(AOF) – Klépierre posted a 7.3% increase on a like-for-like basis in its net rental income, to 481 million euros, for the first half of 203. Over the period, net current cash flow increased by 7.4% compared to the first half of 2022 to stand at 1.21 euros per share. As of June 30, 2023, Klépierre’s consolidated net debt decreased compared to the end of 2022 to stand at 7.40 billion euros, after payment of the interim dividend of 248 million euros on March 30.
In this context, Klépierre is raising its net current cash flow target for 2023 and is now targeting net current cash flow of at least 2.40 euros per share, which represents growth of 7% compared to 2022.
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Key points
– Number 1 European shopping center present in 12 European countries;
– Portfolio of €19.6 billion and turnover of €1.2 billion split between France- (41%), Italy (27%), Scandinavia (12%), Spain-Portugal ( 10%), Central Europe (5%) then the Netherlands and Germany (3%);
– Business model of a player that is both investor, operator (72% of the portfolio of more than 100 shopping centers in cities with more than 1 million inhabitants) and developer exercising strict financial discipline;
– Split capital (1st shareholders: the American Simon Property Group with 22% and the Dutch fund APG with 6%), David Simon being chairman of the 9-member supervisory board and Jean-Marc Jestin chairman of the management board;
– Financial position under control, with net debt rated A, reduced to €7.6 billion for an LTV (loan-to-value) of 37.7% and cash of €2.6 billion.
Challenges
– Goodwill strategy broken down into 4 points:
– rationalization of the centers’ asset portfolio and the share of brands, cosmetics, sports, catering and innovative brands to the detriment of ready-to-wear,
– Shop.Meet. Connect.® and Retail First for the attractiveness of the centers,
– Let’s Play®, marketing positioning of Klépierre shopping centers, promoting shopping as a game, Clubstore® for optimizing the customer journey;
– Innovation strategy focused on making customer knowledge available to businesses via the Klépierre ID open innovation platform and association with dozens of start-ups to test new services;
– “Act4good 2030” environmental strategy, at the top of the world rankings, aiming for net zero carbon:
– energy efficiency of 70 kWh/m2 of the portfolio, based on autonomous production capacities of renewable energies, including 30% self-consumption in the first 40 assets;
– 50% recovery of materials,
– assistance to traders for a 20% reduction in their energy consumption,
– 40% reduction in carbon emissions related to visitor means of transport;
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Development pipeline of €1.9 billion concentrated in France, Italy and the Netherlands, focusing on the renovation of existing assets and partially financed by disposals.
Challenges
– Two ratios to monitor, that of the revalued net assets or ANR (€30.90), key data for the real estate sector, and that of the vacancy rate (4.2%), indicator of the real estate market;
– Rise in the attendance rate, to 92% of 2019 levels;
– Reinforcement of energy savings, the group’s French centers being the least energy-intensive (109 kWh/m2);
– After a 24.8% increase in rental income, 2023 objective of free cash flow per share of at least €2.55 generated by stable turnover, occupancy rate and rent collection rate ;
– Dividend of €1.75, with deposit of €0.87.
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%.