Covivio Sa · EURONEXT:COV
Covivio Sa — H1 2020 Earnings Presentation
96 slides from Covivio Sa's earnings presentation, July 2020
Slide 1: Half-Year Results 2020
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Slide 2: Summary
SUMMARY I. INTRODUCTION & BUSINESS MODEL II. ACTIVITY H1 2020 III. H1 RESULTS & GUIDANCE 2020 IV. PERSPECTIVES APPENDIX 2
Slide 3: I. Introduction & Business Model
I. INTRODUCTION & BUSINESS MODEL Paris Carré Suffren Headquarters of AON France
Slide 4: An unprecedented crisis but no financial crisis
AN UNPRECEDENTED CRISIS …BUT NO FINANCIAL CRISIS ECONOMIC DOWNTURN IN EUROPE… THANKS TO SUSTAINED LOW RATES LOCKDOWN AND TRAVEL RESTRICTIONS GERMANY 10-YEAR BOND YIELD 5% 4% -8.3% GDP forecasted in 20201 3% -0.45% GDP GROWTH EUROPEAN UNION 2% >3% IN JULY 2020 2% 1% IN 2007-09 -2% 0% -6% -1% -10% 200
Slide 5: Covivio: a diversified model able to get through this crisis
COVIVIO: A DIVERSIFIED MODEL ABLE TO GET THROUGH THIS CRISIS €25 bn portfolio (€17 bn group share) 60% 24% 15% OFFICES RESIDENTIAL HOTELS €10.2 bn Group share €4.1 bn Group share €2.4 bn Group share (€12.4 at 100%) (€6.4 at 100%) (€6.2 at 100%) High-quality assets in strategic locations… Strategic p
Slide 6: H1 2020 Key Figures
H1 2020 KEY FIGURES OPERATING PROFILE QUALITY HEALTHY PORTFOLIO DEBT PROFILE % 96 rate occupancy +1.0% 41.1% like-for-like value growth LTV 7.1 years average firm lease length 6.1x +1.9% LfLexcl.rental growth hotels €400 m ICR new disposals Group share Rating S&P with 15% margin % -51 on Hotels LfL
Slide 7: II. H1 2020 Activity
II. H1 2020 ACTIVITY ► Asset rotation acquisition, disposal & development ► Letting activity & rent collection ► Negotiations on hotels leases Paris 8th Jean Goujon
Slide 8: Integration of Godewind completed
INTEGRATION OF GODEWIND COMPLETED… GODEWIND A €1.2 BN PORTFOLIO WITH 10 ASSETS Frankfurt – Airport Center Frankfurt – City Gate Frankfurt – Comcom 89% of shares held +10% put option granted to one shareholder Delisting effective Frankfurt – Y2 Düsseldorf – Herzog T. Düsseldorf – Airport Center since
Slide 9: €1.7 bn portfolio in top 5 German cities
…LEADING TO A €1.7 BN PORTFOLIO IN TOP 5 GERMAN CITIES €1.4 bn group share 460,000 M² IN THE TOP 5 GERMAN CITIES... …IN A MARKET WITH SOUND FUNDAMENTALS2 Hamburg 360,000 m² of existing 3.1% assets valued ~€4,100/m² vacancy rate 19% Berlin Dusseldorf 21% 100,000 m² of 60% 21% development potential pr
Slide 10: Reinforcement in Germany over the past years
REINFORCEMENT IN GERMANY OVER THE PAST YEARS 2015 H1 2020 A PREDOMINANTLY More German A EUROPEAN FRENCH PORTFOLIO Residential INTEGRATED PORTFOLIO (+€2.1 bn Group share) Portfolio geographic breakdown Building a prime portfolio Portfolio geographic breakdown (31/12/2014) Structurally resilient (evol
Slide 11: Disposals / €400 million with +15% margin
DISPOSALS / €400 MILLION WITH +15% MARGIN on track to >€600 million target for 2020 Disposals 100% Group Gross Margin H1 2020 share Yield (Group Q1 2020 (Group share) share) €164 m at 7% margin France offices €239 m €239 m 4.7% 11% Italy offices €127 m €111 m 3.5% 22% Disposals Germany signed mainly
Slide 12: Focus on offices disposals
FOCUS ON OFFICES DISPOSALS Disposal agreements on mature office assets in France & Italy Mature assets developed by Covivio between 2013 and 2017 90% Nanterre - Respiro value 11,170 m² / delivered in 2015 creation since delivery Successful asset of the assets management Incl. disposal margin -Mainta
Slide 13: Developments / timeline extended but value potential confirmed
DEVELOPMENTS / TIMELINE EXTENDED BUT VALUE POTENTIAL CONFIRMED… MINIMAL POSTPONEMENT OF DELIVERIES Only +3 months on average Flow with short-term impact on 2020 revenue Montrouge Close to no impact on cost 100% pre-let Maximum +1% Future HQ of Edvance, PROFITABILITY CONFIRMED subsidiary of EDF 6.0%
