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					Residential
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Foncière Développement
Logements In 2010
      Profile
      Foncière Développement Logements, a specialist in the
      long-term ownership and management of residential
      property, owns a portfolio of more than 46,000 homes
      in France and Germany. A key player in the residential
      market in the two countries, it manages every stage of
      the real-estate process, in order to create value for its
      shareholders.
      It has a practical commitment to the environmental quality
      of its portfolio and pursues an active policy to enhance its
      portfolio value.




2
Residential property
       Rétrospective




Keys
events
2010
                                   Increase in asset values
                                   and a dynamic trade-off policy
                                   As of 31 December 2010, valuations of the company’s
                                   assets increased by 2.8% over a year. The company also
                                   benefited from a rising market to carry out an ambitious
                                   €313.6M disposal plan. This resulted in average margins
                                   for the company of 11% compared with valuations as
                                   of 31 Dec. 2009.




                                   Arrival of a new
                                   FDL shareholder
Increase in valuations             Macif took a stake in Foncière Développement Logements.
(on a constant structure basis):   This transaction, which expanded its shareholder


+ 2.8%                             base, demonstrates institutional investors’ confidence
                                   in the residential sector.


Increase in annualised rents
(on a constant structure basis):   Active management of liabilities
+ 1.7%                             In 2010, Foncière Développement Logements agreed
                                   a €70M financing deal in France, linked to a portfolio
                                   of 366 homes and a €207.5M seven-year refinancing deal
                                   in Germany, linked to a portfolio of around 7000 homes.
Increase in Recurring              These transactions reflect the quality of the assets owned
Net Profit after tax:              by FDL in France and Germany, and the company’s ability


+ 18.2%                            to benefit from current financing conditions. It also acquired
                                   €100.3M of securitised bonds, with an average discount
                                   of 22%.

NAV Triple Net/share
compared with 31 Dec. 2009:


+ 5.3%


                                                                                                    3
                                                         Foncière Développement Logements in 2010
                 Strategy




      Interview with
      Bertrand                                                                       What is Foncière Développement Logements’
                                                                                     strategy in light of this?


      de Feydeau
      Chairman of the Board of Directors
                                                                                              Thierry Beaudemoulin: We want to
                                                                                     strengthen our position as the leading property
                                                                                     company in the residential market in France and Ger-
                                                                                     many. Our strengths result from an usual business
                                                                                     model based on partnerships with long-term inves-


     & Thierry                                                                       tors, who benefit from the expertise of our specialist
                                                                                     teams and indirect exposure to the residential market


     Beaudemoulin
                                                                                     which guarantees them higher profitability than
                                                                                     direct exposure, with stock market returns of around
                                                                                     5.9% in 2010.
      CEO
                                                                                              B. de F.: We are unusual in that we are
                                                                                     a property company dedicated to housing. This
                                                                                     specialisation is vital on a market which demands a
                                                                                     high level of professionalism and a very close relation-
                                                                                     ship with tenants. We have expert teams who know
                                                                                     about the day-to-day management of buildings, but
                                                                                     are also able to undertake sales on an individual
                                                                                     basis, which can sometimes take several years.
                          What is your assessment of the German                      This is knowledge which can now be applied to an
                          and French markets in 2010?                                increasingly diverse portfolio, set to expand beyond
                                   Bertrand de Feydeau: The market experi-           the regions in which we have historically been based.
                          enced sustained activity in France in 2010, both in
                          terms of production of new housing and transaction         What were the key events of 2010?
                          volumes. Prices in the sector proved very resilient,                T. B.: We successfully completed a signifi-
                          performing significantly higher than inflation. Foncière   cant trade-off plan, with sale prices significantly
                          Développement Logements used this situation to             higher than valuations, demonstrating the high quality
                          pursue an ambitious asset trade-off policy. Its sales,     and liquidity of our assets. Valuations, which are up
                          most of which were on an individual basis, achieved        2.8% on a constant structure basis, are benefitting
                          IFRS margins of more than 15%. This therefore              from a recovery in the real-estate market (mainly
                          exceeded the targets set for 2010, both in terms of        in France), as well as the quality of our management
                          number of transactions and sale price. Although            centres in France and Germany, which have contrib-
                          sales benefited from the rising prices on the residen-     uted to an increase of 1.8% in rents in France on
                          tial market, acquisitions became more difficult in         a constant structure basis and of 1.7% in Germany.
                          France. The situation in Germany is different. Rents       Vacancy also fell and renewal rents increased in
                          there are more modest than in France, but offer            both countries. These positive results, both in terms
                          higher returns for institutional investors. Investment     of sales and rentals, contributed to an 18% increase
                          opportunities therefore exist on the German market.        in our recurring net profit.




