“Covivio had a good first half with more than 140,000 m2 of new office leases and renewals, €400 million in agreed disposals with a 4% margin and a 2% growth in asset values on a like-for-like scope. NAV increased by 4% year-on-year and EPRA Earnings by 7.5%. Ahead of its financial and non-financial objectives, Covivio is raising its 2021 earnings guidance and strengthening its environmental ambition by aiming for carbon neutrality by 2030.”
Christophe Kullmann, Covivio Chief Executive Officer
Successful deployment of the offices strategy (58% of the portfolio): centrality, quality, services
- Acceleration of asset turnover: €404 million in agreed disposals (with a 4% margin), including €334 million in offices, bringing office disposals to more than €1 billion over 18 months (a margin of 5% on disposals).
- Successful development project: five assets delivered for €307 million, pre-let at 97% and generating 43% value creation.
- A value-creating development pipeline of €1.3 billion: 39,000 m2 of new contracts for our development projects; €450 million of expected value creation, including €250 million still to be captured.
- Ever more centrality: 100% of the committed projects in the coming months will be concentrated in the CBDs of Paris, Berlin and Milan, with a value creation objective of €200 million.
- Transformation of offices – housing: 1,545 housing units and €256 million in committed projects by the end of 2021, i.e. seven times more than at the end of 2020.
Strengthening Germany residential (27% of the portfolio)
- €140 million (€98 million Group share) of acquisitions in the centre of Berlin with a 3.5% yield.
- Continued growth of the development pipeline: 1,100 housing units under construction (€294 million at 100%).
- Strong growth momentum: +3.8% in rental income; +7.4% on a like-for-like scope.
Hotels (15% of the portfolio): the first signs of recovery after a half year impacted by lockdown measures
- The health crisis continues to weigh on hotel activity in the first half.
- The gradual lifting of lockdown measures should allow a resumption of activity during the second half of the year.
- Covivio has a strategic portfolio for operators, by its location (Booking.com average rating of 8.8/10) and the intrinsic profitability of its hotels (average rent-to-sales ratio of 60% in 2019).
First-half net income growing
- €26 billion portfolio (€17 billion Group share), up 2% on a like-for like basis.
- LTV stability (41%) despite the full payment of the dividend in cash during the half year.
- NAV up 4% year-on-year on average (EPRA NTA per share of €101.6 and EPRA NDV of €91.7).
- Rental income: €291 million; stable on a like-for-like scope excluding hotels, and -20% in hotels.
- EPRA Earnings up by 7.5% to €207 million (€2.19 and +0.9% per share).
ESG strategy: new carbon ambitions
- In 2018, Covivio set itself an ambitious carbon trajectory (-34% between 2010 and 2030 on scopes 1, 2 and 3) approved by SBTi, in line with the 2°C scenario.
- Ahead of its objectives (-20% at the end of 2020), Covivio is strengthening its ambition and is setting a new roadmap.
- Scopes 1 and 2: Covivio is on the 1.5°C trajectory and aims for carbon neutrality by the end of 2030.
- Scope 3: trajectory well below of 2°C.
2021 Outlook raised
- Objective of more than €600 million in new disposal agreements confirmed.
- EPRA Earnings 2021 guidance of €390 million to €400 million vs €380 million to €395 million.