1
Developer
REIT
Property investment Property development Services
2
Contents
1.
Organisation
2.
Property investment pipeline
3.
Property development and services
3
1.
Organisation
Property investment Property development Services
4
Target: To become the No. 1 developer REIT
FONCIÈRE
CA 2006
328 M€
5,2 Md€ d'actifs
au 30-06-20007PROMOTION
SERVICES
Property investment
Revenue: €327m / EBITDA: €179mProperty dev’t
Revenue: €791m / EBITDA: €90m
Services
Revenue: €215m /EBITDA: €4m
Maximising the value of properties
through synergies or acquisitions
A prospective view allowing for
a balance between developments on
behalf of ICADE and for third parties
Realising value on ICADE's properties
and aiming to achieve profitability
in line with market levels
2006 figures (excluding synergies,
Icade SA and International)
5
ICADE
A new business model and clearer organisational structure
Change in corporate structure from market-based management to business line-market-based management
Assigning responsibility to managers Strengthening strategy steering functions Repositioning of central and support
functions
Effective management systems PROPERTY
INVESTMENT
PROPERTY DEVELOPMENT
6
Business lines with clear objectives
PROPERTY INVESTMENT
2006 revenue
€328m
Property assets of €5.2bn
As at 30-06-2007PROPERTY DEVELOPMENT
SERVICES Same objectives for each business line Clear objectives for each business lineRealise value
on property assets
ICADE SERVICES
Business
development
ICADE PROPERTY DEVELOPMENT ICADE PROPERTY INVESTMENTCreate
value
Developproperties within the context of allocation of resources
Realisecapital gains through portfolio rotation and selling mature properties
Promotesynergies with ICADE Property development and ICADE Services, particularly within the framework of complex projects
Identify and provide
ICADE Property investment with high-potential properties
Manage external projects or own projects with profitability targets in line with market levels and risk control
Maintain and develop
properties for ICADE Property investment and third parties
Achievea high standard of quality across all departments
Generate a profit
on services activities at the level of targets set
Roll outstrategic plans
Encourage and structure interaction
Participate in arbitration of synergies between business lines
Encourage career development and developtalented employees
7
Target: To become the No. 1 developer REIT
PROPERTY INVESTMENT
2006 revenue
€328m
Property assets of €5.2bn
As at 30-06-2007PROPERTY DEVELOPMENT
SERVICESICADE
PROPERTY
DEVELOPMENT
ICADE
PROPERTY
INVESTMENT
ICADE
SERVICES
Icade Capri Icade Tertial Icade EMGP ICADE Foncière des Pimonts ICADE Foncière Publique ICADE ICADE Patrimoine Icade ADB Icade Eurostudiomes Icade Gestion Tertiaire Icade Eurogem SIIC Invest ICADE Tertial Régions Merger ICADE Pierre Pour Tous Icade Arcoba ICADE Foncier Développement Icade G3A ICADE Setrhi-Setae Icade Conseil8
An experienced Executive Committee
Serge Grzybowki Chairman Chief Executive Officer
Serge Grzybowki Chairman Chief Executive Officer
* As of 1/2/2008
** Subject to the agreement of the compliance commission ICADE Property investment ICADE Property investment ICADE Property development ICADE Property development ICADE Services ICADE Services Finance Legal IT Finance Legal IT Communication Marketing International Communication Marketing International Human Relations Human Relations H. Manet
H. Manet M. Sissoko**M. Sissoko** N. PalladitcheffN. Palladitcheff M. de BattistiM. de Battisti G. ParisotG. Parisot
Residential A. Fayet Residential A. Fayet Commercial M. Brouder* Commercial M. Brouder*
9
Restructured corporate governance
Restructured Board of Directors
comprising 15 members,
five of whom are independent
Three corporate governance
committees:
-
Audit, sustainable development and risk
management
-
Appointments and remuneration
-
Strategy and investment
10
2.
