Rental income grew by 11%
Annual growth target of +10% of EPRA
Recurring Net Income, Group share Confirmed
Regulatory News:
The transformation was materialized thanks to the fast rate
in deliveries of rented commercial properties in regional cities,
€45 million in the first half-year, and thanks to the
implementation of an action plan focused on the heritage portfolio
in Marseille. Thus, ANF Immobilier (Paris:ANF) saw its revenue
increase by 11% compared with the first half-year 2015 and confirms
its annual growth target of 10% of the EPRA Recurring Net Income,
Group share. The negative fair value change of €17 million stems
from adjustments related to the heritage portfolio in
Marseille.
"Firmly established in our strategy and armed with our
renewed identity, in this half-year we’re securing and continuing
our projects in Lyon, Marseille and Bordeaux and we are tackling
the challenges inherent to our heritage portfolio" states
Renaud Haberkorn, Chief Executive Officer of ANF Immobilier.
1) Strong performance of financial indicators
- Rental income increases of 11% from new
investments, and 3% Group share. On a like-for-like basis, the
income remained stable compared with the first half-year 2015;
- Consolidated EPRA Recurring Cash Flow:
an increase of 12% compared with the first half-year 2015 at €10.4
million. The Group share for the latter stood at €7.5 million;
- Fair value: -€17 million, mainly
resulting from the decline in the fair value of heritage retail
assets in Marseille. This variation arises from the adjustment of
rental values and is not yet offset by the outcome of our strategy
of repositioning these retail assets. This strategy is reflected by
the arrival of the chains King Jouet, Musée du Savon, Copy Top
during the first half-year 2016;
- Portfolio value of €1.1 billion, stable
compared with the end of 2015.
2) Multiple deliveries and impending launches
- Effective rotation of assets between
the disposals of heritage vacant assets and deliveries of newly let
commercial assets:
- Delivery of €45 million worth of
investments particularly with three hotels in Marseille and Bobigny
(331 rooms) and a group of shops in Rue de la République in Lyon,
occupied by Maxi Bazar and Nike (opened in March 2016);
- Volume of heritage portfolio disposed
of in Lyon of €21 million and an extra €30 million already secured
(signed agreements to sell);
- Signature of the Le Castel investment,
almost 6,000 sq.m. of new office space along the seafront in
Marseille for an amount of €19 million, for a delivery at the end
of 2018;
- Impending launch of the Quai Ilot 8.2
project in Bordeaux planned for September 2016, for a total of
almost €90 million: 29,500 sq.m. of office space and 2,000 sq.m. of
shops in the immediate vicinity of the future high-speed train
line;
3) NNNAV of €26.2 per share on June 30th 2016
negatively affected by:
i. the payment of the annual
dividend increased by its exceptional component (-€1.2 per
share) with only +€0.4 per share generated by the cash flow in the
current half-year;ii. the adjustment of the market value of
hedging instruments (-€0.5 per share);iii. reductions in the
value of Marseille retail premises (-€1.0 per share).
Income
Rental income totaled €25.8 million in the first
half-year 2016, a sharp rise of 11% compared with the first
half-year 2015 (stable like-for-like). This rise mainly comes from
the delivery of 36,000 sq.m. of office space leased to Alstom in
Lyon on June 30th 2015 and multiple deliveries of hotels in
Marseille, Bordeaux-Bègles and Bobigny. Gross rental income, Group
share, amounted to €20.9 million.
Portfolio income mainly stemmed from office leases
(55%), commercial leases (17%) and hotels (12%). The
residential sector now accounts for only 13% of rental income.
Recurring EBITDA increased 12% to €17.6 million,
resulting mainly from new acquisitions and deliveries in the
commercial real estate segment.
The EPRA Recurring Net Income, Group share, stands at
€7.9 million, i.e. a rise of 15%. Net income, Group share
(IFRS) was -€15.6 million, affected by the declines in value
in Marseille.
Recurring consolidated Cash Flow increased 12% to €10.4
million. Group share Cash Flow was €7.5 million in this half-year,
i.e. €0.4 per share.
The real estate portfolio value established by two
independent appraisers totals €1,082 million, stable compared with
end December 2015.
The Loan-To-Value ratio was 45.5% on June 30th
2016 compared with 43.0% at December 31st 2015. The cost of debt
came to 2.7% in the first half-year. During the first
half-year, the company restructured old hedging instruments in an
amount of almost €5 million. At the end of the first half-year, the
debt hedging rose to 86%, mainly through caps.
