PEC Annual results 2018 - 1ère foncière de retail park. · The low cost retail park specialist...

The low cost retail park specialistLa foncière spécialiste des Retail parks low cost

2018 ANNUAL RESULTS

28 February 2019

The low cost retail park specialist

2018 key figures

3

NAV(5)€26.0

457,714sqm

surface area

7.2%

LTV(3)45.0%million

total asset value(2)€760

Capitalisation

rate(4)

million

rental income(1)€43.1

(1) Gross rental income

(2) Excluding transfer taxes (incl. group share of Cherbourg and Studio Prod and assets held for sale)

(3) Adjusted for security deposits and hedging instruments

(4) Annualised rental income + ERV of vacant spaces/value excluding transfer taxes

(5) Triple net/share

+4.8% vs 2017

+€24m vs Dec. 2017 (220) bps vs Dec. 2017

Total asset surface area


CONTENTS

1. Retail park business model

2. The low cost retail park specialist

3. Financials

4. Strategy and outlook

4

The low cost retail park specialist 5

1. RETAIL PARK BUSINESS MODEL

Sainte Eulalie (33)


The suburban retail park

6

An example of retail park : Poitiers Porte Sud (86)

Key success factors

Visibility Accessibility Anchor Car park


Retail brand where the business models are all

built on the basis of tight cost control

7

Personal goods

Household goods

Services

Food – Restaurants – Hotels

DIY & Electrical appliances

Children

Sport, entertainment and culture

Discount


The retail park, a proven business model

8

262

431 439

653

560 565

521

353

608

489

293

404

490472

613 (1)

c.400/500 (2)

0

100

200

300

400

500

600

700

In thousands

of

sqm

450,000 sqm / year

Evolution of retail park opening in France

> 600 sites

> 12,500 sqm of average surface area

> 25% of commercial areas opened in France since 1998

> c.€600m invested per year between 2006 and 2017 (17% of invested amount in commercial real estate)

Source : Cushman & Wakefield

(1): of which 536 000 sqm in project (2): estimates – per year

The French market in figures


The retail park, a business model that meets the

various players’ expectations

9

An answer to consumer requirements

> Diversity of retail brands

> Offer at the right price

> Business model specifically suited to changing consumption habits

• Uniformity in new projects architecture, increasing offer dedicated to leisure and restaurants,

newcomers, etc.

Property that is attractive to retail brands

> Low service charges: competitive rents and limited service charges

> High marketability: flow, accessibility, car park

A preferred solution for local authorities

> Better control of commercial town planning and development

> Emergence of a local offer in both medium-sized town suburbs and rural areas in answer to

the increasing population density in peri-urban areas

> Complementarity with city-centre retail outlets

Limited service

charges

€10 / sqm

Human scale

surface areas

5,000 –

15,000 sqm


The retail park, a profitable business model for

investors

10

Higher yield> Above shopping centres

Resilient revenues

> Structurally high occupancy rate at c. 95%

> Low turnover rates at c. 2%

> Very limited overdue c. 1%

Low CAPEX levels> Reduced maintenance costs

> Non-significant « greening » investments

A model with a strong development potential> A market full of opportunities that benefits from a more qualitative and well-managed offer

> A fragmented market ideal for consolidation

P&C : an attractive

yield

7.2%

Source: Cushman & Wakefield – Evolution des taux de rendements prime

2%

4%

6%

8%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 T2 2018

4.25%

3.50%

2.50%

city centre Paris shopping centre Super prime retail parks


2. THE LOW COST RETAIL PARK SPECIALIST

11


Critical mass player in France

> 71 assets

> 458,000 sqm

> €760m(1) asset value

> 6 regional offices

CAGR 09-18:

19%

A dense national networkKey figures as of December, 31st 2018

Asset value evolution (in €m)

(1) : asset value excluding rights

62 Retail Parks6 shopping centres /

high street3 Offices

Retail park

Shopping centre / High street

Office

Regional locations

164

489

760

0

100

200

300

400

500

600

700

800

Dec. 2009 Dec. 2012 Dec. 2018

in €

m


75%

92% 92%

95%98% 99%

100%

9%

5%

4%

3% 3%

2% 2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

60%

65%

70%

75%

80%

85%

90%

95%

100%

SIIC status of 100% of the portfolio

13

SIIC assetsOffice property

assets

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016Dec.

2017

Dec.

2018

98% of retail assets


0.9%

7.1%

0%

2%

4%

6%

8%

Retail park Centre commercial / Galeriemarchande

A renowned expertise in retail park

14

Occupancy rate Tenant turnover

Overdue rate Re-invoicing rate of service charges

Selected key performance indicators (31/12/2018)

95%

90%

86%

88%

90%

92%

94%

96%


1.7%

3.3%

0%

1%

2%

3%

4%


Note : turnover des loyers

Group : 94.1%

Group : 2.1%

Group : 1.9%

82.6%

68.3%

50%

60%

70%

80%

90%


Group : 80.6%

Shopping centre Shopping centre

Shopping centre Shopping centre


Attractive nationwide retailers

15

TOP 15 retailers38% of total rental income

Breakdown in rental incomeby retailer type

90%

Nationwide

retailers

Personal products

27%

Household goods26%

Leisure and culture

14%

Food13%

Services7%

Beauty and Health

7%

Discount6%


Selective acquisition strategy

16

Acquisition of 17,548 sqm: €21.5 m(1) and 7.2%(1) yield

Lannion (22)

