ALTAREIT Press release | Half-year results 2021 |
Paris, 30 July 2021, 5.45 p.m. |
Revenue: €1.3bn (+4.1%)
Net income FFO Group share: €54.2m (+1.5%)
Residential: offer refocused on Individuals, earnings growth
New orders: | €1,293m (-33%) for 4,923 units (-26%) |
of which Individuals | €816m (+18%) for 2,789 units (+28%) |
Operating income : | €87.6 million (+18%) |
Business Property: marketing of two towers in La Défense and strong activity in the Regions
La Défense: | Eria (26,600 m²) let to Campus Cyber | |
Sale agreement on Bellini (18,100 m²) to Swiss Life | ||
Regions: | six new secured projects with a total of 54,400 m² | |
Consolidated results | ||
- Revenue1: | €1,325.4 million (+4.1%) driven by Residential (+13%) | |
- Operating income: | €88.8 million (+15.5%) | |
- Net income FFO Group share2: | €54.2 million (+1.5%), after tax increase | |
- Net debt3: | €228 million (€20 million at end-2020) | |
- Gearing4: | 0.22x (vs 0.02x at end-2020) | |
Paris, 30 July 2021, 5.45 p.m. Following review by the Supervisory Board, the Management has approved the consolidated financial statements for the first half-year 2021. Limited review procedures have been completed. The Statutory Auditors' reports on the half- year financial information were issued without reservations.
ABOUT ALTAREIT - FR0000039216 - AREIT
A wholly-owned subsidiary of the Altarea group, Altareit is a pure player in Property Development in France. Its unique expertise in multi-product development makes it a leading player in large mixed-use projects in French cities. Altareit has all the know-how needed to design, develop, market and manage bespoke real estate products. Altareit is listed on Compartment B of Euronext Paris.
FINANCE CONTACTS
Eric Dumas, Chief Financial Officer | Pierre Perrodin, Deputy Chief Financial Officer |
edumas@altarea.com, tel: + 33 1 44 95 51 42 | pperrodin@altarea.com, tel: + 33 6 43 34 57 13 |
DISCLAIMER
This press release does not constitute an offer to sell or solicitation of an offer to purchase Altareit shares. For more detailed information concerning Altareit, please refer to the documents available on our website www.altareit.com. This press release may contain forward-looking statements. While the Company believes such declarations are based on reasonable assumptions at the date of publication of this document, they are by nature subject to risks and uncertainties which may lead to differences between real figures and those indicated or inferred from such declarations.
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1 Revenue by % of completion basis (excluding external services).
2 Corresponds to the net income Group share Funds from operations (FFO) column of the consolidated income statement. 3 Consolidated net bank and bond debt.
4 Net bond and bank debt/consolidated shareholders' equity.
BUSINESS REVIEW
30 JUNE 2021
ALTAREIT | BUSINESS REVIEW | 2 |
SO MMAIRE | ||
1.1.2 | Business property ........................................................................................................................................... | 8 |
1.2 | CONSOLIDATED RESULTS................................................................................................. | 11 |
1.3 | FINANCIAL RESOURCES .................................................................................................... | 13 |
ALTAREIT | BUSINESS REVIEW | 3 |
1.1 A pure player in property development in France
A resilient model
A 99.85% subsidiary of the Altarea Group, Altareit offers a skills platform covering all asset classes (residential, retail, offices, logistics, hotels, serviced residences, etc.), in order to respond effectively and comprehensively to the challenges of urban transformation.
Residential: Altareit is now the second-biggest developer in France5, structured to be able to reach a potential of 18,000 units sold per year depending on market conditions.
Business property: Altareit has developed a unique model that enables it to operate in a highly significant manner and with moderate risk on this market:
- as a property developer6 for external customers with a particularly strong position on the turnkey users market,
- as a medium-termdeveloper-investor in assets with a strong potential (prime location) to be redeveloped pending sale (via AltaFund7).
A unique positionning
Over the years, the Group has built up a unique platform of in order to respond effectively and comprehensively to the challenges of urban transformation :
- the concentration of populations, activities and wealth within major large gateway cities, which is now covering new territories, constituting new real estate markets;
- the inadequacy of real estate infrastructures, which must be rethought to meet the challenges of densification. This phenomenon is behind the boom in major mixed-use urban redevelopment projects, which constitute a particularly dynamic market segment. As of June 30, 2021, Altareit managed 13 major mixed-use projects (for nearly 910,000 m²) with a value of €3.7 billion.
Added to these long-term trends is the ecological emergency, which is revolutionising expectations with regard to real estate (energy performance, mobility, reversibility, mixed- use, new consumer habits, etc.).
The very core of Altareit's know-how consists of developing mixed real estate products that factor these challenges into a complex economic equation, giving it access to the huge urban transformation market.
With more than 600 projects at the end of June 2021, Altareit has secured a huge portfolio of projects of more than 4.2 million m² with a potential value8 of more than €17.3 billion9 in all product categories.
5 Source: Ranking of Developers carried out by Innovapresse which analyses and compares the volumes of activity, the number of housing units or square meters produced, or the equity and debt of the main property developers. It provides detailed figures, developer by developer, and outlines their projects and strategies.