Slide 14: Strategic locations of our projects
…THANKS TO STRATEGIC LOCATIONS OF OUR PROJECTS €1.3 bn €0.3 bn €0.2 bn OFFICES IN FRANCE Group share OFFICES IN MILAN Group share RESIDENTIAL IN BERLIN Group share Paris, Greater Paris Mainly CBD & and city-center of In sought-after districts Symbiosis area major regional cities M3 M5 M1 M2 M1 Macia
Slide 15: Office letting activity / 114,000 m² let & renewed
OFFICE LETTING ACTIVITY / 114,000 M² LET & RENEWED Slowdown in office market activity: -35% take-up in France, Italy & Germany1… … but Covivio’s letting activity remained active 30,800 m² of new leases for 8 years firm on average Paris Carré Suffren Bordeaux Cité Numérique Turin Corso Ferrucci Munic
Slide 16: German residential / exploiting our growth drivers
GERMAN RESIDENTIAL / EXPLOITING OUR GROWTH DRIVERS ACTIVE RELETTING PRIVATIZATIONS DESPITE THE LOCKDOWN OF EXISTING & NEW UNITS 1,250 units relet in H1 2020 52 existing units sold in Berlin €19 million1 at €4,400 / m² Mostly in NRW, Dresden & Leipzig +81% margin on book value with +15% increase on p
Slide 17: Strong rent collection thanks to a solid tenant base
STRONG RENT COLLECTION THANKS TO A SOLID TENANT BASE EXCLUDING HOTELS QUALITY TENANTS 91% large corporates on offices & residential tenants Offices & Residential Retail €250 m €23 gross rental income gross rental income 96.4% & 60% collection rate collection rate =€15 m =€240 m Low amount of provisi
Slide 18: Hotels closed, triggering negotiations with operators
HOTELS CLOSED, TRIGGERING NEGOTIATIONS WITH OPERATORS NEGOTIATIONS % of Covivio FINALIZED ~80 hotels closed with operators representing 66% of leased hotel revenues during the lockdown % RevPar -65 on Covivio variable leases & management contracts Help operators Switching to monthly payment with sho
Slide 19: III. H1 2020 Results & Guidance 2020
III. H1 2020 RESULTS & GUIDANCE 2020 ► Revenues ► Financial results Berlin residential - Kreuzberg
Slide 20: III. H1 2020 Results & Guidance 2020
III. H1 2020 RESULTS & GUIDANCE 2020 ► Revenues ► Financial results Berlin residential - Kreuzberg
Slide 21: H1 2020 revenues / +1.9% LfL excluding hotels
H1 2020 REVENUES / +1.9% LFL EXCLUDING HOTELS Revenues Revenues Revenues % change Average Occupancy rate H1 2020, €million H1 2019 H1 2020 H1 2020 like-for-like lease term % Group share 100% Group share Group share firm, in years France Offices 115.1 121.0 105.7 +1.0% 95.8% 4.5 Italy Offices 72.9 84
Slide 22: Offices / +1.4% LfL rental growth
OFFICES / +1.4% LFL RENTAL GROWTH 60% OF COVIVIO’S PORTFOLIO Office portfolio in France & Italy: sound like-for-like rental growth & high occupancy 35% Covivio portfolio Driven by indexation: +1.0% 96% occupancy Good performance in Milan1: +3.3% 17% driven by 2019 reletting Slight increase outside M
Slide 23: German residential revenue / +2.9% LfL rental growth
GERMAN RESIDENTIAL REVENUE / +2.9% LFL RENTAL GROWTH 24% OF COVIVIO’S PORTFOLIO 11% of 13% of Covivio’s portfolio Covivio’s portfolio Berlin 49% of rents +2.3% LfL NRW, Hamburg, +3.6% Hamburg Berlin +2.3% Dresden 7% of rents +2.6% LfL & Leipzig Dresden & Leipzig 10% of rents +3.6% LfL NRW First impa
Slide 24: Hotels / fully impacted by lockdown
HOTELS / FULLY IMPACTED BY LOCKDOWN: -51% LFL REVENUES 15% OF COVIVIO’S PORTFOLIO 4% of Covivio’s portfolio 3% 2% 6% MANAGEMENT VARIABLE LEASES UK PORTFOLIO OTHER LEASES CONTRACTS MOSTLY MOSTLY 100% closed during lockdown 93% of hotels 75% of hotels Accompanying closed during closed during operators
Slide 25: III. H1 2020 Results & Guidance 2020
III. H1 2020 RESULTS & GUIDANCE 2020 ► Revenues ► Financial results Berlin residential - Mitte
