Regulatory News:
Mercialys (Paris:MERY):
« The fourth quarter of 2011 was particularly positive for
Mercialys: 4 new Esprit Voisin projects were completed; in addition
the shopping center of Brive Malmort joined Mercialys portfolio at
the end of 2011. It puts an end to a successful year, marked by a
growth in rental revenues that remained steady, a record
performance in lettings, and a rate of completions of Esprit Voisin
projects that reached a level never achieved before that will still
emphasize in the next years, commented Jacques Ehrmann, Chairman
and CEO of Mercialys.
« At the same time, we kept on carrying out our asset rotation
policy of selling mature properties. In 2011, we sold approximately
5% of our portfolio value to long-term institutional investors.
This process of asset rotation coupled with the implementation of
the "Esprit Voisin" program allows us to boost the momentum of our
portfolio and strengthen the commercial power of our sites. »
Rental revenues up +7.7%
2011 full year rental revenues amounted to Euro 161.0 million,
up +7.7% compared with the same period in 2010:
Thousands
of Euro FY 2010 FY 2011 % change
Invoiced rents 144,695 153,385 +6.0%
Lease rights / entry fees 4,811 7,621
Rental revenues 149,506
161,005 +7.7%
Invoiced rents as of December, 2011 were up +6.0%
at Euro 153.4 million due to:
- a steady organic growth: +3.2 points (including
indexation1: +0.5 point and impact of variable rents: +0.1
point)
- the impact of the completion of "Esprit Voisin" development
projects and the inclusion in the portfolio of the Caserne de Bonne
shopping center at the end of 20102: impact of +8.8 points
on growth in invoiced rents
- the effect of asset sales carried out at the end of 2010
and 2011 reducing the rental base: -5.7 points
2011 growth in invoiced rents was mitigated by the effect of
non-recurring items, mainly the strategic vacancy due to our
on-going restructuring programs on our sites that had a slight
negative effect on 2011 invoiced rents (-0.2 point).
Entry fees and despecialization indemnities received as
of December 31, 20113 remained at a high level, in the continuity
of 2010 that had already benefited from significant entry fees. It
results both from a significant growth in recurring entry fees
received in 2011 compared with 2010, and from a significant amount
of entry fees received at Esprit Voisin projects completions in
2011.
The total entry fees and despecialization indemnities received
in 2011 amounted to Euro 10.2 million compared with Euro
10.1 million in 2010, including:
- Euro 4.8 million entry fees
linked to the recurring reletting activity (compared with Euro 3.2
million in 2010)
- Euro 5.4 million entry fees
linked to the letting of new extensions/restructuring programs
completed in 2011, mainly Geispolsheim, Ajaccio, Marseille La
Valentine, Annemasse, Auxerre and Villefranche (compared with Euro
6.9 million in 2010 mainly on the sites of Brest, Castres, Annecy,
Sainte Marie at the Reunion island and Paris St Didier).
Including IFRS smoothing accounting, entry fees accounted for at
the end of 2011 were up +58.4% at Euro 7.6 million compared with
Euro 4.8 million in 2010, fuelled by the significant entry fees
received both in 2011 and 2010.
A strong performance in letting activity
The letting activity - that includes renewals, relets and the
letting of new premises - beat a record in 2011: 402 leases were
signed (vs 351 in 2010):
> 255 leases were renewed or relet in 2011 (vs 237 leases in
2010)
> 147 leases signed relating to extensions under development
(vs 114 leases signed in 2010).
In addition, thanks to the implementation of a dedicated team in
2010, the Speciality Leasing activity kept on developing at a high
pace and achieved a significant performance in 2011: invoiced rents
were up +15% at Euro 3.9 million (vs Euro 3.4 million in 2010), up
Euro +0.5 million compared with 2010.
Mercialys rental management indicators as of December 31,
2011 remained satisfactory, and even improved slightly:
> The current vacancy rate4 as of December 31, 2011 improved
at 2.0% (vs 2.1% at December 31, 2010);
> 2011 recovery rate over 12 months as of December 31, 2011
reached 98.3% (vs 98.0% at December 31, 2010);
> The number of tenants under liquidation remained stable and
very low at end-2011 in comparison with end-2010 (19 tenants in
liquidation at end-2011 out of a portfolio of 2,649 leases).
