(AOF) – Icade has unveiled a current net cash flow for 2022 up 7% to 417 million euros. Based on the number of shares, it rose 5.9% to 5.50 euros. The latter was expected to grow by around 5.7% to 6%. Turnover increased by 9%, to 1.8 billion euros. In detail, rental income from Commercial Property Investment fell by 2.2% to 355 million euros in a context of sustained asset disposals. Excluding the impact of these disposals, they would show growth of 4.7%.
Rental income, share of Healthcare Property Investment amounted to €210.5 million in 2022, up 11.7% on a current basis, mainly due to the effect of acquisitions made in 2021 and 2022 both in France and internationally.
The turnover of the Promotion activity jumped by 17% to 1.26 billion euros. On the commercial front, reservations reached a new record at 6,014 lots in 2022, vs 6,004 lots in 2021, and up 10% in value.
The 2022 dividend proposed to the general meeting of April 21, 2023 amounts to 4.33 euros per share, up 3.1%. This amount is equivalent to a payout ratio of 78.7% of current net cash flow in 2022.
The payment of the dividend will be made in two instalments: an interim payment of 50%, or 2.16 euros per share, will be paid in cash with a secondment on February 28 for payment on March 2 and the balance will be paid at the beginning of July.
As of December 31, 2022, the total value of the portfolio (group share) stood at 11.8 billion euros, down 3.8%, due in particular to the disposals carried out over the year (684 million of which 600 million on the tertiary portfolio) and a change on a like-for-like basis of -2.5%.
NDV or liquidation revalued net assets increased by nearly 12% to 101.4 euros per share, driven by the positive fair value effects of fixed-rate debt and derivatives over the year.
The LTV, the equivalent of the debt ratio in the sector, stood at 39.3%, down 80 basis points over one year.
This year, the evolution of the group’s net current cash flow per share is expected to be stable to slightly positive, excluding the effect of the 2023 disposals. The 2023 dividend should evolve in line with that of the net current cash flow and the distribution rate s rise to about 80%
In a context marked by a real estate and financial environment that is complex and volatile but full of opportunities, the Board of Directors wished to appoint a new Chief Executive Officer at the end of Olivier Wigniolle’s second term, responsible for defining a strategy adapted to this new environment. Olivier Wigniolle’s mandate will end on April 21, 2023 at the end of the next general meeting.
Icade’s Board of Directors has already initiated the search process for Olivier Wigniolle’s successor and the company will communicate on this subject in the coming weeks.
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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 heading the Board of Directors and Olivier Wigniolle being Chief Executive Officer;
– 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 €90.6, key data for the property sector to be compared to the stock market price and the occupancy rate (87.2%) for property companies);
– Energy inflation: securing gas and electricity purchases until early 2024 and adapting consumption, in partnership with the Ecowatt system;
– Maintaining the European growth of Icade Santé, the sharp rise in interest rates having led to a slowdown in investments;
– 2022 objective, confirmed, of a +4% increase in net current cash flow for the group and of 5 to 6% for health property and a 3 to 4% increase in the dividend.
Find out more about the real estate sector
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%.