Slide 26: H1 2020 valuation / resilient values thanks to quality assets
H1 2020 VALUATION / RESILIENT VALUES THANKS TO QUALITY ASSETS LIKE-FOR-LIKE VALUE GROWTH Paris +2.0% PORTFOLIO First Ring, Western GROUP SHARE FRANCE OFFICES +1.4% Crescent & La Défense +1.0% €16.9 BN Major Regional cities +1.0% PORTFOLIO 100% Milan +0.5% ITALY OFFICES -0.3% €25.3 BN Rest of Italy -
Slide 27: Scrip dividend 2020 / €343 million capital increase
SCRIP DIVIDEND 2020 / €343 MILLION CAPITAL INCREASE 2019 DIVIDEND €4.8 per share REWARDED SUPPORT OF OUR SHAREHOLDERS with payment option in shares at a subscription price of €47.80 CHOSEN BY 82.3% +34% between OF THE SHAREHOLDERS PERFORMANCE subscription price & current share price1 €343 MILLION CA
Slide 28: Solid debt profile
SOLID DEBT PROFILE LTV 41.1% <40% Strong liquidity of €2.0 bn policy €0.6 bn available cash €1.4 bn of undrawn credit lines 1.31% -24 bps LOWER COST OF DEBT 82% hedged vs 2019 & limited short-term debt maturities Debt maturities (in €million, Group share) +0.4x 2 361 HIGHER ICR 6.1x vs 2019 1,484 1,
Slide 29: EPRA NAV / +7.4% year on year
EPRA NAV / +7.4% YEAR ON YEAR EPRA NAV H1 2020 vs H1 2019 €9,444 m €9,256 m €8,794 m EPRA NAV H1 2020 EPRA NAV EPRA NAV END-2019 H1 2019 €100.6 / €105.8 / €99.8 / share share share -0.8% year-on-year due to scrip dividend 2020 29 See appendix page 90 for more details
Slide 30: EPRA earnings H1 2020 / €192.4 million
EPRA EARNINGS H1 2020 / €192.4 MILLION €2.17 / -17.4% EPRA Earnings €192.4 m share1 due to scrip dividend 2020 VS H1 2019 -12.4% Asset rotation Strong Offices Decrease in Impact of covid -€4 m & Residential financial costs -€36 m €219.7 m +€5 m +€8 m €2.63 / share €192.4 m €2.17 / share +€19 m -€23
Slide 31: Guidance of EPRA earnings 2020
GUIDANCE OF EPRA EARNINGS 2020 Revised 2020 guidance by ~€100 million due to crisis impacts on: 70% 10% 10% 10% HOTELS UNPAID RENTS OFFICES PIPELINE 2020 Decrease Mostly on retail Slight increase Delay in revenues in vacancy in deliveries EPRA EARNINGS GUIDANCE AROUND €380 m ~€4.15 / SHARE vs €452 m
Slide 32: IV. Perspectives
IV. PERSPECTIVES Paris 5th Gobelins
Slide 33: Covivio's purpose & strategy are even more relevant
COVIVIO’S PURPOSE & STRATEGY ARE EVEN MORE RELEVANT BUILD SUSTAINABLE RELATIONSHIPS & WELL-BEING BUILD SUSTAINABLE AND WELL-BEING RELATIONSHIPS New products fitted Buildings to foster social Care for end-users to client’s needs links, corporate culture through high quality & evolving usage and colla
Slide 34: First answers to this changing environment
FIRST ANSWERS TO THIS CHANGING ENVIRONMENT Accelerating trends Accelerate mature office disposals to OFFICE already identified reinvest in new buildings Proven resiliency Pursue residential development in Germany RESIDENTIAL and growing supply needs & transform offices into residential in France A s
Slide 35: Acceleration of asset rotation
ACCELERATION OF ASSET ROTATION …to redevelop & build new efficient buildings More mature office disposals… 6 offices projects & 225 residential units to be committed by end-2021 in central locations Laborde – Paris CBD Anjou – Paris CBD Carnot – Paris CBD 6,200 m² 10,100 m² 11,200 m² +€400 m of matu
Slide 36: Transformation of obsolete offices into build-to-sell residential
TRANSFORMATION OF OBSOLETE OFFICES INTO BUILD-TO-SELL RESIDENTIAL IN FRANCE Meudon Bellevue - 1,800 m² 2018: SETTING-UP A RESIDENTIAL DEVELOPMENT TEAM Capitalizing on our long-term expertise in France & Germany… …to exploit offices & land banks in our portfolio… …and maximize the disposal value Le R
Slide 37: Perspectives in hotels / a steep but conjunctural crisis