On June 30th 2016, the Triple Net Asset Value was
€26.2 per share, based on the EPRA method. Excluding payment
of the dividend of €1.24 per share and the adjustment of the fair
value of the hedging instruments, this represents a drop of
2% stemming mainly from the negative fair value change of
Marseille high street retail assets of €17 million and the impact
of the cash flow for the half-year.
Consolidated data* (H1 2016/H1 2015)
H1 2016 H1 2015 (million
€) EPRA IFRS EPRA IFRS Var. EPRA Gross rental income 25.8
25.8 23.2 23.2 11% Group Share 20.9 20.3 3% Net operating
expenses - 2.5
- 3.3 - 1.6 - 2.4
Net rental
income 23.3 22.5 21.6 20.8
8% margin 90% 87% 93% 89% Administrative expenses - 5.7
- 5.7 - 5.9 - 5.9
Recurring EBITDA
17.6 16.8 15.7 14.9 12%
margin 68% 65% 67% 64% Financial expenses - 8.3
- 8.3
- 8.3 - 8.3 Amortization -
- 0.5 - - 0.3 Change in Fair
Value -
- 17.4 - 13.0 Other items 0.2
- 3.3 - 0.2 -
0.2 Taxes 0.1
0.1 - 0.2 - 0.2 Minority interests - 2.8
- 3.1 - 2.0 - 10.5
Recurring Net Income,
Group Share 6.8 - 15.6 5.0
8.4 37% margin 26% -61% 21% 36% Adjustment non
recurring administrative expenses - - 0.6 - Adjustment financial
expenses 1.1 - 1.4 -
Recurring Net Income, Group
Share adjusted 7.9 - 15.6 6.9
8.4 15%
Recurring
EBITDA, Group Share 13.3 17.6 Cash
flow, Group Share 7.5 10.4
* The procedures for a limited examination of the half-yearly
financial statements were carried out. The limited examination
report is being issued.
A changing core
portfolio
1) Succession of deliveries
The first half-year 2016 was marked by the delivery of three
hotels with almost 331 rooms and the delivery of 2,500 sq.m. of new
high street retail premises in Rue de la République, the result of
the restructuring of the former Banque de France regional
headquarters. All of these operations represent €45 million of
investments in commercial assets generating effective yields
exceeding 7%.
Details of the hotels are as follows: one hotel in
Marseille-Vélodrome with 126 rooms under the AC By Marriott name
delivered in January 2016, a second hotel in Marseille-Euromed 2
with 88 rooms under the B&B name delivered in May 2016 and the
last hotel in Bobigny with 117 rooms under the B&B name
delivered in June 2016. These three assets were acquired through
the subsidiary ANF Immobilier Hôtels and generate an additional
income of €1.9 million, bringing the number of hotel rooms of the
specialized subsidiary to more than 1,300.
The project creating 2,500 sq.m. of commercial premises by
restructuring the former Banque de France headquarters in Lyon, was
completed and is fully leased. The property is occupied by two
major chains: Nike which opened in March 2016 and Maxi Bazar which
plans on opening before the end of the year. This Banque de France
restructuring operation is a €20 million project. It illustrates
the expertise of the ANF Immobilier teams, boasting a return on
equity of approximately 75%.
2) Anticipation and significant marketing
activity on “Ilot 34” in Marseille
Ilot 34 in Marseille, an integral part of the core commercial
portfolio of ANF Immobilier, is an asset located in the immediate
vicinity of the new European hospital within the Euromed program.
It is made up of two office buildings, 4,600 sq.m. and 8,000 sq.m.
respectively rented to the Caisse Primaire d’Assurances Maladie and
to the SNCM on January 1st 2016. The first tenant expressed its
intent to exercise an option to buy at the end of the initial
three-year period, for a price of €17 million which is in line with
the appraisal values. The second tenant's lease was partially
replaced by new leases, in particular with the company MCM for
3,500 sq.m.
3) The actual launch of the Le Castel
project and the Adecco - Adely project
At the end of May 2016, ANF Immobilier signed an agreement with
Eiffage Immobilier for the development of almost 6,000 sq.m. of
office space, not yet rented, on the Quai de la Joliette: Le
Castel. This operation will take the form of a forward purchase
agreement which should start in 2017 for a delivery at the end of
2018/early 2019. This €19 million operation shows a conservative
yield and rental value combination.
The year 2016 will be known as the year of the Adecco-Adely
project, an investment of €34 million and a development of 13,100
sq.m. of offices leased to Adecco in the Quartier du Carré de Soie,
in Lyon. The investment will be made in partnership with Crédit
Agricole Assurances and DCB International. Its delivery is planned
for the third quarter with an additional rental income of €2.5
million. As of June 30th 2016 the rate of building construction is
in line with the expectations.
