Annual Results 2010 25 th February 2011 Positioning CeGeREAL - PowerPoint PPT Presentation

Annual Results 2010 25 th February 2011

Positioning  CeGeREAL Foundations  100% offices in France  Recent (acquired under developer's 10-year guarantee) and large properties (greater than €50 million) offering high value-added services  Rental income secured by first-class tenants  Yield play company  A sound financial situation (LTV limited to 50%)  3-year objective: Portfolio reinforcement  Diversify real estate risk  Reach a market capitalisation of €1 billion Annual Results 2010 – 25 th February 2011 1

2010 Main Events  Negotiation of a €5 million indemnity with Bouygues Telecom  Departure of TF1 from a 4,000 m² space in January  New tenant in Europlaza : 1,300 m² over 6 years firm commitment  Extension of the Board of Directors  Proposed dividend: 1.10 € per share Portfolio value Net rents (€m) NAV (€/share) (€m) 57.0 54.7 31.6 34.7 828 861 2009 2010 2009 2010 2009 2010 -4% +4% +10% Annual Results 2010 – 25 th February 2011 2

Index  Real estate activity Overview 2010  Key financials  CGR stock performance  Presentation of the property Arcs de Seine  Reletting Strategy  Arcs de Seine within the portfolio  Stockholders’ agenda Appendices  Stock ID & Contacts  Annual accounts (IFRS & French GAAP) Annual Results 2010 – 25 th February 2011 3

Overview 2010 – Real estate Rives de Bercy – Charenton-le-Pont

Office real estate in Ile de France Office take-up in the Investment in offices in Paris region (million m²) the Paris region 2010 2.16 2010 6,731 +16% +49% 2009 2009 1.87 4,509  Key facts 2010 :  A significant increase in rental transactions within Paris – return of “premium” transactions  Stabilisation of supply around 4.8 million m² - increased volume of available second-hand assets  Launch of “speculative” projects  Influx of capital on core properties offering secured income -> Bout of yield compression Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 5

Large properties: increase in transactions in 2011-12  Rental activity 2010 : Weight of transactions > 10,000 m² in m² in % of total take-up  470,000 m² in surfaces greater than 900 847 60% 806 806 10,000 m² (22% of total) 784 800 50%  Fall-back in the percentage of large 700 in thousands m² 558 areas in take-up compared to the 556 549 600 40% 488 470 average over the last 10 years 458 500 30% 368 400  Postponement of real estate 300 20% decisions of the corporates in 200 2009/10 10% 100 -> increase in large transactions in 0 0% 2011-12 according to CBRE 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010  Investment : Source : BNP Paribas Real Estate  Increase in office investment in Ile de France : €6.7 billion - 38 transactions concerning office buildings greater than €50 million (vs. 18 in 2009)  Examples of major transactions in 2010 :  In Paris: Headquarters of HSBC and Capital 8  The Delta in Boulogne and CB 16 in La Défense Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 6

Reconciling workplace effectiveness and … For what reasons are you considering a move in the short- or mid-term? Rationalisation 64% Property 53% consolidation Reduction of area 24% Extension 21% Other 8% Source: BNP Paribas Real Estate 2 nd User Indicator Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 7

… quality of life for employees  The 3 CeGeREAL properties offer the 7 key services tenants are looking for Which services seem to you to be the most indispensable or incidental?    Parking 94% 6%    Air-conditioning 92% 8%    Security 90% 10%    Inter-company restaurant 61% 39%    Cafeteria 53% 47%    Conference room 34% 66%    Fitness 9% 91% Concierge service 8% 92% Travel agency 5% 95% Nursery 3% 97% 0% 20% 40% 60% 80% 100% Indispensable Incidental Source: BNP Paribas Real Estate 2 nd User Indicator Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 8

CeGeREAL properties, spaces for life and work - Europlaza Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 9

CeGeREAL properties, spaces for life and work – Arcs de Seine Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 10

CeGeREAL properties, spaces for life and work – Rives de Bercy Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 11

Real estate properties with added value  Spaces for life and work with numerous services (parking lots, auditorium, inter-company restaurant, etc.)  Real estate properties > 20,000 m²  All accessible by metro and RER  Constructed between 1998 and 2003  Rented to first-rate tenants EUROPLAZA ARCS DE SEINE RIVES DE BERCY La Défense Boulogne-Billancourt Charenton-le-Pont Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 12

