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Together in real estate Cofinimmo – Press Conference Acquisition of the MAAF branches portfolio Divestment of the Citylink office park December 21, 2011.

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Presentation on theme: "Together in real estate Cofinimmo – Press Conference Acquisition of the MAAF branches portfolio Divestment of the Citylink office park December 21, 2011."— Presentation transcript:

1 Together in real estate Cofinimmo – Press Conference Acquisition of the MAAF branches portfolio Divestment of the Citylink office park December 21, 2011

2 1. Introduction: Cofinimmo Total Return YTD 2. Acquisition of the MAAF branches portfolio Presentation of the acquisition Description of the MAAF branches portfolio About MAAF Assurances SA About Foncière Atland Financing of the acquisition Impact on Cofinimmo net current result Integration of the acquisition in the Cofinimmo distribution property networks segment 3. Divestment of the Citylink office park Description of the operation 4. Balance sheet impact 5. Evolution of Cofinimmo properties portfolio Annex 1: Pictures of MAAF branches Annex 2: Characteristics of the mandatory convertible bonds Presentation Take Aways Table of Contents 1

3 1. Introduction 2

4 Cofinimmo Total Return YTD 1

5 4 2. Acquisition of the MAAF branches portfolio

6 Acquisition of all 285 sites (branches and offices) currently owned by MAAF. All sites located in France. Total surface of m2. Total investment of € million (price of € 1 781/m2). MAAF Assurances SA is sole tenant of the properties. Indexed leases with an average weighted duration of 9.7 years Annual indexation based on the commercial leases index (“ ILC”). Rental income: € 7.86 million per annum (rent of € 130/m2). Gross yield of 7.31%. Renovation and compliance works on 219 sites to be undertaken by MAAF, at their own cost, before 2017, for €79.3 million. Presentation of the acquisition - Summary (1) 5

7 Portfolio to be acquired by a newly formed subsidiary of Cofinimmo, Cofinimur I SA (“Cofinimur”):  Capital and voting rights:  Cofinimmo SA: 97,65%  Foncière Atland: 2,35%  SIIC status Foncière Atland REIM responsible for asset management property management Presentation of the acquisition (2) 6 Cofinimur

8 Portfolio of 270 branches and 15 properties used mainly as offices Weighted average lease term of 9.7 years 83% of rental income comes from fixed leases for 9/12 year, 3% from 6/9 year leases and 13% from 3/6/9 year leases. The remaining is vacant or 1 year leases. Description of the MAAF portfolio (1) 7 Total weighted surface : m² Rental income p.a. : € 7.86 million

9 Portfolio of 270 branches and 15 offices Out of a total of 587 branches constituting the total MAAF network in France (the other 317 already rented) 15 sites rented by GIE Europac (guarantee of MAAF) Total surface of m2 2/3 of the portfolio is located in geographical areas with high population growth (“Ile- de- France”, PACA region and Western France) 55% of the sites are located in cities with more than inhabitants Prime, Bis and Ter locations Description of the MAAF portfolio (2) 8 PRIME BIS Location hyper centre, near pedestrian streets Paris Location « city entrance » Ile de France Major cities (Lyon, Marseille, Toulouse, …) Small agglomerations (remaining townships) Location close to the city center Location on high streets with commercial activities and medium visibility TER

10 MAAF is part of the Covéa Group, a mutual insurance company Multi-line insurer aimed at the general public, private individuals and businesses 587 branches in France –sales network operated by employees (--> no subletting) MAAF with 2 others brands of the Covéa Group (MMA and GMF) account for 20% of the French insurance market. Renovation and compliance works of branches and offices before 2017 financed by MAAF for € 79.3 million (from € 1300/m2 to € 1800/m2). Key MAAF figures on :  Income € million  Net Result –Group Share € 134 million  Equity € million  Members and clients 4.1 million About MAAF Assurances SA 9

11 Foncière Atland is a real estate investment trust (SIIC), listed on Euronext Paris. It operates in the “Ile-de-France” region and in the French regions Key player in the sector through 3 business lines :  Outsourcing of property assets  Construction on own account and development of turnkey properties for rent  Opportunistic investments Portfolio of € 100 million own assets and € 170 million assets under management mainly within corporate partnerships Foncière Atland REIM is responsible for the asset management and the property management of the MAAF 285 sites portfolio About Foncière Atland 10

12 Financing of the acquisition (1) 11

13 Mandatory convertible bonds issued by Cofinimur for € 52 million Issue price: € 96 per bond Mandatory redemption in shares of Cofinimur (1 share for 1 bond) on the 12 th anniversary date Exchangeable at the bondholders’ option for Cofinimmo SA ordinary shares (1 share for 1 bond) in the month preceding the 12 th anniversary date Call option for Cofinimmo as from the 7 th anniversary date: at Cofinimmo’s option in cash or in Cofinimmo ordinary shares at market value, then with bondholders’ consent 20 % coupon step-up from the 10 th anniversary date Financing of the acquisition (2) 12

14 Characteristics of the mandatory convertible bonds (a) Financing of the acquisition (3) 13 Maturity : 12 years Issue price: € 96 for each bond (= NAV of Cofinimmo at ) Coupon : ‐without exceeding the lower of : ‐ 9% of the par value or ‐86.5% of the net current result per share of Cofinimur ‐without being lower than 1%  Step-up of 20% as from the 10th anniversary date Bonds redemption : in the issuer’s shares (1 share/1 bond) Call option for Cofinimmo as from the 7th anniversary date, with bonds valued at intrinsic value ‐in cash ‐or with at least the agreement of 2/3 of the bondholders: in Cofinimmo ordinary shares (at a price equal to the average closing price of the 30 calendar days preceding the exercise of the call )  Payment at Cofinimmo’s choice  5.5% indexed