4) Impending launch of the Quai 8.2
project in Bordeaux
The final deeds for the Quai 8.2 transaction in Bordeaux
(formerly Armagnac) will be signed in September 2016. As a
reminder, this project represents 29,500 sq.m. of office space and
2,000 sq.m. of retail premises in the immediate vicinity of the
future high-speed train line, for an amount of €90 million. The
offices are currently 31% leased to Orange and Allianz by means of
9-year fixed-term leases. ANF Immobilier shall retain 65% of the
investment. In parallel, ANF Immobilier, in its capacity as
developer and in partnership with Vinci, will purchase the land and
start the construction.
Re-inventing the heritage portfolio,
adapting it to the economic context
1) Anticipation of the economic context
affecting retail businesses in Marseille
During the first half-year 2016, the shops in the Rue de la
République faced an environment that was difficult for their retail
businesses. This arose from factors internal or external to the
city of Marseille. On the one hand, locally, the almost
simultaneous opening of all the retail premises and shopping malls
in the immediate vicinity (such as the Terrasses du Port, the
Centre Bourse, the Docks or the Voûtes) created oversupply,
particularly in the clothing and personal goods sectors. On the
other hand, retailers throughout France, particularly those working
on the ground floor, had a generalized drop in their income due to
the sluggish French economic climate.
Anticipating this downturn at the start of 2016, ANF Immobilier
decided to adapt its strategy through identifying two separate
segments: the first, linked to the Vieux-Port, will group together
retail premises intended specifically for the families and
tourists, and the second, linked to the Place de la Joliette, will
have an offer complementary to the expansion of the Euromed
commercial sector.
This strategy, crucial for the development of the Rue de la
République, is already bearing fruit with new establishments during
the first half-year 2016: King Jouet, a leader in the toys field,
has leased 600 sq.m., the Musée du Savon, symbolic of Marseille,
has decided to occupy 800 sq.m., Copy Top has taken more than
100 sq.m. However, this new dynamism is not enough to curb the
decline in rental values stemming from the drop in the revenues of
the retail businesses in the city center. The resulting adjustment
in the value of our Marseille retail premises is close to €15
million. Nevertheless, these new chains are signs of the resurgence
and the adaptation of the Rue de la République, with a target for
growth and pedestrian flow and a dynamism that is once again on the
move.
2) Disposal of the Lyon heritage
assets
The volume of disposals in the first half-year 2016 was mainly
composed of residential assets and shops in the Rue de la
République in Lyon. It represents €21 million bringing the
so-called "heritage" portfolio down from 46% at the end of 2015 to
44%. In mid-2016, ANF Immobilier secured the disposal of several
retail premises at 2, 3, and 4 rue de la République for an amount
of €13 million and plans on signing the final deed before the end
of the year.
Outlook
The strategy and identity of ANF Immobilier are based on three
pillars: investment in regional cities with strong potential where
the real estate compliments its development, the shift of its
portfolio to the commercial real estate sector and a recognized
capacity to operate as investor, developer and asset manager at an
early stage in all of its projects.
Right now, the company is sowing the seeds of its future
development. Accordingly, it has filed a building permit for the
Park View project (formerly known as "Future Way – Tête d’Or")
in Lyon and has cleaned out the one for the Rive Neuve project in
Marseille, strengthening and extending its pipeline beyond 2019.
These two transactions represent a supplementary amount of €63
million, i.e. almost 26,000 sq.m. of additional new office space
and ideally situated.
For the year 2016, ANF Immobilier reasserts its target and
anticipates a growth of 10% in its EPRA Recurring Net Income, Group
share.
2016 Financial Agenda Publication of revenue for the 3rd
quarter 2016 November 10, 2016 (before market opening)
About ANF Immobilier
ANF Immobilier (ISIN FR0000063091) is a
French listed real estate investment company that owns a
diversified portfolio of French office, retail, hotel and
residential property worth €1,082 million. It is currently
undergoing a major transformation to concentrate on commercial real
estate, and aims to invest in the regions and promote regional
cities. It currently has assets in Bordeaux, Lyon and Marseille.
Listed on Eurolist B of Euronext Paris and included in the EPRA
real estate index, ANF Immobilier is a company of the Eurazeo
Group.
http://www.anf-immobilier.com
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version on businesswire.com: http://www.businesswire.com/news/home/20160727005579/en/
ANF Immobilier:Laurent Milleron, Tel: +33 1 44 15
01 11investorrelations@anf-immobilier.comorPress contact:
Renaud Large, Tel: +33 1 58 47 96
30renaud.large@havasww.com
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