PERSPECTIVES IN HOTELS / A STEEP BUT CONJUNCTURAL CRISIS Tourism will come back in top European destinations €573 million1 CLOSING OF THE ACQUISITION OF 8 HOTELS €248 m Group share In the heart of some of the most visited European cities 1,115 rooms PALAZZO NAIADI ROME PALAZZO GADDI FLORENCE HOTEL D
Slide 38: Intensify services & digitalization
INTENSIFY SERVICES & DIGITALIZATION STRATEGY LAUNCHED IN 2018 A WIDE SERVICE OFFER, RANGING FROM DIGITAL SERVICES TO FULL FLEXIBLE SOLUTION PARIS 5th GOBELINS DEPLOYING WELLIO MILAN 4,300 m² Covivio flex-workspace offer VIA 2021 DANTE 4,700 m² 2020 5 SITES opened on Paris (x3) Bordeaux Continue to o
Slide 39: Appendix
APPENDIX Paris 8th Jean Goujon
Slide 40: Appendix contents
APPENDIX CONTENTS 1. COVIVIO’S ESG STRATEGY 40 2. MARKETS 50 3. DEVELOPMENT PIPELINE AT END-JUNE 2020 58 4. H1 2020 INVESTMENTS & DISPOSALS 74 5. PORTFOLIO BREAKDOWN 78 6. KEY PERFORMANCE INDICATORS 86 7. DEBT PROFILE 93 40
Slide 41: Covivio's ESG Strategy
COVIVIO’S ESG STRATEGY COVIVIO
Slide 42: A sector at the heart of sustainable development stakes
A SECTOR AT THE HEART OF SUSTAINABLE DEVELOPMENT STAKES COVIVIO’S PURPOSE: BUILD SUSTAINABLE RELATIONSHIPS & WELL-BEING Our 3 strategic pillars… …drive ESG performance MAJOR EUROPEAN CITIES Offer quality locations & proximity to public transport DEVELOPMENT PIPELINE Build energy efficient assets CLI
Slide 43: 4 axes for our ESG policies
4 AXES FOR OUR ESG POLICIES E 1- SUSTAINABLE BUILDINGS 2- COMMUNITIES S 3- SOCIAL G 4- GOVERNANCE 43
Slide 44: Covivio carbon trajectory
COVIVIO CARBON TRAJECTORY: -1/3 OVER 2010-2030 Covivio carbon trajectory -1/3 carbon weight/m² over 2010-2030 In line with the <2° trajectory of the 2015 Paris agreement Average carbon weight per m² ▪ Over all European activities Average carbon weight per m² ▪ Taking into account the whole life cycl
Slide 45: Owning & developing sustainable buildings in a sustainable city
OWNING & DEVELOPING SUSTAINABLE BUILDINGS IN A SUSTAINABLE CITY… GREENER 84% 100% ASSETS with in German residential Target 2025 First operator to obtain 100% of assets certified “HQE in Operation” in Germany CLOSE TO PUBLIC 96% 100% TRANSPORT <5’ walk from public transports Target 2025 Target SUPPOR
Slide 46: Emitting less carbon through less energy consumption
…EMITTING LESS CARBON THROUGH LESS ENERGY CONSUMPTION… FRANCE ITALY HOTELS GERMAN OFFICES OFFICES IN EUROPE RESIDENTIAL TARGET -40% -15% -40% -15% (primary energy consumption measured in kWhpe/m²/year) over 2008-2020 over 2015-2020 over 2008-2020 over 2017-2025 ACHIEVEMENTS VS TARGET -35% -33% -47%
Slide 47: Generating more well-being for end-users
…AND GENERATING MORE WELL BEING FOR END-USERS E Success of our flex-workspace offer MORE Target 100% of office & residential buildings Offer a digital journey to our clients SERVICES with a service offer by 2025 ► Deployment of our Office service app started in 2020 ► Residential app available to 10
Slide 48: Strengthening social commitments
STRENGTHENING SOCIAL COMMITMENTS SUPPORTING EMPLOYEE GENDER EQUALITY & DIVERSITY TRAINING For our employees… 50%-50% of men and women in the Group1 4% Ex-aqueo initiative launched in 2017 of the payroll spent on training2 to promote women within the Group Gender equality index in France: 97/100 Camp
Slide 49: Ensuring effective & exemplary governance
ENSURING EFFECTIVE & EXEMPLARY GOVERNANCE SUPPORT OF LONG-TERM SHAREHOLDERS AND BEST PRACTICES BOARD COMPOSITION 51% 27% Free float Delfin (since 2007) 15 members Separate chairman & CEO €6.0 bn market capitalization1 40% women members 60% independent members Strong experience with diversity of skil
Slide 50: An awarded CSR strategy
AN AWARDED CSR STRATEGY Indices FTSE4Good DJSI Euronext Vigeo Eiris Euronext STOXX Ethibel 2019 Grade: 4.4/5 2019 Grade: 68/100 2019 Sector Leader Included in the indices Included in the STOXX Europe Sustainability Index Europe Included since 2011 DJSI World Index since 2013 Included since 2013 in t
