Activity at end-September 2019: 10.8% growth in revenue
Strong revenue growth
* Revenue of EUR775 million and revenue Group share of EUR511 million, up
+10.8% and +2.8% like-for-like
* France Offices: +3.2% like-for-like
* Italy Offices: +1.2% like-for-like
* Germany Residential: +4.0% like-for-like
* Hotels in Europe: +1.8% like-for-like
* Pre-letting of 5,000 m2 of offices by Siemens in the building IRO, located in
the Malakoff-Montrouge-Chatillon business district
* Delivery of 6,500 m2 of offices in Milan on via Principe Amedeo, 100% pre-let
* Delivery of Meininger Hotel Porte de Vincennes with 249 rooms, the first
Meininger in France
Non-financial rating: A1+ maximum score obtained from Vigeo-Eiris
* Covivio is ranked 1st in its sector and 7th across all sectors in Europe and
Successful issue of the second Green Bond of EUR500 million
* 12-year maturity and 1.125% coupon
* Improvement in the average cost of debt and the maturity
Revenue at end-September: strong growth of 10.8%
Revenue at end-September stood at EUR775 million and EUR511 million Group
share, a 10.8% increase driven by the strong investment momentum of 2018 and
the merger with Beni Stabili.
At a like-for-like scope, revenue from activities rose by 2.8% (2.9% on the
strategic scope), exceeding the 2019 growth target of 2.5%. Lettings (net of
vacating of premises) and rent increases on renewals contributed 1.5 pt to this
> In France Offices, rental income grew by 3.2% at a like-for-like scope,
compared with 2.8% growthin 2018. This performance is due mainly to new leases
in 2018 (+1.5 pt), signed primarily in the first half. This effect gradually
eased off during 2019. Indexation contributed +1.3 pt and renewals +0.6 pt.
> In Italy, rental income grew 1.2% at a like-for-like scope, mainly due to
indexation (+1.2 pt), with the occupancy rate remaining stable at 98%. Growth
in the offices portfolio in Milan stood at +1.7%.
> The rental performance of Germany Residential reached +4.0% at a
like-for-like scope, driven by growth in Berlin (+4.6% at a like-for-like
scope) and North Rhine-Westphalia (+4.1%). 36% of this growth was generated
through indexation, 22% by re-letting, and 42% from modernisation.
> Lastly, in Hotel, revenue increased by +1.8% at a like-for-like scope.
Regarding Accor leases, which are 100% variable, the 1.3% growth is due to the
repositioning works being carried out by Accor in 2019 and 2020 to secure
future growth. EBITDA for Hotel operating properties rose 2.2%, after an
exceptional 2018 (+5.6%).
The occupancy rate and the maturity of the leases remain high across all
assets, respectively at 97.9% and 7.0 years firm.
A end-September 2019
(9 months) Revenue Revenue Variation Variation Occupancy Lease
at 100% Group share at like- rate term
(EURm) (EURm) (%) (%) (%) (years)
This quarter, Covivio pre-let 5,000 m2 of offices to Siemens as part of the IRO
project in Chatillon. This signature comes after the pre-letting of the entire
Flow building in Montrouge to EDF at the end of 2018 (Covivio's second project
located in this area south of Paris). IRO is now 20% pre-let and represents the
only new offer in the area that will be delivered in 2020.
At the same time, two development projects were delivered in Paris and Milan:
> Principe Amedeo, redevelopment of a building with 6,500 m2 of offices
acquired in 2017 in the Porta Nuova district, representing a total cost of
EUR60 million. Today, the building is fully let, mainly to the law firm Gattaï
and to iGenius, a company specialised in artificial intelligence;
> the Meininger Hotel - Paris Porte de Vincennes, with 249 rooms, which opened
its doors in the third quarter of 2019. Developed by Covivio at a total cost of
EUR47 million, this is the first Meininger hotel in France, and the third in
partnership with the operator, after those in Milan and Munich. A fourth
project is being developed in Lyon, with delivery planned for late 2019.
With these operations, Covivio is strengthening its presence in major European
cities and confirming the success of its development projects. The pre-let
ratio for projects to be delivered in 2019 and 2020 is already at 71%.
Non-financial rating: Covivio received the maximum score (A1+) for its
Corporate Rating from Vigeo-Eiris and is ranked 1st in its sector
Covivio obtained the maximum score of A1+ for its Sustainability Rating from
Vigeo-Eiris. This assessment recognises Covivio's commitments and the effective
integration of ESG (environmental, ethical, social and governance) factors in
the Group's strategy, operations and risk management. This is the best score
obtained by a company in the "Financial services - Europe real estate" sector
and the 7th best rating across all sectors (link to the press release).
Covivio successfully issues its second Green Bond of EUR500 million over 12
years with a 1.125% coupon
In September 2019, Covivio successfully issued its second Green Bond of EUR500
million, maturing in 2031 and offering a 1.125% coupon.
