H1 2017 Results: Solid performances and pursuit of the growth story 20 July 2017
CONTENTS
>1. STRATEGIC POSITIONING >2. REAL ESTATE ACTIVITY >3. FINANCIAL RESULTS >4. OUTLOOK >APPENDIX
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
2
1 Strategic positioning
H1 2017 RESULTS
3
A UNIQUE BUSINESS MODEL We are a European operator working across the entire real estate value chain Focus on the major European cities
H1 2017 achievements
Develop tomorrow’s buildings
Client centric
Business & tourism centers Transportation hubs
Smart and efficient buildings Mixed-use projects
Enhanced services for our clients Create a productive and well-being environment
€1.2 billion1 acquisitions in Berlin, Milan, Barcelona & Madrid
14 deliveries in 2017 100,000 m² of offices 830 hotel rooms
Launch of a flexible and co-working workspace offer
FONCIÈRE DES RÉGIONS 1 €614
H1 2017 RESULTS million Group Share
4
BE CUSTOMER ORIENTED: DEVELOP TOMORROW’S BUILDINGS
Development pipeline: the best strategy
A €4.1 billion1 development pipeline
New trends in workspace environments & accelerated obsolescence of the buildings A demand focused on New/refurbished buildings
€3.4 bn in Offices Paris, Milan, Lyon, Marseille
Higher returns than buying assets
30%
value creation already realized on the 2017 deliveries
Low risk
92%
average occupancy rate the year of their delivery of the French offices since 2011
Better quality
100%
€400 million in Residential Berlin €280 million in Hotels Paris, Lyon, Berlin, Munich, Milan
Green
FONCIÈRE DES RÉGIONS 1 €3.2
H1 2017 RESULTS billion Group Share
5
OFFERING GROWTH AND PROFITABILITY A growing portfolio: €21 billion (€13 billion Group Share) at end-June +28% growth since 2014
A strong profitability
€21.0 bn €19.3 bn €17.8 bn
€16.4 bn
French offices pipeline
2016
Residential in Berlin
+37% like-for-like value growth since 2014
2014
FONCIÈRE DES RÉGIONS
like-for-like value growth since 2014
H1 2017
2015
€4.9 bn investments since 2014 Mostly in Paris, Berlin & Milan
+41%
€2.7 bn disposals since 2014 Non core assets
One of the strongest ROE of its sector 6.8% (Recurring net Income 2016/EPRA NNNAV 2016)
H1 2017 RESULTS
6
H1 2017 RESULTS: STRONG GROWTH
RENTS
OCCUPANCY RATE
RECURRING NET INCOME
+3% +2% LFL
96.6%
+12%
€295 MILLION
6.6-YEAR LEASE
PORTFOLIO
NAV
LTV
+10%
42.9%
+5% +3% LFL €13 BILLION
EPRA NAV €6.6 BN; €88.4/SHARE
€198.3 MILLION €2.7/SHARE
vs 44.6% in 2016
Group share data FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
7
2 Real Estate Activity > France Offices > Italy Offices > Germany Residential > Hotels in Europe
H1 2017 RESULTS
8
POSITIVE RENTAL TRENDS IN ALL OUR MARKETS Milan office market Average economic rent for prime offices
Greater Paris office market Average economic rent for new/refurbished offices in Paris, La Défense, Western Crescent 320 €
480 €
315 €
460 €
310 €
440 €
+8.0% 420 €
+4.0%
305 € 300 €
400 € 2013
2014
2015
2016
2017
2013
2014
2015
2016
Source: CBRE
Hotels in Europe RevPar1 evolution in Europe (Base 100 end-2013)
(in €/m²/month) 6,6 €
120
6,4 €
115
+9.4%
6,0 €
Office - Milan
Source: JLL
Residential Berlin Mietspiegel index evolution since 2013
6,2 €
2017
110
5,8 €
105
5,6 €
100
+8.1%
5,4 € 95
5,2 € 5,0 €
90 2013
FONCIÈRE DES RÉGIONS
2015
2017
2013
2014
2015
2016
May 2017 Source: MKG
H1 2017 RESULTS Per Room
1 Revenue
9
France Offices
SIGNIFICANT LETTING SUCCESSES IN A SUPPORTIVE MARKET
Greater Paris office market positively oriented
A good letting activity in our portfolio
Take-up H1 2017 +4% YoY
Rental growth like-for-like
For offices > 5,000m²: +9% Western Crescent: +50%
+0.9%
Vacancy rate 6.5%
Historically high occupancy rates
Obsolescence issue No short-term oversupply risk
Economic rents +4% vs 2015
94.3%
Thaïs, Greater Paris
FONCIÈRE DES RÉGIONS
96.0%
94.7%
2009
95.8% 95.7%
95.8% 96.8%
95.3% 95.6% H1 2017
H1 2017 RESULTS
11
2017: A RECORD YEAR OF DELIVERIES OF PROJECTS, FAVORED BY THE TENANTS H1 2017: 4 deliveries for €137 million1 and 33,000 m² Already 86% let with a 9-year average firm maturity +50% average total value creation
100% secured
100% let
Silex1 - Lyon 10,700 m²
Thaïs–Paris Hermione - Euromed Marseille
