Developer REIT Organisation and Pipeline

Transcription

1 Developer REIT Organisation and Pipeline Property investment Property development Services 1

2 Contents 1. Organisation 2. Property investment pipeline 3. Property development and services 4. Outlook 2

3 1. Organisation Property investment Property development Services 3

4 Target: To become the No. 1 developer REIT Maximising the value of properties through synergies or acquisitions Property PROMOTION investment Revenue: 327m / EBITDA: 179m FONCIÈRE CA M 5,2 Md d'actifs au figures (excluding synergies, Icade SA and International) Property dev t Revenue: 791m / EBITDA: 90mSERVICES Services Revenue: 215m / EBITDA: 4m A prospective view allowing for a balance between developments on behalf of ICADE and for third parties Realising value on ICADE's properties and aiming to achieve profitability in line with market levels 4

5 ICADE A new business model and clearer organisational structure Change in corporate structure from marketbased management to business line-based management Assigning responsibility to managers Strengthening strategy steering functions PROPERTY INVESTMENT PROPERTY DEVELOPMENT SERVICES Repositioning of central and support functions Effective management systems 5

6 Business lines with clear objectives Same objectives for each business line Clear objectives for each business line ICADE PROPERTY INVESTMENT Create value ICADE PROPERTY DEVELOPMENT Business development PROPERTY DEVELOPMENT PROPERTY INVESTMENT 2006 revenue 328m Develop properties Identify and provide within the context ICADE Property of allocation Property of resources assets of investment 5.2bn with Realise capital gains As at high-potential properties through portfolio Manage external projects rotation and selling or own projects with mature properties profitability targets Promote synergies SERVICES in line with market levels with ICADE Property and risk control development and ICADE Services, particularly within the framework of complex projects ICADE SERVICES Realise value on property assets Roll out strategic plans Encourage and structure interaction Participate in arbitration of synergies between business lines Encourage career development and develop talented employees Assume responsibility for teams, organisation and shared responsibility for results Maintain and develop properties for ICADE Property investment and third parties Achieve a high standard of quality across all departments Generate a profit on services activities at the level of targets set 6

7 Target: To become the No. 1 developer REIT ICADE PROPERTY INVESTMENT ICADE PROPERTY DEVELOPMENT ICADE SERVICES ICADE Patrimoine PROPERTY Icade Capri DEVELOPMENT ICADE Pierre Pour Tous Icade ADB Icade Eurostudiomes Merger Icade EMGP Icade Tertial PROPERTY INVESTMENT 2006 revenue 328m ICADE Foncière des Pimonts Property assets of 5.2bn ICADE As at ICADE Foncière Publique Setrhi-Setae ICADE Icade G3A SIIC Invest ICADE Tertial Régions Icade SERVICES Arcoba ICADE Foncier Développement Icade Gestion Tertiaire Icade Eurogem Icade Conseil 7

8 An experienced Executive Committee Serge Grzybowki Chairman Chief Executive Officer ICADE Property investment ICADE Property development ICADE Services Finance Legal IT Communication Marketing International Human Relations Residential A. Fayet Commercial M. Brouder* H. Manet M. Sissoko** N. Palladitcheff M. de Battisti G. Parisot * As of 1/2/2008 ** Subject to the agreement of the compliance commission 8

9 Restructured corporate governance Restructured Board of Directors comprising 15 members, five of whom are independent Three corporate governance committees: - Audit, sustainable development and risk management - Appointments and remuneration - Strategy and investment 9

10 2. Property investment pipeline Property investment Property development Services 10

11 PROPERTY INVESTMENT Maximising the value of properties through synergies or acquisitions A targeted asset allocation strategy Properties of 5.1bn as at N 4 property investment company by market capitalisation Distinctive areas of strong expertise Selective and reactive investment approach Identified investments of 2.7bn for Offices* 2.1bn Residential property 1.3bn 0.1bn 1.4bn Shopping centres and retail property*** Business parks** 0.2bn Public and healthcare An active arbitrage strategy Realising value on the office property portfolio Drawing value from the residential property portfolio Planned property sales of 1.6bn for Operating synergies Ownership of significant land reserves Icade s property development business accounts for around 40% of identified investments for the property investment division Capacity for yields + capacity for growth = total yields * Excluding Odysseum shopping centre ** Excluding Aubervilliers shopping centre *** Shopping centres: Odysseum and Aubervilliers 11

