rental income from Healthcare Property Investment stood at
EUR56.7 million, a significant increase of +7.5% compared to March 31, 2017
(EUR52.7 million).
The increase in rental income was mainly driven by acquisitions completed in
2017, including:
- Europe private hospital in Rouen (+EUR1.3 million)
- Saint Roch polyclinic in Cabestany (+EUR1.1 million)
- Ormeau polyclinic in Tarbes (+EUR0.6 million)
On a like-for-like basis, rental income rose by +1.2%.
Analysis of the leasing activity on a like-for-like basis:
Financial occupancy rate Weighted average unexpired
(in %) lease term
(in years)
Like-for-like
Asset class 03/31/2018 12/31/2017 change* 03/31/2018 12/31/2017
HEALTHCARE
PROPERTY
INVESTMENT 100.0% 100.0% +0.0 pp 7.3 7.6
*Excluding completions, acquisitions and disposals for the period
The financial occupancy rate of Icade Santé's portfolio was 100% as of March
31, 2018 and the weighted average unexpired lease term stood at 7.3 years.
Cumulative investments since January 1, 2018:
(in millions of euros)
Asset Projects under Other capex Other Total
acquisitions development
HEALTHCARE PROPERTY
INVESTMENT 0.3 11.4 14.3 0.7 26.8
Investments made for the Icade Santé portfolio amounted to EUR26.8 million and
mainly consisted of:
* Investments related to the development pipeline for EUR11.4 million,
including EUR6.8 million for the Croix du Sud polyclinic in Quint-Fonsegrives
and EUR3.2 million invested in the project to build the Reims-Bezannes
polyclinic;
* Other capex for EUR14.3 million, including extension works amounting to
EUR5.4 million for the Atlantique private hospital, EUR1.8 million for the
Saint-Herblain private hospital and EUR1.7 million for the Châtaigneraie
private hospital.
On March 22, 2018, Icade Santé completed the 30,000-sq.m Reims-Bezannes
polyclinic which is in the process of obtaining HQE certification. The lease-a
12-year off-plan lease agreement with no break option entered into with
Courlancy Santé-took effect on April 1, 2018.
(1) On a full consolidation basis
In addition, Icade Santé made its first investment in the nursing home sector
through the signing of a preliminary agreement to acquire 14 facilities, for
EUR189 million, from the Residalya group. Residalya will remain the tenant and
operator of these nursing homes under new 12-year leases with no break options.
The acquisition is expected to be completed in July 2018 once the conditions
precedent have been fulfilled.
Through this transaction, Icade Santé has implemented its strategy to
diversify into long-term facilities. It has also reinforced its position as the
leader in healthcare real estate, with a post-acquisition portfolio of 114
assets for a total of more than EUR4.2 billion (excl. duties) and annualised
rental income of over EUR235 million(1).
3. PROPERTY DEVELOPMENT DIVISION
03/31/2018 03/31/2017 RESTATED (a)
Reclassification Reclassification
of joint of joint
IFRS ventures Total IFRS ventures Total Change
(in millions of euros)
Residential Property
Development 135.6 9.4 145.0 138.2 10.4 148.6 (2.5%)
Commercial Property
Development 72.3 9.7 81.9 44.4 15.2 59.6 37.3%
REVENUE (a) 207.8 19.1 226.9 182.6 25.6 208.3 8.9%
(a) Revenue calculated in accordance with IFRS 15
03/31/2018 03/31/2017 Change (%) 12/31/2017
New housing orders
and building plot
reservations
Housing orders
(in number of units)(1) 1,242 1,139 +9.0% 5,776
Housing orders
(in millions of euros
including taxes) 236.3 233.0 +1.4% 1,082.6
Housing order cancellation rate
(in %) 14% 18% (4.0) pps 18%
Average sale price and average
floor area based on orders
Average price including taxes
per habitable sq.m (in EUR/sq.m) 4,080 3,704 +10.1% 3,663
Average budget including taxes
per housing unit (in EURk) 190.3 206.0 (7.6)% 187.5
Average floor area per housing
unit (in sq.m) 46.6 55.5 (16.0)% 51.2
Breakdown of housing orders by
type of customer (in %)
Home buyers 23.4% 28.5% (5.0) pps 22.6%
Private investors 29.7% 45.0% (15.3) pps 36.8%
Institutional investors 46.8% 26.5% +20.3 pps 40.6%
(1) "Units" means the number of residential units or equivalent residential
units (for mixed-use developments) of any given development. The number of
equivalent residential units is determined by dividing the floor area by type
(business premises, shops, offices) by the average floor area of residential
units calculated during the preceding quarter.