66% let
Office - Milan Thaïs Levallois-Perret
10,400 m²
5,500 m²
New in H1 2017 Under final negotiation
New in H1 2017 3,530 m² let to MCI & Gekko
91% let
O’rigin - Nancy 6,300 m²
FONCIÈRE DES RÉGIONS 1 €123
H1 2017 RESULTS million Group Share
12
2017: A RECORD YEAR OF DELIVERIES OF PROJECTS, FAVORED BY THE TENANTS
H2 2017: 4 deliveries for €268 million1 and 48,000 m² +20% average value creation to date 100% let
Edo – Issy-les-Moulineaux
Floréal - Euromed Marseille
New St Charles Reims
10,800 m²
13,400 m²
10,300 m²
New in H1 2017 Under final negotiation
Advanced negotiations ongoing
100% let
100% secured
Art & Co - Paris 13,500 m²
New co-working activity for 5,000 m²
FONCIÈRE DES RÉGIONS 1 €250
H1 2017 RESULTS million Group Share
13
CLIENT CENTRIC: A NEW FLEXIBLE & CO-WORKING ACTIVITY
Launch of a new third-places offer Meet a new and fast growing demand Stay close to the tenants
1st openings coming soon Create a territorial network in the major French cities DELCASSE PARIS CBD October 2017 3,300 m²
GARE DE LYON PARIS 12th January 2018 5,000 m²
Keep value creation in-house
10 sites already identified Target return : c. 30% margin vs rents
GARE ST JEAN LGV BORDEAUX Q2 2018 3,000 m² COMPANS CAFFARELLI TOULOUSE Q2 2018 3,300 m²
FONCIÈRE DES RÉGIONS
Silex² LYON 2020 5,000 m² EUROMED CENTER MARSEILLE October 2017 2,300 m²
H1 2017 RESULTS
14
WE WANT OUR BUILDINGS TO BE BUSINESS DRIVERS FOR OUR CLIENTS
TERRACES
Flexible RESTAURANT
VIP ROOM
AUDITORIUM
TERRACES
FITNESS ROOM
TERRACES
Connected TERRACES URBAN AGRICULTURE
CLASSICAL LEASES
Full of services
CONCIERGE
CO-WORKING FLEX-OFFICE
Mixed and diverse
RECEPTION DESK PATIO
RESTAURANT
CAFETERIA
CONVENIENCE STORE
LOUNGE CAR PARKS
Silex2 - Lyon FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
15
Italy Offices
H1 2017: A SOUND OPERATING PERFORMANCE
Milan office market positively oriented
First impacts of the operating successes of 2016 Recovery in like-for-like rent
1.5%
Take-up H1 2017: +29% YoY Grade A: 65% of the take-up
+0.2% H1 2017 2016
-1.5% 2014
-4.1% 92.1%
Prime economic rent: +8% vs 2015
2015 Occupancy rate ex-TI
87.4%
91.6% Portfolio ex-Telecom Italia: +2.9%
84.7%
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS Source: Cushman & Wakefield
17
H1 2017: GOOD LETTING ACTIVITY ON THE DEVELOPMENT PIPELINE Via Cernaia, Milan Fully pre-let to Amundi for 9.5 years 8,300 m², delivery Q4 2017 €57 million cost; €3.1 million of rent
€792 million1 development pipeline 224,000 m²; c.90% in Milan €332 million2 committed projects 58% pre-let
New HQ
FONCIÈRE DES RÉGIONS 1
H1 2017 RESULTS €412 million Group Share; ² €174 million Group Share
18
H1 2017: REINFORCEMENT IN MILAN CITY-CENTER
Acquisition of a €118 million1 portfolio 17 properties2; 21,700 m² 82% in Milan
Milan, Corso Magenta
A high-quality portfolio with prime locations Let to the Credito Valtellinese Group Double net leases; 10.8-year firm lease terms Attractive initial yield of 6.0%
Milan, Piazza San Fedele FONCIÈRE DES RÉGIONS 1
H1 2017 RESULTS €62 million Group Share; ² including 2 long-term leasehold rights
19
H1 2017: QUALITATIVE ASSET ROTATION Diversification of the tenant base Closing of the partnership on TI portfolio with two major international investors
Disposal of a core mature asset
11,705 m² of offices in Milan via San Nicolao
> 40% share of the portfolio to Crédit Agricole Assurances & EDF Invest
> €114.6 million2, 4.2% exit net yield
> Equivalent of €618 million1 of underlying assets
> Redevelopped in 2014 and let to Luxottica
Naples, Via de Pretis
Milan, San Nicolao
FONCIÈRE DES RÉGIONS 1
H1 2017 RESULTS €323 million Group Share; ; 2 €60 million Group Share
20
Germany Residential
H1 2017: SUCCESS OF OUR BUSINESS MODEL Continuation of the strong growth, in all our markets
Mainly through reletting
Like-for-like rents +4.0% +3.6% +2.4% +1.8%
H1 2017
9% Modernization
2016
Like-forlike rents +4.0%
2015
2014
Hamburg +5.3% Berlin +4.8% NRW +3.2% Dresden & Leipzig +3.8%
FONCIÈRE DES RÉGIONS
58% Reletting
33% Indexation
H1 2017 RESULTS
22
H1 2017: PURSUIT OF ACQUISITIONS IN BERLIN AT ATTRACTIVE CONDITIONS FdR : A €2.4 billion2 Berlin portfolio focused on the best locations