12 ICADE identified property investment pipeline 1000 m 700 Total property investment = 2.7bn * Expected average gross yield (excluding capex) = 6.7%** (renovation) Offices 392 Business parks 319 Shopping centres and retail property 408 Public and healthcare Residential property Total property sales = 1.6bn** * Identified investments and intra-group developments (including capex of 0.3bn) ** Expected gross yield is calculated including investments already made, if applicable *** Property sales identified (housing subject to agreements, housing sold to the occupier, offices at maturity) 12

13 RESIDENTIAL PROPERTY Updating of portfolio to refocus on vacant housing Total investment area Developed area Number of homes (99% in Ile de France region) Appraisal value excluding transfer taxes Financial occupancy rate Block sales Average price Individual sales Average price 564 hectares 2.4m m² 41,500 2,109m (+11%) 97.3% 2,431 homes 750/m² 156 homes 1,780/m² Disposal of 6,500 homes subject to agreements Developing sales to owner-occupiers changing each property from single-use rental to co-ownership realising capital gains increasing NAV Selective investments offering overall yields and future value Realising capital gains and recurring cash flow 469 homes under construction (expected yield on cost: 5.3%) 558 student rooms under development including 340 developed by the residential property development division (expected yield on cost: 5.4%) Figures: as at 30/09/07, excluding appraisal value as at 30/06/07 (increases: vs ) 13

14 pipeline Residential property Portfolio value as at 30 June bn Investment + 0.7bn including capex of 0.3bn (renovations) Property sales - 1bn 14

15 pipeline Residential property Investment in existing portfolio (renovations): 270m Acquisition of 2,278 homes student rooms developed by the residential property development division: investment of 430m expected yield on cost: 5.2% Property sales: 980m block sales: 14,000 homes (systematic invitations to tender) to occupiers: 2,500 homes Average sale price of sales to occupiers and block sales: 1,000/m 2 (conservative assumptions on account of the geographical diversity of the portfolio) 15

16 OFFICE PROPERTY Reserve of capital gains and potential for optimisation Selective approach based on quality criteria and location Seeking value and overall yields France Leasable area 160,075 m² Appraisal value excluding transfer taxes 893m (+26%) Financial occupancy rate 95.2% SIICInvest: 69,462 m² Appraisal value excluding transfer taxes 115m Germany Office properties: 149,000 m² Land reserves: 79 hectares Appraisal value excluding transfer taxes Financial occupancy rate Arbitrage and value creation 379m (+2%) 80.3% Tour Descartes (formerly IBM), La Défense Investment: 497m (including works) - Expected gross yield*: 6.6% 140m high (41 floors) - Net area: 85,000 m² - Area: 66,000 m² Former ESSO head office, Rueil-Malmaison (92) Investment: 144m (including works and excluding extension) - Expected gross yield: 6.5% Area: 24,200 m² of offices and 5,000 m² of building rights. "Opéra" building, Villejuif 5 (94) Investment: 48m Expected yield on cost: 8.5% Area: 15,250 m² Ernst & Young building, Munich Investment: 58m - Expected gross yield: 6.9% Area: 20,670 m² Figures: as at 30/09/07, excluding appraisal value as at 30/06/07 (increases: vs ) * based on historic cost of property 16

17 pipeline Office property Portfolio value as at 30 June bn Investment + 0.9bn Expected yield on cost = 6.4% Property sales - 0.6bn 17

18 pipeline Office property Villejuif block 4 - Le Châtelet Investment including Villejuif block 1 Completion Q Net area (m 2 ) 10,839 Investment m bn Expected yield on cost 6.8% Villejuif block 3 Q , % Villejuif block 4 Q , % Pyrénées Q , % Property sales 0.6bn Villejuif block 3 - L'Italie Well positioned properties with limited marketing risk 18

