Quaterly business report : 3rd quarter 2013

Paris, 14 November 2013, 8am

Third quarter revenues stable at € 5.4 million

Cumulative 9-month revenues: € 16.8 million

SIIC PAREF, a property company with the dual business of property investment and management on behalf of third parties, announces revenues of € 5.4 million for the third quarter of 2013, compared to € 5.5 million for the same period of 2012. Cumulative revenues for the first 9 months of the 2013 financial year totalled € 16.8 million, a decline of 8.1% compared to the first 9 months of 2012.

Investment business

 

Rent and costs recovered for the first nine months of 2013 totalled € 12.7 million, compared to € 13.7 million for the year to 30 September 2012. This decline of € 1.0 million was due to the € 0.5 million negative impact of certain temporary usufructs (related to residential buildings) which matured in 2012, the € 0.3 million positive impact related to the acquisition of the Lyon and Combs-la-Ville buildings, the € 0.4 million negative impact of rental income from disposed assets (primarily related to the Berger and Rueil buildings), the € 0.7 million negative impact of vacant property and rent renegotiations and the € 0.3 million positive impact of rent indexing and step up leases.

On a constant group structure basis (excluding 2012 sales and the maturing of usufructs), rental income declined by 2.8%.

The occupancy rate was 87% at the end of September, a 1% decline compared to the end of June. After restatement for properties for which an undertaking to sell has been signed, occupancy was 92%.

Management on behalf of third parties

 

Management fees totalled € 4.1 million for the year to 30 September 2013, compared to € 4.6 million for the same period of 2012. This fall was attributable to subscription fees (SCPI), which represented € 1.8 million as against € 2.4 million for the year to 30 September 2012. Early in 2012, SCPI fundraising had benefited from exceptional subscriptions originating from institutional investors.

Fees related to SCPI, OPCI and third-party assets under management (and miscellaneous fees) represented € 2.2 million, compared to € 2.1 million for the year to 30 September 2012.

Third party assets under management (SCPI and OPCI) continued to grow. The takeover of SCPI Capiforce Pierre as of 1 January 2013, which represented an increase of € 42 million, was increased by a further € 39 million in assets under management, which took their total amount to € 670 million at 30 September 2013. Total assets held or managed by the Paref Group following elimination of duplication (Paref investments in funds managed by Paref Gestion) thus totalled € 812 million.

Detailed information on Group operations and financial position concerning this period is provided in the accompanying quarterly financial report published on the Company's website: www.paref.com (investor/publication area).

Shareholders' agenda:

Publication of 2013 full-year revenues: 30 January 2014

About PAREF

PAREF Group operates in two major complementary areas:

§ Commercial and residential investments: PAREF owns various commercial buildings in and out of the Paris region. The Group also owns the temporary usufruct of residential property in Paris.

§ Management on behalf of third parties: PAREF Gestion, an AMF-certified subsidiary of PAREF manages 4 SCPIs and 2 OPCIs.

At 30 September 2013, PAREF Group owned € 180 million in property assets and managed assets worth € 670 million on behalf of third parties.

PAREF shares have been listed on Compartment C of the NYSE Euronext Paris Stock Exchange since December 2005

ISIN Code: FR0010263202 - Ticker: PAR

For further information, please visit www.paref.com

Quarterly business report ⁽[1]⁾

Third quarter 2013

14 November 2013

SIIC PAREF, a property company specialised in property investment and management on behalf of third parties, announces revenues of € 16.8 million for the first nine months of the year, compared to € 18.2 million for the year to 30 September 2012.

1 – Property assets and Group debt

 

1.1 Property portfolio

 

The following changes have affected the consolidated property portfolio since 30 June:

- Construction of the “Gaïa” building (an 11,000 m² high environmental quality, low energy consumption office building located in Nanterre) was completed on 18 September 2013. Delivery is scheduled for 18 November. Marketing of the building is in progress, with prospecting being directed at either single or multi tenants (starting from 4,000 m²).

- The main tenant of La Courneuve, which held a call option, has expressed an interest in purchasing the whole site. Discussions are underway and the sale is expected to proceed rapidly.