€376 million of acquisitions1
73%
Good location
Berlin (86%), Leipzig & Düsseldorf
Quality portfolios with high growth potential
Prime location
22%
Average location
€1,860/m² (€2,170/m² in Berlin) 4.5% yield after reletting of 11% vacant units (4.3% in Berlin) +35% reversionary potential
5%
Basic location
Green area Source: Engel & Völkers Residential
New acquisitions
FONCIÈRE DES RÉGIONS 1
H1 2017 RESULTS €241 million Group Share; 2 €1.5 million Group Share
23
H1 2017: EXTENSION OF THE DEVELOPMENT PIPELINE IN BERLIN €400 million1 of development pipeline identified 86% in Berlin 1,980 units for 133,000 m²
Roof extensions (10%)
€3,000 average cost per m² 5.4% 1/3
average yield on cost for lease
2/3
for sale
60% average value creation target on the first sites under construction New developments (90%)
FONCIÈRE DES RÉGIONS 1
H1 2017 RESULTS €244 million Group Share
24
CLIENT CENTRIC: OFFER MORE SERVICES > 18 to 30 m² apartments
Furnished apartments
> Full of services > Targets: students, business travellers, seniors > Target rents: €17/m²
> Furnished rooms and shared spaces
Shared apartments
> 80+ m² apartments > Full of services > Targets: students, business travellers > Target rents: €19/m²
First tests on 600 apartments Increase the return: +50-70% in rents vs traditional units FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
25
Hotels in Europe
THE LEADER IN EUROPE WITH A UNIQUE BUSINESS MODEL One of the major global Hotel REITS (ranking in number of rooms under management; ‘000) 57
A key partner for its 18 hotel operators
55 47
30
Host
FDM
Lease properties A global solution to be the preferred partner of hotel operators
HPT
Pandox
11
10
Hispania
Japan Hotel REIT
Operating properties
Development pipeline FONCIÈRE DES RÉGIONS
Apple Hospitality REIT
26
Hotel 4* Mercure, Greater Paris H1 2017 RESULTS
27
A PERFORMANCE TO BE BOOSTED BY A GROWING EUROPEAN MARKET
First positive impacts for Foncière des Régions
Hotels in Europe: a well oriented market Growth in RevPar1 in Europe YTD
Lease properties Increase in like-for-like rents
+2%
+1.9% H1 2017
+2%
-0.6% 2014
+11%
-0.6% 2015
-2.9%
Variable rents +4.3%
2016
+10% +5%
FONCIÈRE DES RÉGIONS 1Revenue
H1 2017 RESULTS Per Room, sources MKG, PWC; preliminary results end-June for France & Germany; at end-May for Spain, Netherlands & Italy
28
H1 2017: STARTING THE WORK ON THE HOTEL PORTFOLIO IN SPAIN Q1 2017: acquisition of a €514 million hotels portfolio in Barcelona & Madrid1 >
17 hotels 4*-5*, 3,335 rooms
>
Central locations; >40% Ebitdar margin
>
Lease contract; 5.4% yield; 6.3% potential
Q2 2017: strong performances & implementation of our strategy
Enhance quality
Acquisition of the 50% remaining stake in AC Forum², Barcelona (for €45 million)
80% in Barcelona & Madrid vs 74% before
Hotel 4* Paseo Del Arte, Madrid
Like-for-like value H1 2017: +6.8%
Increase
RevPar YTD3: +11%
Variable components in the rents
rents
Asset management on 4 hotels
>+€1 million target in rents
FONCIÈRE DES RÉGIONS 1 €257
million Group Share, excluding 2 non-strategic hotels which have been preempted;
2
H1 2017 RESULTS To be closed in Q3; 3 At end-April
29
H1 2017: EXTRACTING VALUE FROM THE PORTFOLIO IN GERMANY
2016: acquisition of a €811 million hotels portfolio in Berlin (>60%), Dresden & Leipzig1 >
9 hotels 4*-5*, 4,131 rooms
>
Operating properties, 7.7% EBITDA yield
2017: extract the value
Strong performances
Asset management
Development pipeline
> >
EBITDA YTD: +5.6% Value since acquisition: +14% like-for-like
> >
Non-core disposals: €29 million in Dresden Park Inn Alexanderplatz: • renovation of 650 rooms >+4% expected on EBITDA • creation of 16 suites
>
70,000 m² development potential in Alexanderplatz
Hotel 4* Park Inn, Alexanderplatz, Berlin
FONCIÈRE DES RÉGIONS 1 €165
H1 2017 RESULTS million Group Share
30
CLIENT CENTRIC: ACCOMPANY OUR CLIENTS’ EUROPEAN EXPANSION Identify new concepts Provide business solutions to our partners in Europe > Example: the success of our partnership with Meininger with 4 operations in Europe for €120 million
Paris & Lyon
Munich
