ICADE (EPA:ICAD) - ICADE – Q1 2019 PERFORMANCE A STRONG Q1 FOR THE PROPERTY INVESTMENT DIVISIONS
Transparency directive : regulatory news
25/04/2019 07:15
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PRESS RELEASEIssy-les-Moulineaux, April 25, 2019, 7:15 a.m.
ICADE - Q1 2019 PERFORMANCE
A STRONG Q1 FOR THE PROPERTY INVESTMENT DIVISIONS
- Office Property Investment: rental income up 2.7% on a like-for-like basis
o 48 leases were signed or renewed during the quarter for nearly
82,946 sq.m
o A financial occupancy rate of 91.4%
o Investments accelerated to EUR108 million, primarily in the development
pipeline
- Healthcare Property Investment: rental income soars by +14.2%
o Significant increase in rental income due to 2018 completions and
acquisitions (+2.7% on a like-for-like basis)
o 7 leases secured(1) during the quarter for a WAULT of 10.6 years,
resulting in a portfolio WAULT of 7.7 years
o Expansion continues with the signing of a preliminary agreement for the
acquisition(2) of 12 medium- and long-term care assets for EUR191 million
- Property Development: lower revenue and residential backlog up nearly 5%(3)
o Consolidated revenue drops 28.5% to EUR148.5 million; residential segment:
-14.7%
o Growth in the backlog (EUR1,195 million, up +2.8%3) and land portfolio
(EUR2.5 billion in potential revenue at the end of March 2019)
o Icade continues to perform well in competitive selection processes:
contract for the "Inventing Bruneseau" project which features a buildable
area of 100,000 sq.m awarded in February 2019
- Executive Committee appointments and changes in governance
- 2019 guidance confirmed:
o Stable Group net current cash flow per share, excluding the impact of any
opportunistic disposals in 2019
o 2019 dividend: c.+4.5%
(in millions of euros) 03/31/2019 03/31/2018 Change Like-for-like
(%) change(%)
Gross rental income from
Office Property Investment 92.0 99.0 (7.0)% 2.7%
Gross rental income from
Healthcare Property
Investment 64.7 56.7 14.2% 2.7%
Gross rental income from
Property Investment 156.7 155.7 0.8% 2.7%
Property Development
revenue (3.1) (1.3) N/A N/A
Other revenue (*) 148.5 207.8 (28.5)% (28.5)%
CONSOLIDATED REVENUE 302.1 362.1 (16.6)% (17.0)%
(*) "Other revenue" mainly includes intra-group revenue eliminations
(1) Lease renewal or extension
(2) See dedicated press release from April 11, 2019
(3) vs. December 31, 2018
1. PROPERTY INVESTMENT DIVISIONS
1.1 Office Property Investment
Gross rental income:
Leasing
(in millions of euros) 03/31/2018 Completions/ activity and
Developments/ rent
Refurbishments Disposals escalation
Offices (*) 62.5 (1.3) (1.4) 1.7
Business parks (*) 29.7 (0.6) (6.6) (0.8)
OFFICE AND BUSINESS
PARK ASSETS 92.3 (1.9) (8,0) 2.5
Other assets (*) 7.9 0.1 (0.7) 0.0
Intra-group transactions
from Office Property
Investment (1.3) 1.0 0.0
GROSS RENTAL INCOME
FROM OFFICE
PROPERTY INVESTMENT 99.0 (1.7) (7.7) 2.6
03/31/2019 Change (%) Like-for-like
change (%)
61.6 (1.4)% 2.9%
23.3 (21.7)% 2.7%
84.9 (8.0)% 2.8%
7.4 (6.3)% (0.1)%
(0.3) (74.7)% N/A
92.0 (7.0)% 2.7%
(*) Since September 30, 2018, the assets from the Millénaire business park
(excluding the shopping centre) and the assets from the Pont de Flandre
business park have been included in the Office segment, and the Fresnes
business park and public-private partnerships have been included in "Other
assets". All comparative information has been restated for these
reclassifications (pro forma data for 2018).
Analysis of leasing activity in Q1 2019:
The Office Property Investment Division reported gross rental income of EUR92
million.
- On a like-for-like basis, the Office Property Investment Division
recorded a +2.7% increase in income, including +2.9% for offices and
+2.7% for business parks, buoyed by vibrant leasing activity and a rent
escalation rate of 2.0%;
- On a reported basis, rental income dipped EUR7.0 million (-7.0%) due to
asset disposals carried out in H2 2018 (it is recalled that rental
income related to assets sold in 2018 represented EUR37 million on an
annual basis).