The value of the Group's property portfolio, based on the appraised values of buildings at 30 June 2013, totalled € 180 million at the end of September 2013, compared to € 172 million at the end of December. This figure includes SCPI and OPCI shares valued at € 12.0 million (based on share prices at 30 September).

The increase in the value of the portfolio is primarily due to the Group's share of work carried out on the “Gaïa” building, which represented € 8.3 million.

1.2 Financial debt

 

Total Group financial debt was € 78.1 million at 30 September 2013, compared to € 80.4 million at 30 June 2013. The € 2.3 million movement was due to debt amortisation.

Including escrow accounts of € 2.0 million and cash and cash equivalents of € 9.4 million, the consolidated net financial debt was € 65.5 million.

The LTV ratio (net financial debt to property portfolio value), including the share of the “Gaïa” building owned by Wep Watford, an equity‐accounted company, was 42.1%, compared to 42.0% at the beginning of the year, with debt amortisation and the sale of the Rueil building during the 1^st half of the year offsetting the negative impact of drawdowns on the loan facility held by Wep Watford.

2. – Revenues

 

Revenues for the third quarter of 2013 were stable at € 5.4 million, compared to € 5.5 million for the same period of 2012.

Cumulative revenues for the first 9 months of the 2013 financial year totalled € 16.8 million, a decline of 8.1% compared to the first 9 months of 2012.

2.1 - Decline in rental income following selective disposals in 2012 and 2013 and the maturing of certain residential usufructs

 

Rent and costs recovered for the year to 30 September 2013 totalled € 12.7 million, compared to € 13.7 million over the same period of the previous financial year, a decline of € 1.0 million. This change was due to:

· The acquisition of the Lyon and Combs-la-Ville buildings, with a positive impact of € 0.3 million;

· The usufructs of the Bastille, Saint Antoine, Maurice de Fontenay and Lafayette buildings reaching maturity (negative impact of € 0.5 million);

· The disposal of the Berger, Roule, Rivoli and Les Ulis buildings effected in 2012, and Rueil in 2013 (negative impact of € 0.4 million);

· The renegotiation of leases, representing a negative impact of € 0.4 million (namely Saint Maurice and Gentilly buildings);

· Vacated buildings, with a negative impact of € 0.3 million;

· Other causes, particularly including rent indexing and step up leases, with a positive impact of € 0.3 million.

On a constant group structure basis, excluding acquisitions, disposals and the maturing of usufructs, rental income declined by € 0.4 million.

The occupancy rate was 87% at the end of September, a 1% decline compared to the end of June. After restatement for properties for which an undertaking to sell has been signed, occupancy was 92%.

2.2 – Management on behalf of third parties: increase in recurring management fees but decline in SCPI subscription fees

 

Recurring SCPI management fees (fees from assets under management) continued to increase to € 2.2 million (€ 2.1 million for the year to 30 September 2012) as a result of growth in managed assets (€ 670 million at 30 September 2013, compared to € 593 million at 31 December 2012 – see below), of which € 42 million was attributable to the takeover of Capiforce Pierre.

Over the first nine months of the 2013 financial year, variable-capital SCPI managed by PAREF GESTION (Pierre 48, Novapierre 1 and Interpierre France) raised € 23 million.

Subscription fees (excluding Interpierre France, a consolidated entity) thus represented € 1.8 million, compared to € 2.4 million for the same period of 2012.

OPCI management fees totalled € 0.4 million, compared to € 0.6 million for the year to 30 September 2012. This decline was due to fees from Naos, whose commission terminated in 2012.

The assets managed by the Group at 30 September 2013 may be analysed as follows

 

4 – Outlook

 

During the fourth quarter, Paref expects to complete the ongoing selective disposal programme (with the sale of the Fontenay, Gentilly and La Courneuve buildings). The proceeds from these disposals will be invested in projects under consideration and which are consistent with Paref's strategy. 

 

Paref Gestion will continue to develop its diversified SCPI range, currently comprising Novapierre 1 (retail stores), Pierre 48 (residential property in Paris and the Paris region), Interpierre France (offices and business premises) and Capiforce Pierre (diversified SCPI).

A new product invested in German retail stores will be launched during the fourth quarter, in partnership with an experienced and solid player recognised for its capacity to operate under this investment strategy.

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