(Boursier.com) — INEA specialist in tertiary real estate in the Regions and leader in Green Building, presents its consolidated annual results as of December 31, 2022 approved by its Board of Directors meeting on February 8, 2023.
INEA’s 2022 financial results once again combine solid operational growth and strong asset value appreciation. In a turbulent market context, they highlight the relevance of the real estate positioning of the property company.
Consolidated revenue is up 13% over 12 months, at 58.5 ME, compared to 51.9 ME in 2021.
This increase is driven both by the entry into operation of new buildings (+8.5%) and by the good growth in income on a like-for-like basis (+4.2%).
Indexation accounted for half of this increase (1.9%), the balance being mainly explained by the improvement in the occupancy rate on this scope (1.2%). The full effect of the indexation will materialize in 2023, given the terms provided for in the leases.
Rental activity was sustained in 2022 (61 leases signed for more than 43,000 m(2)), but did not regain its pre-COVID colors on large areas, which is explained by a certain wait-and-see attitude by large groups.
Thus the slowdown in the pace of marketing of VEFAs delivered post-COVID generated a shortfall of 2.7 ME on 2022 turnover, and is directly reflected in the EPRA vacancy rate:
-which is up slightly across the portfolio as a whole, to 10.4% compared to 9.0% at the end of 2021,
-while it is down excluding recent off-plan sales, to 5.5% (vs. 5.9% at the end of 2021).
The increase in take-up (+10% in 2022) in the main regional cities suggests an intensification of rental activity on these recent VEFAs over the coming semesters.
Solidity of the financial structure
The raising of a new credit (Sustainability Linked Loan of 170 ME) in March and the strengthening of equity (capital increase of 107.3 ME) in June allow INEA to find itself in a very favorable financial situation at the end of 2022 :
– it has no significant debt repayment deadline before 2027;
-and has a comfortable margin on its covenants, with an LTV down more than 7 points, to 42%.
The total balance sheet now exceeds one billion euros (1,073 ME) and the Company has 165 ME of undrawn credit lines, out of total debt of 599 ME.
The debt is long (average maturity of 4 years, compared to 4.7 years at the end of 2021), competitive (average interest rate of 2.20%, compared to 2.01% at the end of 2021), “green” at 80% (compared to 60% at the end of 2022) and 77% secured (as at the end of 2021) against the risk of rate fluctuations.
In this regard, the rise in rates since the middle of the year has hardly affected INEA in 2022 given the hedges in place. The growth in net financial expenses (+18%) is thus linked to an increase in the average outstanding debt of 23% in 2022. were fully invested during the second half.
Continued appreciation of the portfolio
INEA records in 2022 a change in the fair value of its assets of more than 31 ME for the second consecutive year. This appreciation of 32 ME, i.e. more than in 2021 in a market context that is nevertheless much more uncertain, is indicative of the relevance of INEA’s business model and the quality of its assets.
The increase in value is consistent across the portfolio: offices and urban logistics buildings (housed in the Flex Park subsidiary) appreciated in 2022.
The average capitalization rate used by the experts continues to compress: it is 5.78% compared to 5.87% at the end of 2021.
The reasonable level of this rate makes it possible to maintain an attractive premium of 300 bps compared to the OAT (2.75%).
The company continued its acquisitions in 2022, adapting to market conditions and weighting its risk taking:
-it carried out two office operations under off-plan agreement, in Aix-en-Provence and Montpellier, for a total value of 49 ME;
-it acquired for 62 ME two recent office buildings, leased to high quality tenants, in Toulouse (EDF) and Le Mans (STMicroelectronics);
-and it accelerated on the second axis of its strategic plan, namely the development of its subsidiary Flex Park in the regions, by positioning itself on two new business parks in Toulouse and Mérignac, for an investment volume of 20 ME .
Two buildings were also sold in 2022 (in Toulouse and Mérignac), at an average price 17% higher than the appraisal value, explaining the sale result of 1.9 ME.
At the end of 2022, the total value of the portfolio stood at €1,224 million including duties, up 12% over 12 months. 19% of this portfolio is not yet in operation and constitutes a growth driver for future years.
The very good results achieved in 2022 make it possible to erase, over the financial year, the dilutive effect of the capital increase carried out in June.
Recurring Net Income (EPRA NRI) is up 5% in absolute value, and down 8% per share, due to the 15% increase in the weighted average number of shares. The Company’s profitability therefore enabled it to absorb 50% of the dilutive effect linked to the capital increase:
The stock closed the year at -3.32% (dividend reinvested), outperforming the EPRA Europe (-36.65%) and SIIC France (-16.44%) sector indices.
The share’s discount (41.5 euros as of December 31, 2022) compared to the revalued net asset amounts to 28% excluding duties (ANR NDV).
Proposed dividend: 2.70 euros/share
The very good results recorded in 2022 allow the Company to propose to the next general meeting of shareholders a stable dividend of EUR 2.70/share, despite the 28% increase in the number of shares in 2022. The dilutive effect of the capital increase is thus also absorbed over the financial year at the level of the dividend.
This dividend represents a payout of 78% on the cash flow generated over the financial year, and offers a yield of 6.5% on the closing price on December 31, 2022.
It reflects the Company’s confidence in its future.
A portfolio already in line with new environmental regulations
The year 2022 will have been marked by the translation into law of the energy transition imperative, with the entry into force of new environmental regulations, in particular the RE 2020 and the Tertiary Eco-Energy Scheme (“DEET”).
The intrinsic qualities of the assets built up, combined with the efforts made over the past 10 years in terms of environmental management, allow INEA’s assets to display a very efficient level of energy consumption, at 101 kWhef /m(2) in 2022, i.e. 31 % less than the average for the French fleet (146 kWhef /m(2)).
INEA’s office properties are already in phase with DEET, outperforming the consumption threshold set for 2030 by 14% on average. In detail, 88% of INEA’s office buildings already have energy consumption below the regulatory threshold 2030 which is applicable to them, and 12% are in a favorable reduction trajectory.
Thus, the company has no “green” capex to consider in order to bring its assets into line with this new regulation, and ensures its tenants a competitive level of rental charges in a context of rising energy costs.
The energy sobriety of INEA’s assets is directly reflected in its greenhouse gas emissions, the level of which at the end of 2022 (4.64 kg CO2/m(2) – scopes 1&2) is already 65% lower than the objective set by the French State for 2030 (9.25 kg CO2/m(2) – National Low Carbon Strategy / ACT benchmark).
INEA is thus seen as a mature player in the contribution to carbon neutrality, and intends to remain a leader in this area, in particular by adopting the framework of the Net Zero Initiative (total decarbonization) as a voluntary benchmark.
Philippe Rosio, Chairman and CEO of INEA, comments on these results: “The relatively chaotic macro-economic context in 2022 paradoxically made it possible to highlight the strengths of INEA, positioned on healthy and resilient regional markets, and on new, green real estate products that meet the new demands of tenants.
The 2022 financial results thus combine operating profitability and the creation of asset value, allowing us to offer an attractive dividend.
The emergence in 2022 of a new demanding regulatory framework in environmental matters allows INEA to highlight the progress made on this issue, thanks to a pragmatic and voluntary CSR policy implemented for nearly 10 years.
INEA is more than ever one of the leaders in Green Building in France and intends to continue its efforts to maintain this competitive advantage.
Next press release: Q1 2023 revenue, April 12, 2023