SFL – Third-Quarter 2023 Financial Information
October 19 2023 - 12:43PM
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#cloud.paris (Paris 2) - SFL © Clément
Guillaume
SFL (Paris:FLY):
Robust business performance
“SFL’s high-quality portfolio, 99% of which is located within
Paris including 77% in the CBD, is a guarantee of resilience in a
tight and highly selective market driven by demand, among companies
and their employees, for centrally located, modern buildings
meeting the highest environmental standards. The growth in our
rental income and our robust operating ratios are proof of
this.” Dimitri Boulte, Chief Executive Officer of
SFL
Rental income up by a sharp 13.1% to
€171.6 million
Consolidated revenue by
business segment (€000’s)
Rental income:
2023 (9 months)
2022 (9 months)
Change
Paris CBD
129,235
116,743
+10.7%
Paris Other
40,056
32,825
+22.0%
Western Crescent
2,335
2,163
+7.9%
Total rental income
171,626
151,731
+13.1%
Consolidated rental income for the first nine months of 2023
totalled €171.6 million, up by a strong €19.9 million (up 13.1%)
versus the year-earlier period:
- On a like-for-like basis (excluding all changes in the
portfolio affecting period-on-period comparisons), rental income
was €10.8 million higher (up 8.3%), reflecting:
- application of rent escalation clauses (€6.4 million
impact);
- the gradual recovery in occupancy of the hotel located in the
Edouard VII complex following the end of Covid-19 restrictions in
February 2022 (€1.2 million impact);
- the improved occupancy rate for the Group’s revenue-generating
units, thanks to the signature of new leases in 2022 and 2023 (with
long-standing tenants or new clients such as Promontoria, Atalante
and Fabrique de Styles);
- the effective rent uplifts negotiated for new leases, addenda
or protocols on occupied space.
In particular, a significant increase in rental income was
observed from the Edouard VII, #cloud.paris, Louvre Saint-Honoré,
Washington Plaza and 103 Grenelle buildings.
- Rental income from spaces being redeveloped rose by a net €4.3
million versus the first nine months of 2022, reflecting:
• An increase of €13.3 million, due in particular to:
- the contribution over the entire nine-month period of revenues
from the Biome building (delivered in July 2022 following its
complete restructuring and fully let to La Banque Postale and
SFIL);
- the delivery in July 2023 of the retail area of the Louvre
Saint-Honoré complex redeveloped for the Cartier Foundation, whose
lease took effect immediately;
- new leases signed on several floors renovated in 2022 and/or
2023, mainly in the Cézanne Saint-Honoré building (Wendel, Lacourte
Raquin Tatar, Lincoln International and Jouin Manku).
• A decrease of €9.1 million, mainly due to:
- part of the retail space in the Galerie des Champs-Elysées
building (former H&M store) becoming vacant in 2022; following
restructuring and delivery in August 2023, this space is now set to
become the Paris flagship for its new tenant, Adidas;
- the Scope building (formerly Rives de Seine) previously let to
Natixis being vacated at the end of September 2022 in preparation
for its redevelopment.
- The acquisition of the Pasteur building in April 2022 generated
a significant increase in rental income, partly offset by the
impact of Pretty Simple’s October 2022 departure from the 6 Hanovre
building, which was sold in April 2023. Together, these movements
had a positive net impact on rental income of €4.1 million.
- Lastly, rental income for the first nine months was boosted by
€0.7 million in penalties received from tenants for breaking their
leases.
Sustained business volumes in an
uncertain environment
In the first nine months of 2023, the Group signed leases on
over 30,000 sq.m. of mainly office space.
The average nominal rent for the new office leases was
significantly higher, at €845 per sq.m., corresponding to an
effective rent of €695 per sq.m., for an average non-cancellable
period of 8.5 years. These lease terms attest to the resilience of
the Paris office property market and the attractiveness of the
Group’s properties.
The physical occupancy rate for revenue-generating properties at
30 September 2023 was a record 99.7% (compared with 99.5% at 31
December 2022). The EPRA vacancy rate was 0.3% (versus 0.6% at 31
December 2022).
On 11 April 2023, SFL sold the 6 rue de Hanovre building in
Paris (2nd arrondissement) to the GCI/Eternam joint venture for a
net selling price of €58.3 million. The building’s tenant moved out
in October 2022 and the 4,600 sq.m. complex was sold untenanted in
its condition on the transaction date.
No properties were purchased during the first nine months of
2023.
Financing: increased liquidity and
sound debt ratios
SFL’s consolidated net debt at 30 September 2023 amounted to
€2,570 million, compared with €2,438 million at 31 December 2022,
representing a loan-to-value ratio of 30.4% based on the
portfolio’s appraisal value (including transfer costs) at 30 June
2023. The average cost of debt after hedging was 2.0% and the
average maturity was 3.8 years. At end-September 2023, the interest
coverage ratio stood at 3.7x.
The Company’s liquidity position at 30 September 2023 was
excellent, with €1,600 million in undrawn confirmed lines of
credit
About SFL
Leader in the prime segment of the Parisian
commercial real estate market, Société Foncière Lyonnaise stands
out for the quality of its property portfolio, which is valued at
€7.9 billion and is focused on the Central Business District of
Paris (#cloud.paris, Edouard VII, Washington Plaza, etc.), and for
the quality of its client portfolio, which is composed of
prestigious companies. As France’s oldest property company, SFL
demonstrates year after year an unwavering commitment to its
strategy focused on creating a high value in use for users and,
ultimately, substantial appraisal values for its properties. With
its sights firmly set on the future, SFL is committed to
sustainable real estate with the aim of building the city of
tomorrow and helping to reduce carbon emissions in its sector.
Stock market: Euronext Paris Compartment A – Euronext Paris ISIN
FR0000033409 – Bloomberg: FLY FP – Reuters: FLYP PA S&P rating:
BBB+ stable outlook
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version on businesswire.com: https://www.businesswire.com/news/home/20231019027084/en/
SFL – Thomas Fareng – T +33 (0)1 42 97 27 00 –
t.fareng@fonciere-lyonnaise.com www.fonciere-lyonnaise.com
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