Milan
First 2 hotels in France: Paris Porte de Vincennes (249-room, 950-bed); Lyon (169-room, 580-bed) Delivery 2019
Transformation of offices in a 173-room & 820-bed hotel Delivery 2018
Transformation of offices in a 131-room & 491-bed hotel Delivery2018
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
31
3 H1 2017 results
€614 MILLION GROUP SHARE ACQUISITIONS DURING THE 1ST HALF OF THE YEAR 55% secured during H2 2016 Hotels in Europe: Expansion in Spain and Germany
Germany Residential: Increase the footprint in Berlin
Italy Offices: Focus on Milan
€613 million (€284 million Group Share)
€376 million (€241 million Group Share)
€165 million (€86 million Group Share)
5.4% immediate yield Drivers for growth: Asset management Variable component in the leases
4.0% immediate yield Drivers for growth: Reduce vacancy (4.5% yield post reletting) +35% reversionary potential
5.7% immediate yield Drivers for growth: Asset management Development potential
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
33
€505 MILLION GROUP SHARE OF DISPOSALS France Offices: Focus on strategic locations €105 million
7.1% average yield 35 assets
Italy Offices: -40% Exposure to Telecom Italia €657 million (€343 million Group Share)
6.3% average yield Share of 40% of Telecom Italia portfolio for €618 million
Exit from non-strategic activities: €61 million (€38 million Group Share) in France Residential
1.2% average yield Only €371 million (€226 million) of French Residential assets left
Further disposals to come Already €392 million Group Share (€642 million 100%) secured FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
34
+3.2% LIKE-FOR-LIKE IN VALUE AT END-JUNE 2017
Over-performance of our strategic moves Like-for-like growth in H1
(€ million, excluding duties)
Value Value Like-for-like H1 2017 H1 2017 change 100% Group Share
Yield 2016
Yield % of H1 2017 portfolio
Offices - France
6,332
5,439
+2.6%
5.7%
5.4%
43%
Offices - Italy
4,304
1,924
+1.2%
5.7%
5.5%
15%
Residential Germany
4,690
2,911
+7.8%
5.4%
5.0%
23%
Hotels
5,180
1,965
+1.9%
5.7%
5.7%
16%
485
285
-0.4%
n.a.
n.a.
2%
20,993
12,557
+3.2%
5.6%
5.3%
100%
Non strategic Portfolio
France Offices
H1 2017 deliveries:
Italy Offices
Milan ex-TI:
Germany Residential
Berlin:
Hotels
FONCIÈRE DES RÉGIONS
+23%
+3%
+9% Spanish portfolio:
+7%
H1 2017 RESULTS
35
ACTIVE FINANCING ACTIVITY FOR A STRONGER DEBT STRUCTURE €400 million capital increase in January 2017
Strong financing activity > €2.0 billion of new financings (€1.2 billion Group share) with 8-year average maturity
Successful liability management > New €500 million bond with a10-year maturity (2027) & 1.5% coupon (85 bps margin above swap rate)
Lower LTV
42.9% vs 44.6% end-2016
Lower cost of debt
1.95% vs 2.21% end-2016
5.8-year
Longer maturity
vs 5.7-year end-2016
> Purchase of €273 million of its 1.75% note due in 2021 (4 years)
Investor
4% mortgages
New Investment Grade rating in Italy > Beni Stabili, rated BBB-, stable outlook by S&P (FdR S&P Rating : BBB, Stable outlook) > Completes the transformation of the company in Italy since 2015
Better diversification 40%
Bank mortgage loans
55% unsecured debt
40%
Bonds
15%
Corporate credits FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
Group share data
36
REGULAR INCREASE IN EPRA NAV
88.4
+19% Since 2014
86.7 80.5 79.4
EPRA NAV vs end-2016
€6.6 billion +9.5% €88.4/share +1.9%
77.2
74.5
H1 2017
+24% Since 2014
2016
68.8 65.0 EPRA Triple Net NAV €6.0 billion +12.1% €80.5/share +4.3%
2015
2014
Growth in NAV in € per share
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
37
H1 2017 REVENUES : +2.8% INCREASE
Rental income 100%
Rental income Group Share
Change
Offices - France
135.7
123.0
-2.1%
Offices - Italy
101.9
52.7
Of which Telecom Italia offices
49.1
Of which portfolio ex-Telecom Italia
€million
Change on likefor-like basis
1
Occupancy rate
Residual firm terms of leases (in years)
+0.9%
95.3%
5.2
+6.3%
+1.5%
94.8%
6.9
25.1
+1.2%
+0.0%
100%
13.4
52.8
27.6
+11.5%
+2.9%
92.1%
3.5
Residential Germany
112.9
69.9
3
+4.0%
98.4%
n.a.
Hotels
102.9
45.7
4 +10.2%
+1.9%
100%
10.4
6.1
3.7
-25.6%
n.a.
n.a.
n.a.