13 new defaults of retailers were recorded during 2011.
Q4 2011 activity
A record performance in completion of projects: 11 programs
completed in 2011 including 4 in Q4 2011
During Q4 2011, completions of Esprit Voisin projects kept on
going at a steady pace with the opening of four extensions that
joined Mercialys portfolio:
- The sites of Annemasse, Auxerre and
Villefranche benefited from a renovation and an extension of the
shopping mall that will significantly increase their commercial
position.
- In Angers Espace Anjou, new shops were
developed on an area acquired from the anchored hypermarket.
H&M is part of the new retailers.
68 new retailers opened during Q4 2011, representing a full-year
rental value of Euro 4.8 million and a GLA5 of 32,600 m². On
average, the letting rate in value achieved on those projects was
106%6 as of December 31, 2011.
7 projects had already been completed during the previous
quarters of 2011:
- 3 extensions opened during the
first-half of 2011 at the sites of Geispolsheim, Ajaccio and Sables
d’Olonne;
- 3 redevelopments were carried out at
the sites of Nîmes, Marseille La Valentine and Montauban: new
stores opened on area acquired from the anchored hypermarket;
- In Annecy, 4 mid-size stores were added
to the site, which underwent the development of an extension in
2010 following the creation of an adjacent retail park in
2007.
In total, 146 new retailers opened during 2011,
representing a full-year rental value of Euro 10.3 million
and newly created, redeveloped and/or renovated GLA of 112,900
m².
Disposal of Euro 120 million of assets
Q4 2010 marked a new step in Mercialys's strategy of enhancing
the value of its properties, adopting an active arbitrage policy
for its portfolio.
During 2011, Mercialys continued with this dynamic asset
rotation policy of selling mature assets. 16 mature assets gathered
in 6 portfolios were sold for an amount of Euro 120 million
including transfer taxes, equal to around 5% of the value of
the portfolio (including transfer taxes) at June 30, 2011, at an
average capitalization rate of 6.36% (ie a yield lower than
the appraisal yield for these properties). Net rental income from
these assets amounted to Euro 7.4 million over the full year.
The assets sold are mature assets mainly composed of service
malls, standalone stores and various co-ownership lots as well as
two mature shopping centers located in Nevers and Béziers.
Portefeuilles Sites Portfolio of 7
sites in the Rhine/Rhône region of small service malls and
standalone mid-size stores Annonay, Oyonnax,
Pontarlier, Montélimar, St Claude, St Louis, Carpentras Portfolio
of 5 retail sites in the Atlantic / Mediterranean region
Albi, La Chapelle sur Erdre, Montpellier Celleneuve, Canet
en Roussillon and Béziers (mature shopping center) One mature
shopping center Nevers Co-ownership lots
Bordeaux-Pessac (Retail park, cafeteria and car center),
Co-ownership lots Angoulême (Mid-size stores)
Co-ownership lots Hyères (supermarket site)
Note that the assets of Bordeaux-Pessac were sold to Union
Investment, a German fund manager highly active in the real estate
market, with which Mercialys initiated the creation of a
partnership in 2011.
The two partners created a fund of mature retail properties via
an OPCI fund that is 80%-owned by Union Investment and 20% by
Mercialys. Mercialys operates the fund, responsible primarily for
asset management and letting of premises.
The fund acquired its first asset in Bordeaux-Pessac
representing a total value of around Euro 80 million including lots
owned by Mercialys (a retail park, a cafeteria and a car center).
Besides, Mercialys has started the development of the extension of
the shopping mall under the "Esprit Voisin" concept, extension
which is due to be delivered to the fund in November 2012.
The fund is designed to invest in mature retail properties as
opportunities arise on the market.
Acquisition of a shopping center in Brive Malmort for Euro
14.8 million on December 31, 2011
The shopping center of Brive Malmort was added to Mercialys
portfolio at the end of 2011.
It was acquired for Euro 14.8 million. The annual rental value
represents an amount of Euro 950 thousand.