Asset rented to Conforama

June 2018 5,100 sqm

IstresPau

Frouard

Champagne-au-Mont-d’Or

Bourg-en-Bresse

Lannion

Champagne-au-Mont-d’Or (69)

Istres (13)

Asset rented to Kiabi

Oct. 2018 1,000 sqm

Oct. 2018 4,442 sqm

Six commercial premises increasing

P&C presence on site

(1) : including rights and fees

PoitiersPoitiers (86)

Asset rented to Stokomani (close to

Poitiers Porte Sud)

Dec. 2018 2,077 sqm

Legend :

Acquisition

Project P&C

Legend :

Asset P&C

Acquisition

http://www.google.fr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwj2_Mim1Y7ZAhVGZFAKHRHrDgYQjRx6BAgAEAY&url=http://chm-electricite.com/eclairage-led/chm-reference-joueclub/&psig=AOvVaw0Ym6ySkZ3_SmztU8ZP7rsT&ust=1517916379394845

http://www.google.fr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwiapLHa0Y7ZAhWPLFAKHUctDIAQjRx6BAgAEAY&url=http://newpubmarketing.over-blog.fr/2017/08/branding-nouveau-logo-pour-lapeyre.html&psig=AOvVaw1McwmtMSnxlGjkEfmq9dN5&ust=1517915404159473

https://www.google.fr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjb26r_047ZAhVSmbQKHRO5CkwQjRx6BAgAEAY&url=https://www.groupon.fr/code-promo/magasins/electrodepot.fr&psig=AOvVaw39ESHcG6niM_NFS-l_mYEB&ust=1517916028792307


Continued divestment strategy focused on non

core asset

17

January

Disposal of 7 assets for a total amount of €16.2 m (1) in line with

expert valuations

Jouy-aux-Arches (57)

Commercial premise

Montfermeil (93)

High street

Quetigny (21)

Commercial premise

Gif-sur-Yvette (91)

High street

Paris place des fêtes

(75)

High street

March May July September

2018

Plérin (22)

Commercial premise

(exercise of purchase

option)

Salon de Provence (13)

High street

August

(1) : net selling price


Specific focus on asset upgrade

18

Parigné (72) Saint-Priest (69)

> Extend of the existing building with two new areas

for a surface of 1,476 sqm in an industrial

warehouse

> Signing of a new 12-year firm lease

> Heavy restructuring of an old and vacant asset

100% rent to four tenants (Action, Gautier, V&B,

Comera)


3. FINANCIALS

19


Simplified 2018 P&L

20

In €m12 month 12 month Variation

31/12/2018 31/12/2017 in %

Gross rental income 43.1 41.1 +4.8%

Net rental income 40.1 37.6 +6.7%

Operating expenses and other income (4.8) (4.6) +3.7%

Normative EBITDA 35.3 32.6 +6.0%

Net cost of debt (9.4) (8.9) +5.8%

Funds from operations (FFO) 25.9 24.0 +7.6%

Change in FV of properties (1.3) 1.3

Change in FV of financial instruments 0.4 1.9

Equity method investees (1.8) (1.8)

Other income and expenses 0.9 5.0

Net income 24.0 30.4 (20.9)%

Minority interest 0.1 (0.9)

Net income, group share 24.2 29.5 (18.0)%

Net income, group share, restated from Cergy 24.2 24.6 (1.9)%


Increasing gross rental income

21

2017 gross

rental income

2018 gross

rental income

Acquisitions Constant

perimeter

(1.1)

Disposal

In €m

Restructuring

43.141.1

0.3

3.0

(0.2)

+4.8%

€108 / sqm

Avg. GRI for retail park

€264 / sqm

Avg. GRI for shopping

centre

79% ILC

16% ICC


FFO improvement

22

FFO 2017 (1) FFO 2018Service charges

reinvoicing

GRI Other charges Net financial cost

25.9

24.0

2.00.5

(0.5)(0.7)

+7.6%In €m

Normative EBITDA: +€2.3m

(1) : excluding Cergy


Solid financial structure

23

Cash

OtherOther

Financial debt

Minority interests

Equity (group share)

805

Assets

December 2018

NAV / share

€26.0

(1) : Excluding assets held for sale and equity affiliates

Portfolio appraisal value

€760mincl. Group share of ownership in

assets owned by entities

consolidated using the equity

method

737(1)

Liabilities

December 2018

3929

362

805

45

377

22


Active strategy of asset rotation

24

Portfolio appraisal

value

1st January 2018 (1)

Portfolio appraisal

value

31st December 2018 (1)

Acquisitions

and deliveries

Fair valueDisposal

(1) : including assets held for sale

In €m

739.5

713.4

43.5

(16.2) (1.3)


Monitored LTV ratio

25

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016Dec.

2017

Dec.

