(growth of 13.7%, excluding non-recurring operations)
SIIC PAREF, a property company specialised in property investment and management on behalf of third parties, announces quarterly revenue of € 7.06 million, compared to € 7.11 million in the 1st quarter of 2010.
| Revenue (€ thousands) | Q1 2011 | Q1 2010 | % change | FY 2010 |
| Rent and cost recovered | 5,482 | 5,481 | 0.0% | 22,969 |
| residential | 781 | 754 | 3.6% | 3,159 |
| commercial | 4,701 | 4,727 | (0.6%) | 19,810 |
| Management fees | 1,577 | 729 | 116.3% | 4,140 |
| Total recurring operations | 7,059 | 6,210 | 13.7% | 27,109 |
| Property dealings | 0 | 900 | ns | 946 |
| Consolidated IFRS revenue | 7,059 | 7,110 | (0.7%) | 28,055 |
Rent revenue stable due to the integration of Interpierre
Rent and costs recovered for the 1st quarter of 2011 were stable at € 5.5 million, due to the integration of Interpierre. On a constant group structure basis (excluding the impact of Interpierre in particular), rent revenue declined by 3.5%. The occupancy rate decreased slightly at the end of March to 89%, compared to 90% at 1 January.
As part of its selective disposal policy and pursuant to the undertaking signed at the end of 2010, in March, the Group sold the building of the private hospital located on Avenue Parmentier in Paris, at the net sales price of € 14 million (equal to the appraised value at 31 December). There were no other significant changes to the portfolio during the quarter. In April, the Group proceeded as planned with the sale of the Rivoli-Roule buildings for € 13 million, in accordance with the undertaking signed in December 2010. Following this disposal, the ratio of consolidated net debt to property asset value was 53% at the end of April.
Strong rise in SCPI subscription fees
Management fees from third parties totalled € 1.6 million for the period, compared to € 0.7 million in the 1st quarter of 2010, an increase of 116%. This strong growth was primarily due to the rise in SCPI subscription fees, more specifically those of Novapierre (stores).
More detailed information on Group operations and financial position during the period is provided in the quarterly financial report attached to this press release.
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Shareholders’ agenda
Annual General Meeting; 11 May 2011
1st half-year revenue: 29 July 2011
About PAREF
PAREF Group operates in two major complementary areas:
- Commercial and residential investments: PAREF owns various commercial buildings in and out of the Paris region. The Group also owns the temporary usufruct of residential property in Paris.
- Management on behalf of third parties: PAREF Gestion, an AMF-certified subsidiary of PAREF manages 3 SCPIs and 3 OPCIs.
At 31 March 2011, PAREF Group managed € 680 million in property assets, of which more than € 200 million were assets owned by the Group itself.
PAREF shares have been listed on Eurolist Compartment C of the European Paris Stock Exchange since December 2005
ISIN Code: FR00110263202 - Ticker: PAR
| Hubert LEVY-LAMBERT Chairman of the Management Board Alain PERROLLAZ Chief Executive Officer Tel: 01 40 29 86 86 |
Agnès VILLERET Analyst Investor Relations Lucie LARGUIER Financial Press Relations Tel: 01 53 32 78 95 / 84 75 agnes.villeret@citigate.fr / lucie.larguier@citigate.fr |
For further information, please visit the PAREF Group website: www.paref.com
Quarterly business report
1st quarter 2011
5 May 2011
During the quarter, Foncière PAREF pursued its selective disposal and debt reduction policy and continued to seek to increase the value of its property assets and develop its management on behalf of third parties business.
1 – Property portfolio and Group debt
1.1 Property portfolio
The following changes have affected the consolidated group property portfolio since 1 January:
- As part of its selective disposal policy and pursuant to the undertaking signed in December, in March, the Group sold the building of the private hospital located on Avenue Parmentier in Paris, at the net sales price of € 14 million (equal to the appraised value at 31 December), thereby generating a capital gain of € 3.1 million in the parent company financial statements.
- The last section owned in the Bell shopping centre in Jerusalem by SCPI Interpierre (a fully consolidated subsidiary) was sold for US$ 90 thousand. The SCPI no longer owns any foreign assets.