48 leases were signed or renewed for nearly 82,946 sq.m as leasing activity
remained strong:
- 17 leases were renewed during the quarter ended, representing a total area
of 54,652 sq.m, total annual headline rental income of EUR12.3 million and
a weighted average unexpired lease term of 7.1 years.
- New leases signed during the quarter ended totalled 28,294 sq.m, with
annualised headline rental income of EUR5.7 million and a weighted average
unexpired lease term of 6.4 years.
Tenant departures during the period stood at 69,941 sq.m (including
31,353 sq.m
on a like-for-like basis).
As of March 31, 2019, the financial occupancy rate stood at 91.4%, a 0.7 pp
decrease on a like-for-like basis (2.0 pps on a reported basis) compared to
December 31, 2018. This drop is primarily due to completion of an asset
currently being offered for lease.
The average unexpired lease term stood at 5.0 years, an increase of 0.3 years
compared to December 31, 2018, due in part to leases renewed during the
quarter.
Financial
occupancy rate
(in %) (**)
03/31/2019 12/31/2018 Like-for-like
change*
Asset classe
Offices 95.2% 95.2% (0.8) pp
Business parks 82.2% 89.1% (0.8) pp
OFFICE AND BUSINESS
PARK ASSETS 91.3% 93.5% (0.8) pp
Other assets 93.2% 92.9% +0.3 pp
OFFICE PROPERTY
INVESTMENT 91.4% 93.4% (0.7) pp
Weighted average unexpired lease term
(in years) (**)
03/31/2019 12/31/2018
5.6 5.2
3.2 2.9
4.9 4.6
6.5 6.7
5.0 4.7
Q1 2019 investments:
(in millions Off-plan Projects under Other capex Other Total
Offices 42.5 38.7 8.9 5.0 95.1
Business parks 8.1 4.3 0.1 12.5
OFFICES &
BUSINESS PARKS 42.5 46.8 13.2 5.1 107.6
Other assets 0.7
OFFICE PROPERTY
INVESTMENT 42.5 46.8 13.9 5.1 108.3
(*) Change between December 31, 2018 and March 31, 2019, excluding
completions, acquisitions and disposals for the period.
(**) On a full consolidation basis, except for equity-accounted assets which
are included on a proportionate consolidation basis.
Q1 2019 investments:
(in millions of euros)
Off-plan Projects under Other capex Other Total
acquisitions development
Offices 42.5 38.7 8.9 5.0 95.1
Business parks 8.1 4.3 0.1 12.5
OFFICES & BUSINESS
PARKS 42.5 46.8 13.2 5.1 107.6
Other assets 0.7 0.7
OFFICE PROPERTY
INVESTMENT 42.5 46.8 13.9 5.1 108.3
As of March 31, 2019, investments amounted to108.3 million (vs.EUR95.8 million
as of March 31, 2018), including:
Off-plan acquisitions
(in millions of euros) Off-plan Projects under Other capex Other Total
acquisitions development
Offices 42.5 38.7 8.9 5.0 95.1
Business parks 8.1 4.3 0.1 12.5
OFFICES & BUSINESS PARKS 42.5 46.8 13.2 5.1 107.6
Other assets 0.7 0.7
OFFICE PROPERTY INVESTMENT 42.5 46.8 13.9 5.1 108.3
As of March 31, 2019, investments amounted to EUR108.3 million (vs. EUR95.8
million as of March 31, 2018), including:
- Off-plan schemes for EUR42.5 million, including EUR15.7 million and EUR14.5
million invested in the Spring A (Rueil-Malmaison) and Gambetta (Paris,
20th district) projects, respectively. Both assets were completed in
Q1 and have a nearly 100% occupancy rate.
- Development projects for EUR46.8 million, mainly allocated to Origine
(EUR22.4 million) and Pulse (EUR5.6 million).
Other investments, encompassing "Other Capex" and "Other" for EUR19.0
million, have been earmarked for building maintenance work and tenant
improvements.
Asset disposals:
Asset disposals completed in the quarter ended March 31, 2019 were not
significant, amounting to EUR5.8 million (a EUR3.0 million gain).
1.2 Healthcare Property Investment(4)
Gross rental income:
(in millions of eur03/31/2018 Acquisitions Completions/ Disposals Leasing
activity and
rent
escalation
GROSS RENTAL
INCOME FROM
HEALTHCARE
PROPERTY 56.7 2.5 4.1 (0.0) 1.5
INVESTMENT
03/31/2019 Change Like-for-like
(%) change (%)
64.7 14.2% 2.7%
Analysis of leasing activity in Q1:
Rental income from Healthcare Property Investment jumped 14.2% to EUR64.7
million.