459.4
295.1
+2.8%
+1.9%
96.6%
6.6
Other (French Resi.) Total
2
+7.1%
5
1 • Renewals: +0.2%; Indexation: +0.3%; Occupancy rate: +0.4%
3 • Acquisitions in Berlin
2 • Increase in occupancy rate
4 • Acquisitions in Barcelona & Madrid
5 • Renewals: +0.8%; Indexation:+0.7%; Occupancy rate: +0.3%
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
38
STRONG INCREASE IN RECURRING NET INCOME: +12.2% (€ million) Group share
%
H1 2016
H1 2017
Change
Net rental income
264,5
271,8
7,3
2,8%
Net operating costs
-32,3
-29,3
3,0
-9,3%
1
7,0
3,2
-3,8
-54,3%
2
-66,0
-55,9
10,1
-15,3%
3
Recurring net income from equity affiliates
5,0
10,1
5,1
102,0%
4
Recurring tax
-1,6
-1,6
0,0
Recurring net income
176,6
198,3
Fair value adjustment on real estate assets
307,2
Fair value adjustment on financial instruments
Income from other activities
Cost of net financial debt
1
Increase in asset management fees Less property development fees
0,0%
2 3
21,7
12,2%
4
350,3
43,1
14,0%
Revenues from Hotel operating properties
-18,7
30,4
49,1
n.a.
1,1
-0,9
-2,0
n.a
Other
-42,4
-51,0
-6,6
n.a.
Non-recurring tax
-12,7
-38,0
-25,3
n.a.
Profits or losses on discontinued operations
-0,1
0,0
0,1
n.a
410,9
489,0
78,1
19,0%
Net Result on disposals
Net income
FONCIÈRE DES RÉGIONS
Lower cost of debt
H1 2017 RESULTS
39
RECURRING NET INCOME PER SHARE: +2.3%
Increase in rents
H1 2016
H1 2017
€176.6 million
€198.3 million
€2.64/share
€2.71/share
+2.3%
Positive impact of investments Lower average cost of debt
Lower leverage
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
Average number of fully diluted shares: 73,292,080 for H1 2017; 66,793,295 for H1 2016
40
4 Outlook
H1 2017 RESULTS
41
OUTLOOK 2017: CONTINUE TO DELIVER ON OUR GROWTH STRATEGY
A good start to the year for the growth in 2017 …
… and for tomorrow’s growth
Increase in the guidance:
Favorable letting markets in all our products
2017 Recurring Net Income growth in €million
Reinforcement in the best areas
>7%
Large development capacity
(vs >5%)
€4.1 billion development pipeline New projects to be launched in H2
Silex2, Lyon
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
42
FINANCIAL AGENDA
Q3 2017 Revenue: 26 October 2017
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
43
Appendix
APPENDIX CONTENTS
> INVESTMENTS & DISPOSALS > PIPELINE: COMMITTED AND MANAGED PROJECTS > GEOGRAPHICAL BREAKDOWN OF OUR ACTIVITIES > ORGANIZATION STRUCTURE > OPERATING INDICATORS SINCE 2009 > GREATER PARIS & MILAN OFFICE MARKETS
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
45
Appendix Investments & Disposals
H1 2017 INVESTMENTS: €614 MILLION GROUP SHARE IN STRATEGIC LOCATIONS
Investments H1 2017 realized (€ million, including duties)
Capex 100%
Capex Acquisitions Acquisitions Group Share 100% Group Share
Investments H1 2017 secured Yield
Acquisitions Acquisitions 100% Group Share
Yield
Offices - France
83
68
3
3
6.7%
0
0
n/a
Offices - Italy
31
16
165
86
5.5%*
29
15
8.9%
Germany Residential
0
0
376
241
4.0%
148
96
3.9%
Hotels in Europe
44
11
613
284
5.4%
71
36
9.1%
159
95
1,157
614
4.9%
248
146
5.7%
Total
* Potential yield on acquisition after delivery of Principe Amedeo, under development
Increased exposure in Paris, Berlin and Milan
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
47
H1 2017 DISPOSALS: €505 MILLION GROUP SHARE OF DISPOSALS Disposals
New disposals
New agreements
Total
Margin vs
2017
2017
2017
2016 value
1
2
3
2+3
100 %
69
36
156
192
5.5%
7.0%
105
Group Share
69
36
110
147
6.2%
7.1%
105
100 %
39
0
120
120
2.8%
4.0%
39
Group Share
343
0
63
63
2.8%
4.0%
343
100%
12
12
210
222
15.7%
6.0%
24
Group Share
7
7
125
132
16.1%
6.0%
14
100 % Group Share 100 % Group Share 100 % Group Share
2 1 34 21 156 441
16 4 27 17 92 64
88 39 68 55 642 392
104 43 95 71 734 456
3.8% 3.9% -0.1% -1.4% 6.9% 6.8%
6.1% 6.3% 2.3% 3.1% 5.5% 5.7%
18 5 61 38 248 505
(agreements as of end of 2015 closed)
(€ million)
Offices - France Offices - Italy Residential - Germany Hotels in Europe Others Total asset disposals
Yield
Total Realized Disposals =1+2
France Offices:
Italy Offices:
German Residential:
Hotels in Europe:
Non strategic:
Less small regional offices
Less Telecom Italia
Less non core NRW
Less Retail
Less French Residential
Only 3% non strategic activities remaining FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
48
