(AOF) – For 2023, Icade recorded net current cash flow from strategic activities, made up of tertiary real estate and development activity, which amounted to 232.6 million euros, up by 0.9%, or 3.07 euros per share, higher than the guidance of 2.95 and 3.05 euros per share. The economic turnover of the promotion increased by 3% to 1.29 billion euros. Rental income from the tertiary property sector, at €363.9 million, increased by 2.2% on a like-for-like basis.
As of December 31, 2023, the value of the portfolio excluding duties of the tertiary property company amounts to 6.5 billion as a group share and 6.8 billion at 100%. At constant scope, over 12 months, the portfolio shows a drop in value of 17.5%
Regarding its debt, the group displays an LTV of 33.5% compared to 39.3% at the end of 2022.
The board of directors will propose to the general meeting, scheduled for April 19, 2024, the payment of a dividend of 4.84 euros per share, an increase of 11.8% compared to the 2022 dividend.
This year, net current cash flow from strategic activities is expected between 2.75 euros and 2.90 euros per share. In addition, the residual holding of non-consolidated securities in the Healthcare activities should, on the basis of the current participation, generate an additional net current cash flow of approximately 0.80 euros per share.
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Key points
– Fifth French real estate company and first in Europe for offices and business parks, with a real estate portfolio worth €7.2 billion;
– Integrated real estate group organized into 2 divisions: tertiary real estate (assets distributed between offices for 3/4 and tertiary parks), and promotion
;
– “Design, build, manage, invest” business model, based on synergies: selective development of tertiary real estate and valorization of the latter’s costs through promotion, particularly in Greater Paris and TGV metropolises;
– Office and business parks located 95% in Ile-de-France – 20% in Paris and 1/4 in La Défense;
– Capital controlled at 39.2% by Caisse des Dépôts, ahead of Crédit Agricole with 19.1I%, Frédéric Thomas directing the board of directors of 15 members, Nicolas Joly being general manager;
– Solid balance sheet: LTV ratio of 40.1% and liquidity of €2.9 billion covering debt maturities until 2026.
Challenges
– 2025 strategic plan, before the new roadmap presented at the end of 2023-beginning of 2024:
– leader in offices in Greater Paris and metropolitan areas, with €5.7 billion in revenue,
– 1st European healthcare property company, through the international development of Icade Santé, 58.3% owned,
– key player in promotion with €1.4 billion in turnover and 7% margin,
– annual growth of 4.5% in current net income;
– Innovation strategy broken down into 3 themes – housing of tomorrow, office of the future (proptech, coworking and third places) and health and well-being in the city – and based on intrapreneurship, co-innovation through start-up incubation -up, via Paris&Co, Creative Factory or H7…, and partnerships;
– Reinforced “Low Carbon by Icade” environmental strategy, validated by the SBTi and approved by the “Say on climate and biodiversity” resolution, via:
– objective of carbon neutrality in 2050 across the entire value chain,
– reduction of the footprint with partners via a climate fund with €2.5 million,
– 2022-26 investment plan of €150 million,
– biodiversity: 100% of business parks and 46% of constructions with positive biodiversity in 2021 and + 170,000 m2 of natural spaces restored and maintained since 2016;
– integration of ESG criteria in bond issues;
– Development pipeline of €676 million in the tertiary sector with great selectivity in rotation and order book of €1.8 billion in promotion;
– Collection, until the end of 2025, of dividends before the sale of the balance of the position in Icade.
Challenges
– Evolution of the revalued net assets or NAV, of €79.3 at the end of June, and the vacancy rate (12.5%);
– Responsiveness to rising material costs and disrupted supply chains;
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Adaptation to the fall in the French residential market: block sales, renovations, conversion into office or business housing, low-carbon wood construction
;
–
After an increase of 2.2% in rental income and 1.7% in development activity, confirmed 2023 objective of free self-financing current between €2.95 and €3.05
;
– Towards a recurring 2023 dividend up 10% and an exceptional dividend of €2.54.
Sector sheet – Business services
A new entity in employee benefits
Pluxee, the division specializing in employee benefits of the services giant Sodexo, will take off on the stock market in 2024. This activity benefits from strong dynamism with organic growth in the third quarter (ended at the end of May) higher than expectations (+25 .5% versus 17.5% expected). The new entity will thus be able to better compete with its competitor Edenred. Since its split from the Accor group in 2010, this company has seen its activity jump and almost double. Having become the world leader in meal vouchers, it even recently joined the flagship stock market index of the Paris market, the CAC 40. This success comes from targeted acquisitions, international development and successful digitalization.
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%.