At 31 March 2011, Paref owned three buildings subject to an undertaking to sell: the Rivoli and Roule buildings, whose disposal was signed in April for a total price of € 13 million (equal to the appraised value at 31 December) and the Fontenay-le-Fleury building (78), whose sale may be finalised at the end of the year, subject to meeting various conditions precedent (city planning and planning permission in particular).
The Group’s property portfolio was thus valued at € 193 million at the end of March 2011, compared to € 207 million at the end of December. This decline was due to the sale of the Avenue Parmentier building. The property portfolio was valued based on appraisals at the end of December, except for SCPI and OPCI which were revalued at 31 March. This includes the Pierre 48 and Novapierre SCPI shares held by the Group (€ 1.4 million), recognised as financial assets in the IFRS balance sheet and the shares held in the Vivapierre OPCI (€ 7.9 million, compared to € 7.4 million at the end of December), in which PAREF holds 27% of the share capital and which are equity accounted.
1.2 Financial debt
In addition to the standard amortisation of the capital of loans financing investment property, major movements since 1 January include the repayment of the Parmentier loan (€ 3 million). The € 3 million cash facility granted by CIC was renewed during the quarter (it remained undrawn at 31 March).
Financial debt (including Interpierre) amounted to €116 million at 31 March 2011 (compared to € 127 million at 31 December). The ratio of consolidated debt (net of cash and cash equivalents and escrow accounts acting as sureties for loans) to the value of property assets, including the property assets held by Interpierre and SCPI and OPCI shares (loan to value ratio) was 55% at the end of March (compared to 58% at the end of December). This ratio fell to 53% at the end of April following the disposal of Rivoli-Roule.
The Group’s bank borrowings were either contracted at a fixed rate or at a capped variable rate. At 31 March 2011, 98% of outstanding debt was at a fixed rate or hedged by a swap.
2. – Growth in revenue from recurring operations of 13.7% to 31 March
The quarterly revenue amounted to € 7.06 million, compared to € 7.11 million in the 1st quarter of 2010, which however included one sale by the property dealing business for € 0.9 million (Lisieux). Recurring operations, excluding property dealings, grew by 13.7%.
| Revenue (€ thousands) | Q1 2011 | Q1 2010 | % change | FY 2010 |
| Rent and cost recovered | 5,482 | 5,481 | 0.0% | 22,969 |
| residential | 781 | 754 | 3.6% | 3,159 |
| commercial | 4,701 | 4,727 | (0.6%) | 19,810 |
| Management fees | 1,577 | 729 | 116.3% | 4,140 |
| Total recurring operations | 7,059 | 6,210 | 13.7% | 27,109 |
| Property dealings | 0 | 900 | ns | 946 |
| Consolidated IFRS revenue | 7,059 | 7,110 | (0.7%) | 28,055 |
2.1 - Rent revenue stable due to the integration of Interpierre
Rent and costs recovered for the 1st quarter were stable at € 5.5 million, unchanged from the same period last year. However, data for the 1st quarter of 2010 did not include SCPI Interpierre, which owned a portfolio of 6 buildings generating quarterly rent revenue before cost recovered of € 0.2 million).
On a comparable group structure bases, rent revenue declined by 3.5%.
The financial occupancy rate has decreased slightly since the start of the year to 89% (compared to 90% at 31 December, due to the departure of Interpierre tenants in Lognes and Vitry).
2.2 – Strong increase in SCPI subscription fees
Management fees from third parties totalled € 1.6 million for the period, more than double those for the same period of 2010.
This performance was more particularly due to the strong rise in gross SCPI subscription fees to € 1.0 million, in particular by Novapierre (SCPI stores). Paref Gestion benefited from a very favourable environment for the collection of capital by property securities and its positioning, with a complete range of SCPI premises, including residential (Pierre 48), commercial (Novapierre) and office/business (Interpierre). Recurring OPCI management fees also grew, due to Vivapierre (holiday resorts), which carried out a major work programme last year.
At 31 March, assets managed by PAREF GESTION (including those of Paref Group) totalled € 681 million (compared to € 659 million at 31 December and € 641 million the previous year). Out of this total, assets managed on behalf of SCPIs (including Interpierre) amounted to € 321 million and those of OPCIs represented € 148 million. SCPI Novapierre’s capitalisation has increased by 13% since 1 January to €85 million. Those of Pierre 48 and Interpierre grew by 4 and 3%, respectively.