19 BUSINESS PARKS Unique area of expertise that can be replicated Gradual and steady value creation Developing construction potential spread out over time Stepping up investment plans and value creation Closer management of offices and business activities Total area of business parks Leasable area Offices Average rents Light Area industrial areas Average rents Warehouses Financial occupancy rate Appraisal value excluding transfer taxes 76 ha 179,909 m² 248/m² 243,118 m² 134/m² 92.6% 1,464m (+19%) PARC DU MILLÉNAIRE 1 Investment: 104m - Gross yield: 8.6% Area: 20,000 m² occupied by Icade and 10,000 m² leased to external companies (ODDO et Cie etc.) PARC DU MILLÉNAIRE 2 Investment: 104m - Expected gross yield: 8.5% Total area: 30,000 m² - Completion end-2007 Figures: as at 30/09/07, excluding appraisal value as at 30/06/07 (increases: vs ) 19

20 pipeline Business parks Portfolio value as at 30 June bn Investment Expected yield on cost (excluding capex) = 8.1% 0.4bn 20

21 pipeline Business parks PARC DU MILLÉNAIRE 3 & 4 Estimated investment: 197m including user works) Expected gross yield: 8.7% Development of 48,750 m² Estimated completion 2011 CAPEX: Access and utilities, revegetation works 50m Parc du Millénaire BUILDINGS 521 & 114 Expected gross yield: 6.7% Planned office space of 19,000 m² (estimated 53m) and 6,000 m² (estimated 20m) Completion 2008 Building 114 Building 521 Flexible rate of completions depending on marketing 21

22 SHOPPING CENTRES AND RETAIL PROPERTY A product line offering recurring cash flow under development Selective approach based on quality criteria and location Seeking value and overall yields ODYSSEUM shopping centre Future value creation and recurring cash flow ODYSSEUM shopping centre, Montpellier (34) Icade share: 50% - Icade investment: 90m Expected yield on cost: 5.4% - Total area: 49,000 m² Planned opening: 2010 CANAL shopping centre, Aubervilliers (93) Icade share: 50% - Icade investment: 167m Expected yield on cost: 6.2% - Total area: 29,000 m² Planned opening: 2011 CANAL shopping centre Acquisition of 95% of Foncière Monsieur Bricolage 40 stores - Investment: 107m Gross yield: 8% - Area 151,000 m² 22

23 pipeline Shopping centres and retail property Portfolio value as at 30 June bn Investment + 0.3bn Expected yield on cost = 6.5% 23

24 pipeline Shopping centres and retail property Retail park example: Les Terrasses de Montrabé (31) 32,200 m 2 average area over 11 hectares (catchment area: 200,000 hectares) 16-screen multiplex cinema, 1,200 parking spaces, 8 km from the centre of Toulouse Opening: Q3 2011; architect: Sign Architecture Investment: 61m Expected yield on cost: 6% Very limited marketing risk 24

25 PUBLIC AND HEALTHCARE Investor approach drawing on reputation in public sector property development Criteria of overall yields and value creation Recurring long-term returns with PPP developments Regular yields IGH Ministry of the Interior, Levallois-Perret (92) Amount: 179m - Rate of interest on capital employed: 6.8% (real estate financing) - Area: 30,000 m² 2 Clinics in the Centre Amount: 43m - Area: 35,200 m² Immediate gross yield on acquisition > 6.7% Investment in progress in 6 PPP developments Amount: 130m - Expected rate of interest on capital employed: 5.4% (expected IRR on equity: 10%) Area: 95,000 m² 3 Clinics in the Aquitaine Basin Amount: 99m (including works) - Area: 45,300 m² Immediate gross yield on acquisition > 7.5% 25

26 pipeline Public and healthcare Portfolio value as at 30 June bn Investment + 0.4bn Expected average gross yield = 6.8% 26

27 pipeline Public and healthcare Public sector (including PPP): Investment: 174m Expected rate of interest on capital employed: 6.4% (Expected IRR on equity: 10%) Harpin: Esquirol Saint-Hilaire clinic (Agen, 47) Clinics: Investment: 234m Expected gross yield: 7% Vedici: Archette clinic (Olivet, 45) Vedici: Saint François clinic (Mainvilliers, 28) Immediate cash flow on clinics No rental risk for PPP developments 27

28 3. Property development and services Property investment Property development Services 28

