(AOF) – On Tuesday, Icade signed the definitive protocol with Primonial REIM and the minority shareholders of Icade Santé and IHE (Icade Healthcare Europe), and thus confirms the organization of the total sale of its healthcare portfolio for a valuation of 2.6 billion euros, “NAR NTA base as of December 31, 2022”.
The conclusion of the definitive agreements thus relates to all of the Healthcare assets held by Icade, i.e. the liquidity of its stake in Icade Santé (IS) and the organization of the sale of the portfolio of assets of Icade Healthcare Europe (IHE) , in line with the performance conditions described in the press release of March 13, 2023.
The effective completion of the first stage of the operation (closing of stage 1), consisting of the sale by Icade of Icade Santé shares for a total amount of 1.4 billion euros, i.e. 64% of its stake in Icade Santé, is expected in July 2023 at the latest. The terms of the agreements confirm the parties’ desire to see the balance of the operation completed by the end of 2025 at the latest (stages 2 and 3).
As a reminder, the announcement of this operation, with the immediate consequence of the loss of control of Icade in its Healthcare activity, results from 2023, in the deconsolidation of healthcare activities in the group’s financial statements.
As announced, Icade will present, on the occasion of its half-year results, and once the closing of stage 1 has been completed, the impact of the operation on the group’s NCCF (current net cash flow) in 2023 and will provide clarification on the amount of the exceptional dividend for the 2023 financial year as well as the schedule for its payment.
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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 the synergies between the poles: 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 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 19.1%, Frédéric Thomas leading the Board of Directors and Nicolas Joly becoming Chief Executive Officer in April;
– Solid balance sheet: LTV ratio of 40.1% and liquidity of €2.9bn covering debt maturities up to 2026.
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,
– leading player in property development with €1.4 billion in revenue and 7% margin,
– 4.5% annual growth 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 partnerships;
– Reinforced “Low Carbon by Icade” environmental strategy, validated by the SBTi and approved by the resolution “Say on climate and biodiversity”, via:
– objective of carbon neutrality in 2050 throughout the value chain,
– reduction of the footprint with partners via a climate fund endowed with €2.5 million,
– 2022-26 investment plan of €150 million,
– biodiversity: 100% of business parks and 46% of constructions in 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 €1.7 billion in the tertiary sector, portfolio of +€1 billion in health investment projects and order book of €1.7 billion in property development;
– Indexation of rents on the cost of construction favorable to the growth of income in the tertiary and healthcare divisions;
– Rent collection rate of 99%, compared to an average of +70% for the sector.
Challenges
– Change in revalued net assets or ANR, of €101.4, key data for the real estate sector on the stock market;
– Responsiveness to rising material costs and disruption of supply chains;
– Acceleration of the European growth of Icade Santé, the IPO of which is suspended;
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After a 9% increase in turnover, the 2023 objective of stable or slightly increasing free current cash flow, the dividend evolving in line with the latter
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– 2022 dividend up 3.1% to €4.33
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A demand crisis
According to data from the Federation of Property 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 decline reached 10.2%, to 72,670 units.
Reservations are also plummeting due to the collapse of bulk sales to social landlords and institutional investors. As interest rates rise, institutional investors renegotiate or halt operations. First-time buyers are penalized by the rise in rates and the tightening of the Pinel system puts off some private investors.
Due to the sharp rise in construction costs, the REIT estimates that one out of six authorized operations is ultimately not carried out for economic reasons.
Faced with this, prices are still rising: the sale prices of new collective housing increased by 5.9% throughout France in the third quarter of 2022. Ile-de-France is an exception, with a drop of 0, 9%.