The assets managed by PAREF GESTION at 31 March 2011 (including those managed on behalf of the Group) may be analysed as follows:
| ASSETS MANAGED BY PAREF GROUP | ||||||
| Capital under management | 31/03/2011 | 31/12/2010 | % change | |||
| m2 | € thousands | m2 | € thousands | m2 | € thousands | |
| Paref Group (1) | 247,401 | 206,988 | 247,401 | 206,988 | 0% | 0% |
| Interpierre | 47,702 | 16,461 | 47,779 | 16,028 | 0% | 3% |
| Novapierre 1 | 25,237 | 85,399 | 22,685 | 75,341 | 11% | 13% |
| Pierre 48 | 52,236 | 219,541 | 52,660 | 211,775 | (1%) | 4% |
| Total SCPIs (2) | 125,175 | 321,400 | 123,124 | 303,144 | 2% | 6% |
| Vivapierre (1) | 53,833 | 116,500 | 53,833 | 115,375 | 0% | 1% |
| Naos (1) | 5,982 | 31,500 | 5,982 | 28,550 | 0% | 10% |
| Total OPCIs | 59,815 | 148,000 | 59,815 | 143,925 | 0% | 3% |
| Third party | 16,593 | 20,817 | 16,593 | 20,917 | 0% | 0% |
| Usufruct counted twice (3) | (16,661) | (16,661) | ||||
| Interpierre (4) | (47,779) | (16,461) | (47,779) | (16,028) | ||
| Grand total | 384,544 | 680,744 | 382,493 | 658,947 | 1% | 3% |
| (1) appraised value of assets at 31 December | ||||||
| (2) capitalisation at 31 March based on share issue prices at that date | ||||||
| (3) floor area counted both by Pierre 48 (bare owner) and Paref or third party under management (usufruct). | ||||||
| (4) value counted both by Paref Group (consolidated data) and the SCPI | ||||||
3 – Share capital
At the start of March, the Autorité des Marchés Financiers (AMF) informed PAREF that the Company’s principal shareholder, the Lévy-Lambert family (which owns 31.6% of the share capital and 39.4% of voting rights) had to comply with new public offering rules before 1 February 2012, i.e. reduce its shareholding to below 30% or file a public offering with the AMF. The AMF had specified that only individuals who already held between 30% and 33.33% of the share capital at 1 January 2010 could continue to benefit from the 33.33% threshold rule.
The Lévy-Lambert family shareholding had increased to between 30% and 33.33% between 1 January 2010 and 1 February 2011, but only passively due to a reduction of the share capital. The Lévy-Lambert family notified the Company that it has applied for an exemption from the AMF.
4 – Planned acquisition of Watford
Paref has put forward a firm bid for the acquisition of Watford Eurl through its wholly-owned subsidiary Watford II Sarl, for € 0.6 million, the sole aim of which, , is to own a building site located in Nanterre (92) which benefits from an 11,000 m2 planning permission, free and clear of any appeal. This company has debt of € 7.5 million. The signing of this acquisition remains subject to the fulfilment of ongoing due diligence procedures.
5 – Outlook
The selective disposals carried out during the period and the € 4.6 million capital increase carried out last October have strengthened PAREF Group’s financial position and facilitated the development of the business of management on behalf of third parties.
The governance changes announced on 11 April 2011 will take effect after the General Meeting of 11 May and will contribute to accelerating the Group’s development.
With a stronger and younger management team, PAREF Group will continue to implement its growth strategy, which is based on the development of its asset portfolio, with a moderate use of leveraging, primarily through indirect investment via minority shareholdings in OPCIs launched by Paref Gestion, and the development of management on behalf of third parties.
The development of new institutional, dedicated or theme-based OPCIs, in the wake of Vivapierre, Polypierre and Naos, should increase before the planned termination of certain tax incentives.
Paref may also benefit from the significant potential of the SCPI management business. With a complete range of residential (Pierre 48), stores (Novapierre 1) and offices (Interpierre) SCPIs, Paref Gestion will be able to tap into savers’ strong interest in property securities.
The selective disposals policy will be continued and will feature one or two disposals a year of assets reaching maturity or inconsistent with our strategy.
Lastly, Paref will continue its policy of increasing its equity, in particular through capital increases by contributions in kind, depending on the opportunities that will present themselves.
1Unaudited data