Slide 51: Markets
MARKETS COVIVIO
Slide 52: Greater Paris office market
GREATER PARIS OFFICE MARKET Take-up 667,500 m² Vacancy rate in Greater Paris remains historically low -39% year-on-year H1 2020 New & refurbished space more resilient (-18%) 7,5% Immediate <3 million m² 7,0% offer +9% vs Dec.19 6,5% only 21% of new space 6,0% Vacancy 5.1% 5,5% rate (4.9% at end-2019
Slide 53: Milan office market
MILAN OFFICE MARKET Milan Office Sub-markets Take-up 160,000 m² Periphery -30% year-on-year Stock 3,5 million m² H1 2020 on par with the 10-year average Semicenter Stock 2,8 million m² 2019 take-up 132,000 m² Prime rent €290/m² of which 70% of grade A offices 2019 take-up 67,000 m² Grade A vacancy r
Slide 54: Germany office market
GERMANY OFFICE MARKET Top 7 cities Take-up 1.3 million m² H1 2020 -33% year-on-year Hamburg 2019 take-up 535,400 m² Vacancy rate 2.8% Future supply 264,000 m² Prime rents €30.0/m² Berlin Vacancy 3.1% (+20 bps) Düsseldorf 2019 take-up 475,000 m² 2019 take-up 1,030,000 m² Vacancy rate 1.2% rate 1.2% i
Slide 55: European hotel market / an unprecedented crisis
EUROPEAN HOTEL MARKET / AN UNPRECEDENTED CRISIS… -% RevPar evolution at end-May YTD LOCKDOWN & EU Borders reopening since 15/06 TRAVEL RESTRICTIONS forcing hotels to close from March to June Late reopening (borders, mandatory quarantine) -57% RevPar YTD at end-May Including -95% in April & May -53%
Slide 56: European market fundamentals are solid
…BUT EUROPEAN MARKET FUNDAMENTALS ARE SOLID % 90 of overnight stays in EU are from EU residents Share of domestic clientele ~60% incl. 50 % from domestic clients ~85% ~80% ~55% more than 80 % of residents plan a holiday trip in the next 12 months 1 1 Google travel intent survey conducted in April 20
Slide 57: Germany residential market
GERMANY RESIDENTIAL MARKET Existing shortage in Berlin: 200,000 units 70 K 50 K c.400,000 new units 30 K Housing shortage… needed per year in Germany 10 K vs 293,000 delivered in 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 -10 K New residents New appartments Focus on Berlin new regul
Slide 58: European investment market
EUROPEAN INVESTMENT MARKET Greater Paris Office Milan Office Germany Office Germany Residential €6.0 bn €1.3 bn €8.8 bn €12.5 bn -32% vs H1 2019 +6.7% vs H1 2019 Stable vs H1 2019 (-1%) +96% vs H1 2019 Prime yields stable Prime yields stable (3.3%) Prime yields lower (2.75%) (Adler mega deal) (2.75%
Slide 59: Committed pipeline
COMMITTED PIPELINE COVIVIO
Slide 60: Committed development delayed by months on average
COMMITTED DEVELOPMENT DELAYED BY 3 MONTHS ON AVERAGE €1.8 bn 6.0% 51% >30% cost Group share yield on cost pre-let Target margin €501 m €383 m €360 m €315 m €321 m €308 m €306 m €281 m 92% Previous schedule €232 m 54% €204 m 50% Updated schedule €150 m Cost in Group share €x 35% 54% % pre-let x% 10%
Slide 61: Committed pipeline at end-June 2020 (1/3)
COMMITTED PIPELINE AT END-JUNE 2020 / €2.3 BILLION AT 100% (1/3) €1.8 BN GROUP SHARE Total Total Surface 1 Pre-leased Synthesis of Committed projects Budget 2 Budget 2 Target Yield 3 (m²) (%) (€M, 100%) (€M, Group share) France Offices 256,960 m² 48% 1,642 1,255 5.9% Italy Offices 65,100 m² 59% 338
Slide 62: Committed pipeline at end-June 2020 (2/3)
COMMITTED PIPELINE AT END-JUNE 2020 / €2.3 BILLION AT 100% (2/3) €1.8 BN GROUP SHARE Total Total Surface¹ Target rent Pre-leased Committed projects Location Project Delivery Budget² Budget ² Target Yield³ (m²) (€/m²/year) (%) (€M, 100%) (€M, Group share) Meudon Ducasse Meudon - Greater Paris Constru
Slide 63: Committed pipeline at end-June 2020 (3/3)