Appendix Committed and managed pipeline
COMMITTED PIPELINE: €1.1 BILLION AT 100% (€603 MILLION GS) - 1/3
Projets in Group share, €million
Surface 1 (m²)
Target rent (€/m²/year)
Pre-leased (%)
Total Budget 2
Target Yield 3
Progress
Capex to be invested
Total France Offices
99,600 m²
377
46%
339
6.0%
58%
78
Total Italy Offices
91,000 m²
302
58%
174
5.9%
45%
83
4,130 m²
na
na
7
5.6%
na
na
2,032 rooms
na
100%
84
6.2%
58%
26
na
57%
603
6.0%
54%
187
Total Germany Residential Total Hotels in Europe
Total 1100%
usable area excl. car park Total cost including land value & financial costs 3 Yield on total rents including car parks, restaurants, etc. 2
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
50
COMMITTED PIPELINE: €1.1 BILLION AT 100% (€603 MILLION GS) - 2/3 Projects in Group share, €million
Location
Project
Surface 1 (m²)
Euromed Center - Bureaux Floreal (FdR share 50%) 4
Marseille
Construction
13,400 m²
265
Issy Les Moulineaux - Greater Paris Reims
RegenerationExtension Construction
10,800 m²
Paris
Régénération
Edo
Offices France
ENEDIS - New Saint Charles Art&Co Total deliveries 2017 Hélios
Total Budget 2
Target Yield 3
Progress
Capex to be invested
100%
18
>7%
87%
2
430
100%
83
6.0%
80%
8
10,300 m²
141
100%
19
>7%
55%
7
13,400 m²
520
5%
130
5.0%
53%
12
47,900 m²
444
50%
250
5.7%
65%
30
Lille
Construction
9,000 m²
160
100%
21
>7%
24%
15
Riverside
Toulouse
Construction
11,000 m²
195
0%
32
7.0%
45%
15
Ilot Armagnac (FdR share 35%)
Bordeaux
Construction
31,700 m²
200
29%
35
6.5%
47%
18
Total deliveries 2018
51,700 m²
189
35%
89
6.8%
41%
48
Total France Offices
99,600 m²
377
46%
339
6.0%
58%
78
Via Cernaia
Milan
Regeneration
8,300 m²
460
100%
30
5.4%
65%
5
Corso Ferrucci
Turin
Regeneration
45,600 m²
130
29%
46
5.7%
55%
16
53,900 m²
261
57%
76
5.6%
59%
21
Total deliveries 2017
Offices italy
Target rent Pre-leased (€/m²/year) (%)
Via Colonna
Milan
Regeneration
3,500 m²
265
50%
9
5.1%
30%
4
Milan, Piazza Monte Titano
Milan
Regeneration
6,000 m²
190
100%
12
5.0%
25%
7
Symbiosis A+B
Milan
Construction
20,600 m²
305
85%
48
7.1%
40%
38
Milan, P. Amedeo
Milan
Regeneration
7,000 m²
460
0%
30
5.2%
10%
13
Total deliveries 2018
37,100 m²
334
58%
98
6.1%
28%
62
Total Italy Offices
91,000 m²
302
58%
174
5.9%
42%
83
1100%
usable area excl. car park Total cost including land value & financial costs Yield on total rents including car parks, restaurants, etc. 4 Under final negotiation 2 3
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
51
COMMITTED PIPELINE: €1.1 BILLION AT 100% (€603 MILLION GS) - 3/3
Germany Residential
Projects in Group share, €million
Project
Surface 1 (m²)
Berlin
Extension
400 m²
na
400 m²
Konstanzer Total deliveries 2018
Target rent Pre-leased (€/m²/year) (%)
Total Budget 2
Target Yield 3
Progress
Capex to be invested
na
1
5.8%
na
na
na
na
1
5.8%
na
na
Genter Strasse 63
Berlin
Construction
1,500 m²
na
na
2
5.7%
na
na
Birkbuschstrasse / Kühlbornweg
Berlin
Extension
810 m²
na
na
2
5.2%
na
na
Breisgauer Strasse
Berlin
Extension
1,420 m²
na
na
2
5.8%
na
na
Total deliveries 2019
3,730 m²
na
na
6
5.6%
na
na
Total Germany Residential
4,130 m²
na
na
7
5.6%
na
na
B&B Lyon Club Med Samoëns B&B Berlin B&B Nanterre
Hotels in Europe
Location
Lyon - France
Construction
113 rooms
na
100%
2
5.5%
79%
0
France
Construction
420 rooms
na
100%
12
6.0%
80%
2
Berlin - Germany
Construction
140 rooms
na
100%
6
7.0%
45%
3
Nanterre - Greater Paris
Construction
150 rooms
na
100%
3
6.2%
91%
0
823 rooms
na
100%
23
6.2%
73%
6
Construction
255 rooms
na
100%
2
6.3%
42%
1
Construction
255 rooms
na
100%
9
6.2%
81%
2
Construction
173 rooms
na
100%
15
6.4%
73%
4
683 rooms
na
100%
26
6.3%
73%
7
Total deliveries 2017
Motel One Porte Dorée
Châtenay Malabry Greater Paris Paris
Meininger Munich
Munich - Germany
B&B Chatenay Malabry
Total deliveries 2018 Meininger Porte de Vincennes
Paris
Construction
249 rooms
na
100%
23
6.2%
52%
11
B&B Bagnolet
Paris
Construction
108 rooms
na
100%
2
6.3%
15%
2
Lyon - France
Construction
Meininger Lyon Zimmermann Total deliveries 2019 and beyond Total Hotels in Europe
169 rooms
na
100%
9
6.1%
0%
0
526 rooms
na
100%
35
6.2%
36%
13
2,032 rooms
na
100%
84
6.2%
58%
26
1100% 2
FONCIÈRE DES RÉGIONS
3
usable area excl. car park Total cost including land value & financial costs Yield on total rents including car parks, restaurants, etc.