- On a like-for-like basis, income rose by + 2.7%, fuelled by rent escalation
of around 2.0%.
- On a reported basis, this strong income growth is attributable to asset
completions (+EUR4.1 million) and acquisitions (+EUR2.5 million)
recorded in 2018.
Financial occupancy rate
(in %)**
03/31/2019 12/31/2018 Like-for-like change*
HEALTHCARE PROPERTY
INVESTMENT 100.0% 100.0 % 0.0 pp
Weighted average unexpired lease term
(in %)** (in years)
03/31/2019 12/31/2018 7.7 7.4
(*) Change between December 31, 2018 and March 31, 2019, excluding
completions, acquisitions and disposals for the period.
(**) On a full consolidation basis.
The Healthcare Property Investment Division increased its weighted average
unexpired lease term to 7.7 years (+0.3 years) as of March 31, 2019 after
renewing or extending 7 leases during the quarter for a WAULT of 10.6 years.
(4) Icade Santé on a full consolidation basis
Q1 2019 investments:
(in millions Asset Projects under
of euros) acquisitions development Other capex Other Total
HEALTHCARE
PROPERTY
INVESTMENT 12.3 11.4 9.1 0.4 33.2
As of March 31, 2019, the Healthcare Property Investment Division?s
investments amounted to EUR33.2 million (vs. EUR26.8 million as of March 31,
2018), including:
- The acquisition of a new facility (Jesolo) for EUR12.1 million which will
start generating cash flows immediately, in line with the memorandum of
understanding signed at the end of 2018 with respect to the development of
7 nursing homes in northern Italy;
- Development projects for EUR11.4 million, including the Greater Narbonne
private hospital (EUR3.0 million) and the Clinique de l?Atlantique private
hospital in Puilboreau (EUR1.6 million).
2 PROPERTY DEVELOPMENT DIVISION
03/31/2019 03/31/2018
Reclassification of Reclassification of
IFRS joint ventures Total IFRS joint ventures Total Change
(in millions
of euros)
Residential Property 115.6 10.2 125.7 135.6 9.4 9.4 145.0
Development
Office Property
Development 33.0 0.8 33.7 72.3 9.7 81.9 (58.8%)
REVENUE 148.5 11.0 159.5 207.8 19.1 226.9 (29.7%)
226.9 (29.7%)
03/31/2019 03/31/2018 Change (%)12/31/2018
Orders for new housing
units
an building plots
Housing order
(inunits) (*) 847 1,242 31.8)% 4,938
Housing orders
(in millions of euros
including taxes) 197.3 236.3 (16.5)% 1,041.3
Housing order cancellation
rate (in %) 23% 14% +9.0 pps 16%
Average sale price and
average floor area
based on housing orders
Average price including
taxes per habitable sq.m
(in EUR/sq.m) 3,858 4,080 5.4)% 3,851
Average budget including
taxes per housing unit
(in EURk) 233.4 190.3 22.6% 211.2
Average floor area per
housing unit (in sq.m) 60.5 46.6 29.8% 54.8
Breakdown of housing orders
by type of customer (in %)
Home buyers 36.3% 23.4% +12.8 pps 29.2%
Private investors 40.0% 29.7% +10.3 pps 36.8%
Institutional investors 23.8% 46.9% (23.1) pps 34.0%
(*) Units means the n
umber of residential units
or equivalent residential
units (for mixed-use
developments) of any
given development.
(in millions of euros) 03/31/2019 12/31/2018 Change (%)
Property Development backlog 1,195.0 1,162.8 + 2.8%
Residential Property Development 972.4 927.4
Office, Public Amenities and
Healthcare Property Development 192.3 203.0 (5.3)%
Project Management Support
service order book 30.2 32.4 (6.7)%
2.1 Residential Property Development
Following a record-breaking 2018 in terms of sales and construction starts,
Residential Property Development revenue amounted to EUR125.7 million for the
quarter, down 13.3% compared to March 31, 2018. This decrease, in line with
forecasts, is due to the time lag between the moment sales are signed and
revenue is recognised (percentage of completion method).
Net new housing orders were down by 31.8% in volume terms, bringing the total
to 847 units. This fall is attributable to a lower absorption rate (7.8% in Q1
2019 vs. 9.0% in Q1 2018) and fewer properties put on the market than in Q1
2018 (645 units in Q1 2019 vs. 1,397 units in Q1 2018). The period required to
obtain government permits has also increased in the run-up to elections.