COMMITTED PIPELINE AT END-JUNE 2020 / €2.3 BILLION AT 100% (3/3) €1.8 BN GROUP SHARE Total Total Surface¹ Target rent Pre-leased Committed projects Location Project Delivery Budget² Budget ² Target Yield³ (m²) (€/m²/year) (%) (€M, 100%) (€M, Group share) Symbiosis School Milan Construction 7,900 m²
Slide 64: High-quality projects to be delivered in the next 12 months
HIGH-QUALITY PROJECTS TO BE DELIVERED IN THE NEXT 12 MONTHS 11 OFFICES (136,200 m²) / 214 RESIDENTIAL UNITS (13,800 m²) IRO Flow Ducasse School Belaïa Gobelins CHATILLON MONTROUGE MEUDON ORLY PARIS 25,600 m² / €138 m 23,600 m² / €115 m 5,100 m² / €23 m 22,600 m² / €33 m1 4,360 m² / €50 m 6.4% YIELD
Slide 65: IRO & Flow / two smart & attractive developments
IRO & FLOW / TWO SMART & ATTRACTIVE DEVELOPMENTS MALAKOFF-MONTROUGE-CHATILLON BUSINESS DISTRICT FLOW – 23,600 m² €115 m total cost 6.6% yield on cost 100% pre-let to EDF IRO – 25,600 m² €138 m total cost 6.4% yield on cost 20% pre-let MARKET Malakoff - Montrouge - Châtillon Office stock ~1 million m
Slide 66: Paris So Pop
PARIS SO POP / IN A GROWING AND ATTRACTIVE BUSINESS DISTRICT FULL URBAN REGENERATION OF A BUSINESS DISTRICT AROUND THE LINE 14 OF THE GRAND PARIS EXPRESS N2 project (15,600 m², mixed-use) SO POP – 31,300 m² Committed with delivery in 2022 €230 m total cost New Paris shared at 50% courthouse 6.1% yie
Slide 67: Silex 2 / prime location in Lyon CBD
SILEX 2 / PRIME LOCATION IN LYON CBD Lyon Part-Dieu business district Tramway SILEX 2 – 30,900 m² 30 min to airport €169 m total cost shared at 50% 5.8% yield-on-cost 53% pre-let / Delivery 2021 MARKET Office Stock >1 million m² Metro & Tramway New space available under construction until 2022 Only
Slide 68: Vélizy / new turnkey development for Dassault Systèmes
VÉLIZY / NEW TURNKEY DEVELOPMENT FOR DASSAULT SYSTEMS ASSET SHARED AT 50% WITH CRÉDIT AGRICOLE ASSURANCES 2008 2016 End-2019 Delivery Additional Commitment of a 56,600 m² 12,800 m² of a third campus building building 27,500 m² Extension 2016 Initial campus €141 m >7% ~30% 2008 TOTAL COST YIELD TARGE
Slide 69: Managed pipeline
MANAGED PIPELINE COVIVIO
Slide 70: Managed pipeline at end-June 2020 (1/2)
MANAGED PIPELINE AT END-JUNE 2020 / €6 BILLION AT 100% (1/2) €5 BN GROUP SHARE Surface 1 Projects Type Location Area Project Commitment Timeframe (m²) Laborde Office France Paris CBD France Regeneration 6,200 m² 2021 Villeneuve d'Ascq Flers Office France Lille France Construction 22,100 m² 2021 Carn
Slide 71: Managed pipeline at end-June 2020 (2/2)
MANAGED PIPELINE AT END- JUNE 2020 / €6 BILLION AT 100% (2/2) €5 BN GROUP SHARE Surface 1 Commitment Projects Type Location Area Project (m²) Timeframe Corso Italia Office Italy Milan Italy Regeneration 12,200 m² 2020 The Sign D Office Italy Milan Italy Construction 11,500 m² 2021 Symbiosis - other
Slide 72: Office France / growth potential through development
OFFICE FRANCE / GROWTH POTENTIAL THROUGH DEVELOPMENT … including 3 projects in Paris A total of €3.0 bn / 520,000 m² of Parisian assets Total cost Value creation target CBD to be launched in 2021 & with high potential for transformation… ~ €480 m >40% delivered in 2023 / 2024 Laborde – Paris 8th Car
Slide 73: Developments in Berlin offices
DEVELOPMENTS IN BERLIN OFFICES 60,000 m² mixed-use project 38,800 m² of development secured in Berlin Alexanderplatz in Berlin & Munich Schöneberg district Aldershof district Offices / Residential / Retail Including one project to be committed in 2020 in Berlin ~€500 m total cost ~88 m total cost on
Slide 74: Milan Symbiosis / growing & successful business district
MILAN SYMBIOSIS / GROWING & SUCCESSFUL BUSINESS DISTRICT ~135,000 m² of existing & potential offices Symbiosis A&B Delivered in 2018 20,500 m² 100% let to Fastweb Symbiosis School Delivery in 2020 7,900 m² School 100% pre-let to ICS International School G+H F D Symbiosis D Delivery in 2021 18,500 m²