H1 2017 RESULTS
52
MANAGED PIPELINE : €3.0 BILLION AT 100% (€2.6 BILLION GROUP SHARE) Location
Project
Surface 1 (m²)
Delivery timeframe
Rueil-Malmaison - Greater Paris
Regeneration-Extension
43,000 m²
>2020
Paris Meudon - Greater Paris
Construction Construction
50,000 m² 55,000 m²
>2020 2020
Montpellier
Construction
60,000 m²
2018-2020
Silex II
Lyon
Regeneration-Extension
31,000 m²
2020
Omega
Levallois-Perret - Greater Paris
Regeneration-Extension
21,500 m²
>2020
Citroën PSA - Arago
Paris
Regeneration
27,200 m²
>2020
Anjou
Paris
Regeneration
11,000 m²
>2020
Opale
Meudon - Greater Paris
Construction
28,500 m²
2019
Projects Rueil Lesseps Cap 18 Canopée
Offices France
Montpellier Majoria
Avenue de la Marne
Montrouge - Greater Paris
Construction
25,300 m²
2020
Philippe Auguste
Paris
Regeneration
13,200 m²
>2020
Cité Numérique
Bordeaux
Regeneration-Extension
18,100 m²
2,018
Campus New Vélizy Extension (FdR share 50%)
Vélizy - Greater Paris
Construction
14,000 m²
2020
DS Campus Extension 2 (FdR share 50%)
Vélizy - Greater Paris
Construction
11,000 m²
>2020
Paris
Regeneration
4,900 m²
>2020
Angers
Construction
4,700 m²
2019
Gobelins ENEDIS Angers
Italy
Total Offices - France Via Schievano
Milan
Restructuration
31,800 m²
2019
Symbiosis (other blocks)
Milan
Construction
101,500 m²
2022
Total Offices - Italy Residential Germany Total 1
FONCIÈRE DES RÉGIONS
418,400 m²
133,000 m² Berlin
Extensions & Constructions
c.130,000 m² 681,700 m²
100% usable area excl. car park H1 2017 RESULTS
53
Appendix Geographical breakdown of our activities
FRANCE OFFICES BREAKDOWN A €5.4 billion portfolio in Group Share (€6.3 billion at 100%) at end-June 2017
26% Western Crescent and La Défense 18% Inner Ring
The strategic locations in Paris, the Inner Ring and 7% Paris North-East
2% Outer Ring
10% Paris South
18 % Paris Center West
FONCIÈRE DES RÉGIONS
14% Major Regional Cities
the Major regional cities represent 93% of the portfolio
5% Regions
H1 2017 RESULTS
55
ITALY OFFICES BREAKDOWN A €1.9 billion in Group Share (€4.3 billion at 100%) at end-June 2017
6% Turin 5% Rome
Milan represents 62% of the portfolio with an objective of
62% Milan
19% Northern of Italy
80% at 2020
9% Other
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
56
GERMANY RESIDENTIAL BREAKDOWN A €2.9 billion portfolio in Group share (€4.7 billion at 100%) at end-June-2017 FdR : A €2.4 billion1 Berlin portfolio focused on the best locations 9% Hamburg
7% Dresden & Leipzig
73%
7% Duisburg (NRW )
52% Berlin
10% Essen (NRW )
Prime location
Good location
22%
Average location
5%
Basic location
4% Müllheim (NRW ) 5% Oberhausen (NRW ) 6% Others (NRW ) Green area
Source: Engel & Völkers Residential
FONCIÈRE DES RÉGIONS 1€1.5
H1 2017 RESULTS billion Group Share
57
HOTEL REAL ESTATE PORTFOLIO BREAKDOWN A €1.7 billion hotel portfolio in Group share1 (€4.6 billion at 100%) at end-June 2017
23% Germany
37% Economic
11% Belgium
45 % France
47 % Midscale
17% Spain
16% Upscale
4% Others
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS 1Hotels only
58
Appendix Organization structure
ORGANIZATION CHART AT END-JUNE 2017
Foncière des Régions
France Offices
52.2%
61.0%
Italy Offices
German Residential
Hotels & Service Sector
French Residential
(Immeo)
(Foncière des Murs)
(FDL)
(Beni Stabili)
50.0%
61.3%
40.7%
Operating hotel properties Consolidated subsidiaries
(FDM Management)
Equity affiliates FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
60
Appendix Operating indicators since 2009