- This development activity does not present any commercial risk: Altareit carries only a measured amount of technical risk.
- AltaFund is a discretionary investment fund, created in 2011, of which Altareit is one of the contributors alongside leading institutional investors.
8 Potential value = market value on delivery date. Residential: offer for sale + portfolio incl. VAT. Business property: potential market value excl. transfer duties on the date of disposal for investment projects (at 100%), amount excl. VAT of off-plan sales/PDCs for the other development programmes (at 100%, or Group share for jointly owned projects), and capitalised DPM fees, near stable year-on-year.
9Pipeline excluding the Group's backlog exceeding €4.2 bn.
ALTAREIT | BUSINESS REVIEW | 4 |
1.1.1 Residential
1.1.1.1 STRATEGY
Altarea is the second-largest residential developer in France10 and the Group has structured itself to eventually sell a potential 18,000 units per year.
The Group's development strategy aims to hold strong positions in the most dynamic regions, in large and also medium-sized cities, where the need for housing is the greatest.
Almost all of the property for sale and the land portfolio are located in "high-demand" areas and concern multi-household buildings with very high quality and/or environmental certification.
In addition, to meet the changing expectations of the French public in terms of housing (comfort, teleworking space, outdoor spaces), Cogedim, the Group's main brand, has launched its "goods that feel good" range around the world, consisting of ten commitments to health, well-being and the environment, with particular attention paid to air quality, carbon neutral materials, reduction of CO2 emissions, energy savings, lighting and thermal and acoustic comfort.
A multi-brand and multi-product strategy
The various Group brands (Cogedim, Pitch Promotion, Histoire & Patrimoine, Woodeum, Severini and Cogedim Club) enjoy operational autonomy whilst benefiting from the power of the Group embodied by the Altarea umbrella brand (strategy, finance, support, etc.).
The Group thus provides a well-judged response in all market segments for all customer types:
- High-end:products defined by demanding requirements in terms of location, architecture and quality;
- Entry-leveland mid-range: programmes specifically designed to address: the need for affordable housing both for first-time buyers (secured prices), private investment and institution; the challenges facing social landlords;
- Serviced residences: Altarea is currently developing this type of offering, particularly under the Cogedim Club brand for active senior citizens, combining city-centre locations with a range of a la carte services;
- Renovation of historical sites: under the Histoire &
Patrimoine brand, the Group has a range of products for Historical Monuments, Malraux Law properties and Real Estate Tax schemes; - Sales in dismemberment of ownership: the Group is developing programmes under a French Government policy known as social rental usufruct. This additional offering, whilst meeting the need for low-cost housing in high-demand areas and thereby helping out local communities, provides an alternative investment product for private investors;
- Timber housing development under the brand Woodeum, leader in carbon-free development in France and a 50%- owned subsidiary of the Group.
10 Source: Ranking of Developers 2021 carried out by Innovapresse which analyses and compares the volumes of activity, the number of housing units or square meters produced, or the equity and debt of the main property developers. It provides detailed figures, developer by developer, and outlines their projects and strategies.
The Group has also developed Altarea Solutions & Services, an in-housevalue-added service platform to support its customers and partners throughout their project.
1.1.1.2 ACTIVITY IN THE FIRST HALF-YEAR
Scarce supply in H1 2021
At the beginning of 2021, turnover continued to be held back by delays in bringing projects to market, as a result of the COVID-19 pandemic, longer lead times in obtaining building permits and the strategy of block sales to Institutional investors in 2020. In the first half of the year, the Group prioritised Individuals, which represented 63% of sales by value at the end of June 2021, mainly as part of investment projects. For example, Histoire & Patrimoine recorded the best half-year of new orders in its history.
New orders11: € 1.3bn
New orders | H1 2021 | % | H1 2020 | % | Chge | ||||
Individuals - Residential buyers | €321m | 25% | €347m | 18% | (7)% | ||||
Individuals - Investment | €495m | 38% | €345m | 18% | 43% | ||||
Bloc sales | €478m | 37% | €1,228m | 64% | (61)% | ||||
Total in value | €1,294m | €1,921m | (33)% | ||||||
o/w equity-method (Group share) | €56m | €92m | (39)% | ||||||
Individuals - Residential buyers | 934 | 19% | 946 | 14% | (1)% | ||||
Individuals - Investment | 1,855 | 38% | 1,238 | 19% | 50% | ||||
Bloc sales | 2,134 | 43% | 4,483 | 67% | (52)% | ||||
Total in units | 4,923 | 6,667 | (26)% | ||||||
This situation should improve in the coming semesters thanks to:
- the gradual increase in the pace of sales;
- the confirmed appetite of Institutional investors for real assets (classic housing and managed residences);
- the return of demand from Individuals (successful commercial launches and increase in sales, particularly in rental investment). Demand for new housing remains more than ever driven by the fundamentals of real estate, which is a safe haven in a context of low interest rates: demographic growth, the level of available savings post-COVID and changes in housing expectations.
11 New orders net of withdrawals, in euros, including VAT when expressed in value. Data at 100%, with the exception of operations under joint control which are reported in Group share (including Woodeum).
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Altareit SCA published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2021 07:31:04 UTC.