Slide 75: H1 2020 Investments & Disposals
H1 2020 INVESTMENTS & DISPOSALS 75
Slide 76: H1 2020 investments / €1.4 billion
H1 2020 INVESTMENTS / €1.4 BILLION €1.2 BILLION GROUP SHARE Acquisitions H1 2020 Development Capex H1 2020 realized (€ million including duties) Acquisitions Acquisitions Yield Capex Capex 100% Group Share Group Share 100% Group share France Offices - - - 100 82 Italy Offices - - - 31 31 Germany Off
Slide 77: H1 2020 disposals / €400 million Group share
H1 2020 DISPOSALS / €400 MILLION GROUP SHARE Disposals Agreements New New Margin vs Total (agreements as as of end Total (€ million) disposals agreements 2019 Yield Realized of end of 2019 of 2019 H1 2020 H1 2020 H1 2020 value Disposals closed) to close 1 2 3 =2+3 =1+2 France Offices 100 % 1 54 83 1
Slide 78: Portfolio
PORTFOLIO COVIVIO
Slide 79: France offices portfolio
FRANCE OFFICES PORTFOLIO Covivio’s Greater Paris Portfolio A €7.1 BN PORTFOLIO €5.9 bn in Group share 5.0% rental yield Rueil-sur-Seine 23% Western Crescent and La Défense 20% 1st Ring % value - Group share 1% 2nd Ring 40% 13% Paris Major Regional Cities PARIS CENTER OUEST 2% Regions LA DÉFENSE COVI
Slide 80: Italy offices portfolio
ITALY OFFICES PORTFOLIO Milan: a €2.3 bn portfolio (€2.2 billion Group share) Focusing on Milan (excl. Telecom Italia) focused on the best locations PORTFOLIO 100% Milan M3 €3.6 BN 89% M5 Bicocca % value excl. Telecom M1 Italia M2 Certosa - M1 Maciachini Group share Outside Milan 11% Porta Nuova POR
Slide 81: Germany offices portfolio
GERMANY OFFICES PORTFOLIO 100% in the Top 5 cities PORTFOLIO 100% €1.7 BN Munich 8% Other 1% Berlin 21% Hamburg 19% PORTFOLIO GROUP SHARE % value - €1.4 BN Group share Frankfurt 31% Düsseldorf 21% RENTAL YIELD 3.5% +€0.6 bn of development potential Frankfurt – City Gate 81
Slide 82: Germany offices portfolio / Düsseldorf – Herzogterrassen
GERMANY OFFICES PORTFOLIO / DÜSSELDORF – HERZOGTERRASSEN AN ATTRACTIVE LOCATION IN DÜSSELDORF CBD STRONG RENTAL UPSIDE THROUGH LEASE-UP ▪ Düsseldorf CBD ▪ 55,700 m² office building ▪ Metro stations at 5 min walk ▪ Occupancy: 61% due to the financial agreement reached with WeWork (21,600 m²) to termi
Slide 83: German residential portfolio
GERMAN RESIDENTIAL PORTFOLIO Berlin: a €3.6 billion portfolio (€2.3 bn Group share) focused on the best locations Prime locations Average locations PORTFOLIO 100% 72% of the portfolio 5% of the portfolio €6.4 BN Covivio Assets 10% Good locations Basic locations Dresden & Leipzig 7% 23% of the portfo
Slide 84: Hotels / a unique portfolio able to face a conjunctural crisis
HOTELS / A UNIQUE PORTFOLIO ABLE TO FACE A CONJUNCTURAL CRISIS …WITH SOUND 87% IN MAJOR EUROPEAN CITIES1… PROFITABILTY PROFILE PORTFOLIO2 €2.4 BN Edinburgh ~35% Group share Germany Amsterdam 26% EBITDAR Margin Warsaw in 2019 UK Berlin London 15% Lille Brussels Krakow % value2 Paris Munich France Spa
Slide 85: Covivio hotel portfolio / diversified by tenant & segment
COVIVIO HOTEL PORTFOLIO / DIVERSIFIED BY TENANT & SEGMENT 27% Economic B&B 11% RHG 11% IHG 17% Marriott 7% 38 % % revenue1 Midscale % value in Group Share NH Hotels in Group Share 7% Hotusa 3% Accor Barcelo 27% 2% 35% Upscale Other 15% 1 Based on 2019 annualized revenues 85
Slide 86: Financial & Operational Key Performance Indicators
FINANCIAL & OPERATIONAL KEY PERFORMANCE INDICATORS 86
Slide 87: Revenue H1 2020 / -7.5% LfL rental growth
REVENUE H1 2020 / -7.5% LFL RENTAL GROWTH 100% Group share Change Change Change % of H1 2019 H1 2020 H1 2019 H1 2020 (%) (€ million) (%) (%) revenue LfL 1 France Offices 130.3 121.0 -7.1% 115.1 105.7 -8.2% +1.0% 35% Paris 42.6 43.7 +2.6% 40.0 40.8 +2.1% +3.1% 13% Greater Paris (excl. Paris) 66.2 57.