In value terms, the decrease in potential revenue from housing orders was less
pronounced (16.5%) due to a favourable price effect (average budget per
housing unit of EUR233.4k in Q1 2019 vs. EUR190.3k in Q1 2018).
The Residential Property Development backlog was up 4.9% compared to
December 31, 2018 and theland portfolio continued to grow: as of
March 31, 2019, the lan=d portfolio amounted to 11,762 units compared to
11,638 units at December 31, 2018, representing potential revenue including
tax of EUR2.5 billion.
The outlook for Residential Property Development is therefore positive over
the time horizon of Icade's medium-term plan.
2.2 Office Property Development
At the end of March 2019, the Property Development Division completed the
Sky-Line II project in Toulouse. This 4,692-sq.m building was sold to the City
of Toulouse and is fully leased by some of the City's departments.
The revenue of the Office Property Development business reached EUR33.7
million, sharply down compared to Q1 2018 (EUR81.9 million) but in line with
our forecasts.
At the end of March 2019, the backlog of the Office, Public Amenities and
Healthcare Development business amounted to EUR192.3 million, down by 5.3%
compared to December 31, 2018. This drop results from the progress of ongoing
projects (especially an office building in the Carré de Soie district of
Vaulx-en-Velin, the Latécoère building in Toulouse and an office building in
Villejuif).
The lower revenue recorded in Q1 2019 is due to the completion of numerous
projects in 2018 (over 150,000 sq.m including 9 major completions in 2018).
The major contracts won in 2018 (and Q1 2019) will translate into significant
revenue generation starting in 2020.
2.3 Contracts awarded in 2019: new attractive opportunities
- "Inventing Bruneseau - Nouvel R Project", France's first low-carbon
neighbourhood
In Mar 2019, a consortium of developers made up of AG Real Estate, Icade, Les
Nouveaux Constructeurs and Nexity, was selected as the winner of the
"Inventing Bruneseau" call for projects organised by the City of Paris and
SEMAPA.
"Nouvel R" involves carrying out a project covering close to 100,000 sq.m
(25,000 sq.m offices, 50,000 sq.m housing and 20,000 sq.m shops and business
premises) designed to create a real link between Paris and Ivry-sur-Seine.
The carbon footprint of this ambitious project is expected to be five times
lower than the average in Paris, making Bruneseau France's first low- carbon
neighbourhood.
- Îlot K in Bordeaux
Icade Promotion was selected by the urban planner Bordeaux-Euratlantique to
carry out a mixed-use project near the Saint-Jean train station.
The project will include a 450-space multi-storey car park (around 10,000
sq.m), 64 residential units (5,000 sq.m) and 350 sq.m of shops. The
project's distinctive features include a mainly wood-based structure and a car
park that can be partly converted into offices. An application for a building
permit will be lodged in the spring with the aim of starting construction work
in early 2020.
3. FINANCIAL MANAGEMENT
- In February 2019, Icade successfully completed a bond tender offer for three
outstanding issues maturing in 2021, 2022 and 2023 listed on Euronext
Paris.
The offer was closed on February 27, 2019 with a total buyback amount
of EUR156.5 million. This transaction had a positive impact on the average
debt maturity, which improved by 0.2 years for the Group.
- In addition, Icade was awarded the highest score by the Climate Bonds
Initiative for its Green Bond reporting at the end of March 2019.
It should be noted that Icade issued its Inaugural Green Bond in 2017
for a total of EUR600 million, with a maturity of 10 years and an annual
coupon of 1.5%.
- Lastly, Icade completed its share buyback programme launched in December
2018 and limited to 0.5% of its share capital: 372,679 shares were
repurchased at an average price of EUR69.68.
These shares are intended to cover existing or future employee share
ownership plans.
4. EXECUTIVE COMMITTEE APPOINTMENTS AND CHANGES IN GOVERNANCE
- Françoise DELETTRE, CEO of Icade Santé and member of Icade's Executive
Committee, has announced her retirement. She will be replaced by Xavier
Cheval, the current Deputy CEO of Icade Santé, effective today.
- Maurice SISSOKO, CEO of Icade Promotion and member of Icade's Executive
Committee, is leaving the company to pursue personal goals. He will be
replaced in the coming weeks by Emmanuel DESMAIZIERES, currently CEO of
UrbanEra, International activities, Subsidiaries and Commercial business
for Bouygues Immobilier.