15 Financing of the acquisition (4) 14 Property portfolio of Cofinimur: only MAAF properties Financing of Cofinimur: no financial debt at the inception (but for the bonds and the shareholders loans) maximum LTV of 10% allowed subsequently for capex financing Subscribers of bonds: French and Belgian insurers Solvency II Directive : bonds categorized as real estate investment for insurers Characteristics of the mandatory convertible bonds (b)

16 Issuying mandatory convertible bonds compares favorably to issuing new Cofinimmo shares:  Issue price of the mandatory convertible bonds (€ 96 per bond) is above the current 30-day average closing price of the Cofinimmo ordinary share (€ 86.06)  Bonds issued at the Cofinimmo’s NAV per share at (portfolio in fair value)  5.5 % coupon is well below Cofinimmo share dividend yield (€ 6.50/ € 86.06= 7.55%) For Cofinimmo: equity at NAV in the form of minority interests For the institutional investors in the bonds: property exposure with low volatility but less liquidity than Cofinimmo shares Financing of the acquisition (5) 15 Advantages for Cofinimmo shareholders

17 Gross yield of portfolio: 7.31% Net yield of portfolio: 7.05% (after direct costs):  Estimated maintenance obligations limited to the structural maintenance (art.606 of French civil code): 2% of rents or 2,3 EUR/m² (vs Cofinimmo office portfolio: 3,6 EUR/m²) Net net yield of portfolio: 6.18% (after direct and indirect costs):  Asset management fee: 0.5% of acquisition value- 5 year contract with Foncière Atland REIM  Other costs : accountants, property experts  Some VAT not recovered (non VAT leases) Relutive impact of € 0.13 on the net current result per share – MAAF portfolio is 3.3% of Cofinimmo’s total portfolio (in investment value) Impact on Cofinimmo net current result 16

18 Acquisition of MAAF properties portfolio is a further step in the Cofinimmo portfolio diversification strategy 2 nd real estate distribution property network after the acquisition of the Pubstone portfolio (partnership with AbInBev) realized in 2007 Characteristics of the investments:  Direct distribution network necessary for the tenant activities  Sale and lease back  Longer term leases  Possibility of alternative uses (local shops)  Acquisition at an attractive price per square meter  If vacated these assets attract interest from local investors  Small unit values – Residual value risk widely spread The distribution property networks segment now regroups the properties of Pubstone and Cofinimur and accounts for 16.5% of Cofinimmo’s total portfolio Integration of the acquisition in the Cofinimmo distribution property networks segment 17

19 3. Divestment of the Citylink office park 18

20 Sale of the Antwerp located Citylink office business park to Mercator Verzekeringen NV for a price of €63.2 million Business park composed of 4 office buildings of m2 and 587 parking slots delivered in 2009 (contract signed in 2007) 100% occupancy thanks to successful letting by Cofinimmo Main tenants: Mercator (51% of the rental income), Arcadis and Soresma Sale price in line with the latest investment value (including taxes) determined by the independent expert. Description of the operation 19

21 4. Balance sheet impact 20

22 Impact of both transactions on Cofinimmo’s consolidated balance sheet 21 Acquisition MAAF Sale Citylink Total Investment properties107.6 (a) Total assets Shareholders’ equity attributable to shareholders of the parent company 0.0 Minority interests1.3 (b) – 4.5 (c) = Financial debts (non-current and current) Total shareholders’ equity and liabilities (a) Fair value assumed equal to acquisition price (b) Interest of Foncière Atland (c) Discounted value of minimum coupon

23 22 5. Evolution of Cofinimmo properties portfolio

24 23 Evolution of Cofinimmo properties portfolio (1) Diversification strategy started by Cofinimmo in 2005, from 100% in Belgian offices, allowed Cofinimmo to enlarge its portfolio to the nursing homes/clinics segment In 2007, first distribution property networks contract with the acquisition of AbInBev pubs portfolio in Belgium and Netherlands (AbInBev retains 10% interest) During : Cofinimmo reinforces its position in healthcare real estate assets and becomes a European leader in the nursing homes segment In December 2011, with the acquisition of the MAAF branches, Cofinimmo improves the overall composition of its portfolio and reinforces its distribution property networks segment which now accounts for 16.5% of Cofinimmo’s portfolio End 2011, the percentage of the office buildings segment is below the 50% mark

25 24 Evolution of Cofinimmo properties portfolio (2) Portfolio in investment value : Portfolio in investment value: Total portfolio residual lease term/order book : 11.5 years

26 25 Annex 1: Pictures of MAAF branches

27 26

28 27 Annex 2: Characteristics of the mandatory convertible bonds

29 28

30 29

31 30 Presentation Take Aways New niche in Cofinimmo portfolio with:  Attractive yield  Recurrent cash flows  Attractive values/m2 Use of JV structure commonly utilized in the US Alternative raising of equity at NAV Rotation of office portfolio Increased diversification of assets

32 31

33 Together in real estate Disclaimer: This presentation is directed to financial analysts and institutional investors and is not to be considered as an incentive to invest or as an offer to acquire Cofinimmo shares. The information herein is extracted from Cofinimmo annual and half-yearly reports and press releases but does not reproduce the whole content of these documents. Only the French annual and half-yearly reports and press releases form legal evidence. For more information contact: Valerie Kibieta Tel.:


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