4
Residential property
         B. de F.: The acquisition by Macif of a stake      discount of 22%. Finally, we established two new
in FDL also confirmed institutional investors’ interest     financing deals – one for €70M over seven years
in residential investment and particularly in our portfo-   in France, linked to assets acquired at the end of
lio and our dual exposure in France and Germany.            2009, and the other for €207.5M over seven years in
                                                            Germany – which made it possible to extend the
The financial year was also characterised                   average maturity of the consolidated debt through
by a continued improvement in financial                     the refinancing of the securitised debt.
structure…
         T. B.: Absolutely. A special effort was made       What is the outlook for 2011?
to improve our financial structure, with the specific                B. de F.: Following this very good year,
objective of reducing our consolidated LTV ratio            we will be pursuing the restructuring of our liabilities,
to below the 50% mark, and to restructure our debt,         reinvesting in France if the conditions allow it and
by focusing both on its term and its composition.           continuing to take advantage of opportunities in
In 2010 the company made significant acquisitions           Germany by expanding on the far side of the Ruhr,
of securitised bonds for €100M, with an average             particularly in the Berlin region.




                                                                                                                                      5
                                                                                                Foncière Développement Logements in 2010
                   Activity & Portfolio



      €940.3M                                             3,327                               + 1.8%
                                                                                              increase in rents on
      portfolio                                           houses
                                                                                              a constant structure basis




      FranCE

      A year
      of consolidation
      Foncière Développement Logements took advantage
      of the favourable market in 2010 to carry out a large-scale
      disposals programme and continued to develop effective tools
      for further improving the quality of its rental management.




      In France, Foncière Développement Logements owns                  a sustained trade-off policy
      and manages a portfolio of 3327 homes with a value                In 2010, the company used a particularly favourable market
      of €940.3M, representing 28% of its total portfolio. This         context to carry out an ambitious disposals plan for €181.2M,
      is evenly distributed between Paris (26%), the Ile-de-France      including sales and undertakings to sell, an increase of 20%
      (39%) and the major regional cities (35%). This strategy          compared with 2009. Completed sales, representing 12%
      allows Foncière Développement Logements to benefit from           of the France portfolio, related mainly to buildings in the
      the economic and demographic dynamism of these large              Ile-de-France. Of these sales, 90% were on an individual
      centres, while protecting itself from the possible risks          basis, providing a higher margin than from block sales.
      represented by some secondary regional property markets.
                                                                        rigorous rental management
      Increase in asset values                                          As part of its ongoing efforts to satisfy its tenants,
      As of 31 December 2010, the total valuation of FDL’s assets       a targeted works policy was defined and the quality plan
      in France was up 5.3% on a constant structure basis.              strengthened. Renewal rents also increased by 5.2%
      This change is mainly the result of a decline in capitalisation   in 2010 compared with previous rents, resulting in an
      rates combined with a 1.8% increase in rents on a constant        increase in rents on a constant structure basis. Finally,
      structure basis.                                                  assets vacancy rate fell by 26% over a year, from 5.9%
                                                                        at the end of 2009 to 4.3% at the end of 2010.




