2016 ANNUAL RESULTS – INCREASED GROSS RENTAL INCOME BY +18.8%
2016 ANNUAL RESULTS – Increased gross rental income by +18.8%
Growth in FFO (Funds From Operations) of +16.2%
Dividend up by +8%
Asset valuation of €666M, up by +5.5%
Boulogne-Billancourt, 8th March 2017
At its 7 March 2017 meeting, the Patrimoine & Commerce Supervisory Board reviewed the Company’s operations and approved the 2016 financial statements, prepared by Management.
|Key figures – IFRS – In euros million||2016||2015||Variation||%|
|Gross rental income||40.9||34.4||+6.4||+18.8%|
|Recurring net income (EPRA Earnings)1||24.1||20.7||+3.4||+16.2%|
|Asset appraisal value (excluding transfer taxes)²||666.4||631.8||+34.6||+5.5%|
|EPRA NNNAV (in €/share)||24.7||23.9||+0.9||+3.6%|
Gross rental income growth: +18.8%
For the fiscal year ended 31 December 2016, Patrimoine & Commerce reported consolidated gross rental revenues of €40.9M compared with €34.4M for the fiscal year ended 31 December 2015, up by +18.8%, primarily driven by the impact of assets leased in the course of the year and by the full-year impact of acquisitions and projects delivered in 2015.
During the period, the portfolio underwent minor changes in tenancy (tenant turnover rate of around 1.7%) despite a challenging economic environment. The occupancy rate remains high at 96%3 for the portfolio as a whole, and the rental payment default rate of 2.1% attests to the quality and resilience of the Company’s portfolio.
Increase in recurring net income: +16.2%
Recurring net income (EPRA Earnings) amounted to €24.1M (€1.88 per share), an increase of +16.2% compared with 2015. Group net income amounted to €25.9M, a slight decrease compared with the prior fiscal year (€26.6M).
Asset valuation: +€35M
As of 31 December 2016, independent appraisal of assets (excluding transfer taxes and including assets held for sale) amounted to €630M (€666M if the assets of equity method investees are included), an increase of +4.0% compared with 31 December 2015. Indeed, Patrimoine & Commerce managed an active acquisitions and development assets policy throughout 2016, investing a total of €48.3M.
The change in the fair value of investment properties had a positive impact of +€1.8M on net income (which is about 0.3% of the portfolio’s global value). The capitalization rate of assets in use was at 7.3%.
Net Asset Value per share growth at €24.7
The group’s consolidated net debt, €284.7M as of 31 December 2016, enables the Company to present a Loan-To-Value ratio of 43.6%, which remains well below the average target of 50% that Patrimoine & Commerce has set for itself.
In addition, the Company was able to take advantage of the low interest rate environment to renegotiate or hedge its debt. Accordingly, 83% of the debt is now hedged with financial instruments and the average rate for fiscal year 2016 is 3.1%.
EPRA NNNAV amounted to €316.5M (€24.7 per share), an increase of +7.5% versus 31 December 2015. This increase in NAV is primarily attributable to Patrimoine & Commerce’s 2016 satisfactory results.
Dividend growth: +8.0%
At the annual meeting of Patrimoine & Commerce shareholders on the 27th of June 2017, shareholders will be asked to approve a dividend distribution based on €1.08 per share, with shareholders opting between payment in cash or in newly issued shares of the Company. This dividend payout is +8.0% higher than the 2015 dividend.
Asset portfolio growth and optimization
In 2016, Patrimoine & Commerce continued its expansion with the acquisitions of 8 assets located in Champniers (16), Lempdes (63), Loches (37), Poitiers (86), Provins (77), Mantes-la-Jolie (78) and Limoges Le Vigen (87). Those acquisitions sum €48.3M in investment for a net return of 7.65%.
Patrimoine & Commerce pursue its portfolio turnover policy of non-strategical assets with the sale of Chasseneuil-du-Poitou (86), Melesse (35), Quetigny (21) and La Rochelle (17) for total amount of €12M, in line with independent appraisal.
« In six years, we successfully disseminated our innovative concept of low-cost retail parks. This new concept is recognized by financial market and is widely approved by major retailers. Our operational performances confirm the strength of Patrimoine & Commerce’s business model. Our 2016 results reinforce the financial position of our low-cost retail park Company.» said Eric Duval, Managing Director and Founder of Patrimoine & Commerce.
Notes: 1 Groupe Sepric income and expenses have been reposted to net income.
² Excluding transfer taxes (incl. Cherbourg and Studio Prod for the percentages held)
3 Calculated on the basis of rents (excluding strategic vacancies).