Rental activity 2010  Negotiation of a €5 million indemnity with Bouygues Telecom  “Physical” departure of Bouygues Telecom in October 2010 vs. lease ending on 01/01/11  Payment of a €5 million indemnity to cover the renovation of the vacated area (36,000 m², i.e. €140 / m²)  Renovation begun in October 2010. Delivery expected in April 2011  Opportunity to refresh the building after 10 years of tenancy and to reinforce its environmental qualities  Departure and reletting Area Firm Rent-free Gain / Loss Tenants Transaction Building (m²) duration period of rent (%) LETTING Experian New lease 1,300 Europlaza 6 10 months 0% DEPARTURE TF1 Departure 3,800 Arcs de Seine Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 13

Rental schedule Bouygues Telecom 40% Next break option Lease end 35% 30% Crédit Foncier 25% 20% Cap Gemini GE Money Bank 15% 10% 5% 0% S1 11 S2 11 S1 12 S2 12 S1 13 S2 13 S1 14 S2 14 S1 15 S2 15 S1 16 S2 16 S1 17 S2 17 S1 18 S2 18 S1 19 S2 19 Occupancy rate Remaining lease as at 31/12/10 as at 01/01/2011 period (years) Europlaza 91% 91% 5.9 Arcs de Seine 93% 12% 0.9 Rives de Bercy 100% 100% 7.1 Total 93% 64% 4.1 Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 14

Slight reduction in rental revenues -4% 57.0 +0.0 -3.3 -0.8 +2.2 54.7 -0.3 Indexation Rent-free Other Departures Relettings adjustments 2009 2010 Rents Rents (€m) (€m) Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 15

First-rate tenants Tenant rating analysis (% of rent) 74% 80% 60% 40% 22% 20% 2% 1% 0% 0% Excellent Very good Normal Average Poor tenant tenant tenant tenant tenant Source: Dun & Bradstreet Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 16

Progression of RE value In € million 1,200 1,032 961 938 1,000 861 854 188 828 187 163 800 +4% Appraisal 168 168 156 in one year values: 385 600 350 363 309 340 311 400 113 million Unrealised euros gains: 459 425 412 200 384 361 346 0 2005 2006 2007 2008 2009 2010 Europlaza Arcs de Seine Rives de Bercy Net book value Real Estate Finance Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 17

Overview 2010 – Finance Arcs de Seine – Boulogne-Billancourt

A stable operational cash flow ∆ % -4% In €k 31/12/2010 31/12/2009 Rents: IFRS Rents 54,687 57,039 Recovered RE expenses and indemnities 10,236 10,135 Stable Operating income: Real Estate expenses (12,110) (10,638) Net rents 52,813 56,536 -6.6% Stable Operational Cash Flow: Asset Management fees (3,014) (2,896) Other management costs (2,828) (2,760) Others 1 101 French GAAP Renovation indemnity 4,068 2010 2009 in €k Operating income 51,040 50,981 0.1% 7,329 Net income 15,541 Net financial interests (16,264) (16,283) 7,329 Net recurring income 8,691 Recurring Cash Flow 34,776 34,698 0.2% Finance Real Estate Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 19

Net Cash Flow of €2.6 / share ∆ % 31/12/2010 31/12/2009 Net Cash Flow (€k) 34,776 41,548 Total number of shares 13,372,500 13,372,500 Net Cash Flow per share 2.6 3.1 -16% Net cash flow (€ / share) 3.1 2.8 2.7 2.6 Stabilised CF 1.8 €2.5 / share 2006 2007 2008 2009 2010 (9 months) Finance Real Estate Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 20

Decrease in LTV Total amount of debt: €398.9m Financial ratios Current LTV 46.4% vs. 48.6% as at 31/12/09 Forward-looking ICR (12 months) 212% Tranches A & B Tranche C Main terms & conditions Amount 376,400,000 € 22,500,000 € Interest rate 4.15% E3M + 60 bps Maturity March 2013 March 2013 Ranking pari passu Covenants LTV thresholds 60% Amortisation of 1% p.a. + 10 bps additional margin 70% Event of default ICR thresholds 180% Amortisation of 1% p.a. 150% Event of default Finance Real Estate Stock market Arcs de Seine Annual Results 2010 – 25 th February 2011 21