                                  Laurence Bortolussi ASSET MANAGER FRANCE
                                  “Our strength lies in the pooling of skills”
                                  In 2010, in a rising market with a shortage of supply, we carried out a large number of disposal
                                  transactions, mainly in the inner suburbs of Paris. My role as an asset manager is to coordinate
                                  these disposal plans by offering homes to tenants, new purchasers and investors. The special
      relationship we have with our tenants, made possible by our property management teams, is an advantage when it comes
      to selling homes. It means we can carry out a large proportion of sales on an individual basis.




6
Residential property
€2 369.3M
portfolio
                                                  43,142
                                                  houses
                                                                                          + 1.7%
                                                                                          increase in rents on
                                                                                          a constant structure basis




GErManY

Promises
of growth
In Germany, Foncière Développement Logements
stepped up the pace of asset disposals in 2010
in preparation for taking advantage of new investment
opportunities.




Foncière Développement Logements owns 43,142 homes                 plots (mainly shops in the ground floor of buildings).
in Germany, representing 72% of the value of its total             At the end of December 2010, the total value of these
portfolio. These assets are located in the west of the             assets was €2369.3M excluding duties.
country, in the Ruhr region, which has around 5 million
inhabitants, or a third of the population of the federal           active portfolio management
state of North Rhine-Westphalia, the most highly                   In 2010, Foncière Développement Logements disposed
populated in Germany.                                              of 3% of its German portfolio. This brought the total amount
                                                                   for sales and undertakings to sell to €132.4M, representing
a thriving business area                                           a 40% increase compared with 2009. Furthermore,
A former industrial and mining region, the Ruhr has now            annualised rents on a constant structure basis increased
successfully completed its transformation into a major             by 1.7% in 2010 and rent renewals were agreed at levels
source for e-intelligence. It also houses the head offices         3.6% higher than previous rents. Finally, the vacancy
of well-known large companies, such as Thyssen Krupp               rate fell significantly, from 3.50% at the end of 2009
Technologies, Aldi, Tengelmann and RAG. Of the homes               to 3.34% at the end of 2010.
owned by Foncière Développement Logements, 62%
are divided between the two large cities of Duisbourg
and Essen. The company also owns 164 tertiary




                            Michael Kajdres ASSET MANAGER GERMANY
                            “The trend in 2010 was towards investments in small portfolios”
                              Prices increased significantly in the residential sector in 2010. The trend in the residential market
                              was clearly towards small portfolios, with volumes of around €10M and transactions carried out
                              above all by family groups looking to reinvest in residential property assets. The German teams
succeeded in achieving nearly €85M in disposals. We anticipate high demand for residential products in 2011 and we are
confident in our ability to further increase sales volumes.




                                                                                                                                      7
                                                                                        Foncière Développement Logements in 2010
                   Activity & Portfolio




      CLIEnT rELaTIOnS

      Quality
      in client services
      Closeness, attentiveness and supervision – Foncière
      Développement Logements is constantly striving
      to improve its commercial relationship with tenants.




      For Foncière Développement Logements, an effective              measurement of client satisfaction and make it possible
      client satisfaction policy necessarily involves maintaining     to devise any additional action plans.
      a close relationship with tenants. A comprehensive
      information system has therefore been established for           High quality services
      them. This involves using IT equipment in the concierge’s       Finally, Foncière Développement Logements has chosen
      premises and contact books which now enable concierges          quality. Selection of recognised service providers,
      to respond to most common questions and provide                 establishment of maintenance contracts and particularly
      a “real-time” link between tenants and their technical          close attention paid to safety – by improving tenants’
      or rental manager.                                              satisfaction, these initiatives contribute to improving
                                                                      Foncière Développement Logements’ position as a key
      Constant attentiveness                                          player on the residential market.
      In France, Foncière Développement Logements provides
      tenants with a round-the-clock telephone reception service.
      An “on-call” system takes over outside office hours.
      All requests are examined closely by Foncière
      Développement Logements’ technical and rental
      managers and monitoring statistics provide a regular