This shopping center, anchored to one of the first hypermarkets
implemented in Corrèze area, is one of the two main shopping
centers of that geographical area. The shopping center comprises 34
stores representing a GLA of 2,700 m², and 3 mid-stores. It
comprises retailers like Sergent Major, Eram, Pantashop, Mc
Donald.
This press release is available on the
www.mercialys.com website.
Next press release:
- February 9, 2012 (after market close)
2011 FY Results (Press release)
- February 9, 2012 (5:45 pm) 2011 FY
Results (Meeting)
About Mercialys
Mercialys, one of France's leading real estate companies, is
solely active in commercial property. Rental revenue in 2010 came
to Euro 149.5 million and net income, Group share, to Euro 133.5
million.
It owns 130 properties with an estimated value of Euro 2.6
billion at June 30, 2011. Mercialys has benefited from "SIIC" tax
status (REIT) since November 1, 2005 and has been listed on
compartment A of Euronext Paris, symbol MERY, since its initial
public offering on October 12, 2005. The number of outstanding
shares was 92,010,013 outstanding shares as at June 30, 2011 and
92,000,788 as at December 31, 2010.
CAUTIONARY STATEMENT
This press release contains forward-looking statements about
future events, trends, projects or targets.
These forward-looking statements are subject to identified and
unidentified risks and uncertainties that could cause actual
results to differ materially from the results anticipated in the
forward-looking statements. Please refer to the Mercialys shelf
registration document available at www.mercialys.com for the year
to December 31, 2010 for more details regarding certain factors,
risks and uncertainties that could affect Mercialys' business.
Mercialys makes no undertaking in any form to publish updates or
adjustments to these forward-looking statements, nor to report new
information, new future events or any other circumstance that might
cause these statements to be revised.
MERCIALYS RENTAL REVENUES
TOTAL QUARTERS
In Euro thousands
31/03/2009 30/06/2009 30/09/2009
31/12/2009 Q1 Q2
Q3 Q4 Invoiced rents 30,630 62,875
97,591 130,911 30,630 32,245 34,716 33,320 Lease rights 680 1,643
2,650 3,326 680 963 1,007 676
Rental revenues 31,310
64,518 100,241 134,237 31,310
33,208 35,723 33,996 Change in invoiced
rents 10.9% 12.5% 16.5% 15.2% 10.9% 14.1% 24.5% 11.7% Change in
rental revenues 11.3% 13.2% 17.1% 15.5% 11.3% 15.1% 24.8% 11.2%
In Euro thousands
31/03/2010 30/06/2010
30/09/2010 31/12/2010 Q1
Q2 Q3 Q4 Invoiced rents
35,127 70,547 106,995 144,695 35,127 35,420 36,447 37,700 Lease
rights 803 1,842 2,934 4,811 803 1,039 1,092 1,877
Rental
revenues 35,930 72,390 109,929
149,506 35,930 36,459 37,539
39,577 Change in invoiced rents 14.7% 12.2% 9.6%
10.5% 14.7% 9.8% 5.0% 13.1% Change in rental revenues 14.8% 12.2%
9.7% 11.4% 14.8% 9.8% 5.1% 16.4%
In Euro thousands
31/03/2011
30/06/2011 30/09/2011 31/12/2011
Q1 Q2 Q3 Q4
Invoiced rents 36,887 75,583 113,733 153,385 36,887 38,696 38,150
39,652 Lease rights 1,581 3,571 5,314 7,621 1,581 1,990 1,742 2,307
Rental revenues 38,468 79,154 119,046
161,005 38,468 40,686 39,892
41,959 Change in invoiced rents 5.0% 7.1% 6.3% 6.0%
5.0% 9.2% 4.7% 5.2% Change in rental revenues 7.1% 9.3% 8.3% 7.7%
7.1% 11.6% 6.3% 6.0%
1 In 2011, for the majority of leases, rents were indexed either
to the change in the construction cost index (CCI) or to the change
in the retail rent index (ILC) between the second quarter of 2009
and the second quarter of 2010 (respectively +1.27% and
-0.22%).
2 See press release on 2010 results published on January 17,
2011.
3 Cash amounts received before IFRS smoothing accounting (over
the first 3 years of leases)
4 Excluding strategic vacancy
5 Gross Leasable Area
6 Effective rents on leases compared to target rents set at the
origin of the project