2013: A Year of Consolidation and \u201cGreen\u201d Certifications<\/p>\n
Key indicators:<\/strong><\/p>\n 2013 Business Performance:<\/strong><\/p>\n Outlook:<\/strong><\/p>\n Cegereal’s Board of Directors met on February 13, 2014 to approve the audited consolidated financial statements for the year ended December 31, 2013.<\/p>\n Rapha\u00ebl Tr\u00e9guier, Cegereal\u2019s Chief Executive Officer, said: Cegereal sets the standard in the ownership and management of prime office properties on the outskirts of Paris let over the long term to first-class companies looking for facilities that offer high value added amenities. Listed on Euronext since 2006, in compartment B, its market capitalization as of February 11, 2014 totaled \u20ac325 million.<\/p>\n BUSINESS REVIEW<\/p>\n Arcs de Seine: a further 7,800 sq.m. let during the year<\/span><\/p>\n Cegereal kept up its marketing strategy for Arcs de Seine, offering prospective tenants the opportunity to lease smaller units rather than whole floors, and highlighting features such as the high ratio of private underground parking spaces (1 for 3 users), the property\u2019s proximity to Paris and its dual in-use environmental certification (HQE Exploitation and BREEAM In-Use Very Good).<\/p>\n After securing tenants for 22,220 sq.m. in 2012, new leases were signed on a further 7,800 sq.m. in 2013, lifting the building\u2019s occupancy rate to 81% at December 31 from 63% a year earlier:<\/p>\n As at December 31st, there remained just 8,400 sq.m. of available areas.<\/p>\n Rives de Bercy: lease on 31,900 sq.m. with Cr\u00e9dit Foncier renewed for nine years<\/span><\/p>\n In January 2013, a new nine-year \u201cgreen\u201d lease was signed with the building\u2019s long-standing sole tenant, Cr\u00e9dit Foncier, expiring in 2021.<\/p>\n This triple net lease sets a new standard by including stringent undertakings by the owner and the tenant to meet certain environmental targets. It is a practical demonstration of Cegereal\u2019s commitment to improving environmental performance embodied in the Go Green project.<\/p>\n Europlaza: the \u201cloyalty\u201d operation continues<\/span><\/p>\n In July 2013, Cap Gemini\u2019s lease on 7,400 sq.m. was renewed for a further six years. At end-2013, the occupancy rate at Europlaza was 89%.<\/p>\n After the year-end, in January 2014, the lease with Galderma was also renewed for six years on a total 4,825.sq.m. versus 4,000 sq.m. previously.<\/p>\n As part of the strategy to enhance and lock in the value of the portfolio, audits have been performed since 2012 on all of the properties, with a view to having their environmental performance certified.<\/p>\n So far, the Arcs de Seine and Europlaza properties have both been certified to HQE Exploitation and BREEAM In-Use Very Good standards, making them only the third and fourth buildings in France to earn the two distinctions.<\/p>\n An environmental audit is currently underway at Rives de Bercy and the entire portfolio should be certified to HQE Exploitation standards by the end of 2014.<\/p>\n All of the properties are also now part of the Green Rating association benchmark.<\/p>\n The marketing programs and the measures to preserve the properties\u2019 value over the long term have helped to lock in their appraisal values despite a mixed macro-economic environment. The portfolio\u2019s total appraisal value excluding transfer costs stood at \u20ac849 million at December 31, 2013 versus \u20ac865 million at the previous year-end.<\/p>\n The overall occupancy rate was 89% at December 31, 2013, up 7 points from 83% at the end of 2012.<\/p>\n IFRS FINANCIALS (consolidated)<\/p>\n In 2013, rental income calculated in accordance with IFRS totaled \u20ac43.3 million, up 12.1% compared with 2012. Expense recoveries and penalties received from tenants were more or less unchanged from 2012 at \u20ac10.4 million. Building-related costs rose slightly to \u20ac16.9 million, due to increased occupancy.<\/p>\n Cash flows from operations amounted to \u20ac19.4 million versus \u20ac4.02 million in 2012.<\/p>\n EPRA earnings (which exclude fair value adjustments to investment property) came in at \u20ac19.1 million.<\/p>\n Cegereal refinanced all of its debt in 2012 and does not have any repayment obligations until August 2017. The Company\u2019s EPRA NNNAV excluding transfer costs declined by \u20ac21.80 million in 2013 to \u20ac454.47 million at the year-end, representing \u20ac34.1 per share versus \u20ac35.7 at end-2012. The net year-on-year change resulted from earnings per share (+\u20ac1.4), fair value adjustments to investment property (-\u20ac1.2), dividend payments (-\u20ac0.7) and other impacts (-\u20ac1.1).<\/p>\n Cegereal intends to recommend paying a total of \u20ac1.50 in dividends per share in 2014, comprising a 2 step distribution: \u20ac0.75 per share to be approved by the Annual Shareholders’ Meeting and \u20ac0.75 per share to be approved by the Board of Directors in December.<\/p>\n The first part of the dividend will be paid on July 17, 2014, subject to shareholders approval.<\/p>\n Cegereal\u2019s goals for 2014 are as follows:<\/p>\n The annual results presentation can be viewed on the Company\u2019s website: www.cegereal.com<\/a><\/em><\/p>\n Investor Calendar<\/strong><\/span><\/p>\n <\/p>\n 1<\/sup> EPRA Earnings excluding non-recurring costs (such as refinancing transaction costs cf. p.7)<\/p>\n 2<\/sup> Total dividends paid during the period plus the unrealized gain on NNNAV expressed as a percentage of the IPO price.<\/p>\n <\/p>\n About Cegereal (NYSE Euronext Paris \u2013 Compartment B – CGR)<\/span><\/strong>\n
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\u201cIn 2013, we continued the strategy to improve our portfolio, notably by moving forward with the Go Green program and earning \u201cHQE Exploitation” in-use environmental certification for Europlaza and Arcs de Seine. Our success in marketing vacant units and renewing the leases on nearly half of the portfolio attests to our properties\u2019 appeal. In all, the portfolio\u2019s occupancy rate currently stands at 89%. Over the seven years since its IPO, Cegereal has lived up to expectations by delivering an average return on NNNAV of 4.50%2<\/sup> while respecting its objectives of sustainable performance.\u201d<\/em><\/p>\n\n
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The debt was refinanced at the competitive rate of 3.40%, reducing finance costs by around 20%. The rate will be reduced to 3.15% as soon as the occupancy rate exceeds 90%.<\/p>\n\n
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Cegereal is a REIT-style property company (\u201cSIIC\u201d) that invests in large prime office properties. Its portfolio currently comprises three office sites located in the inner suburbs of Paris. The portfolio\u2019s appraisal value, as estimated by independent valuers DTZ Eurexi as of June 30, 2013, was \u20ac861 million excluding transfer costs.<\/span><\/span>
www.cegereal.com<\/span><\/p>\n