2012

214222

199

262

280

337 332

46.1% 46.4%

39.0%

43.2% 43.6%

47.2%

45.0

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

0

50

100

150

200

250

300

350

400

LT

V in %

Net

financia

l debt

in €

m

Dec.

2018


Proactive debt management

26

Interest coverage ratio Average interest rate

2,8%

Mortgages71%

Bonds16%

Financial lease13%

3.32

3.46 3.48

3.703.74

3.60%

3.40%

3.10%

2.80%2.68%

2,00%

2,40%

2,80%

3,20%

3,60%

4,00%

4,40%

4,80%

2,5

3

3,5

4

Debt structure as of

31/12/2018

81%

hedged

5.0 years

Average maturity

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017

Dec.

2018


Signing of a €50m corporate credit line

27

Objectives Debt providers

Specificities and pricing Use

Lead

Pool

Institutionalized a part of the debt

1

Balance the debt profile

2

Secure an interest rate

3

€50m

Tranche A Tranche B

€25m

6 years

EUR3M + 1.55 %

Bullet

€25m

7 years

EUR3M + 1.65 %

Bullet

✓ Repayment of Euro PP 2019 term: €18m

(interest rate: 3.4%)

✓ Early repayment of mortgage linked to high

interest rates: €10m

(average interest rate : 3.2%)

✓ Real estate pipeline financing: €22m


Steady dividend growth

28

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017

€0.63

€0.80

€0.85

€1.00

€1.08

€1.15

Dec.

2018

€1.20

A dividend of €1.20 per share (+4.3%) will be proposed at the General

Meeting on 26 June 2019

A yield of 4.6% on the NAV as of 31/12/2018 and of 7.3% on the share

price as of 25 February 2019


4. STRATEGY AND OUTLOOK

PATRIMOINE & COMMERCE, A HIGH-YIELD REAL ESTATE COMPANY

Champniers (16)


P&C, from growth to yield

30

Assets X4

NAV X5

Market capitalisation X6

Dividend 66% of FFO

Q1

2010

Dec.

2010

June

2011

Sept.

2011

Dec.

2012

August

2014

Dec.

2014

Q1

2015

P&C

founded

BPVF

investsSuravenir

invests

Suravenir

bond

Integration

of Sepric

Predica

invests

EuroPP

Issue

Trimax

deal

H2

2015

Foncière

Sepric

merge

with P&C

2016

2017

2018

Successful

stock

dividend

2016 : +70%

2017 : +80%

2018 : +70%


A strong visibility on revenues…

31

€k

WALT: 4.7 years

Lease expiration dates (end of lease)

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

Taciteprolongation

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 >2029Automatic

renewal


… driven by a solid pipeline

32

✓ Alençon (61)

✓ Champniers (16)

✓ Château-Thierry (02)

✓ Chauny (02)

✓ Decazeville (12)

✓ Echirolles (38)

✓ Etrembières (74)

✓ La Rochelle (17)

A pipeline worth €165m

Committed / Identified pipeline

✓ Laon (02)

✓ Limoges (87)

✓ Loches (37)

✓ Salaise (38)

✓ Salon (13)

✓ Soissons (02)

✓ Wittenheim (68)

0

20

40

60

80

100

120

2019 2020 2021

In €

m

Engagé IdentifiéCommitted Identified


Example of a signed project in 2018: Arçonnay

33

Arçonnay (72)

> Acquisition of a land to build a c. 5,000 sqm property

complex for both a furniture brand (But) and a fast food

restaurant (Burger King)

> Patrimoine & Commerce is already settled in the area

through a 15,753 sqm retail park

> Main brands on this retail park are: Leclerc, Besson,

Intersport, Mr. Bricolage, Darty and King Jouet

> This new project will allow the group to reinforce its

position in the area as well as diversifying our

commercial offer

Signing of one VEFA and three CPI in 2018

March 2020

€5.3m

4,990 sqm

7.3%€

CPI

Legende :

P&C presence

Project


Winning strategy of a high-yield SIIC

34

Leader in French low cost retail parks

Target asset valuation of €1bn

Yield above 7.0%

Loan To Value ratio around 50%

Distribution approaching 60% of FFO€


APPENDICES

Lexy (54)


2019 agenda

36

2019✓ 18 April 2019 : Q1 results

✓ 26 June 2019 : Annual General Meeting

✓ 18 July 2019 : Q2 results

✓ 26 September 2019 : 2019 Half Year results

✓ 22 October 2019 : Q3 results


Shareholding structure as of 31 December 2018

37

Duval family

25.2%

Predica

20.4%

Free float

19.5%

Robbe family

4.9%

Vergely family

10.1%

BPVF

9.5%

Graff family

6.4%

Suravenir

4.0%


Gouvernance conforme au Code MiddleNext

Compensation Committee1 independant member / 2

Investment Committee

4 independants members / 5

Audit Committee1 independant member / 3

Supervisory board15 members, 12 independents

Chairman: Mr Louis-Victor

NB : Predica – considered non independant – has two members on the Supervisory board and on each sub-committee

PEC Annual results 2018 - 1ère foncière de retail park. · The low cost retail park specialist...

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