- Jérôme LUCCHINI, Deputy CEO of Icade Santé and Secretary of the Board of
Directors, has been appointed General Secretary of Icade; he will be a
member of the Executive Committee. He has also been reappointed Secretary
of the Board of Directors.
- Icade has today published a press release on the outcome of the General
Meeting held on April 24, 2019 and the changes in governance that ensued
from the meeting of the Board of Directors held on the same date,
including:
- The appointment of Frédéric THOMAS as Chairman of the Board of Directors;
- The reappointment of Olivier WIGNIOLLE as CEO of Icade for four years;
- The appointment of Florence PERONNAU as Vice-Chairwoman and Lead
Independent Director;
- The new composition of the Board of Directors and its committees.
5. 2019 OUTLOOK: PRIORITIES AND GUIDANCE CONFIRMED
Icade's priorities for 2019 were announced last February:
- Office development pipeline and "opportunistic" disposals of Core offices
- International expansion of Icade Santé
- Icade Promotion: launch of large projects won in 2018
- CSR priority: low-carbon
- Continued liability optimisation (LTV ratio, maturity)
At the end of Q1 2019, Icade confirms its guidance for the year announced in
February 2019:
- In 2019, Group net current cash flow per share should be stable excluding the
impact of any opportunistic disposals to be completed in 2019 (it is recalled
that excluding the impact of significant disposals in 2018, 2019 NCCF would
have grown by +6%).
- 2019 dividend policy: in 2019, the dividend should increase by c.+4.5%, in
line with NCCF CAGR over the course of the plan. This increased dividend
will be achieved through a payout ratio of about 90% of NCCF and, as the
case may be, the distribution of part of the capital gains realised on
disposals (in accordance with the dividend distribution requirements
imposed by the SIIC regime).
FINANCIAL CALENDAR
Half-year results: July 22, 2019, before the market opens.
Q3 financial data: October 17, 2019, 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 ICADEBUILDING
FOR EVERY FUTUREAs 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,
Icadeis closely involved with stakeholders and users in the citieslocal
authorities and communities, companies and employees, institutions and
associations... Asanoffice and healthcare property investor
(portfolio value of 11.3bn as of 12/31/18 onaproportionate consolidation
basis) and asaproperty developer (2018economic revenues of 1,251m), Icade
has been able to reinvent the real estate business and foster theemergence of
tomorrows greener, smarter and more responsible cities. Icadeisasignificant
player in the Greater Paris area and majorFrench cities. Icadeis listed on
Euronext Paris asa French Listed Real Estate Investment Company (SIIC).
Itsleading shareholder istheCaisse des dépôts Group.The text of this press
release is available on the Icade website: www.icade.
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 an office and
healthcare property investor (portfolio value of EUR11.3bn as of 12/31/18 on a
proportionate consolidation basis) and as a property developer (2018 economic
revenues of EUR1,251m), 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
APPENDIX
Leasing activity - Office Property Investment Division excluding Residential
12/31/2018 Q1 2019 changes
Leased floor Additions Exits Exits due Adjustments**
area to dispolsal
Offices 787,426 9,794 (21,622) 175
Business parks 580,093 7,411 (9,628) -
Other assets
(*) 147,554 439 (103) -
LIKE-FOR-LIKE 175
SCOPE (A) 1,515,073 17,644 (31,353) -
Offices 30,408 37,912 (30,272) -
Business parks 15,993 - (8,317) -
Other assets (*) - - - -
ACQUISITIONS /
COMPLETIONS (B) 46,401 37,912 (38,589) -
-
SUBTOTAL 1,561,474 55,556 (69,941) 175
Offices - - - -
Business parks - - - -
Other assets (*) 968 - (968) 0
DISPOSALS (C) 968 - - (968) -
OFFICE PROPERTY
INVESTMENT 1,547,264
(A)+(B)+(C) 1,562,442 55,556 (69,941) (968) 175
03/31/20 in Q1 2019 03/31/2019
Leased Leased Total new leases
floor starting afer signed
area Q1 2019 in Q1 2019
775,772 6,523 4,715 11,238
577,877 6,438 - 6,438
147,890 439 1,764 2,203
1,501,540 13,400 6,479 19,879
38,048 - 8,415 8,415
7,676 - - -
- - - -
45,724 - 8,415 8,415
1,547,264 13,400 14,894 28,294
- - - -
- - - -
- - - -
- - - -
1,547,264 13,400 14,894 8,29494 8,294894 8,294
*) Including hotels, warehouses and other non-strategic assets
(**) New survey by a licensed surveyo
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