Cegereal, the French Office REIT - IFRS net income up a sharp 51.2%

Paris, February 16, 2018 - 8:00 am
2017 Annual Results - Regulated information

IFRS net income up a sharp 51.2%

"2017 was a particularly active year for Cegereal, with leases signed for 41,000 sq.m of office space, and the remaining space at the Hanami campus taken up. We also continued to pay special attention to improving returns on our assets, and are continuing to invest, in order to anticipate our tenants' new expectations. Backed by institutional investors, Cegereal is ready to pursue its growth strategy and carry out further acquisitions, said Cegereal's Chief Executive Officer, Jérôme Anselme. 

• Key indicators

The Total Share Return over the last 12 months came to 12.5%, with NAV growth of 7.3% and a distribution ratio of 5.1%.

EPRA NNNAV was up 7.3%, primarily driven by an increase in the portfolio value. The indicator stood at €43.8 per share, reflecting the rise in fair value of properties (positive impact of €3.4 per share), dividend distributions (negative impact of €2.1 per share), consolidated earnings growth (positive impact of €1.3 per share), rent-free periods granted to new tenants (positive impact of €0.2 per share) and changes in the fair value of bank debt (positive impact of €0.2 per share).

In 2017, rental income totaled €51.3 million, up 8.6% from €47.2 million in 2016, of which €9.5 million was contributed by the Hanami property.

EPRA earnings for the year amounted to €32.7 million, up 15.9% like for like from €28.2 million in 2016, with Hanami accounting for €5.2 million of the total.

Net cash flows from operations climbed 3% to €35.8 million, fueled by the strong performance of Cegereal's rental activity. The Hanami property represented €3.8 million of the total.

IFRS net income amounted to €62.4 million in 2017, up a sharp 51.2% from €41.3 million in 2016, thanks to improvements in the cost of debt in 2016 and 4.0% growth in the portfolio value.

• A RECORD YEAR FOR RENTAL ACTIVITY

Cegereal's rental business enjoyed strong momentum in 2017, with extensions, renewals and new leases signed for 41,000 sq.m, or nearly 25%, of the total portfolio.

The most notable signings were as follows:

• Arcs de Seine: Huawei leased additional space in the building for a minimum term of six years, offsetting the early departure of Boursorama and bringing the total office space leased by Huawei to 11,700 sq.m. The building's occupancy rate stood at 98.4% at the year-end.
• Europlaza: My Money Bank took up a portion of the space vacated by GE Capital during the year (3,000 sq.m), and KPMG signed a firm nine-year lease for 2,500 sq.m of space in the building's "garden floors". Cegereal is currently in discussions regarding the 8,000 sq.m of soon-to-be-renovated vacant space in the upper floors of the tower, which is expected to be leased in the near future. The building's occupancy rate stood at 73.7% at December 31, 2017.
• Hanami: Axens signed a firm six-year lease for the eighth and final building at the Hanami campus, representing 2,900 sq.m of office space. The office complex, Cegereal's most recent acquisition, is now fully leased.

Thanks to its marketing initiatives during the year, Cegereal's occupancy rate stood at 91.4% at December 31, 2017, up from 87% at end-2016. The impact of the additional revenue generated by the rental activity will be fully felt in 2018.

In 2018, Cegereal will continue to offer its tenants optimized office space featuring premium amenities and a commitment to the highest environmental standards.

• RECOGNITION AND AWARDS FOR CEGEREAL'S CSR PERFORMANCE

Cegereal once again received recognition for the excellence of its financial and non-financial reporting. The Company won two Gold Awards at the annual conference of the European Public Real Estate Association (EPRA) and, for the third year in a row, was positioned among the top 3 in the Global Real Estate Sustainability Benchmark (GRESB) ranking, coming in at second in the "listed office property companies in Europe" category.

• A healthy balance sheet

At December 31, 2017, Cegereal's debt ratio stood at 53.4%, compared with 52.1% at end-December 2016. Thanks to the refinancing carried out in 2016, Cegereal reduced the average cost of its debt to 1.4% at December 31, 2017.

• Special dividend distribution in 2018: €4.1 per share

In light of its strong performance, at the Annual Shareholders' Meeting to be held in April 2018, Cegereal intends to recommend paying a total dividend of €4.1 per share, comprising an ordinary dividend of €2.2 per share and a special dividend of €1.9 per share.

Cegereal's Board of Directors met on February 15, 2018 to approve the audited consolidated financial statements for the year ended December 31, 2017.

The annual results presentation can be viewed on the Company's website:

www.cegereal.com

Investor Calendar

• April 24, 2018       Annual Shareholders' Meeting
• April 25, 2018       First-quarter 2018 revenue
• May 4, 2018         Payment of the 2017 dividend
• July 26, 2018        First-half 2018 results

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About Cegereal

Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated at €1,257 million at December 31, 2017 (replacement value).
From an environmental point of view, Cegereal's portfolio benefits from the "Green Star" rating in the international GRESB benchmark.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €505 million on February 15, 2018.
www.cegereal.com

IFRS Income Statement (consolidated)

IFRS Balance Sheet (consolidated)

IFRS Statement of Cash Flows (consolidated)

French GAAP Income Statement

French GAAP Balance Sheet