03/31/2018 12/31/2017 Change (%)
RESTATED (a)
Property Development backlog and
service order book based on IFRS 15 1,471.4 1,505.2 (2.2)%
Residential Property Development
(incl. subdivisions) 1,053.4 1,010.4 +4.3%
Commercial, Public Amenities and
Healthcare Development 380.8 457.5 (16.8)%
Project Management Support service
order book 37.2 37.3 (0.5)%
(a) Restated in accordance with IFRS 15
(1) on the basis of data as at 12/31/2017
3.1. Residential Property Development
Revenue from Residential Property Development totalled EUR145.0 million, down
by only 2.5% compared to March 31, 2017. The increase in sales and construction
starts, which is expected starting in H2 2018, should significantly boost the
revenue to be recorded by the Residential Property Development business in 2018
compared to 2017.
Net new housing orders grew by 9.0% in volume terms, reaching 1,242 units. In
value terms, potential revenue from housing orders was up 1.4%, due to the
higher proportion of orders for managed residences (with less floor area and a
lower average price per unit). In late March 2018, orders from institutional
investors represented 46.8%, on the increase compared to the end of March 2017
(26.5%).
The backlog of the Residential Property Development business grew by 4.3%
compared to December 31, 2017, bolstered by the increased number of orders.
At March 31, 2018, the land portfolio amounted to 10,791 units, representing
potential revenue including tax of EUR2.3 billion compared to 11,365 units
representing potential revenue including tax of EUR2.4 billion at the end of
2017.
3.2. Commercial Property Development
Revenue from Commercial Property Development stood at EUR81.9 million, up
sharply compared to Q1 2017 (+37.3%). This strong performance is mainly due to
the signing of an off-plan sale agreement for an office building in Villejuif,
which strongly impacted revenue at the start of the year. This impact should be
somewhat offset over the financial year as whole, as revenue from this business
activity is expected to go up in 2018.
In the first quarter, Icade Promotion and SCPI Elysées Pierre (managed by HSBC
REIM) signed an off-plan sale agreement for an 18,000-sq.m office building in
Villejuif (Val-de-Marne) for EUR95 million excluding tax. The lease for this
development project has been secured since February 2017 through the signing of
a 9-year off-plan lease with no break option with Orange.
At the end of March 2018, the backlog of the Commercial, Public Amenities and
Healthcare Development business amounted to EUR418.0 million.
3.3. Large-scale projects
Since the start of the year, Icade Promotion has been chosen to develop two
major projects:
- Terres de Versailles:
In March 2018, Icade Promotion was awarded the concession to plan and develop
the new "Terres de Versailles" neighbourhood, located on the site of the
former Pion barracks.
This project covers 51,250 sq.m and includes housing units, a hotel, a
childcare centre, shops, a space dedicated to social economy initiatives, as
well as public facilities.
The entire project is scheduled to be carried out from 2019 to 2026. In
addition to the planning involved, Icade Promotion will develop 65% of the
real estate included in the overall project apart from the public facilities.
- Bercy Charenton:
In April 2018, Icade, Sogaris and Poste Immo were awarded a contract as part
of the "Inventing the Greater Paris Metropolis" call for projects on the
Bercy-Charenton site.
Located in the 12th district of Paris, this project encompasses a 50,000 sq.m
mixed-use complex including a 15,000 sq.m office building which will be built
under a delegated project management agreement by Icade Promotion with the
Commercial Property Investment Division as investor. In addition, Icade
Promotion will develop for 18,000 sq.m an off- plan hotel, a co-living
apartment hotel and shops as well as event and sports areas.
This project-scheduled to take place between 2020 and 2023 with Property
Development and Commercial Property Investment working together on a
large-scale initiative-reflects the synergies achieved between Icade's
different divisions.
4. FINANCING
On February 19, 2018, Icade took advantage of favourable timing to successfully
issue a EUR600 million bond (with a maturity of 10 years and an annual coupon
of 1.625%, taking into account the associated hedges).
