(AOF) – Carmila posts net rents on a like-for-like basis up 4.2% compared to the first nine months of 2022. The real estate company specializing in shopping centers has confirmed that recurring earnings per share are expected at 1.57 euros in 2023, representing organic growth in recurring profit of 8%. Retailer turnover increased by 6% and attendance by 3% compared to the first nine months of 2022, while 602 leases were signed over the first nine months.
“This quarter’s performance confirms the solidity of Carmila’s operational results and the relevance of its pivotal mix-merchandising strategy,” said Marie Cheval, President and CEO of Carmila. “The pursuit of dynamic marketing and disposals in line with the expertise values demonstrate the attractiveness of Carmila centers anchored in their territories and benefiting from the power of Carrefour hypermarkets.”
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Key points
– Third largest retail property company in continental Europe managing a network of shopping centers, located around Carrefour hypermarkets in medium-sized towns;
– Real estate portfolio worth €6.2 billion, distributed between France for 71%, Spain for 23% then Italy and generating €357 million in rental income;
– Positioning business model as an incubator & omnichannel platform for merchants, leader in sustainable and diversified transition;
– Capital controlled 35.51% by Carrefour, Predica holding 9.64% of the shares, Marie Cheval being president and CEO of the board of 13 directors;
– Controlled balance sheet with €3.3 billion in equity and LTV ratio of 35.8% but leverage still high at 7.7.
Challenges
– 2026 strategic plan based on multichannel, digital and carbon neutrality:
– annual growth of 10% in recurring earnings per share in 2022 and 2023,
– “Building sustainable growth” growth initiatives: €30 million additional to the net result contributed equally by the incubator and services to retailers, Next Tower and Carmila Retail Development,
– LTV debt ratio of 40%,
– reinvestment of disposals in the activity and distribution to shareholders
;
– Innovation strategy serving the multi-channel offer, the experiments being carried out using data analyzed in cooperation with Carrefour;
– 2030 environmental strategy validated by the SBTi and with an annual budget of €10 million:
– zero net emissions in 2030 for scopes 1 and 2, positive contribution in 2040,
– 40% reduction in energy consumption in 2030, compared to 2019,
– 100% waste recovery and climate resilience of all buildings in 2025,
– carbon compensation actions with the agricultural world, – green loans governed by a Green Bond Framework;
– Postponement to 2025 at the earliest of the 5 major expansion projects in France, due to regulatory constraints affecting profitability, resulting in a drop to €200 million vs. €550 million in investments;
– Delivery in 2023 of 33 restructuring and restoration projects, for a cost of €40 million, and continuation of the disposal plan – an additional €100 million by the end of 2024, part of which will be returned to shareholders;
– Increase in profit contribution from the new business lines, Retail Development and Next Tower.
Challenges
– Monitoring of net assets per share, to compare with the stock price, of €25.26, and activity indicators: rent collection rate (96.6%) and premises occupancy rate (96 % at the end of March);
– After a 5.5% increase in rents at the end of March, 2023 objective of recurring earnings per share up 8% to €1.57;
– 2022 dividend of €1.17, up 17%, i.e. a distribution rate of 75%, €20 million share buyback program.
Learn more about the Real Estate sector
A demand crisis
According to data from the Federation of Real Estate Developers (FPI), the figures for the third quarter of 2022 continue to be alarming. Sales of new collective housing fell by 12.4% over one year, to 19,006 units. Over the first nine months of 2022, the drop reached 10.2%, to 72,670 units.
Reservations are also plummeting due to the collapse of block sales to social landlords and institutional investors. With interest rates rising, institutional investors are renegotiating or halting operations. First-time buyers are penalized by the rise in rates and the tightening of the Pinel system puts off certain private investors.
Due to the sharp rise in construction costs, the FPI estimates that one in six authorized operations is ultimately not carried out for economic reasons.
Faced with this, prices are still rising: the sales prices of new collective housing increased by 5.9% across France in the third quarter of 2022. Ile-de-France is an exception, with a decrease of 0. 9%.