29 PROPERTY DEVELOPMENT A balance between development on behalf of Icade and for third parties ICADE's property development activities in France enable it to anticipate market developments and optimise its investments 2006 property development revenue: 791m Public and healthcare Residential property 112m 553m 126m Commercial property A controlled growth strategy, building up commercial property and public sector activities Looking for synergies with property investment companies as business introducers in line with their strategies Favoured access to land and complex developments Control of assumed risks dictates the strategy of each segment Control of margins aiming for market average rates of return Engineering subsidiary allowing for better assessment of costs and control of risks Figures as at 31 December

30 National coverage No. 4 property developer in France Market trends Structural housing shortage Robust demand, fairly low inventories Continuing favourable loan terms Tax incentives Slowdown in selling price rises Inflation in production costs Development of home ownership and affordable housing Residential property Backlog*: 747m = 14 months revenue Property investment portfolio*: 2,187m Cancellation rate: 19%** Disposal rate: 11%** Average apartment selling price (development launched in 2007): 3,600 per m²** *Figures as at 30 September 2007 including Opera Construction ** Excluding Opera construction 30

31 National coverage No. 4 property developer in France Commercial property Public and healthcare Under development Potential revenue = 288m Preparation in progress Potential revenue = 1,068m Under development 200,700 m² Preparation in progress 122,595 m² Figures as at 30 September

32 Third-party developments Residential and commercial property development Le Perreux sur Marne, "Zac du Canal" A residential development in the south-east of the Ile de France region, offering easy access 3 railway stations, A3 and A4 motorways, RN 34 Land of 2.2 hectares along the Marne river benefiting from a favourable position In May 2006, Icade won a large part of the development, attributed to the residential and commercial property development division TOTAL NET AREA: 51,450 m² HOUSING NET AREA: 30,850 m² OFFICE/BUSINESS NET AREA: 20,600 m² ICADE SHARE: 25,430 m² including office space of 11,230 m² 14,200 m² of housing Average home price: 5,300/habitable m², including parking Business volume: 70m Office business volume: 28.5m 32

33 Property investment pipeline Residential and commercial property development Internal residential property development: L Haÿ-les-Roses (94), "Les Jardins Ronsard" residence Number of homes: 51 (163 homes planned in total) Expected yield on cost: 6.9% Internal residential property development: Juvisy-sur-Orge (91), Rue de Bellevue 56 homes planned Expected yield on cost: 5.2% Internal commercial property development: "L Opéra", Villejuif (94) Investment: 48m Area: 15,250 m² Expected yield on cost: 8.5% 33

34 SERVICES Realising value on properties and aiming to achieve profitability in line with market levels 2006 services revenue: 215m ICADE is structured so as to develop, invest in and manage its properties thanks to specialised teams able to serve their customers Residential property 91m 114m 10m Public and healthcare Commercial property Figures as at 31 December

35 Creation of a Services division Reorganisation and improving margins FRANCE Property management Office space managed: 1,235,988 m² individual property management: 22,171 lots institutional property management: 15,154 lots associations: 119,302 lots SPAIN Student residences Number of beds managed: 6,058 Commercial property management Offices managed: 1,184,632 m² associations: 1,032,049 m² facilities management: 860,367 m² PFM Area in use: 3,622,181 m² Property management individual property management: 1,647 lots individual associations: 7,985 lots Student residences: Number of beds managed: 5,227 Complete reorganisation of services activities Refocusing on activities allowing for better management of properties and developments Organisation of business lines (property management and facilities management) to serve clients (internal and external) Aiming to improve margins Thanks to effects of scale and business line specialisation, setting objective targets in order to bring activities in line with market practices Implementation of procedures and quality analysis grids ITALY Property management Office space managed: 4,334,148 m² Figures as at 30 September

36 4. Outlook Property investment Property development Services 36

37 ICADE outlook Identified investments = 2.8bn Estimated additional investment potential = 1.8bn Planned property sales = 1.6bn Potential LTV ratio of 46% Investments with controlled and limited marketing risk 37

38 ICADE Guidance Growth in net cash flow Maintaining margins in property development activities Properties offering strong value creation Dividend policy in line with SIIC property investment companies 38