Fonciere Developpement Logements : 2017 Half-year report...

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FIN NCIAL REPORT

2017 FIRST-HALF

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2017 FIRST- HALF MANA GEMENT REPORT

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C ONDENSED C ONSOLID ATED FINANCIAL STATEMENTS

A S AT 30 J U N E 2017

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STATUTORY

AUDITORS' REPORT

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CERTIFICATION OF THE PREPARER

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DEFINITIONS, A CRONYMS AND ABBREVIATIONS USED

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2017 FIRST-HALF‌‌

MANAGEMENT REPORT

1.1.1.	Recognised rental income: 2.8% growth	2	1.4.1.	Main debt characteristics	49
1.1.2.	Lease expirations and occupancy rates	3	1.4.2.	Debt by type	49
1.1.3.	Breakdown of rental income - Group Share	4	1.4.3.	Debt maturity	50
1.1.4.	Cost to revenue, by business	5	1.4.4.	Main changes during the period	50
1.1.5.	Disposals totalling €505 million	1.4.5.	Hedging profile	51
1.1.6.	Group Share Asset acquisitions totalling €614 million	6	1.4.6.	Average interest rate on the debt and sensitivity	51
1.1.7.	Group Share Development projects: €4.1 billion	6	1.4.7.	Reconciliation with consolidated accounts	52

1.1. BUSINESS ANALYSIS 2

1.4. FINANCIAL RESOURCES 49

(€3.2 billion Group Share) 7

1. Portfolio 9

2. List of major assets 10

1. BUSINESS ANALYSIS BY SEGMENT 11

2. France Offices 11

3. Italy Offices 20

4. Germany Residential 26

5. Hotels in Europe 32

6. France Residential 40

7. FINANCIAL INFORMATION AND COMMENTS 41

8. Scope of consolidation 41

9. Accounting principles 41

10. Simplified income statements -

    Group Share 42

11. Simplified consolidated income statement 45

12. Simplified consolidated balance sheet - Group Share 46

13. Simplified consolidated balance sheet 47

15. EPRA REPORTING 54

16. Change in net rental income

    (Group Share) 54

17. Investment assets - Lease data 54

    1.5.3 Investment assets - Asset values 55

18. Information on leases 56

19. EPRA topped-up yield rate 56

20. EPRA cost ratio 57

21. EPRA earnings 58

22. EPRA NAV and EPRA NNNAV 58

23. EPRA performance indicator

24. reference table 60

25. FINANCIAL INDICATORS

26. OF THE MAIN ACTIVITIES 61

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    2017 FIRST-HALF MANAGEMENT REPORT‌‌

    Business analysis
27. BUSINESS ANALYSIS Changes in scope

    Throughout 2016, Foncière des Régions increased its stake in its hotel subsidiary Foncière des Murs, holding 50.0% of the share capital at 30 June 2017 compared to 49.6% at 30 June 2016. In the income statement, the average holding recognized in the first half of 2016 was 45.4%.

    Over the same period, Foncière des Régions also increased its stake in its Italian subsidiary Beni Stabili, holding 52.2% of the share capital at 30 June 2017. At 30 June 2016, the average holding recognized in the first half of 2016 was 50.1% in the income statement and 52.2% in the balance sheet.

28. Recognised rental income: 2.8% growth

29. (€M)	100%			Group Share
    	H1 2016	H1 2017	Change (%)	H1 2016	H1 2017	Change (%)	Change (%) LfL(1) % of rent
    France Offices	138.4	135.7	-2.0%	125.7	123.0	-2.1%	0.9%	42%
    Paris	44.2	41.0	-7%	41.9	38.7	-8%	1.3%	13%
    Greater Paris	65.4	67.3	3%	55.0	57.0	4%	1.0%	19%
    Other French regions	28.8	27.4	-5%	28.9	27.4	-5%	-0.4%	9%
    Italy Offices	98.9	101.9	3.0%	49.6	52.7	6.3%	1.5%	18%
    Offices - excl. Telecom Italia	39.3	43.2	10%	19.7	22.6	15%	3.1%	8%
    Offices - Telecom Italia	49.6	49.1	-1%	24.8	25.1	1%	0.0%	9%
    Retail & Others	10.0	9.5	-5%	5.0	5.0	-1%	1.6%	2%
    Germany Residential	105.9	112.9	6.6%	65.3	69.9	7.1%	4.0%	24%
    Berlin	41.1	48.8	19%	24.6	30.5	24%	4.8%	10%
    Dresden & Leipzig	8.7	10.2	17%	5.8	6.3	8%	3.8%	2%
    Hamburg	6.1	7.2	19%	3.4	4.6	36%	5.3%	2%
    North Rhine-Westphalia	50.0	46.6	-7%	31.4	28.5	-9%	3.2%	10%
    Hotels in Europe	100.9	102.9	2.0%	41.5	45.7	10.2%	1.9%	15%
    Hotels	75.2	84.5	12%	29.9	36.5	22%	2.5%	12%
    Healthcare	7.2	0.0	-100%	3.3	0.0	-100%	N/A	0%
    Retail	18.5	18.4	0%	8.4	9.2	10%	0.0%	3%
    Total strategic activities	444.2	453.3	2.1%	282.1	291.4	3.3%	1.9%	99%
    France Residential	8.2	6.1	-26%	5.0	3.7	-25.6%	N/A	1%
    TOTAL RENTS	452.4	459.4	1.6%	287.2	295.1	2.8%	1.9%	100%

    (1) LfL: Like-for-Like.

    Rental income increased by 2.8% over one year in Group Share, including +3.3% for the strategic activities. This €8.0 million increase is due primarily to the following factors:

    w acquisitions (+€19.0 million) particularly consisting of hotels (+€7.7 million), with the acquisition of a portfolio of 17 assets in Spain, and Germany residential assets (+€6.6 million) mainly in Berlin

    w deliveries of new assets (+€2.6 million), mainly in France Offices, including Silex 1 in Lyon

    w rent increases of 1.9% (+€4.3 million) on a like-for-like scope with:

    w +0.9% in France Offices, thanks to the indexation factor (0.3 pt.) and good rental performance (0.6 pt.)

    w +1.5% in Italy Offices, thanks to an improvement in the occupancy rate

    w +4.0% in Germany Residential, including 1.3 pt. due to the indexation factor and 2.7 pts. due to renewals

    w the recovery of hotel activities with 4.3% growth in variable AccorHotels rents

    w releases of assets intended to be restructured or redeveloped (-€3.2 million)

    w asset disposals (-€18.8 million), particularly hotels (-€8.9 million) with the sale of low-performance AccorHotels assets in secondary locations in 2016

    w an increase in Hotel real estate income due to the increase in the ownership stake in Foncière des Murs in 2016 (+€4.2 million).