A STRATEGY STRENGTHENED BY SOUND INDICATORS Record firm term of leases
Historically high occupancy rates 96.6% 95.4% 94.8% 95.8% 95.5% 96.0% 97.1% 96.3% 96.7%
2009
2010 2011
2012 2013
2014 2015
2016 H1 2017
5.8
2009
6.1
6.0
2010 2011
5.5
5.8
2012 2013
7.2
2015
2016 H1 2017
5.8
2014
Ability to keep the tenant in place
>
Occupancy rate track record in the development pipeline
>
Partnership strategy
>
Anticipate disposals
>
Lease maturity in Hotels: 10.4 years
Rent: at like-for-like scope Change in LFL vs N-1
Growth in value Change in LFL vs N-1 +5.3%
+3.3%
+2.2% +2.1%
+0.6% 2010
2011
2012
+1.2%
2013
+4.4%
+1.9% +0.2% 2014
6.6
Firm lease expirations as % of annualised rental income Commercial portfolio (77% of total rents Group Share)
>
2009
7.3
-0.1% 2015
+0.2% 2016
-3.6%
+1.3%
-0.3%
+0.5%
+4.8% +2.9%
+2.1%
H1 2017
2009
2010 2011 2012 2013
2014
2015 2016 H1 2017
>
Stable occupancy rate
>
Low inflation environment
>
Dynamic investment market
>
Improving rental markets
>
Asset management and development pipeline value creation
Group share data FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
62
Appendix Grand Paris & Milan office markets
PARIS & GRAND PARIS OFFICE MARKET Ligne 17
RER C
RER B
Gennevilliers
Saint-Denis
Asnières
Key figures
Nanterre
La Défense Ligne 15
Neuilly Rueil-Malmaison
> 56 million m² of offices in Paris Region, the largest market in Europe 17 million m² in Paris; 3.3 million m² in La Défense; 9 million m² in Western Crescent; 1.4 million m² in the Inner ring
Paris CBD
T2
Suresnes
M2
Bagnolet
M1
Saint-Cloud
Vincennes
M6
BoulogneBillancourt
> Take-up 1.2 million m² in H1 2017 (+4% YoY)
496,000 m² in Paris; 76,000 m² in La Défense ; 310,000 m² in the Western Crescent; 165,000 m² in the Inner ring
Ligne 16
Aubervilliers
Clichy
Paris QCA
Issy-les-Moulineaux Montrouge Clamart Vélizy-Meudon
M14
Charenton-Le-Pont Ivry-sur-Seine RER A
Arcueil
Paris Ouest Paris Sud Paris Nord Est La Défense
RER C
Cachan
Ligne 15
Péri-Défense RER D
> Vacancy rate 6.5%
Vélizy-Meudon
ChatenayMalabry
3.1% in Paris; 8.6% in la Défense; 11.6% in the Western Crescent; 8.6% in the Inner ring
Antony
Neuilly Levallois
Rungis Orly
Boucle Sud Boucle Nord 1re couronne Nord
Ligne 18
1re couronne Est 1re couronne Sud 2e couronne Sud
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS Sources: CBRE, Immostat
64
PARIS & GRAND PARIS OFFICE MARKET
€23 bn invested in transportation
3rd airport hub in the world
Modernization and adaption of the existing network Creation of a complementary transport network: The Grand Paris Express An ambitious project in several steps until 2030
Reinforcement of the main transport hubs in Greater Paris
FONCIÈRE DES RÉGIONS
H1 2017 RESULTS
65
MILAN OFFICE MARKET A c.12 million m² office market
A €2.3 billion1 Milan portfolio to benefit from an improving market
1.5 million m² (12.5%) in the CBD; 1.2 million m² in (10%) Porta Nuova; 2.3 million m² (19%) in the semi-centre
> H1 2017: take-up 209,000 m² (+29% YoY) % of Grade A buildings: 65% > Vacancy rate 10.6% % of Grade A buildings: 25% of the vacant stock
11% Center & Semi Center
Rented portfolio Developments
29% Periphery FONCIÈRE DES RÉGIONS
60% CBD & Porta Nuova
Acquisitions closed in 1H 2017
H1 2017 RESULTS Sources: CBRE, C&W; 1 €1.2 billion Group Share
66
Contact Paul Arkwright Tel.: +33 1 58 97 51 85 Mobile: +33 6 77 33 93 58
[email protected] FONCIÈRE DES RÉGIONS
Paris 30, avenue Kléber 75116 Paris Tel.: +33 1 58 97 50 00
H1 2017 RESULTS