In line with this issue, Icade successfully completed the bond tender offer on
February 26, 2018 for three outstanding issues (for an aggregate amount of
EUR200 million with maturity of less than 3 years).
This transaction supports Icade's policy of optimising its funding structure by
extending the average debt maturity while maintaining a very favourable average
cost of debt.
5. PROPOSED MERGER OF ANF IMMOBILIER INTO ICADE
Icade's Supervisory Board (on the advice of the ad hoc committee), ANF
Immobilier's Executive Board on April 24, 2018 and Icade's Board of Directors
on April 25, 2018 approved narrowing the indicative range of the exchange
ratio to 0.26 and 0.28 Icade share for one ANF Immobilier share.
A separate press release published on April 25, 2018 is available on our
website.
Subject to securing the necessary approvals, the merger should take place
before June 30, 2018.
6. 2018 OUTLOOK: GUIDANCE CONFIRMED
Icade confirms its target growth in Group net current cash flow of around 5%
compared to 2017.
As already announced, Icade will present its strategic plan for 2019-2023 at
the end of H1 2018.
Financial calendar
Half-year results: July 23, 2018, before the market opens
Investor Day: at the end of H1 2018
Q3 financial information: October 19, 2018, after the market closes
This press release does not constitute an offer, or an invitation to sell or
exchange securities, or a recommendation to subscribe, purchase or sell Icade
securities. Distribution of this press release may be restricted by legislation
or regulations in certain countries. As a result, any person who comes into
possession of this press release should be aware of and comply with such
restrictions. To the extent permitted by applicable law, Icade excludes all
liability and makes no representation regarding the violation of any such
restrictions by any person.
ABOUT ICADE
Building for every future
As an investor and a developer, Icade is an integrated real estate player which
designs innovative real estate products and services adapted to new urban
lifestyles and habits. By placing corporate social responsibility and
innovation at the core of its strategy, Icade is closely involved with
stakeholders and users in the cities-local authorities and communities,
companies and employees, institutions and associations... As a commercial and
healthcare property investor (portfolio value of EUR10.8bn as of 12/31/17 on a
proportionate consolidation basis) and as a property developer (2017 economic
revenues of EUR1,209m), Icade has been able to reinvent the real estate
business and foster the emergence of tomorrow's greener, smarter and more
responsible cities. Icade is a significant player in the Greater Paris area and
major French cities. Icade is listed on Euronext Paris as a French Listed Real
Estate Investment Company (SIIC). Its leading shareholder is the Caisse des
dépôts Group.
The text of this press release is available on the Icade website:
www.icade.fr
CONTACTS
Guillaume Tessler,
Head of financial communication and investor relations
+33 (0)1 41 57 71 61
guillaume.tessler@icade.fr
Charlotte Pajaud-Blanchard,
Press relations manager
Tel: +33 (0)1 41 57 71 19
charlotte.pajaud-blanchard@icade.fr
APPENDIX
12/31/2017 Q1 2018 New leases signed
changes 03/31/2018 in Q1 2018 03/31/2018
Leased floor Impact in Impact Total new
area Additions Exits Leased floor Q1 2018 after leases
area Q1 2018 signed
in Q1 2018
Asset
class (sq.m) (sq.m) (sq.m) (sq.m) (sq.m) (sq.m)
Offices 667,524 4,590 (5,012) 667,102 4,057 - 4,057
Business
parks 1,006,415 23,266 (10,324) 1,019,357 8,067 6,113 14,180
Hotels 29,590 - 29,590
Warehouses
38,764 4,819 (4,819) 38,764 -
LIKE-
FOR-LIKE
SCOPE (A)
1,742,293 32,675 (20,155) 1,754,813 12,124 6,113 18,237
Offices 311 881 (311) 881 -
Business
parks 19,154 1,227 (9,285) 11,096 1,227 256 1,483
Hotels - -
Warehouses - - - - - - -
ACQUISITIONS
/ COMPLETIONS
(B) 19,465 2,108 (9,596) 11,977 1,227 256 1,483
SUBTOTAL
1,761,758 34,783 (29,751) 1,766,790 13,351 6,369 19,720
DISPOSALS
(C) - - - - - - -
COMMERCIAL
PROPERTY
INVESTMENT
(A)+(B)+(C)
1,761,758 34,783 (29,751) 1,766,790 13,351 6,369 19,720
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