Slide 88: Portfolio H1 2020 / +1.0% LfL value growth
PORTFOLIO H1 2020 / +1.0% LFL VALUE GROWTH Value Value Value LfL 1 Yield ² Yield ² % of (€ million, Excluding Duties) 2019 H1 2020 H1 2020 6 months 2019 H1 2020 portfolio Group Share 100% Group share change France Offices 5,759 7,120 5,857 +1.4% 5.1% 5.0% 35% Italy Offices 2,976 3,643 2,953 -0.3% 5.
Slide 89: Our approach is successful with our clients
OUR APPROACH IS SUCCESSFUL WITH OUR CLIENTS 20.0% 0.8 7.3 7.2 18.0% 7.1 7.1 7.1 6.4 years 6.6 0.7 on average 6.0 6.1 6.1 6.0 16.0% 5.8 5.8 5.8 5.5 0.6 14.0% 0.5 12.0% 95.5% 96.7% 95.4% 94.8% 95.8% 95.5% 96.0% 97.1% 96.3% 96.7% 98.0% 98.1% 98.3% 96.1% 96.5% 10.0% 0.4 on average 8.0% 0.3 6.0% 0.2 4.0%
Slide 90: EPRA NAV, NNNAV and new EPRA metrics
EPRA NAV, NNNAV AND NEW EPRA METRICS H1 2019 2019 H1 2020 Var 6 months Var 1y EPRA NAV (€ m) 8,794 9,256 9,444 +2.0% +7.4% EPRA NAV / share (€) 100.6 105.8 99.8 -5.7% -0.8% EPRA NNNAV (€ m) 7,889 8,375 8,423 +0.6% +6.8% EPRA NNNAV / share (€) 90.2 95.7 89.0 -7.0% -1.3% Number of shares 87,456,313 87
Slide 91: EPRA NAV & EPRA NNNAV
EPRA NAV & EPRA NNNAV EPRA NAV €9,444 €99.8 / EPRA NNNAV €8,423 €89.0 / m share1 m share1 VS END-2019 +2.0% -5.7% VS END-2019 +0.6% -7.0% script dividend script dividend €105.8 /share €99.8 /share + €2.1 - €4.8 - €4.2 + €1.7 - €0.5 -€0.2 /share /share /share /share /share /share EPRA Earnings Divide
Slide 92: EPRA earnings H1 2020
EPRA EARNINGS H1 2020 Change Change €million – Group share H1 2019 H1 2020 €m % Net rental income 296.4 270.7 -25.7 -8.7% EBITDA from hotel operating activities & coworking 16.2 5.4 -10.8 -66.7% Income from other activities (incl. property development) 8.8 7.5 -1.3 -14.8% Net revenue 321.4 283.6 -37
Slide 93: Debt profile
DEBT PROFILE COVIVIO
Slide 94: Covivio debt profile
COVIVIO DEBT PROFILE LONG DEBT MATURITY 6.1 years stable WELL DIVERSIFIED DEBT PROFILE Debt maturities by company (in €million, Group share) 4% Investor mortgages 2 361 37% Bonds 1 609 1 569 53% 1 193 unsecured 844 43% 514 Bank mortgages 378 282 72 2020 2021 2022 2023 2024 2025 2026 2027 >2027 16% C
Slide 95: Green bonds / financing a sustainable growth
GREEN BONDS / FINANCING A SUSTAINABLE GROWTH 2019 issuance ▪ €500 m at 1.125% and 12-year maturity ▪ 4 development projects in the main transport hubs of leading European cities €1 billion ▪ IRO in Chatillon (Greater Paris), Jean 14% of net debt Goujon in Paris 8th, Silex² in Lyon CBD, The Sign in M
Slide 96: Contact
CONTACT Paul Arkwright Hugo Soussan Tel.: +33 1 58 97 51 85 Tel.: +33 1 58 97 51 54 Mobile: +33 6 77 33 93 58 Mobile: +33 6 84 44 95 40 paul.arkwright@covivio.fr hugo.soussan@covivio.fr Paris 30, avenue Kléber 75116 Paris Tel.: +33 1 58 97 50 00 www.covivio.eu