                                    Yann Bechu HEAd oF pRopERTY MANAGEMENT
                                    “We want to differentiate ourselves through service quality”
                                     Foncière Développement Logements’ property managers manage every aspect of the rela-
                                     tionship with tenants, from their entry into premises to their departure. We are very attentive
                                     to service quality since we know that a satisfied tenant looking for a larger home in another
      region will think of Foncière Développement Logements for the new search. Every aspect of the relationship counts, from how
      the phone is answered to communications with the building’s concierge, via emphasising to suppliers the importance of the
      quality of their work. Our service providers are also ambassadors for our image, which is why we ask them to be responsive
      and professional in their contact with tenants.




8
Residential property
EnVIrOnMEnTaL PErFOrManCES

“Green”
added value
Foncière Développement Logements is a socially
responsible company and participates actively
in changes in its various businesses towards a
more responsible and more sustainable approach.
Buildings’ environmental quality is a therefore an
important factor in enhancing the value of its portfolio.




Sustainable development is now a key part of Foncière           assets labelled F and G by 25% and having less than
Développement Logements’ strategy. The construction             half of the portfolio with climate label D by 2015.
and property sector is particularly concerned by issues
of environmental preservation and the fight against             renovation and innovation
climate change. Regulations in both France and Germany          To achieve this objective, Foncière Développement
are also becoming tighter.                                      Logements implemented an ambitious works policy.
                                                                In France, for example, an energy renovation project
a portfolio with good overall performance                       was initiated for 60 homes in the “Panama” building
RT 2012 regulations in France will apply to new individual      in Marseilles.
and collective housing from 1 January 2013. And in Germany,     In Germany, a programme to replace gas boilers with latest
a new raft of EnEV 2009 thermal regulations will step up        generation condensation boilers will reduce the gas
energy requirements for new buildings by another 30%            consumption of the 300 homes concerned by 18%. Finally,
from 2012. The portfolio’s energy and environmental             use of renewable energies is increasing, as in Germany where
performance mapping, carried out in 2009, reveals a strong      the subsidiary Immeo Wohnen Service installed photovoltaic
average performance, with more than 50% of assets graded        panels at four sites in Oberhausen and Duisbourg in 2010.
A to C. Nevertheless, Foncière Développement Logements
has set itself the target of cutting the proportion of French




                            Jacques Ballery TECHNICAL dIRECToR FRANCE
                            “Tenants need to be persuaded”
                            In our older buildings, the main aspects we can change to improve energy performance are
                            the heating domestic hot water and insulation. It is sometimes complicated, since work needs
                            to be carried out inside apartments in occupied buildings, as will be the case with the Panama
building in Marseilles. Tenants need to be persuaded, since it is vital to obtain their commitment to the approach. Tenants are
winners since these works reduce the amount of rental charges they pay.




                                                                                                                                  9
                                                                                      Foncière Développement Logements in 2010
                   Legal and financial
                      information




                  Property and financial
                  indicators
                   Breakdown by region in France                                             Recurring Net Profit:
                   Total: €940.3M
                   35%
                   Regions
                                                                       26%
                                                                       Paris
                                                                                             + 18.2%
                                                                                             (compared with 2009)

                                                                                             LTV (Loan To Value):



                                                                       39%
                                                                                             52%
                                                                                             compared with 55.9%
                                                                Île-de-France                as of 31 Dec. 2009

                                                                                             Sales and undertakings to sell:


                   Breakdown by region in Germany
                   Total : €2369.3M
                                                                                             €316.6M
                                                                                             representing a 28% increase compared
                                                                                             with 2009
                   13%                                                   4%
                   Other &                                           Datteln
                   Luxembourg
                                                                         3%                 EPRA NAV:


                                                                                            €22.9
                   6%                                              Dinslaken
                   Oberhausen

                   8%                                                  34%
                   Mülheim                                          Duisburg
                                                                                            per share
                                                                                            excluding impacts of financial
                                                                                            instruments and deferred taxation,
                   26%                                                                      representing a 5% increase
                   Essen                                                 6%
                                                                  Düsseldorf                compared with 2009.