Property investment
pipeline
Property investmentProperty development Services
11
PROPERTY INVESTMENT
Maximising the value of properties through synergies or acquisitions
Selective and reactive investment approach
Identified investments of €2.7bn for 2008-12
An active arbitrage strategy
Realising value on the office property portfolio Drawing value from the residential property portfolio Planned property sales of €1.6bn for 2008-12
A targeted asset allocation strategy
Distinctive areas of strong expertise
Operating synergies
Ownership of significant land reserves
Icade’s property development business accounts for around 40% of identified investments for the property investment division
Capacity for yields + capacity for growth = total yields
Residential property Offices* Shopping centres and retail property*** Public and healthcare Business parks**Properties of €5.1bn
as at 30-06-2007N°4 property investment company
by market capitalisation
€0.2bn
€1.4bn
€0.1bn
€2.1bn
€1.3bn
* Excluding Odysseum shopping centre ** Excluding Aubervilliers shopping centre *** Shopping centres: Odysseum and Aubervilliers
12
ICADE
2008-12 identified property investment pipeline
* Identified investments and intra-group developments (including capex of €0.3bn) ** Expected gross yield is calculated including investments already made, if applicable
*** Property sales identified (housing subject to agreements, housing sold to the occupier, offices at maturity)
Total property investment = €2.7bn *
-980 -575 270 905 408 430 319 392 -1000 -500 0 500 1000 Public and healthcare Shopping centres and retail property Offices Residential property Business parks €m
Total property sales = €1.6bn**
Expected average gross yield (excluding capex) = 6.7%** 700
13
RESIDENTIAL PROPERTY
Updating of portfolio to refocus on vacant housing
Disposal of 6,500 homes subject to agreements Developing sales to owner-occupiers
changing each property from single-use rental to co-ownership
realising capital gains increasing NAV
Selective investments offering overall yields and future value
469 homes under construction
(expected yield on cost: 5.3%)
558 student rooms under development including 340 developed by the residential property development division (expected yield on cost: 5.4%)
2.4m m² Developed area
564 hectares Total investment area
97.3% Financial occupancy rate
156 homes €1,780/m² 2,431 homes €750/m² €2,109m (+11%) 41,500 Individual sales Average price Block sales Average price
Appraisal value excluding transfer taxes Number of homes (99% in Ile de France region)
Realising capital gains and recurring cash flow
Figures: as at 30/09/07, excluding appraisal value as at 30/06/07 (increases: 30-06-2007 vs. 31-12-2006)
14
2008-12 pipeline
Residential property
Portfolio value
as at 30 June 2007
€2.1bn
2008-12
Investment
+€0.7bn
including capex of €0.3bn (renovations)
15
2008-12 pipeline
Residential property
Investment in existing portfolio (renovations): €270m
Acquisition of 2,278 homes + 558 student rooms developed by the residential property
development division: investment of €430m expected yield on cost: 5.2%
Property sales: €980m
block sales: 14,000 homes (systematic invitations to tender)
to occupiers: 2,500 homes
Average sale price of sales to occupiers and block sales: €1,000/m2 (conservative assumptions
on account of the geographical diversity of the portfolio)
16
OFFICE PROPERTY
Reserve of capital gains and potential for optimisation
Arbitrage and value creation
Selective approach based on quality criteria and location
Seeking value and overall yields
Germany
Office properties: 149,000 m² Land reserves: 79 hectares
80.3% €379m (+2%) Financial occupancy rate
Appraisal value excluding transfer taxes
France
Leasable area 160,075 m²
€893m (+26%) Appraisal value excluding transfer taxes
95.2% Financial occupancy rate
Tour Descartes (formerly IBM), La Défense
Investment: €497m (including works) - Expected gross yield*: 6.6% 140m high (41 floors) - Net area: 85,000 m² - Area: 66,000 m² Former ESSO head office, Rueil-Malmaison (92)
Investment: €144m (including works and excluding extension) - Expected gross yield: 6.5%
Area: 24,200 m² of offices and 5,000 m² of building rights. "Opéra" building,Villejuif 5 (94)
Investment: €48m – Expected yield on cost: 8.5% Area: 15,250 m²
Ernst & Young building,Munich Investment: €58m - Expected gross yield: 6.9% Area: 20,670 m²
SIICInvest: 69,462 m²
€115m Appraisal value excluding transfer taxes
Figures: as at 30/09/07, excluding appraisal value as at 30/06/07
17
2008-12 pipeline
Office property
Portfolio value
as at 30 June 2007
€1.3bn
2008-12
Investment
+€0.9bn
Expected yield on cost = 6.4%
18
2008-12 pipeline
Office property
Villejuif block 4 - Le Châtelet
Villejuif block 3 - L'Italie
6.4% 199 29,500 Q4 2011 Pyrénées 6.7% 39 8,552 Q1 2010 Villejuif block 4 6.7% 91 20,000 Q3 2010 Villejuif block 3 6.8% 48 10,839 Q4 2009 Villejuif block 1 Expected yield on cost Investment €m Net area (m2)
Completion
Investment
€0.9bn
including
Property sales €0.6bn
19
PARC DU MILLÉNAIRE 1Investment: €104m - Gross yield: 8.6%
Area: 20,000 m² occupied by Icade and 10,000 m² leased to external companies (ODDO et Cie etc.)