This issue rewards Covivio's ambitious ESG strategy across all its activities
in Europe. This issue will finance or refinance more than 190,000 m2 of offices
being developed in Paris, Lyon and Milan through four projects, including two
redevelopments: Jean Goujon in Paris 8th (8,460 m2), IRO in Chatillon (25,600
m2), Silex² in Lyon (30,900 m2) and The Sign in Milan (26,200 m2). These
projects are already 70% pre-let on average and benefit from a high level of
certification: HQE (minimum "Very Good"), BREEAM (minimum "Very Good) or LEED
Covivio had already successfully issued a first Green Bond of EUR500 million in
2016, which served to finance the development of 185,000 m2 of "green" offices
in France. These assets are now fully let.
Tel : + 33 (0)1 58 97 51 85
Thanks to its partnering history, its real estate expertise and its European
culture, Covivio is inventing today's user experience and designing tomorrow's
A preferred real estate player at the European level, Covivio is close to its
end users, capturing their aspirations, combining work, travel, living, and
co-inventing vibrant spaces.
A benchmark in the European real estate market with 23 BnEUR in assets, Covivio
offers support to companies, hotel brands and territories in their pursuit for
attractiveness, transformation and responsible performance.
Its living, dynamic approach opens up exciting project and career prospects for
Covivio's shares are listed in the Euronext Paris A compartment (FR0000064578 -
COV) and on the MTA market (Mercato Telematico Azionario) of the Milan stock
exchange, are admitted to trading on the SRD, and are included in the
composition of the MSCI, SBF 120, Euronext IEIF "SIIC France" and CAC Mid100
indices, in the "EPRA" and "GPR 250" benchmark European real estate indices,
EPRA BPRs Gold Awards (financial + Sustainability), CDP (A), Green Star GRESB
and in the ESG FTSE4 Good, DJSI World & Europe, Euronext Vigeo (World 120,
Eurozone 120, Europe 120 and France 20), Euronext(r) CDP Environment France EW,
Oekom, Ethibel, Sustainalytics and Gaïa ethical indices.
Covivio is rated BBB+/Stable outlook by Standard and Poor's.
Financial part: BBB+ / Stable outlook by Standard and Poor's
Extra-financial part: A1+ by Vigeo-Eiris
Reconciliation with IFRS accounts
EUR million Revenue at end- Minorities Revenue at end-
September 2019 September 2019
France Offices 195 -23 172
Italy Offices 142 -32 110
Germany Residential 188 -67 121
Hotels in lease 176 -106 69
(rents) 700 -229 471
Non-strategic activites 23 -5 17
Total rental income 723 -234 489
properties (EBITDA) 52 -30 22
Total Revenues 775 -265 511
Definition of the acronyms and abbreviations used:
RevPar: Revenue per Available Room
Mietspiegel: Reference index for residential rents in some German cities
GS: Group share
ED: Excluding Duties
ID: Including Duties
MRV: Market Rental Value
Firm residual term of leases
Average outstanding period remaining of a lease calculated from the date a
tenant first takes up an exit option.
Like-for-like change in rent
This indicator compares rents recognised from one financial year to another
without accounting for changes in scope: acquisitions, disposals, developments
including the vacating and delivery of properties. The change is calculated on
the basis of rental income under IFRS for strategic activities.
This change is restated for certain severance pay and income associated with
the Italian real estate (IMU) tax.
Given specificities and common practices in German residential, the
Like-for-Like change is computed based on the rent in EUR/m2 spot N versus N-1
(without vacancy impact) on the basis of accounted rents.
For operating hotels, like-for-like change is calculated on an EBITDA basis.
o Deconsolidation of acquisitions and disposals realized on the N and N-1
o Restatements of under work assets, ie. :
- Restatement of released assets for work (realized on N and N-1 years)
- Restatement of deliveries of under-work assets (realized on N and N-1
The occupancy rate corresponds to the spot financial occupancy rate at the end
of the period and is calculated using the following formula:
1 - Loss of rental income through vacancies (calculated at MRV)
Rental income of occupied assets + loss of rental income
This indicator is calculated solely for properties on which asset management
work has been done and therefore does not include vacant assets under
pre-leasing agreements. Occupancy rate are calculated using annualised data.
The indicator "Occupancy rate" includes all portfolio assets except assets
Committed projects: these are projects for which promotion or construction
contracts have been signed and/or work has begun and has not yet been completed
at the closing date. The delivery date for the relevant asset has already been
scheduled. They might pertain to VEFA (pre-construction) projects or to the
repositioning of existing assets.
Controlled projects: These are projects that might be undertaken and that have
no scheduled delivery date. In other words, projects for which the decision to
launch operations has not been finalised.
Recorded rent corresponds to gross rental income accounted for over the year by
taking into account deferment of any relief granted to tenants, in accordance
with IFRS standards.
The like-for-like rental income posted allows comparisons to be made between
rental income from one year to the next, before taking changes to the portfolio
(e.g. acquisitions, disposals, building works and development deliveries) into
account. This indicator is based on assets in operation, i.e. properties leased
or available for rent and actively marketed.
Annualised "topped-up" rental income corresponds to the gross amount of
guaranteed rent for the full year based on existing assets at the period end,
excluding any relief.
The portfolio returns are calculated according to the following formula:
Gross annualised rent (not corrected for vacancy)
Value excl. duties for the relevant scope (operating or development)
The returns on asset disposals or acquisitions are calculated according to the
Gross annualised rent (not corrected for vacancy)
Acquisition value including duties or disposal value excluding duties