Société de la Tour Eiffel :annual results 2014

Annual results 2014

A year of transition marked by

the securing of rents and the rebound in investments

The Board of Directors of Société de la Tour Eiffel met on March 4, 2015 under the chairmanship of Hubert Rodarie, and approved the accounts for FY 2014. The audit procedures on these accounts have been carried out. The certification reports are being issued.

Consolidated figures

Turnover 2014

The consolidated turnover of Société de la Tour Eiffel amounted to € 64.6m at December 31, 2014, of which € 51.9m in rent, the balance being made service charges rebilled to tenants and the deferred revenue on the Nantes business park B2 building sale, sold by forward purchase agreement.

Two factors contributed to the evolution of rents in 2014:

• The evolution of portfolio perimeter:
   
  1. The group's buildings disposals amounted to close to € 200m in 2013 (-23.4%) and to approximately € 39m in 2014 (-4.8%). This results from the decision concerning the strategic refocusing of the portfolio on the Ile-de-France region carried out in FY 2013 and FY 2014, thereby raising the share of assets in the Paris region to 80%.

                        These disposals of buildings have had an impact on rents of -€ 9.6m;
                         
                        b. The acquisitions of buildings in Bagneux (July 2014) and Suresnes (October 2014) have had an impact of +€ 1.9m on the consolidated rents for 2014. These acquisitions will generate € 7.2m in additional revenue per year as of 2015 and are testimony to the new strategy implemented since mid-2014.
             
             

• The evolution of rents:
   
  1. The company engaged in a substantial proactive effort concerning leases renewals and rental flows securing, in particular on main components of its portfolio (Le Plessis-Robinson, Champigny-sur-Marne, Caen Colombelles). This work extended on nearly a third of the Company's total income. The average fixed term of leases (excluding parks) has now gained a year, reaching over 4.3 years;
  2. The balance of net rents on the existing portfolio has experienced a slight downturn (impact of lease extensions and the vacancy at the Rueil-Malmaison asset on September 30, 2014);
  3. The EPRA financial occupancy rate dropped from 93.7% at December 31, 2013 to 89.6% at December 31, 2014;
  4. The negative effect of indexing.
      

 Portfolio value

The IFRS portfolio value, net of transfer costs, stood at € 765m at December 31, 2014, an increase of € 64m as compared to December 31, 2013. Disposals over the last two years represented approximately € 39m in 2014 and € 200m in 2013. In the second half of 2014, the group resumed investments, with € 108m (costs included) distributed on 2 office buildings located in Suresnes and Bagneux, offering respective performances of 6.5 % and 7.5 %.

At constant scope, the portfolio value is stable (-0.7%).

On the basis of this IFRS portfolio valuation, the Group's LTV was of 47.7% at December 31, 2014 and the EPRA Triple Net NAV reached € 58.2 per share as compared to 58.1 € per share at December 31, 2013, i.e. an increase of 0.2%.

Dividend

The Board of Directors will propose to the General Shareholders' Meeting the distribution of a dividend of € 3.0 per share, which will be paid out within the legal time limits.

Other highlights

The General Shareholders' Meeting of December 5, 2014 ratified the new composition of the Board of Directors and authorised it to carry out a capital increase.

The Board of Directors therefore has the possibility, if it deems appropriate, to open the capital to new investors, thereby allowing the Company to pursue its ambitious development plan and maintain its SIIC (REIT) status.

Outlook
In an economic context which calls for caution, the objective of Société de la Tour Eiffel is to double the size of its portfolio over the next 3 to 5 years. We are therefore approaching 2015 with ambition, but also with realism. This growth objective will be achieved by the acquisition of secured assets,  developments on land both available and to be acquired, but also by external growth. We are willing to examine portfolios of assets or companies which are compatible and consistent with the existing portfolio.

Thus, as early as 2015, Société de la Tour Eiffel is once more on track for a growth trend in its cash flows.

"After the successful take-over bid by the SMA insurance group, Société de la Tour Eiffel now has, thanks to its increased financial resources and an ambitious roadmap, substantial prospects for growth and value creation", stated Philippe Lemoine, Managing Director of Société de la Tour Eiffel.

Agenda:               May 28, 2015 - Annual General Shareholders' Meeting.