PARC DU MILLÉNAIRE 2
Investment: €104m - Expected gross yield: 8.5% Total area: 30,000 m² - Completion end-2007
BUSINESS PARKS
Unique area of expertise that can be replicated
Developing construction potential spread out over time
Stepping up investment plans and value creation
Closer management of offices and business activities Average rents Area Average rents Leasable area €134/m² 243,118 m² 76 ha Total area of business parks
Light industrial areas Warehouses €248/m² €1,464m (+19%) 92.6% 179,909 m²
Appraisal value excluding transfer taxes Financial occupancy rate
Offices
Gradual and steady value creation
Figures: as at 30/09/07, excluding appraisal value as at 30/06/07 (increases: 30-06-2007 vs. 31-12-2006)
20
2008-12 pipeline
Business parks
Portfolio value
as at 30 June 2007
€1.4bn
2008-12
Investment
€0.4bn
Expected yield on cost
(excluding capex) = 8.1%
21
2008-12 pipeline
Business parks
Building 521 Building 114
Parc du Millénaire
PARC DU MILLÉNAIRE 3 & 4
Estimated investment: €197m including user works) Expected gross yield: 8.7%
Development of 48,750 m² Estimated completion 2011
CAPEX: Access and utilities, revegetation works €50m
BUILDINGS 521 & 114
Expected gross yield: 6.7%
Planned office space of 19,000 m² (estimated €53m) and 6,000 m² (estimated €20m)
Completion 2008
22
SHOPPING CENTRES AND RETAIL PROPERTY
A product line offering recurring cash flow under development
Future value creation and recurring cash flow
Selective approach based on quality criteria and location
Seeking value and overall yields
ODYSSEUM shopping centre, Montpellier (34)
Icade share: 50% - Icade investment: €90m
Expected yield on cost: 5.4% - Total area: 49,000 m² Planned opening: 2010
CANAL shopping centre, Aubervilliers (93)
Icade share: 50% - Icade investment: €167m Expected yield on cost: 6.2% - Total area: 29,000 m² Planned opening: 2011
Acquisition of 95% of Foncière Monsieur Bricolage
40 stores - Investment: €107m Gross yield: 8% - Area 151,000 m²
ODYSSEUM shopping centre
23
2008-12 pipeline
Shopping centres and retail property
Portfolio value
as at 30 June 2007
€0.1bn
2008-12
Investment +€0.3bn
24
Retail park example:Les Terrasses de Montrabé (31)
32,200 m2average area over 11 hectares
(catchment area: 200,000 hectares) 16-screen multiplex cinema, 1,200 parking
spaces, 8 km from the centre of Toulouse Opening: Q3 2011; architect: Sign’Architecture Investment: €61m
Expected yield on cost: 6%
2008-12 pipeline
Shopping centres and retail property
25
3 Clinics in the Aquitaine BasinAmount: €99m (including works) - Area: 45,300 m² Immediate gross yield on acquisition >7.5%
PUBLIC AND HEALTHCARE
Investor approach drawing on reputation in public sector property development
Criteria of overall yields and value creation Recurring long-term returns with PPP
developments
IGH Ministry of the Interior, Levallois-Perret (92)
Amount: €179m - Rate of interest on capital employed: 6.8% (real estate financing) - Area: 30,000 m²
2 Clinics in the Centre
Amount: €43m - Area: 35,200 m² Immediate gross yield on acquisition >6.7%
Investment in progress in 6 PPP developments
Amount: €130m - Expected rate of interest on capital employed: 5.4% (expected IRR on equity: 10%) Area: 95,000 m²
26
2008-12 pipeline
Public and healthcare
Portfolio value
as at 30 June 2007
€0.2bn
2008-12
Investment +€0.4bn
27
Public sector (including PPP):
Investment: €174m
Expected rate of interest on capital
employed: 6.4%
(Expected IRR on equity: 10%)
Clinics:
Investment: €234m
Expected gross yield: 7%
2008-12 pipeline
Public and healthcare
Vedici: Archette clinic (Olivet, 45)
Vedici: Saint François clinic (Mainvilliers, 28) Harpin: Esquirol Saint-Hilaire clinic (Agen, 47)
Immediate cash flow on clinics
No rental risk for PPP developments
28
3.
