(AOF) – On July 27, 2022, Icade signed a new lease with the Agence du Numérique en Santé; covering nearly 5,000 square meters and for a fixed term of 7 years. After signing nearly 14,000 square meters with PariSanté Campus on Fresk in 2021, this signing brings the asset’s occupancy rate to 92%. Contacts in progress allow Icade to be confident as to the full letting of the building by the end of the year.
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Key points
– Fifth in France and first in Europe for offices and business parks, with a real estate portfolio worth €12.2 billion;
– Integrated real estate group organized into 3 divisions: tertiary property (68% of assets, 3/4 split between offices and tertiary parks), health property (32%) and development;
– “Design, build, manage, invest” business model, based on synergies between the divisions: resilience of the health real estate company supporting the development of the tertiary real estate company, valuation of the latter’s costs through development, in particular for Greater Paris and the TGV metropolises; – Offices and business parks located 95% in Ile-de-France, including nearly 20% in Paris and 1/4 in La Défense;
– Capital controlled at 39.2% by Caisse des Dépôts, ahead of Crédit Agricole with 19.1%, Frédéric Thomas heading the Board of Directors and Olivier Wigniolle being Chief Executive Officer;
– Solid financial position, the best rated in the sector with Gecina, with an LTV ratio of 40.1%.
Challenges
– 2025 strategic plan: leader in offices in Greater Paris and metropolitan areas, with €5.7 billion in revenue, 1st European health property company, through the international development of Icade Santé, 58.3% owned, with an objective investment of €3 billion, leading player in property development with €1.4 billion in turnover and 7% margin, annual growth of 4.5% in net current 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 regional and industrial partnerships;
– “Low Carbon by Icade” environmental strategy aiming for carbon neutrality by 2050: impact measurement, reduction of the footprint with partners via a climate fund endowed with €2.5 million, compensation for residual emissions, investment plan 2022-26 of €150m, integration of ESG criteria in bond issues;
– Development pipeline of €1.7 billion in the service sector and 27 projects in healthcare;
– Dynamism of portfolio rotation: at the end of 2021, disposals of €507 million and, for 2022, continued disposals of buildings (Gambetta and Millénaire in Paris) and acquisitions;
– Indexation of rents on the cost of construction favorable to income growth.
Challenges
– Change in revalued net assets or ANR, of €90.6, key data for the property sector on the stock market, to be compared with the stock market price and the vacancy rate (87.5%);
– Responsiveness to rising material costs and disruption of supply chains;
– Integration of healthcare property acquisitions in Germany, Spain, Italy and Portugal;
– Postponement of the initial public offering of Icade Santé to the summer of 2022 depending on market conditions;
– 2022 target of a 4% increase in net current cash flow for the group and 5 to 6% for the health property investment company and a 3 to 4% increase in the dividend;
– 2021 dividend of €2.
Business services
The collective catering giants are reviewing their prices
In the first half (ended at the end of March) of its 2021-2022 financial year, Elior benefited from a jump of nearly 20% in its activity to 2.2 billion euros. However, its losses increased from 53 million a year earlier to 266 million euros, partly due to a deterioration in margins. This movement is linked to the inflation of food and energy prices. To remedy this, the group has set up a global and systematic program to renegotiate all price lists with its customers.
As for Sodexo, price increases have already taken place. During the third quarter, they increased by more than 5% year-on-year. The group expects a further increase in tariffs of 4 to 5% by the end of the year. Despite strong growth in its results in the first half (ending at the end of February), the group was cautious for the second half of the year due to an environment that remains uncertain. Executives estimate that the pre-covid margin will be reached again in 2023.
Road transport wants to accelerate its energy transition
The weight of fuel continues to climb in the cost structure of carriers, whereas it usually represents 20% of the cost price. The actors are well aware of the need to carry out the energy transition to free themselves from their great dependence on the price of fuel. However, professionals have to face a lack of supply of clean heavy vehicles at affordable prices. Moreover, the use of hydrogen is still too limited. As for CNG (Natural Gas For Vehicles), although investments have been made in the past, gas trucks are not currently running given the soaring prices. Professionals are therefore asking for support from the public authorities to accelerate their transition.
Property companies facing a less buoyant office market
In 2021, take-up (areas rented or purchased by users) in Ile-de-France remained 22% below its pre-health crisis level (2.38 million in 2019), despite the rebound (+ 32% , to 1.85 million) committed in the second half. It fell back to its 2013 level, far from the 2017 record (2.63 million). On the other hand, in the last quarter of 2021, the immediate supply (stock of empty offices) was at its highest for seven years, at 4 million square meters. The impact of teleworking is difficult to assess and it will be spread over several years, as leases expire (firm terms of three, six or nine years) and companies decide to move. This asset class nevertheless has the advantage of offering rents protected from inflation by indexation. In France, the ILAT index (Index of Rents for Tertiary Activities) takes into account inflation (50%), construction costs (25%) and GDP.