                                      Philippe Prud’homme, dEpUTY CEo
                                      «We focused on improving the company’s financial structure in 2010”
                                      The year was marked by the arrival of a new shareholder, Macif, a leading institutional
                                      investor. And one of our priorities for 2010, in line with the objectives we had set ourselves,
                                      was to tackle debt. In Germany, we took advantage of market conditions to reduce our
                                      outstanding securitised debt, due to be settled in 2013. We purchased €100M of securitised
      bonds, with a 22% discount, and set up a €207.5M refinancing deal linked to a portfolio of around 7000 homes.
      The transactions allowed us to further improve our consolidated LTV ratio, reducing it to 52% at the end of 2010, compared
      with 55.9% at the end of 2009.




10
Residential property
Corporate
governance changes
Foncière Développement Logements is making                    The Board of Directors meeting held on 10 November 2009
changes to its corporate governance in order                  also opted to separate the roles of chairman of the Board
to pursue its growth.                                         of Directors and chief executive officer. The Board
                                                              of Directors now has 11 members. It meets at least once
On 10 November 2009, Foncière Développement                   a quarter. It has several committees to help it fulfil its
Logements adopted a corporate governance structure            objectives: the Investment Committee, the Audit Committee
involving a Board of Directors, in accordance with the        and the Remunerations and the Appointments Committee.
good corporate governance principles of the Afep-Medef
code for listed companies.




Shareholder base
The objective of Foncière Développement                       9.3%
                                                              Generali Group
Logements is the long-term ownership                                                                                    33.4%
                                                                                                                     FDR Group
of residential property assets.                               6.3%
                                                              ACM Vie

                                                              11.6%
Its main shareholders are Foncière des Régions, GMF-Covéa,    BNP group
the Crédit Agricole (Predica), Generali, CIC-Crédit Mutuel,   1.3%
                                                              Banques
Cardif Assurance Vie (BNP) and Mutavie (Macif) groups         Populaires group
and Banques Populaires.                                                                                                     2%
                                                              1.3%                                               Treasury shares
Foncière Développement Logements shareholder base             Macif Mutavie
changed at the end of November 2010, when Macif took                                                                    19.3%
                                                              15%                                                    GMF Covéa
a stake through its life and savings subsidiary, Mutavie.     Predica                                                MMA Group

This acquired 833,333 shares in Foncière Développement        0.5%
                                                              Public
Logements giving it a 1.3% stake in the company.


SToCK MARKET INFoRMATIoN                                      CoNTACTS:

ISIN code: FR0000030181                                       Philippe Prud’homme
Share code: FDL                                               Deputy CEO
Where listed: Euronext Paris                                  +33 (0)1 58 97 51 60 - philippe.prudhomme@fdr.fr
Market: Local securities - Compartment A (Blue Chips) - SRD
Area of activity: Real Estate Investment Trusts               Myriam Despas
PEA/SRD: eligible                                             Head of Corporate Development & Communications
Index: SIIC FRANCE, SBF 80, CAC MID 100, EPRA Europe          +33 (0)1 58 97 51 60 - myriam.despas@fdr.fr




                                                                                                                                   11
                                                                                    Foncière Développement Logements in 2010
Foncière Développement Logements

30, avenue Kléber
75208 Paris Cedex 16
France

Tel.: +33 (0)1 58 97 51 60
Fax: +33 (0)8 21 20 14 75

www.fdlogements.fr




                                                                   - 01 55 76 11 11 • 10262.
                                   Photo credits: P. Mauer, O. Ouadah, T. Thouroude
                                   Design – production:

				
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