Property development
and services
Property investmentProperty development Services
29
PROPERTY DEVELOPMENT
A balance between development on behalf of Icade and for third parties
ICADE's property development activities in France enable it to anticipate market developments and optimise its investments
2006 property development revenue:
€791m
Residential property
Public and healthcare
Commercial property €553m
€126m
€112m
A controlled growth strategy, building up commercial property and public sector activities
Looking for synergies with property investment companies as business introducers in line with their strategies
Favoured access to land and complex developments
Control of assumed risks dictates the strategy of each segment
Control of margins aiming for market average rates of return
Engineering subsidiary allowing for better assessment of costs and control of risks
30
National coverage
No. 4 property developer in France
Residential property
*Figures as at 30 September 2007 including Opera Construction ** Excluding Opera construction
Market trends
Structural housing shortageRobust demand, fairly low inventories Continuing favourable loan terms Tax incentives
Slowdown in selling price rises Inflation in production costs Development of home ownership
and affordable housing
Backlog*: €747m = 14 months’ revenue Property investment portfolio*:
€2,187m
Cancellation rate: 19%** Disposal rate: 11%** Average apartment selling price (development launched in 2007):
31
National coverage
No. 4 property developer in France
Commercial property Public and healthcare
Potential revenue 2008-12 = €1,068m Preparation in progress Potential revenue 2008-12 = €288m
Under development
122,595 m² Preparation in progress
200,700 m² Under development
32
Third-party developments
Residential and commercial property development
Le Perreux sur Marne, "Zac du Canal"
A residential development in the south-east of the Ile de France region, offering easy access 3 railway stations, A3 and A4 motorways, RN 34
Land of 2.2 hectares along the Marne river benefiting from a favourable position
In May 2006, Icade won a large part of the development, attributed to the residential and commercial property development division
TOTAL NET AREA: 51,450 m² HOUSING NET AREA: 30,850 m² OFFICE/BUSINESS NET AREA: 20,600 m² ICADE SHARE: 25,430 m²
includingoffice space of 11,230 m² 14,200 m² of housing Average home price:
€5,300/habitable m², including parking Business volume:€70m
33
Internal residential property development:L’Haÿ-les-Roses (94),"Les Jardins Ronsard" residence Number of homes: 51 (163 homes planned in total) Expected yield on cost: 6.9%
Property investment pipeline
Residential and commercial property development
Internal residential property development:
Juvisy-sur-Orge (91), Rue de Bellevue
Internal commercial property development:
"L’Opéra", Villejuif (94) 56 homes planned
Expected yield on cost: 5.2%
Investment: €48m Area: 15,250 m²
34
SERVICES
Realising value on properties and aiming to achieve profitability in line
with market levels
Figures as at 31 December 2006
ICADE is structured so as
to develop, invest in
and manage its properties
thanks to specialised teams able
to serve their customers
2006 services revenue: €215m
Residential propertyPublic and healthcare Commercial
property €91m
€114m €10m
35
Creation of a Services division
Reorganisation and improving margins
FRANCE Property managementOffice space managed: 1,235,988 m² individual property management: 22,171 lots institutional property
management: 15,154 lots
associations: 119,302 lots
Student residences
Number of beds managed: 6,058
Commercial property management
Offices managed: 1,184,632 m²
associations: 1,032,049 m²
facilities management: 860,367 m²
PFM
Area in use: 3,622,181 m²
SPAIN Property management
individual property management: 1,647 lots individual associations: 7,985 lots
Student residences:
Number of beds managed: 5,227
ITALY Property management
Office space managed: 4,334,148 m² Figures as at 30 September 2007
Complete reorganisation of services activities Refocusing on activities allowing for better
management of properties and developments
Organisation of business lines (property management and facilities management) to serve clients (internal and external)
Aiming to improve margins
Thanks to effects of scale and business line specialisation, setting objective targets in order to bring activities in line with market practices
Implementation of procedures and quality analysis grids
36
4.
Outlook
Property investment Property development Services
